Sec. 22 Board of Directors Flashcards
SEC. 22. The Board of Directors or Trustees of a Corporation;
Qualification
1. A DIRECTOR who ceases to own at least ONE (1) share of stock
2. a TRUSTEE who ceases to be a MEMBER of the corporation
3. must not be disqualified under the RCCP
4. He must be of legal age; NATURAL PERSONS
5. He must possess other qualifications
*no residence requirements
*no citizenship requirements
* dual citizens CAN be directors
*other qualifications provided in the BYLAWS
Term
1. DIRECTOR shall be elected for a term of one (1) year
2. TRUSTEES shall be elected for a term not exceeding three (3) years
*Each director and trustee shall hold office until the successor is elected and qualified.
What is independent Director?
An independent director is a person who, APART from shareholdings and fees received ‘from the
corporation, is independent of management and FREE from any business or other relationship which could, or could reasonably be perceived to materially interfere
with the exercise of independent judgment in carrying out the responsibilities as a director.
Who needs independent Director?
The board of the following corporations vested with PUBLIC INTEREST shall have independent directors constituting at least twenty percent (20%) of such board:
a. corps with assets atleast 50 milliom and have 200 shareholders
b. Banks and quasi-banks, NSSLAs, pawnshops and corps engaged in money service buss
c. others corps determined by commission
How to elect independet directors?
must be elected by the shareholders present or entitled to vote in absentia during the election of directors.
Business Judgement Rule
Under this rule the will of
the majority of the Board members controls in corporate affairs and contracts INTRA VIRES (within its power)entered into by the board of director are binding on the corporation and COURTS WILL NOT INTERFERE ,unless such contracts are so unconscionable and oppressive as to amount to a wanton destruction of rights of the minority.
Requisites for business judgement rule
(1) the presence of a business decision
(2) the decision must be intra vires
(3) good faith,
(4) due care in making the decision, and
(5) the director must not have personal interest or must not be self-dealing or must not otherwise be in breach of the duty of loyalty governed by provisions of the RCCP,
Proxy not allowed
that directors or trustees CANNOT attend or vote by proxy at Board meetings.
A director cannot even delegate his powers as director to another person.
An ALTERNATE director who will act as a director in the absence of the duly elected director is also UNACCEPTABLE under Section 52.
SEC. 23. Election of Directors or Trustees.
each stockholder or member CAN nominate any director or trustee QUALIFIED
stockholders entitled to
vote shall = the number of shares
1. iboto LAHAT ng candidate
2. ibigay lahat ng boto sa ISANG candidate lang
3. idistribute ang boto sa MGA napiling candidate
*no delinquent stockholder
non-stock member = one vote per candidate
HIGHEST NUMBER OF VOTE SHALL BE DECLARED ELECTED
Methods of election for BOD
THERE MUST BE A QUORUM
In person
through proxy
remote communication or in absentia
SEC. 24. Corporate Officers.
the directors of a corporation must formally organize and elect:
(a) ONE president, who must be a director;
(b) ONE treasurer, who must be a local resident;
(c) ONE secretary, who must be a citizen and resident of
the Philippines; and
(d) such other officers
TERM - one year shall be elected by the MAJORITY OF BOD/TRUSTEES
A PRESIDENT CANNOT BE A TREASURER OR A SECRETARY
Corporate officers has implied authority
has implied authority to make any contract or do any other act that is necessary
Officers may WITHOUT any special authority from the Board of Directors, perform all acts of an ordinary nature that by usage or necessity are incident to his office,
Agency by estoppel & apparent authority
corps may be ESTOPPED from DENYINg corporate officers are not their agents
these, officers will then have APPPARENT authority
Compensation
power to fix the compensation of corporate officers RESTS to BOD
