MIDTERMS LAW - Week 6 Persons Vested with Corporate Governance 1 approval of any action for which shareholders approval is also required 2 filing

MIDTERMS LAW - Week 6 Persons Vested with Corporate...

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Week 6: Persons Vested with Corporate Governance 3 Levels of Control in the Corporate Hierarchy 1. The Board of Directors or Trustees They are responsible for corporate policies and the general management of the business and affairs of the corporation 2. The Officers In theory, they execute the policies laid down by the board In practice, they often have wide latitude in determining the course of business operations 3. The stockholders or members They have residual power of fundamental corporate changes Note: BOD can delegate its function to the officers and also to committees appointed by it. Corporate Officers RA 11232 provides for the minimum composition of corporate officers as follows: 1. A president, who shall be a director 2. A treasurer who may or may not be a director 3. A secretary who shall be a resident and citizen of the Philippines, and 4. Such other officers as may be provided for in the By-laws Notes: The corporate officers must be formally elected and organized by the directors immediately after their election. Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same time. Additional qualifications of officers may be provided for in the by-laws Executive Management and other Special Committees Executive Committee - composed of 3 directors; may be created by the corporate by- laws Roles: may act on specific matters within the competence of the board except with respect to the following: 1. approval of any action for which shareholders' approval is also required; 2. filing of vacancies in the board; 3. amendment or repeal of bylaws or the adoption of new bylaws; 4. amendment or term is not amendable or repealable; and 5. distribution of cash dividends to the shareholders. Note: The Executive Committee cannot go as far as to render the BOD powerless and free from all responsibilities imposed on it by law. Special Committees may be created by the BOD may be temporary or permanent the members' term, composition, compensation, powers, and responsibilities are determined by the BoD Week 7: Board of Directors/Trustees and Officers Board — the governing body of corporations, either stock or non-stock The Board exercises corporate powers, conducts all business, and control properties of the corporation. This means that the Board is the decision-making and policy-making office of a corporation. Decisions and policies are executed/materialized by officers and employees of the corporation. The Board of Corporations vested with public interest - must have independent directors composing 20% of the number of directors/trustees. DIRECTOR/TRUSTEE Qualifications: Must own at least one share of stock/must be a member (non-stock) Majority must be residents of the Philippines Not more than 15 Must not have been convicted by final judgment of (5 years prior to election) 1. an offense punishable by imprisonment for a period exceeding 6 years 2. a violation of RA 1 1232 (Revised

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