DIRECTORS,

TRUSTEES AND
OFFICERS
 Sec. 23 of the Corporation Code

- all corporate powers shall be

exercised by, and all corporate business
shall be conducted through the BOD of
the corporation

- other powers: need the ratification

of the stockholders
 CENTRALIZED MANAGEMENT

- human intervention is required in

order to allow juridical person to conduct
its business affairs, and to enter into
contracts and transactions
 PRIMARY OBJECTIVE
OF THE BOARD

1) maximize profit
2) enhance the value of the
corporation
 CORPORATE GOVERNANCE

- a system whereby shareholders,

creditors and other stakeholders of a
corporation ensure that management
enhances the value of the corporation
as it competes in an increasingly global
market place
 DOCTRINE
OF APPARENT AUTHORITY

- if a corporation knowingly permits

one of its officers, or any other agent, to act
within the scope of apparent authority, it
holds him out to the public as possessing
the power to do those acts, and thus the
corporation will, as against anyone who has
in good faith dealt with it through such
agent, be estopped from denying the
agent’s authority.
 DELEGATED POWER

- delegated by the stockholders

- can be overridden by the
stockholders
 BUSINESS JUDGMENT RULE

- when a resolution is passed in good

faith by the board, it is valid and binding,
and whether or not it will cause losses or
decrease the profits of the corporation, the
court has no authority to review them

- laissez faire doctrine

 2 Branches of the Business
Judgment Rule

1) resolutions approved, contracts

and transactions entered cannot be
reversed by the courts

2) directors/officers cannot be held

personally liable for the consequences of
such acts
 EXECUTIVE COMMITTEE

- Section 35 of the Corporation Code

- composed of not less than 3

members of the Board

- can perform acts delegated by the

Board
ELECTION OF BOARD OF
DIRECTORS/TRUSTEES

- majority of the outstanding capital stock

- no delinquent stock shall be voted
- may be done:
a) cumulative
b) straight
 VACANCY IN THE BOARD

- other than removal or expiration of term

- may be filled by the vote of at least a
majority of the remaining directors/trustees

- if no quorum, must be filled by the

stockholders in a meeting called for the
purpose
 REPORT ON ELECTION

- 30 days after the election

- the Secretary shall submit the report to
SEC
 TERM OF OFFICE

- ONE year and until their successors

are elected and qualified

- hold over principle

- non-permanency of Board Seat

 REMOVAL OF DIRECTORS
AND TRUSTEES
- 2/3 of the outstanding capital stock
- Board has no power to discipline or
remove one of their own
- cause: goes into the three duties:
loyalty, obedience, diligence
 KINDS OF MEETINGS

- regular or special
- no proxy
- minutes
- resolutions versus minutes
COMPENSATION OF DIRECTORS
AND OFFICERS
- reasonable per diems
- if compensation is to be given: must be
approved by majority of the stockholders
- in no case shall exceed 10% of the net
income before tax
 CORPORATE OFFICERS

- President – must be a director

- Secretary - must be a resident of the
Philippines
- Treasurer
 DUTIES AND LIABILITIES OF
DIRECTORS, TRUSTEES OR
OFFICERS

1)LOYALTY
2)OBEDIENCE
3)DILIGENCE
 INTERLOCKING DIRECTORS

- shareholdings exceeding 20% of

the outstanding capital stock shall be
considered substantial for purpose of
interlocking directors