DIRECTOR’S CUT
Rewards and responsibilities of the board of directors
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Authority
Ordinarily, a corporation cannot act unless it does so through an authority given by the board. As provided in the Corporation Code:
SECTION 23. The board of directors or trustees. — Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation, who shall hold office for one (1) year until their successors are elected and qualified. (28a) xxx”
But what exactly does a director do? How can one be a director? And what liabilities does a director have to contend with?
Qualifications
The qualifications for appointment to the Board of Directors has been summarized thus:
1. ownership of at least one share of the capital stock of the corporation in his own during his term of office (Section 23);
2. majority of the directors must be residents (Section 23);
3. he must not have been convicted by final judgment of an offense punishable by imprisonment for a period exceeding six (6) years or a violation of the Corporation Code committed within five (5) years prior to the date of his election (Section 27);
4. he must not have a substantial interest in a competing corporation (Gokongwei vs. SEC)
5. only natural persons can be elected as directors, and
6. other qualifications as may be prescribed in the by-laws (Section 47[5]).
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