Summary
Highlights
Attorney Chris Batan Lasko introduces the topic of director and trustee composition, terms, and qualifications within corporations, referencing previous discussions on the role of the board of directors and the business judgment rule.
Directors in a stock corporation serve a one-year term, while trustees in a non-stock corporation can serve a term not exceeding three years, as per Section 22 of the Revised Corporation Code.
To qualify as a director, one must own at least one share of stock, be the registered owner of these shares, and maintain ownership throughout their term. The rationale behind stock ownership is to align the director's interest with the corporation's best interest. Being a 'registered owner' is crucial; even if you purchased shares, if they are registered under another name (e.g., in a voting trust agreement), the registered owner is the one who qualifies.
While juridical persons can be incorporators, they cannot be directors. Only natural persons can serve as directors. A corporation or partnership that is a stockholder, wanting representation on the board, must appoint a natural person and provide them with a qualifying share.
There is no citizenship or residency requirement for directors under the revised corporation code. The video then explains the role of an 'independent director,' who is a shareholder with no other connection to the corporation except their ownership, and does not actively manage the company. They act as a watchdog, ensuring proper governance, especially in corporations vested with public interest.
Specific corporations, including those listed with an exchange, with significant assets and shareholders, banks, quasi-banks, NSSLAs, pawnshops, money service businesses, pre-need, trust, and insurance companies, and other financial intermediaries, are required to have independent directors constituting at least 20% of their board.
The only qualification to become a trustee in a non-stock corporation is to be a member in good standing of that corporation.