How is the election of directors or trustees conducted? (Section 23, Revised Corporation Code)

Introduction to Election of Directors and Trustees00:01:13

The video discusses the election process for directors and trustees, building upon previous videos about their roles, terms, and qualifications. Section 23 of the Revised Corporation Code outlines the requisites for a valid election.

Quorum Requirements for Elections00:02:13

A quorum, defined as the minimum number required to conduct legitimate business, is essential for elections. In a stock corporation, a quorum is a majority (one-half plus one) of the outstanding capital stock, based on ownership, not the number of stockholders. In a non-stock corporation, it's a majority of members entitled to vote, based on the number of members.

Voting Basis in Stock Corporations00:08:10

In stock corporations, voting is based on ownership. The number of votes a shareholder has is determined by multiplying their number of shares by the number of directors to be elected. For example, 5 shares and 10 directors equal 50 votes.

Voting Basis in Non-Stock Corporations00:09:56

In non-stock corporations, as there are no shares, each member is entitled to one vote per director to be elected. So, if 10 trustees are to be elected, a member gets 10 votes (1 multiplied by 10).

Methods of Casting Votes: Straight Voting00:11:16

Straight voting involves equally distributing the total number of votes among the chosen candidates. If a shareholder has 1000 votes and elects 10 directors, each chosen director receives 100 votes.

Methods of Casting Votes: Cumulative Voting (Single Candidate)00:12:41

Cumulative voting in favor of a single candidate allows a shareholder to cast all their computed votes for one candidate. This method is designed to give minority stockholders a chance at representation on the board.

Methods of Casting Votes: Cumulative Voting (Distribution)00:14:26

Cumulative voting by distribution allows shareholders to distribute their total votes among multiple candidates as they see fit, as long as the total votes do not exceed their allocated maximum.

Determining Election Winners and Remote Voting00:15:40

Winners of the election are determined by plurality of votes, meaning those who garner the highest number of votes. Remote voting or voting in absentia is now allowed as an amendment to the Revised Corporation Code, either authorized by the bylaws or approved by the board majority, except for corporations vested with public interest where it is automatically allowed.