Proper notices must be sent to the directors at least 2 days prior to the board meeting. The Chairman of the Board presides during the meeting and a quorum is necessary to transact corporate business. Directors who cannot attend physically may attend and vote through videoconferencing and other alternative modes of communication.
Republic Act No. 11232, otherwise known as “The Revised Corporation Code” has effectively made the legal requirements for board meetings more attuned to the modern times. It has also introduced some changes in how board meetings should be held.
Regular meetings are held monthly while special meetings may be held at anytime and anywhere in or outside the Philippines
Under Section 52 of the Revised Corporation Code, the regular meetings of the Board are held monthly while the special meetings may be held at any time upon the call of the President. Board meetings can be done anywhere in the Philippines and even outside of the Philippines, unless otherwise provided for in the bylaws.
Notices must be sent by the Corporate Secretary to the directors at least 2 days prior to the board meeting.
The notice requirement is oftentimes a contentious issue in intra-corporate disputes. Section 52 of the Revised Corporation Code mandates that notices must be sent to every director at least two (2) days prior to the scheduled meeting, unless a longer time is provided in the bylaws. In SEC Memorandum Circular No. 6, series of 2020 “SEC MC No.6”), the SEC clarified that the notice may be sent to the directors through electronic mail, messaging service or such other manner as may be provided in the bylaws or by a board resolution.
As enunciated in Section 6 of SEC MC No. 6, the Notice of Meetings shall be sent by the Corporate Secretary and shall include the following information:
a. The date, time and place of the meeting;
b. The agenda of the meeting;
c. All pertinent materials for discussion which shall be numbered and marked in such manner that the director or trustee can easily follow and participate in the meeting;
d. That a Director or trustee may participate via remote communication;
e. Contact information of the Corporate Secretary or office staff whom the director or trustee may communicate;
f. When the meeting is for the election of directors or trustees or officers, the requirements and procedure for nomination and election;
g. The fact that there will be a visual and/or audio recording of the meeting; and
h. Other instructions to facilitate participation in the meeting through remote communications.
A quorum is necessary to conduct corporate business
The Revised Corporation Code is explicit in requiring a quorum to transact corporate business. Under Section 52 of the aforesaid law, a quorum shall consist of a majority of the directors, unless a higher number is provided for in the bylaws. It must be added that a director who participates through remote communication, shall be deemed present for the purpose of attaining quorum.
Directors who cannot attend physically may attend and vote through videoconferencing and other alternative modes of communication.
Thanks to the Revised Corporation Code, directors can now utilize technology in attending board meetings. Section 52 expressly provides that Directors who cannot physically attend or vote at board meetings can participate and vote through remote communication such as videoconferencing, teleconferencing, or other alternative modes of communication that allow them reasonable opportunities to participate. However, directors or trustees cannot attend or vote by proxy at board meetings.
Section 4 of SEC MC No. 6 explained that a director who intends to participate in a meeting through remote communication, shall notify in advance the Presiding Officer and the Corporate Secretary, which shall be duly noted in the minutes. The SEC added that corporations may issue their own internal procedures for the conduct of board meetings through remote communication or other alternative modes of communication to address administrative, technical and logistical issues.
A roll call is done at the start of the meeting.
During a board meeting, the Chairman of the Board shall preside, or in his absence, the President.
The SEC, in its MC No. 6 advised that at the start of the meeting, the Presiding Officer shall instruct the Corporate Secretary to make a roll call. Every attendee shall state for the record the following:
1. Full name and position;
3. Confirmation that he/she can clearly hear and/or see the other attendees;
4. Confirmation that he/she received the Notice of the Meeting including the agenda and materials;
5. Specify the device being used (i.e.., smartphone, tablet, laptop, desktop, television, etc.)
Thereafter, the Corporate Secretary shall confirm and note the participants and certify the existence of quorum.
Voting During Board Meetings
The general rule is that a simple majority, or majority of the quorum is necessary to carry out regular corporate acts. However, there are special corporate acts which require a strict majority or 2/3 vote of the Board.
The Presiding Officer should always direct the Corporate Secretary to note the vote of each director.
The SEC enunciated in its Memorandum Circular that the director participating in the meeting via remote communication may cast his vote through electronic mail, messaging service or such other manner as may be provided in the internal procedures. The vote shall be sent to the Presiding Officer and the Corporate Secretary for notation.
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