Business

Organizations
AC 122
Week 7

1
Board of directors/ trustees /
officers -Election of directors
• Corporate officers, quorum
• Disqualification and removal of
directors
• Executive committee

Week 7

2
 Board of directors/ trustees / officers

◺ Election of directors
◺ Corporate officers, quorum
◺ Disqualification and removal of directors
◺ Executive committee

3
* Students to provide examples and discuss
 Board of directors/ trustees / officers

Board of Directors
◺ The board is mandatory for all organizations –
private, nonprofit, or governmental because it is held
accountable for the firm’s policies and actions.
◺ Represents an elected or an appointed body of
members who are responsible for overseeing a firm’s
activities to the benefit of its stockholders. (cont.)

4
* Students to provide examples and discuss
 Board of directors/ trustees / officers

Board of Directors
◺ The board is responsible for protecting shareholders’
interests, establishing policies for management,
oversight of the corporation or organization, and
making decisions about important issues a company
or organization faces.

5
* Students to provide examples and discuss
Board of directors/ trustees / officers

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 Functions of a Board of Directors

◺ Creating dividend policies

◺ Creating options policies
◺ Hiring and firing of senior executives (especially the CEO)
◺ Establishing compensation for executives
◺ Supporting executives and their teams
◺ Maintaining company resources
◺ Setting general company goals
◺ Making sure that the company is equipped with the tools it
needs to be managed well
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* Students to provide examples and discuss
 Election of Directors

◺ Every director must own at least one (1) share of the capital
stock of the corporation
◺ His/Her share shall stand in his/her name on the books of the
corporation
◺ During election, there must be present, either in person or by
representative authorized to act by written proxy
◺ The election must be by ballot if requested by any voting
stockholder or member

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* Students to provide examples and discuss
Corporate officers, quorum

◺ Immediately after the election, the directors of a corporation

must formally organize by:
◺ The election of a president, who shall be a director, a
treasurer who may or may not be a director
◺ A secretary who shall be a resident and citizen of the
Philippines
◺ And such other officers as may be provided for in the by-
laws. Any two (2) or more positions may be held concurrently
by the same person, except that no one shall act as president
and secretary or as president and treasurer at the same time. 9
Corporate officers roles and responsibilities

CEO (Chief Executive Officer) or President

◺ CEO or president is responsible for the overall day-
to-day activities of the corporation, some of which
are often delegated to other officers.
◺ The CEO signs major contracts, stock certificates, and
other legal documents as required.
◺ The CEO acts under the direction of the Board. For
substantial actions to be taken, the CEO will act on
behalf of the corporation by corporate resolution. 10
Corporate officers roles and responsibilities

Vice President
◺ This officer may or may not be required by
your state’s corporation statute. When the
position does exist, the vice president fills in
when the CEO is unavailable or when the
board assigns specific duties.
◺ Second in command in the organization
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Vice President specific responsibilities

◺ Lead significant units, departments, or operations

of a total organization
◺ Sign documents and make commitments for the
company for which the company is legally liable.
◺ Participate on the president- or CEO-led team
that creates the organization's overall vision,
mission, values, beliefs, and strategic goals. (cont)
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Vice President specific responsibilities

◺ Lead, guide, direct, and evaluate the work of

other executive leaders, including assistant vice
presidents, senior directors, and managers.
◺ Formulate and implement the strategic plan that
guides the direction of a team's business or its
area of functional responsibility, such as
developing a strategic marketing plan. (cont.)
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Vice President specific responsibilities

◺ Contribute to the sales and profitability

requirements of the business as determined by the
strategic plans.
◺ Evaluate the success of the organization.
◺ Maintain awareness of both the external and internal
competitive landscape, opportunities for expansion,
customers, markets, and new industry developments
and standards.
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Vice President Skills and Competencies

◺ Communication skills
◺ Innovation
◺ Public Speaking Skills
◺ Interpersonal Skills

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 Corporate officers roles and responsibilities

CFO (Chief Financial Officer) or Treasurer

◺ The treasurer is responsible for the financial matters of the
corporation.
◺ In a larger corporation, this may consist mainly of oversight; in
smaller corporations, this charge will include daily
responsibility for financial matters.
◺ The treasurer is responsible for maintaining the financial
corporate records and for preparing and presenting financial
reports to the Board, officers, and shareholders.
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* Students to provide examples and discuss
 CFO (Chief Financial Officer) or Treasurer specific duties

◺ Develops financial well-being of the organization

by providing financial projections and accounting
services, preparing growth plans, and directing
staff.
◺ Accomplishes finance human resource strategies
by determining accountabilities; communicating
and enforcing values, policies, and procedures;
and reviewing compensation strategies. (cont.) 17
* Students to provide examples and discuss
 CFO (Chief Financial Officer) or Treasurer specific duties

◺ Develops finance organizational strategies by

contributing financial and accounting
information, analysis, and recommendations.
◺ Establishes finance operational strategies by
evaluating trends; establishing critical
measurements; determining production and
implementing change. (cont.)
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* Students to provide examples and discuss
 CFO (Chief Financial Officer) or Treasurer specific duties

◺ Develops financial strategies by forecasting capital, facilities,

and staff requirements; identifying monetary resources; and
developing action plans.
◺ Monitors financial performance by measuring and analyzing
results, initiating corrective actions, and minimizing the
impact of variances.
◺ Maximizes return on invested funds by identifying investment
opportunities and maintaining relationships with the
investment community. (cont.)
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* Students to provide examples and discuss
 Corporate officers roles and responsibilities

Secretary
◺ The secretary is charged with maintaining the
corporate records of the corporation and preparing
minutes of Board and shareholder meetings.
◺ The secretary may also be required to provide
certification for banks or other financial institutions,
and they may also be required to provide requested
copies of corporate documents.
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* Students to provide examples and discuss
 Disqualification and removal of directors

◺ No person convicted by final judgment of an

offense punishable by imprisonment for a
period exceeding six (6) years, or a violation of
this Code committed within five (5) years prior
to the date of his election or appointment,
shall qualify as a director, trustee or officer of
any corporation. (cont.)
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* Students to provide examples and discuss
 Disqualification and removal of directors

◺ Any director or trustee of a corporation may

be removed from office by a vote of the
stockholders holding or representing at least
two-thirds (2/3) of the outstanding capital
stock

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* Students to provide examples and discuss
 Executive Committee

◺ A corporation may create an executive committee, composed of not

less than three members of the board, to be appointed by the
board.
◺ Said committee may act, by majority vote of all its members, on
such specific matters within the competence of the board, as may
be delegated to it in the by-laws or on a majority vote of the board.
◺ Group of directors appointed to act on behalf of, and within the
powers granted to them by, the board of directors. Typically, it
consists of a chairperson, vice-chairperson, secretary, and treasurer.
(cont.)
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* Students to provide examples and discuss
Executive Committee Roles

◺ ExeCom Meetings - executive committee meets more

frequently than the board. More frequent meetings make it
easier for them to move faster when necessary.
◺ Organizational Direction (acting in behalf of the board) – conduct
research relative to investment, risk and industry trends
◺ Providing Organizational Oversight – responsible for overseeing
the daily implementation of board policies
◺ Managing high level workplace issues of a serious nature –
designated chain of command
◺ Communication and board development – communication
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between the board, committees and staff
 Board of directors/ trustees / officers

◺ Election of directors
◺ Corporate officers, quorum
◺ Disqualification and removal of directors
◺ Executive committee

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* Students to provide examples and discuss