1ST SLIDE

Repository of Corporate Powers

The Doctrine of Centralized Management states that, the Board of Directors or Trustees holds all the
authority in a corporation. Sila ang responsible for exercising corporate powers, conducting business, and
controlling all properties ng corporation, unless stated otherwise in the law. This principle is firmly
established in corporate law, ini emphasize na ang corporation can only make decisions and take actions
through its Board of Directors or Trustees.

2ND SLIDE

Repository of Corporate Powers cont.

1. **Executive Committee**: Some corporations nageestablish ng Executive Committee through their by-
laws. This committee ay binigyan ng specific powers to manage certain aspects ng isang corporation's
affairs. These powers may be delegated to them by the Board of Directors.

2. **Contracted Manager**: Instead of the Board of Directors, ang corporation AY MAGHIhire ng

contracted manager to oversee day-to-day operations. yung manager could be an individual, a
partnership, or even another corporation. They would have authority over certain functions as outlined in
their contract.

3. **Close Corporations**: In certain cases, particularly with close corporations kung saan there's a small
group of stockholders na closely involved with the business, the Articles of Incorporation may allow these
stockholders para magmanage ng company's affairs directly instead of relying solely on the Board of
Directors.

These exceptions provide flexibility in corporate governance, allowing for alternative structures and
decision-making processes depending on the needs and circumstances of the corporation.

3RD SLIDE
Repository of Corporate Powers cont.

This means that in a corporation, the power to buy real estate/property is nasa kamay ng Board of
Directors or Trustees. Even if the corporation appoints agents to negotiate the purchase, the final decision
is manggagaling from the Board, and yung approval nila ang magdedetermine ng transaction.

On the other hand, a stockholder ay may right to participate in controlling or managing the corporation.
This happens through their vote in electing directors because they are the ones who control or manage
the corporation. This way, each stockholder has a chance to voice their opinion and be part of running the
corporation.

4TH SLIDE

Limitations on the powers of the BOD/BOT

1.The powers of the Board of Directors or Trustees can be restricted by various legal documents such as
the Constitution, statutes (laws), articles of incorporation (charter), or by-laws (internal rules). These
documents lay out the framework within which the corporation operates and define the boundaries of
the Board's authority. For instance, they may specify the procedures for decision-making, the scope of the
Board's responsibilities, and any restrictions on their actions.
2. **Joint Action with Stockholders**: require both the Board of Directors and the stockholders to come
together and agree.

- **Removing a director from office**: SA pagremove ng director ay kailangan ng vote by both the
Board and the stockholders. It ensures that there is accountability and oversight regarding the
composition of the Board.

- **Amending the Articles of Incorporation**: The Articles of Incorporation outline the fundamental
structure and purpose of the corporation. Any changes to these foundational documents usually
require approval from both the Board and the stockholders. This ensures that significant alterations to
the company's structure are made with careful consideration and broad agreement.

- **Making fundamental changes to the corporation**: include dito yung major decisions such as
mergers, acquisitions, or dissolution. Such actions have far-reaching implications and therefore require
ng joint approval to safeguard the interests of both the shareholders and the company as a whole.

- **Declaring stock dividends**: Stock dividends is nagrerepresent ng distribution of profits to

shareholders. Yung decision to declare them requires agreement ng both the Board and the
shareholders to ensure fairness and transparency in the distribution ng corporate earnings.

- **Entering into management contracts**: Contracts with external parties for managing the
corporation's affairs may impact its operations significantly. Kaya kailangan ng approval of both the
Board and the shareholders to ensure that such agreements align with the company's strategic goals
and interests.

- **fixing of consideration for no-par shares**: No-par shares, ito yung stocks without a designated
par value. Yung Decisions regarding their issuance and valuation may affect the financial structure NG
corporation. Thus, joint approval ensures that such determinations are made with prudence and
consideration for shareholder interests.

- **fixing of compensation for directors**: Setting compensation for directors is a crucial decision that
impacts corporate governance and accountability. Joint approval ensures transparency and fairness in
determining the remuneration for directors.

These joint actions foster transparency, accountability, and alignment of interests between the Board of
Directors, representing management, and the shareholders, who are the owners of the corporation. It
ensures that major decisions are made with careful consideration and broad consensus, ultimately
safeguarding the interests of all stakeholders involved.

5TH SLIDE
Limitations on the powers of the BOD/BOT

The Board of Directors or Trustees cannot exercise powers that the corporation does not possess.IB+big
sabihin nito is that they cannot make decisions or take actions on behalf of the corporation if those
powers are not explicitly granted to the corporation by law, its articles of incorporation, or its by-laws.

For under Section 22 of the Revised Corporation Code (RCC), the authority and responsibility para
determine whether the corporation should enter into a contract that will legally bind the corporation are
vested in the Board. However, this authority is subject to the provisions outlined in the corporation's
articles of incorporation, by-laws, or relevant laws. This ensures that the Board's decisions align with the
corporation's legal framework and organizational structure, and that they act within the scope of the
corporation's powers.
Let's simplify it:

Imagine the Board of Directors of a corporation is considering entering into a contract with another party.
This contract could be for purchasing supplies, leasing property, or any other business agreement.

According to Section 22 of the Revised Corporation Code (RCC), the authority to decide whether the
corporation should enter into such a contract rests with the Board of Directors. However, this authority is
not unlimited. It's subject to certain conditions:

1. The decision must align with the corporation's articles of incorporation: These are the foundational
documents that outline the corporation's purpose, structure, and powers. The Board cannot make a
decision that goes against what is stated in these articles.

2. The decision must also comply with the corporation's by-laws: These are the internal rules and
regulations that govern the corporation's day-to-day operations. The Board cannot make a decision that
violates these rules.

3. The decision must also be in accordance with relevant provisions of law: This means that the Board
must ensure that their decision follows all applicable laws and regulations.

So, in simple terms, the example illustrates that while the Board of Directors has the authority to decide
whether the corporation should enter into a contract, they must make sure that their decision follows
the rules and regulations outlined in the corporation's articles of incorporation, by-laws, and relevant
laws. They cannot make a decision that contradicts these legal frameworks.

6TH SLIDE
TENURE

Directors of a corporation serve a term of one year, chosen from among the holders of stocks registered
in the corporation's books, as stated in Section 22 of the law. This means that individuals who own stocks
in the corporation are eligible to be elected as directors, and they serve for a duration of one year at a
time.

On the other hand, trustees have a slightly longer term of service, not exceeding three years. Trustees are
selected from among the members of the corporation. Unlike directors, trustees may serve for a
maximum period of three years before their term expires, as mandated by Section 22 of the law.

These provisions ensure that there is a regular turnover of leadership within the corporation and that
individuals with vested interests in the company are given the opportunity to participate in its
governance.

7TH SLIDE
Holdover Principle

The Holdover Principle, as outlined in Section 22 of the law, states that each director and trustee remains
in office until a successor is duly elected and qualified to take their place. This means that even if their
term officially expires, they continue to hold their position until someone else is chosen to replace them
and fulfills the necessary requirements to assume the role.

In situations where a quorum (the minimum number of members required for a meeting to be valid) is
not met at a meeting called for the purpose of electing directors or trustees, the existing directorate
continues to function. This means that the current directors or trustees remain in office until a new
directorate is elected and qualified.
Importantly, the failure to elect new directors or trustees does not automatically terminate the terms of
the incumbent officers nor does it dissolve the corporation. Instead, the existing leadership continues to
operate until proper elections can be held and new officers are elected and qualified. This ensures the
continuity of the corporation's operations and governance even in situations where elections are delayed
or not immediately successful.

8TH SLIDE
Qualifications

The qualifications for serving as a director or trustee in a corporation

a. **Ownership of Shares**: A director must own at least one share of stock in the corporation. This
requirement ensures that directors have a vested interest in the company's success. On the other hand, a
trustee must be a member of the corporation, indicating their affiliation and involvement in its activities.

b. **Legal Capacity**: The individual must be a natural person, of legal age, and possess full legal
capacity. This means they must be recognized by law as having the ability to enter into contracts and
make decisions on behalf of the corporation.

c. **No Conviction of Certain Offenses**: The individual must not have been convicted by final
judgment of an offense punishable by imprisonment for a period exceeding six years. This requirement
aims to ensure that individuals with serious criminal convictions are not entrusted with positions of
authority within the corporation.

d. **Other Qualifications in By-laws**: The by-laws of the corporation may prescribe additional
qualifications for directors or trustees. However, these qualifications cannot conflict with the
requirements set by the Revised Corporation Code (RCC). This provision allows corporations to establish
specific criteria tailored to their needs, provided they do not contradict the law.

These qualifications ensure that individuals serving as directors or trustees have the necessary legal
capacity, integrity, and vested interest in the corporation's success, while also allowing flexibility for
corporations to set additional requirements as deemed appropriate.

9TH SLIDE
Nomination

The nomination of directors or trustees in a corporation generally follows this rule: every stockholder or
member has the right to nominate any individual who meets all the qualifications and none of the
disqualifications outlined in the law.

However, there is an exception to this rule. When the exclusive right to nominate directors or trustees is
reserved for holders of founders' shares under Section 7 of the Revised Corporation Code (RCC), other
stockholders or members may not have the same nomination rights.
In simple terms, most shareholders or members can nominate anyone who meets the requirements to be
a director or trustee. But in cases where founders' shares are involved, those holding these specific shares
may have exclusive rights to nominate directors or trustees, which could limit the nomination rights of
other shareholders or members.

10TH SLIDE
Quorum

refers to the minimum number of participants required for a meeting to be valid and for decisions to be
binding. In the context of elections for directors or trustees in corporations, quorum requirements

1. **Stock Corporations**: For stock corporations, there must be present, either in person or through a
representative authorized by written proxy, the owners of the majority of the outstanding capital stock.
This means that a majority of the shareholders, who collectively hold more than half of the total shares
issued by the corporation, must be present or represented for the election to proceed.

2. **Non-Stock Corporations**: In the case of non-stock corporations, such as non-profit organizations or

associations, a majority of the members entitled to vote must be present for the election to be valid. This
means that more than half of the members who have the right to vote must be in attendance or
represented by proxy.

Take note: It's important to note that having a quorum is necessary for the validity of the election. If the
required quorum is not met, the election cannot proceed and any decisions made would be considered
invalid. This ensures that decisions regarding the election of directors or trustees are made with the
participation of a significant portion of the stakeholders, thereby enhancing transparency and legitimacy
in corporate governance.

11TH SLIDE
Voting via Remote Communication/In Absentia

Even if the corporation's by-laws don't specifically mention it, shareholders or members can still vote
through remote communication or in absentia. This can be done through a resolution approved by the
majority of the Board of Directors, but this resolution only applies to a specific meeting.

If a shareholder or member participates through remote communication or in absentia, they are

considered present for determining quorum. This means their participation counts towards meeting the
minimum number of participants required for the meeting to proceed.

Additionally, if any voting shareholder or member requests it, the election must be conducted by ballot.
This ensures transparency and fairness in the voting process, as each vote is recorded and counted
accurately.

12TH
Report to the SEC

Within thirty (30) days following the election, it is required by law that the secretary or any other officer
of the corporation must submit to the Securities and Exchange Commission (SEC) the names, nationalities,
shareholdings, and residence addresses of the elected trustees and officers. This reporting ensures
transparency and accountability in the corporate governance structure, allowing the SEC to maintain
accurate records of the individuals holding key positions within the corporation.

13TH
Adjournment of meeting

A meeting may be adjourned under the following circumstances:

1. If no election takes place.

2. If the owners of the majority of the outstanding capital stock or the majority of the members entitled to
vote are not present in person, by proxy, through remote communication, or not voting in absentia at the
meeting.

Following such adjournment, if elections were not held and the reasons for this are reported to the
Commission within thirty (30) days from the originally scheduled election date. The report must include a
new date for the election, which must not be later than sixty (60) days from the scheduled date.

This process ensures that if a meeting cannot proceed due to lack of attendance or other reasons, the
matter is promptly reported to the regulatory authority, and a new date for the election is set within a
reasonable timeframe.

14TH SLIDE
Election of officers

Following the election of directors, the newly elected directors must promptly organize themselves by
electing corporate officers. These officers are responsible for implementing the policies established by the
Board of Directors, as well as those outlined in the Articles of Incorporation (AOI) and the corporation's
by-laws.

The election of officers is a crucial step in the corporate governance process, as it ensures that individuals
are appointed to key positions within the organization to oversee its day-to-day operations and execute
the directives set forth by the Board. By electing officers immediately after the election of directors, the
corporation can efficiently establish its leadership structure and begin carrying out its objectives and
goals.

15TH SLIDE
Corporate officers

The appointment of corporate officers in a corporation follows specific guidelines as mandated by Section
24 of the law:

1. **President**: The President must also be a director of the corporation. This ensures that the
individual leading the corporation's executive functions is directly involved in its governance and decision-
making processes.

2. **Treasurer**: The Treasurer may or may not be a director, but they must be a resident of the
Philippines. This position is responsible for managing the corporation's finances and ensuring compliance
with financial regulations.

3. **Secretary**: The Secretary is not required to be a director unless specified in the by-laws.
However, they must be a citizen and resident of the Philippines. The Secretary plays a crucial role in
maintaining corporate records, handling communications, and ensuring compliance with legal
requirements.

4. **Other Officers**: The by-laws of the corporation may provide for the appointment of additional
officers as needed to fulfill specific functions or roles within the organization.

It's important to note that one person can hold two or more positions concurrently, except for specific
combinations prohibited by law. For example, a person cannot simultaneously hold the positions of
President and Secretary or President and Treasurer, unless permitted otherwise in the Code. This ensures
a separation of powers and responsibilities within the corporation's leadership structure.

16TH SLIDE
Disqualification of Directors, Trustees and Officers

A person may be disqualified from serving as a director, trustee, or officer of any corporation if, within the
five (5) years prior to their election or appointment, they meet any of the following criteria:

A. **Convicted by Final Judgment**:

- Of an offense punishable by imprisonment for a period exceeding six (6) years.
- For violating the provisions of the Corporation Code.
- For violating Republic Act No. 8799, also known as "The Securities Regulation Code."

B. **Found Administratively Liable**:

- For any offense involving fraudulent acts.

C. **Found by a Foreign Court or Regulatory Authority**:

- To have committed acts, violations, or misconduct similar to those described in paragraphs (a) and (b)
above.

These disqualifications aim to uphold the integrity and credibility of corporate governance by preventing
individuals with a history of criminal or fraudulent behavior from holding positions of authority within
corporations. It ensures that only individuals of good standing and ethical conduct are entrusted with the
responsibilities of directing and managing corporate affairs.

17TH SLIDE
Removal

The general rule regarding the removal of any Director or Trustee of a corporation is that they may be
removed from office with or without cause, as stated in Section 27 of the law.

However, there is an exception to this rule. If a director was elected by the minority, meaning they
represent a minority group of shareholders or members, there must be a cause for their removal. This
exception exists because the minority should not be deprived of the right to representation to which they
may be entitled under Section 23 of the Code.
The right to representation mentioned here refers specifically to the right to cumulative voting for one
candidate. Cumulative voting allows minority shareholders or members to concentrate their votes on a
single candidate, thereby increasing their chances of representation on the Board of Directors or Trustees.

So, while Directors or Trustees can generally be removed from office with or without cause, if they were
elected by the minority, there must be a valid reason for their removal to ensure that the minority's right
to representation is respected.

18TH SLIDE
Requisites for removal

The removal of directors or trustees from office must adhere to the following requisites:

1. **Meeting Requirement**: The removal must occur at either a regular meeting or a special meeting of
the stockholders or members specifically called for the purpose of removing directors or trustees.

2. **Calling of Special Meeting**: If a special meeting is needed for the purpose of removing directors or
trustees, it must be called by either:
- The secretary, upon order of the president; or
- The secretary, upon written demand of the stockholders representing or holding at least a majority of
the capital stock or a majority of the members entitled to vote.

3. **Notice Requirement**: There must be prior notice given to the stockholders or members informing
them of the intention to remove a director or trustee. This ensures that all stakeholders are aware of the
proposed action and have an opportunity to participate in the decision-making process.

4. **Voting Requirement**: The removal requires a vote of the stockholders representing two-thirds of
the outstanding capital stock. In the case of a non-stock corporation, the removal requires a vote of two-
thirds of the members entitled to vote.

Adhering to these requisites ensures that the removal of directors or trustees from office is conducted in a
fair and transparent manner, with proper consideration given to the rights and interests of all
stakeholders involved.

19TH SLIDE
New Power of the SEC under the Revised Corporation Code

Under the Revised Corporation Code, the Securities and Exchange Commission (SEC) is granted a new
power related to the removal of disqualified directors or trustees:

1. **Authority to Order Removal**: The SEC ay may authority to order the removal of a director or
trustee who was elected despite being disqualified, or whose disqualification arose or was discovered
after the election. This can be initiated by the SEC on its own initiative or in response to a verified
complaint. The process involves providing the concerned individual with due notice and an opportunity
for a hearing before the decision is made.

2. **Consequences for Failure to Remove Disqualified Director**: If the Board of Directors or Trustees,
with knowledge of the disqualification, fails to remove such a director or trustee, the SEC may impose
sanctions on the board. These sanctions could include fines, penalties, or other disciplinary measures.

This new power of the SEC aims to strengthen corporate governance and ensure the integrity of the
leadership within corporations. It provides a mechanism for addressing situations where individuals
serving as directors or trustees are found to be disqualified, either during or after their election, and holds
accountable those who fail to take appropriate action in response to such disqualifications.

20th Slide
Designation of director or trustee

If there's an empty spot/vacancy for a director or trustee sa company, and there aren't enough people to
make important decisions, the company can choose someone to temporarily fill that spot. This person can
be chosen from the current leaders or officials of the company. Everyone who's still a director or trustee
has to agree on this choice. They can only do this if the situation is really important and there's a risk of
serious harm to the company if they don't act quickly. Once the spot is filled, the person chosen can only
do what's needed to fix the emergency situation.

21st
Term of designated director or trustee

Once a person is chosen to temporarily fill a position as director or trustee because of an emergency, their
time in that role will end:
- When the emergency situation is over, and it's a reasonable time for them to step down.
- Or, when a new director or trustee is elected to take their place, whichever happens first.

22nd SLIDE
Compensation of directors or trustees

When it comes to how much money directors or trustees get paid:

- Usually, they only get a reasonable daily allowance, called per diems. They don't get paid as directors or
trustees.
- But there are some cases where they can get paid more than just per diems:
- If the company's Articles of Incorporation, its rules (called by-laws), or a contract made in advance says
so.
- If most of the people who own shares in the company or most of the members vote for it.

23RD SLIDE
Limitations to compensation under the RCC

Here are the limits on how much directors can get paid under the Revised Corporation Code:

- Directors can't be paid more than 10% of the company's yearly profit before taxes as their total yearly
compensation.
- Directors or trustees can't decide how much they get paid themselves. Someone else needs to decide for
them.
- Companies that are really important for the public need to tell their shareholders and the government
how much they pay each director or trustee every year.

24TH SLIDE
Business Judgment Rule

The Business Judgment Rule is a simple idea: it says that the people in charge of running a company—the
officers and directors—get to make decisions about how the company is run. The courts and government
can't step in and change their decisions unless there's a really good reason to do so.
In other words, as long as the board of directors is making decisions honestly and in the best interests of
the company, their decisions can't be second-guessed by the courts or government agencies like the
Securities and Exchange Commission (SEC).

25TH SLIDE
Business Judgment Rule cont.

Even though the Business Judgment Rule usually lets the board of directors make decisions without
interference, there are some situations where their decisions can be challenged:

1. If their actions are really unfair and harm the rights of the minority shareholders in a severe way.
2. If they break the rules set out in Section 30 of the law, like by allowing clearly illegal activities or by
being really careless or dishonest.
3. If they violate Section 33, which means if a director takes advantage of a business opportunity that
should belong to the company, unless most of the shareholders agree to it.

26TH SLIDE
Consequences of the Business Judgment Rule

The Business Judgment Rule has some important effects:

- The decisions made by the board of directors, like passing resolutions or making contracts, can't be
changed or canceled by the courts. This is because the law trusts the board to handle the company's
affairs.

- Directors and authorized officers of the company can't be held personally responsible for the decisions
they make as long as they're using their best judgment and acting in the company's best interests.

27TH SLIDE
Solidary liability for damages

When we talk about "solidary liability for damages," it means that someone can be held responsible for
damages caused by a corporation along with the corporation itself. Here are some reasons why someone
might be held accountable:

1. If they knowingly agree to unlawful actions of the corporation.

2. If they show really bad judgment or act dishonestly when making decisions for the corporation.
3. If they do something that benefits them personally but goes against what they should be doing for the
corporation.
4. If they allow the corporation to issue stocks that are worth less than they claim to be.
5. If they agree in a contract to be personally responsible for things the corporation does.
6. Or if there's a specific law that says they're responsible.

In simpler terms, if someone does any of these things, they can't just say they were acting on behalf of the
corporation to avoid responsibility. They'll be held responsible for the damage caused, just like the
corporation itself.

28TH SLIDE
Personal liabilities
General rule: If members of the Board (the people in charge of making decisions for the company) act
honestly and within their authority, they're not personally responsible for what happens because of their
decisions. The company is responsible for their actions, not them.

Exception: But if there's enough evidence that the officers (the people who carry out the decisions) acted
dishonestly, went beyond what they were allowed to do, or agreed to be personally responsible for
something on behalf of the company, then they can be held personally responsible.

As a whole, this means that usually, the Board members aren't personally liable for what happens
because of their decisions, as long as they acted honestly and within their authority. However, if they
acted dishonestly or went beyond their authority, they can be held personally responsible.

29TH SLIDE
Three-fold duties of Directors and Trustees

here's a breakdown of the three-fold duties of Directors and Trustees in simple terms:

1. Duty of Obedience: This means that directors and trustees must only make decisions for the company
that are in line with the reasons why the company was set up in the first place.

2. Duty of Diligence: Directors and trustees can't knowingly agree to or support actions by the company
that are clearly against the law, or act recklessly or carelessly when making decisions for the company.

3. Duty of Loyalty: Directors and trustees can't have personal interests that conflict with their
responsibilities to the company. They need to put the interests of the company first, ahead of their own
personal gain.

As a whole, these duties ensure that directors and trustees act responsibly, honestly, and in the best
interests of the company and its stakeholders. They need to follow the company's goals, avoid breaking
the law, and prioritize the company's success over their own personal interests.
30TH SLIDE
Doctrine of Corporate Opportunity

The Doctrine of Corporate Opportunity is a rule that says if a director of a company finds a good business
opportunity that the company could take advantage of, they can't take it for themselves. Instead, they
have to offer it to the company first.

Here's how it works:

- If the company has enough money to do the business opportunity,
- If the opportunity fits with what the company does, and would be good for the company,
- And if the company has some kind of interest or expectation in that opportunity,

then the director can't keep it for themselves. Even if they invested their own money into it, they still have
to give the opportunity to the company. If they don't, and they make a profit from it, they have to give
that profit back to the company, unless the company agrees to let them keep it.

31ST SLIDE
Doctrine of Corporate Opportunity cont.

The Doctrine of Corporate Opportunity is a rule that says if an officer or director of a company finds a
good opportunity that could benefit the company, they can't take it for themselves. Even if they plan to
use their own money, taking the opportunity would create a conflict of interest between them and the
company.
If they do take the opportunity, they're breaking the rule and must give any profits they make back to the
company. They'll also be held responsible for any benefits the company would have gained if they hadn't
taken the opportunity for themselves.

32ND SLIDE
Creation of Executive Committee

Here's a simple explanation of creating an Executive Committee:

1. Creating the Committee: The company's rules (called by-laws) can say that an Executive Committee will
be formed. This committee will have at least 3 members from the Board of Directors, and the Board will
choose who these members are.

2. What the Committee Can Do: The Executive Committee can make decisions on certain matters that are
within the authority of the Board. These matters can be specified in the by-laws, or the Board can vote
and give the committee authority on a particular issue.

As a whole, creating an Executive Committee allows the company's Board of Directors to delegate some of
its responsibilities to a smaller group, making decision-making more efficient.

33RD SLIDE
Special Committees

Special Committees are groups of people that the Board of Directors can set up for specific purposes.
These committees can be either temporary, meaning they exist for a short time, or permanent, meaning
they're around for the long haul. The Board gets to decide who's on these committees, how long they
serve, how they're paid, and what they're in charge of.

As a whole, this means that the Board can delegate certain tasks or decisions to these committees,
allowing them to focus on specific issues or projects without having to handle everything themselves. It's
a way for the Board to divide up the work and make sure everything gets done efficiently.

34TH SLIDE
Limitations on Its Power

Here's a simple explanation of the limitations on the power of the Executive Committee:

The Executive Committee, a group within the company, can't handle certain important tasks on its own.
These tasks include:
- Things that need approval from the shareholders, who are the owners of the company.
- Filling up any empty spots on the Board of Directors.
- Changing or making new rules for how the company operates, called by-laws.
- Changing or canceling any decisions made by the Board of Directors that can't be changed or canceled
according to the rules.
- Deciding how much money the company gives out as cash dividends to its shareholders.
- Doing anything that would make the Board of Directors useless or not responsible for what happens in
the company.

So, the Executive Committee has its limits—it can't do everything the Board of Directors can do. This is to
make sure that important decisions are made by the right people and that everyone's interests are
protected.