Process for appointing members of the Board of Directors of a joint stock company?

Who has the authority to elect members of the Board of Directors of a joint stock company?

Pursuant to Article 138 of the Law on Enterprises 2020 on the rights and obligations of the General Meeting of Shareholders as follows: following:

Rights and obligations of the General Meeting of Shareholders

1. The General Meeting of Shareholders includes all shareholders with voting rights and is the highest decision-making body of a joint stock company.

2. The General Meeting of Shareholders has the following rights and obligations:

a) Approve the company’s development orientation;

b) Decide on the types of shares and the total number of shares of each type that can be offered for sale; Decide on the annual dividend level of each type of share;

c) Elect, dismiss, dismiss members of the Board of Directors and Controllers;

d) Decide to invest or sell assets with a value of 35% or more of the total asset value recorded in the company’s most recent financial report, except in cases where the company charter stipulates a ratio or value other;

d) Decision to amend and supplement the company charter;

e) Approve the annual financial report;

Thus, the election, dismissal, and removal of members of the Board of Directors is the responsibility of the General Meeting of Shareholders.

What is the process for appointing members of the Board of Directors of a joint stock company?

As analyzed above, because the election, dismissal, and dismissal of members of the Board of Directors falls under the authority of the General Meeting of Shareholders, according to the provisions of Article 139 of the 2020 Enterprise Law, a joint stock company must organize a General Meeting of Shareholders.

On the other hand, if the number of remaining members of the Board of Directors is less than the minimum number of members as prescribed by law, the Board of Directors will convene an extraordinary meeting of the General Meeting of Shareholders as prescribed in Point b, Clause 1, Article 140 of the 2020 Enterprise Law.

The process of electing members of the Board of Directors of a joint stock company is carried out as follows:

Step 1: The convener of the General Meeting of Shareholders prepares a list and detailed information of the candidates in case of electing members of the Board of Directors (based on Point d, Clause 5, Article 140 of the Law on Enterprises 2020)

Step 2: Conduct a General Meeting of Shareholders to vote on the appointment of board members

Step 3: Voting to approve the resolution of the General Meeting of Shareholders on electing members of the Board of Directors.

According to Clause 3, Article 148 of the Law on Enterprises 2020, the procedure for electing members of the Board of Directors is prescribed as follows:

– Voting to elect members of the Board of Directors must be carried out by cumulative voting method:

Accordingly, each shareholder has a total number of votes corresponding to the total number of shares owned multiplied by the number of elected members of the Board of Directors and shareholders have the right to give all or part of their total votes to one or several candidates.

– The elected member of the Board of Directors is determined by the number of votes counted from high to low, starting from the candidate with the highest number of votes until the number of members specified in the company’s Charter is reached.

– In case there are 02 or more candidates with the same number of votes for the last member of the Board of Directors, re-election will be conducted among the candidates with an equal number of votes or selected according to the criteria specified in the election regulations or the company’s Charter.

Is the charter of a joint stock company required to specifically stipulate the number of members of the Board of Directors?

Basics Pursuant to Article 154 of the 2020 Enterprise Law, it is stipulated on the term and number of members of the Board of Directors as follows:

Term of office and number of members of the Board of Directors

1. The Board of Directors has from 3 to 11 members. The company charter specifies the number of members of the Board of Directors.

2. The term of a member of the Board of Directors shall not exceed 05 years and may be re-elected for an unlimited number of terms. An individual can only be elected as an independent member of the Board of Directors of a company for no more than 02 consecutive terms.

3. In case all members of the Board of Directors end their terms at the same time, those members will continue to be members of the Board of Directors until a new member is elected to replace them and take over the work, unless otherwise stipulated in the company charter.

4. The company charter specifies the number, rights, obligations, organization and coordination of activities of independent members of the Board of Directors.

Thus, based on the above regulations, the company charter specifies the number of members of the Board of Directors.

Note: The law stipulates that the Board of Directors has from 03 to 11 members.