What standards and conditions are needed to become a member of the Board of Directors? How many members does the Board of Directors have?

What is the Board of Directors?

According to Clause 1, Article 153 of the Law on Enterprises 2020, the Board of Directors 2020 regulates the Board of Directors as follows:

“Article 153. Board of Directors

1. The Board of Directors is the company’s management body, with full authority on behalf of the company to make decisions and exercise the rights and obligations of the company, except for the rights and obligations under the authority of the General Meeting of Shareholders.

Accordingly, the Board of Directors is the company’s management agency, with full authority on behalf of the company to decide and exercise the rights and obligations of the company, except for the rights and obligations under the authority of the General Meeting of Shareholders.

What standards and conditions do you need to meet to become a member of the Board of Directors?

According to Article 155 of the Law on Enterprises 2020, the organizational structure, standards and conditions for becoming a member of the Board of Directors are as follows:

– Members of the Board of Directors must have the following standards and conditions:

+ Not subject to the provisions of Clause 2, Article 17 of this Law;

+ Have professional qualifications and experience in business administration or in the company’s field, industry or business and do not necessarily have to be a shareholder of the company, unless otherwise stipulated in the company’s charter;

+ A member of the Board of Directors of a company can simultaneously be a member of the Board of Directors of another company;

+ For state-owned enterprises as prescribed in Point b, Clause 1, Article 88 of this Law and subsidiaries of state-owned enterprises as prescribed in Clause 1, Article 88 of this Law, members of the Board of Directors must not be family members of the Director, General Director and other managers of the company; of the manager, the person with authority to appoint managers of the parent company.

– Unless otherwise prescribed by securities laws, independent members of the Board of Directors as prescribed in Point b, Clause 1, Article 137 of this Law must have the following standards and conditions:

+ Not a person working for the company, parent company or subsidiary of the company; not be a person who has worked for the company, parent company or subsidiary of the company for at least 3 consecutive years;

+ Not be a person receiving salary or remuneration from the company, except for the allowances that members of the Board of Directors are entitled to according to regulations;

+ Not a person whose spouse, biological father, adoptive father, biological mother, adoptive mother, biological child, adopted child, biological brother, biological sister, or younger sibling is a major shareholder of the company; is a manager of the company or a subsidiary of the company;

+ Not a person who directly or indirectly owns at least 01% of the company’s total voting shares;

+ Not be a person who has served as a member of the Board of Directors or Supervisory Board of the company for at least the previous 5 consecutive years, unless appointed for 2 consecutive terms.

– Independent members of the Board of Directors must notify the Board of Directors of no longer meeting the standards and conditions specified in Clause 2 of this Article and of course no longer be independent members of the Board of Directors from the date of not fully meeting the standards and conditions. The Board of Directors must notify the case of an independent member of the Board of Directors that no longer meets the standards and conditions at the nearest General Meeting of Shareholders or convene a meeting of the General Meeting of Shareholders to elect additional or replace independent members of the Board of Directors within 06 months from the date of receiving the notice from the relevant independent member of the Board of Directors.

How many members must the Board of Directors in a joint stock company have?

According to Article 154 of the Law on Enterprises 2020, the terms and number of members of the Board of Directors are stipulated as follows:

“Article 154. Term and number of members of the Board of Directors

1. The Board of Directors has from 03 to 11 members. The company charter specifies the number of members of the Board of Directors.

2. The term of the Board of Directors is not more than 05 years and can 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 continue.

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 and take over the work, unless otherwise stipulated in the Company’s Charter.

4. The Company’s Charter specifies the number, rights, obligations, organization and coordination of activities of independent members. establish a Board of Directors.”

Accordingly, the Board of Directors has from 03 to 11 members. The company charter specifies the number of members of the Board of Directors.