Tiếng Việt
中文Short answer: A member of the Board of Directors (BOD) must satisfy the standards in Article 155 of the Law on Enterprises 2020: not falling under the categories prohibited from managing enterprises; having professional qualifications and experience in business administration or in the company’s sector; not necessarily being a shareholder. The BOD of a joint stock company has from 03 to 11 members (Article 154).
Legal basis
- Law on Enterprises 2020 (Articles 153, 154, 155, 137).
Standards and conditions for BOD membership
Under Article 155 of the Law on Enterprises 2020, a BOD member must satisfy the following standards and conditions:
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- Not falling under the categories prescribed in Clause 2, Article 17 (persons without the right to establish or manage enterprises, such as officials, civil servants, persons with limited civil act capacity, etc.);
- Having professional qualifications and experience in business administration or in the company’s business sector; not necessarily being a shareholder, unless the company charter provides otherwise;
- May simultaneously be a BOD member of another company;
- For state-owned enterprises and subsidiaries of state-owned enterprises: a BOD member may not be a family member of the Director, General Director, or other managers of the company or its parent company.
Standards for independent BOD members
Under Clause 2, Article 155 (except where securities law provides otherwise), an independent BOD member of a company prescribed at Point b, Clause 1, Article 137 must:
- Not currently be and not have been employed by the company, its parent company, or its subsidiaries in the 03 consecutive preceding years;
- Not receive salary or remuneration from the company (except BOD allowances as prescribed);
- Have no family relationship (spouse, parents, children, siblings) with major shareholders or managers of the company or its subsidiaries;
- Not directly or indirectly own 01% or more of the total voting shares;
- Not have been a BOD or Board of Supervisors member of the company in the 05 consecutive preceding years (except for continuous appointment for 02 terms);
- An individual may be elected as an independent BOD member of a company for no more than 02 consecutive terms.
How many members does the Board of Directors have?
Under Article 154 of the Law on Enterprises 2020: the BOD has from 03 to 11 members; the company charter prescribes the specific number. The term of a BOD member does not exceed 05 years and may be re-elected without term limits.
Frequently asked questions
May a non-shareholder serve as a BOD member?
Yes, unless the company charter provides otherwise.
May a BOD member concurrently serve as Director?
The Law on Enterprises 2020 does not prohibit this; however, the company charter or specialized laws (for example, for public companies or credit institutions) may restrict it. Check the charter and applicable specialized regulations.
To review your BOD structure and member standards for compliance, you should contact ANT Legal’s lawyers at 0966.475.966 for review and advice before proceeding.
