Standards and conditions for being a member of the Board of Directors of a Joint Stock Company according to the law

1. What are the standards and conditions for being a member of the Board of Directors of a Joint Stock Company?

Pursuant to Article 155 of the Law on Enterprises 2020 stipulates the organizational structure, standards and conditions for being a member of the Board of Directors as follows:

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

+ Not subject to provisions in 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;

+Members of the Board of Directors of a company can simultaneously be members 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 in case an independent member of the Board of Directors no longer meets the standards.

Accordingly, the standards and conditions to become a member of the Board of Directors are:

+ Not subject to provisions in 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.

2. What are the salaries, remunerations and other benefits of members of the Board of Directors?

According to Article 163 of the Law on Enterprises 2020 stipulations on salaries, remunerations, bonuses and other benefits of members of the Board of Directors are as follows:

– The company has the right to pay remuneration and bonuses to members of the Board of Directors, pay salaries and bonuses to the Director or General Director and other managers according to business results and efficiency.

– If the company charter does not provide otherwise, the salaries, remunerations, bonuses and other benefits of members of the Board of Directors, Director or General Director are paid according to the following regulations:

+ Board members receive remuneration and bonuses. Remuneration for work is calculated according to the number of work days needed to complete the duties of a member of the Board of Directors and the remuneration rate per day. The Board of Directors estimates the remuneration for each member according to the principle of consensus. The total remuneration and bonus of the Board of Directors is decided by the General Meeting of Shareholders at the annual meeting;

+ Members of the Board of Directors are paid meals, accommodation, travel and other reasonable expenses when performing assigned tasks;

+ Director or General Director is paid salary and bonus. The salary and bonus of the Director or General Director are decided by the Board of Directors.

– The remuneration of each member of the Board of Directors, the salary of the Director or General Director and other managers are included in the company’s business expenses in accordance with the law on corporate income tax, shown in a separate section in the company’s annual financial report and must be reported to the General Meeting of Shareholders at the regular meeting. year.

Accordingly, the company has the right to pay remuneration and bonuses to members of the Board of Directors according to business results and efficiency. The remuneration of each member of the Board of Directors is included in the company’s business expenses according to the provisions of the law on corporate income tax, shown as a separate item in the company’s annual financial report and must be reported to the General Meeting of Shareholders at the annual meeting.

3. Is it possible to be a member of the Board of Directors in the same joint stock company for two consecutive terms?

Pursuant to Article 154 of the Law on Enterprises 2020, which stipulates the term and number of members of the Board of Directors as follows:

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

1. Association 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.

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 specifically stipulates the number, rights, obligations, organization and coordination of activities of independent members of the Board of Directors.”

Accordingly, the term of office 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 may only be elected as an independent member of the Board of Directors of a company for no more than 02 consecutive terms.