The rights and obligations of the Chairman of the Board of Directors according to the law Law

If the Chairman of the Board of Directors of a company has just passed away suddenly, how long after the death of the chairman will it take to re-elect a new chairman? How are the rights and obligations of the Chairman of the Board of Directors regulated?

1. What is the Board of Directors?

According to Article 153 of the Law on Enterprises 2020, the Board of Directors is regulated as follows:

– The Board of Directors is the company’s management body, 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. Dong.

– The Board of Directors has the following rights and obligations:

+ Decide on the company’s strategy, medium-term development plan and annual business plan;

+ Recommend the types of shares and the total number of shares authorized to be offered for sale of each type;

+ Decide to sell unsold shares within the number of shares The portion authorized to be offered for sale of each type; decide to mobilize additional capital in other forms;

+ Decide on the selling price of the company’s shares and bonds;

+ Decide to repurchase shares according to the provisions of Clauses 1 and 2, Article 133 of this Law;

+ Decide on investment plans and investment projects within the authority and limits prescribed by law law;

+ Decide on solutions for market development, marketing and technology;

+ Approve contracts to buy, sell, borrow, lend and other contracts and transactions with a value of 35% or more of the total asset value recorded in the company’s most recent financial report, unless the company’s charter stipulates a different ratio or value and the contract and transaction fall under the decision-making authority of the company. The General Meeting of Shareholders according to the provisions of Point d, Clause 2, Article 138, Clauses 1 and Clause 3, Article 167 of this Law;

+ Election, dismissal, dismissal of the Chairman of the Board of Directors; appoint, dismiss, sign contracts, terminate contracts with the Director or General Director and other important managers as prescribed by the company’s Charter; decide on salaries, remunerations, bonuses and other benefits of those managers; appoint authorized representatives to participate in the Board of Members or General Meeting of Shareholders in other companies, decide on the remuneration and other benefits of those people;

+ Supervise and direct the Director or General Director and other managers in operating the company’s daily business;

+ Decide on the company’s organizational structure, internal management regulations, and decide on the establishment of the company subsidiaries, branches, representative offices and capital contributions and share purchases of other enterprises;

+ Approve the agenda and content of documents for the General Meeting of Shareholders, convene a General Meeting of Shareholders or collect opinions for the General Meeting of Shareholders to pass a resolution;

+ Submit annual financial reports to the General Meeting of Shareholders;

+ Recommendations dividend rate to be paid; decide on the time limit and procedures for paying dividends or handling losses arising during the business process;

+ Proposing the reorganization or dissolution of the company; request bankruptcy of the company;

+ Other rights and obligations according to the provisions of this Law and the company’s Charter.

– The Board of Directors passes resolutions and decisions by voting at meetings, collecting opinions in writing or in other forms prescribed by the company’s Charter. Each member of the Board of Directors has one vote.

– In case a resolution or decision passed by the Board of Directors is contrary to the provisions of law, the resolutions of the General Meeting of Shareholders, or the Company’s Charter, causing damage to the company, the members who approve the resolution or decision must jointly bear personal responsibility for that resolution or decision and must compensate the company for damage; Members who oppose the adoption of the above resolutions and decisions are exempted from liability. In this case, the company’s shareholders have the right to request the Court to suspend the implementation or cancel the above resolutions and decisions.

2. What are the rights and obligations of the Chairman of the Board of Directors?

According to Clause 3, Article 156 of the Law on Enterprises 2020, the provisions on the Chairman of the Board of Directors are as follows:

“Article 156. Chairman of the Board of Directors

[…]

3. The Chairman of the Board of Directors has the following rights and obligations:

a) Prepare programs and operational plans of the Board of Directors;

b) Prepare programs, contents, and documents for meetings; convene, chair and chair meetings of the Board of Directors;

c) Organize the adoption of resolutions and decisions of the Board of Directors;

d) Supervise the process of organizing the implementation of resolutions and decisions of the Board of Directors;

dd) Chair the meeting of the General Meeting of Shareholders Dong;

e) Other rights and obligations according to the provisions of this Law and the Company’s Charter.

[…]”

Accordingly, the Chairman of the Board of Directors has the following rights and obligations:

– Establishing programs and operational plans of the Board of Directors;

– Prepare the agenda, content, and documents for meetings; convene, chair and chair meetings of the Board of Directors;

– Organize the adoption of resolutions and decisions of the Board of Directors;

– Supervise the process of organizing the implementation of resolutions and decisions of the Board of Directors;

– Chair the meeting of the General Meeting of Shareholders Dong;

– Other rights and obligations according to the provisions of this Law and the Company’s Charter.

3. If the Chairman of the Board of Directors suddenly passes away, how long does it take to re-elect a new Chairman?

According to Clause 1, Article 157 of the Law on Enterprises 2020, it is stipulated as follows: following:

“Article 157. Meeting of the Board of Directors

1. The Chairman of the Board of Directors is elected at the first meeting of the Board of Directors within 07 working days from the end of the election of that Board of Directors. This meeting is convened and chaired by the member with the highest number of votes or the highest percentage of votes. In case there is more than one member with the highest and equal number of votes or percentage of votes, the members vote according to the majority principle to select 01 person among them to convene a meeting of the Board of Directors.

[…]”

According to the above regulations, it is specified how long the company must elect a new Chairman of the Board of Directors, from the date the Chairman of the Board of Directors dies. Which Chairman The Chairman of the Board of Directors is elected at the first meeting of the Board of Directors within 07 working days from the end of the election of that Board of Directors.

At the same time, in Clause 4, Article 156 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 156. Chairman of the Board of Directors

[…]

4. In case the Chairman of the Board of Directors is absent or unable to perform his duties, he must authorize in writing another member to exercise his rights and duties. Obligations of the Chairman of the Board of Directors according to the principles stipulated in the Company’s Charter. In case there is no authorized person or the Chairman of the Board of Directors dies, is missing, is detained, is serving a prison sentence, is serving administrative measures at a compulsory drug treatment facility, compulsory educational establishment, escapes from the place of residence, has limited or lost civil act capacity, has difficulty in cognition or behavior control, is banned from holding a position or practicing a profession by the Court, or To do a certain job, the remaining members elect one person among the members to hold the position of Chairman of the Board of Directors according to the principle that the majority of the remaining members agree until there is a new decision of the Board of Directors.

[…]”

Thus, the first thing the Board of Directors usually does is to elect a person to temporarily hold the position of Chairman; After that, there are 2 options:

– The Board of Directors or shareholders or directors can request to convene an extraordinary General Meeting of Shareholders to re-determine the members of the Board of Directors, thereby re-electing a replacement Chairman of the Board of Directors.

– Wait until the Annual General Meeting of Shareholders to make additions.