Does a Deceased Supervisory Board Member Need to be Replaced Immediately?
According to Clause 1, Article 163 of the Law on Enterprises 2014: The Supervisory Board of a joint-stock company shall consist of 03 to 05 members, the term of office of Supervisors shall not exceed 05 years, and Supervisors may be re-elected for an unlimited number of terms.
At the same time, Point b, Clause 3, Article 136 of the Law on Enterprises 2014 states that the Board of Directors must convene an extraordinary shareholders' meeting in the event that the number of remaining members of the Supervisory Board is less than the prescribed number.
Therefore, in your case, your company is missing 1 member in the Supervisory Board due to one person's death. The Board of Directors of your company is required to convene an extraordinary shareholders' meeting to elect an additional member to the Supervisory Board.
According to Clause 2, Article 135 of the Law on Enterprises 2014, the General Meeting of Shareholders has the following rights and obligations:
- Approving the company's development orientation;
- Deciding the type of shares and the total number of shares of each type to be offered; deciding the annual dividend rate for each type of share;
- Electing, dismissing, and removing members of the Board of Directors and Supervisory Board members;
The voting for members of the Supervisory Board must be conducted by the cumulative voting method as prescribed in Clause 3, Article 144 of the Law on Enterprises 2014, according to which:
“Each shareholder has a total number of voting rights corresponding to the total number of shares owned multiplied by the number of members to be elected to the Board of Directors or the Supervisory Board, and shareholders have the right to accumulate all or part of their total votes for one or several candidates. The members elected to the Board of Directors or the Supervisory Board are determined based on the highest number of votes from highest to lowest, starting from the candidate with the highest number of votes until the required number of members as prescribed in the company charter is met.”
Therefore, according to the current legal regulations, to elect a new member of the Supervisory Board, the company must follow the cumulative voting method at the shareholders' meeting and no other method is allowed.
Sincerely!
