Regulations on term of office and quantity of members of the Board of Directors in joint stock companies in Vietnam

Regulations on the Board of Directors in joint stock companies in Vietnam

Pursuant to Article 153 of the Law on Enterprises 2020, the Board of Directors is the managerial body of the company and has the right to make decisions on behalf of the company, perform rights and obligations of the company, except the rights and obligations of the GMS.

The Board of Directors has the following rights and obligations:

- Decide the company’s medium-term development strategies and annual business plans;

- Propose the types of authorized shares and quantity of each type;

- Decide sale of certain types of unsold authorized shares; decide other methods of raising capital;

- Decide selling prices for the company’s shares and bonds;

- Decide repurchase of shares as prescribed in Clause 1 and Clause 2 Article 133 of the Law on Enterprises 2020;

- Decide the investment plan and investment projects within its jurisdictions and limitations prescribed by law;

- Decide solutions for market development, marketing and technology;

- Approve sale contracts, purchase contracts, borrowing contracts, lending contracts, other contracts and transactions that are worth at least 35% of the total assets written in the latest financial statement, unless another ratio or value is specified in the company's charter; contracts and transactions within the jurisdiction of the GMS as prescribed in Point d Clause 2 Article 138, Clause 1 and Clause 3 Article 167 of the Law on Enterprises 2020.

- Elect, dismiss the President of the Board of Directors; designate, dismiss, enter into and terminate contracts with the Director/General Director and other key executives specified in the company's charter; decide salaries, remunerations, bonuses and other benefits of these executives; designate authorized representatives to participate in the Board of Members or GMS of another company; decide their remunerations and other benefits;

- Supervise the Director/General Director and other executives managing the company’s everyday business;

- Decide the company’s organizational structure, rules and regulations; establishment of subsidiary companies, branches and representative offices; contribution of capital to and purchase of shares of other enterprises;

- Approve the agenda and documents of the GMS; convene the GMS or carry out surveys for the GMS to ratify its resolutions;

- Submit annual financial statements to the GMS;

- Propose the dividends; decide the time and procedures for paying dividends or settling business losses;

- Propose reorganization or dissolution of the bankruptcy; file bankruptcy of the company;

- Other rights and obligations prescribed by Law and the company's charter.

The Board of Directors shall ratify its resolution and decisions by voting at the meeting, questionnaire survey or another method specified in the company's charter. Each member of the Board of Directors shall have one vote.

In case a resolution or decision is ratified by the Board of Directors against regulations of law or a resolution of the GMS or the company’s charter and causes damage to the company, the members that vote for the ratification of such resolution or decision shall be jointly responsible for it and pay compensation for the company; the members that vote against such resolution or decision shall not be held responsible. In this case, the company’s shareholders are entitled to request the court to suspend or invalidate the resolution or decision.

Regulations on term of office and quantity of members of the Board of Directors in joint stock companies in Vietnam (Internet image)

Term of office and quantity of members of the Board of Directors in Vietnam

Pursuant to Article 154 of the Law on Enterprises 2020, the Board of Directors shall have 03 – 11 members. The specific quantity of members shall be prescribed by the company's charter.

The term of office of a member of the Board of Directors shall not exceed 05 years without term limit. An individual may only be elected independent member of the Board of Directors of a company for up to 02 continuous terms.

In case the term of office of all members of the Board of Directors ends at the same time, they shall remain members of the Board of Directors until new members are elected and take over their jobs unless otherwise prescribed by company's charter.

The company's charter shall specify the quantity, rights, obligations of independent members of the Board of Directors; method for organizing and coordinating their activities.

Mai Thanh Loi

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