9.
Do directors have to be employees of the company? Can shareholders inspect
directors' service contracts?
France
Law stated as at 01-Apr-2011
Unitary
structure. A director is prohibited from
entering into an employment contract. However, an employee can, under certain
circumstances, be appointed as director. The employment contract must
correspond to an actual position and cover specific non-managerial duties for
which the relevant person is in a subordinate position with regard to the
company. The number of directors employed by the company is limited to
one-third of the total.
Dual
structure. An employee can become a member of
the company's management board and vice versa. The employment contract must
correspond to an actual position and cover specific non-managerial duties for
which the relevant person is in a subordinate position with regard to the
company. Up to one-third of supervisory board members can simultaneously hold
employment contracts. A supervisory board member can enter into an employment
agreement with the company before or after becoming a member of the supervisory
board.
For
listed companies, the AFEP-MEDEF code recommends that a manager should
terminate his employment contract on becoming a director or board member.
Directors'
employment contracts and any material amendments to them, as regulated
agreements, require the prior approval of the board of directors or supervisory
board and disclosure to the statutory auditors. A shareholders' meeting
subsequently ratifies the agreements.
Germany
Law stated as at 01-Apr-2011
Management
board members generally have a service contract with the company in addition to
being appointed to the management board. However, they are not considered as
employees of the company as they provide independent services. Supervisory
board members elected or appointed by the shareholders generally do not have
service contracts with the company besides their appointment to the supervisory
board. Employee representatives serving as members of the supervisory board
generally continue to be party to their regular employment agreements.
Shareholders
generally cannot inspect the service agreements of the management board members
(see alsoQuestion 11).
India
Law stated as at 01-Apr-2011
Directors
do not become employees of a company simply by virtue of directorship. However,
if a director has been appointed for a dual role (for example, of a manager and
a director or a managing director), the director will be considered to be an
employee of a company.
The
shareholders cannot inspect directors' service contracts.
The Netherlands
Law stated as at 01-Dec-2012
There are no statutory restrictions on directors'
terms of appointment. In large companies, a supervisory board member must
resign no later than four years after he is appointed. However, a supervisory
board member can be reappointed and there is no limit on the number of times he
can be reappointed.
The
CGC recommends that a management board member be appointed for a maximum period
of four years and that he be reappointed for a term of no more than four years
at a time. The CGC recommends that a person be appointed to the supervisory
board for a maximum of three four-year terms.
UK (England and Wales)
Law stated as at 01-Apr-2011
There
is no requirement in UK law for directors to be employees of the company on
whose board they serve.
Shareholders
of a company have a right to inspect the service contracts of directors without
payment of any charge. (If there is no written contract, a memorandum of the
agreed terms should be kept and be available for inspection.) Copies should be
supplied on payment of a prescribed fee. The Code also recommends that the
terms of appointment of non-executive directors should be available for
inspection at the company's registered office and 15 minutes before and during
its AGM.
United States
Law stated as at 01-Dec-2012
Term limits for directors are relatively uncommon,
although Delaware’s General Corporation Law allows a corporation’s certificate
of incorporation or bye-laws to prescribe various qualifications for directors,
including the term of appointment. While 72 of the Top 100 US Companies discuss
the topic of term limits for directors in their proxy statements, only five
have adopted mandatory term limits (2012 S&S Corporate Governance Survey).
France
Law stated as at 01-Apr-2011
There is no legal requirement for directors or
supervisory board members to own shares in their company, although this may be
required by the bye-laws.
Germany
Law stated as at 01-Apr-2011
Management board members are not required to own
shares in the company. They are, however, allowed to own shares in the company
and the articles of association can determine that they have to own a certain
amount of shares. If they own company shares, they are subject to disclosure
obligations and restrictions concerning insider trading under the WpHG. The
same applies for members of the supervisory board (see Question 21).
India
Law stated as at 01-Apr-2011
There is no mandatory requirement for directors to own
shares in the company. However, the articles of association can provide that
the director must procure the required shares within two months from the
appointment.
The Netherlands
Law stated as at 01-Dec-2012
It
is not necessary for managing directors to be employees of the company.
Generally, a managing director who receives a salary and performs work
regularly is considered to be an employee of the company. A supervisory
director usually performs incidental work for the company and is therefore not
considered an employee.
The
Amendment Management and Supervision provides that a managing director of a
listed public company will never be considered an employee or have an
employment contract.
The
general meeting is entitled to all company information that it requests, unless
that disclosure conflicts with the company's material interest. This can
include the directors’ service contracts. Individual shareholders have the
right to request this information during the general meeting. However, in
principle they do not have the right to demand specific information outside of
the general meeting except for special circumstances.
UK (England and Wales)
Law stated as at 01-Apr-2011
There are no restrictions in law on a director owning
shares in a company. A company's articles may require a director to own shares
in the company, but this is not common.
United States
Law stated as at 01-Dec-2012
Directors
do not have to be employees of the corporation. In fact, under the NYSE and
Nasdaq listing standards, a majority of the board must be comprised of
independent directors. In order to be considered independent, the director
cannot be, nor have been within the last three years, an employee of the
corporation.
Federal
securities law requires extensive disclosure concerning directors’ compensation
arrangements, as well as related party transactions between the directors and
the corporation. Public companies must disclose material transactions that
exceed US$120,000 between the company and certain related parties, including
directors. In addition, public companies must disclose their policies and
procedures used in reviewing and approving these related-party transactions.
11. How is directors' remuneration determined? Is its
disclosure necessary? Is shareholder approval required?
France
Law stated as at 01-Apr-2011
To
comply with professional corporate governance guidelines, many (mostly listed)
companies have established compensation committees to determine the criteria
applicable to the remuneration of corporate officers.
Unitary
structure. A lump-sum amount of fees (jetons de
présence) for the entire board is approved each year by the shareholders'
meeting, which the board then divides among its members. Board members cannot
receive any other compensation for their board activity. The board may also
allocate exceptional remuneration to certain directors for special assignments.
The
compensation of the chairman and CEO is set by the board of directors.
Dual
structure. The remuneration of management board
members is set by the supervisory board. The fees payable to supervisory board
members are allocated in a similar manner to directors' fees.
In
listed companies, the AFEP-MEDEF code stipulates that remunerations and
benefits of any kind (including golden parachutes) granted to the chairman,
CEO, deputy CEO or a member of the management board must be disclosed to the
shareholders and linked to the beneficiary's performance, and that golden
parachute arrangements are not acceptable in distressed companies.
Companies
with more than 200 employees must disclose the global amount of compensation
paid to the five highest-paid individuals, as certified by the statutory
auditors, before the general shareholders' meeting.
Fees
paid to directors and supervisory board members are approved each year by the
general shareholders' meeting.
In
listed companies, bonuses and golden parachutes for corporate officers and
board members must comply with the procedure applicable to related-party
agreements and be approved by the board and ratified by shareholders.
Germany
Law stated as at 01-Apr-2011
The
entire supervisory board is in charge of determining the remuneration of the
management board. The supervisory board must follow certain criteria for the
appropriateness of the remuneration, such as:
· Performance appraisals.
· Duties of the specific member.
· The economic situation.
· The company's success and future prospects.
· The trends for remuneration in comparable companies.
The
remuneration of the supervisory board members is determined by the articles of
association and the shareholders' meeting.
The
total remuneration of both the management and the supervisory board must be
disclosed (HGB). Listed companies must disclose the individual remuneration
of the management board members. This disclosure must provide the
success-related and non-success-related components of the remuneration. The
shareholders' meeting can opt out of these disclosure rules. The DCGK
recommends that the individual remuneration of the supervisory board members
should also be disclosed.
Shareholder
approval of the remuneration of management board members is not legally
required. In listed companies, the shareholders' meeting has the right to
approve the remuneration system for the management board ("say on
pay" resolution). However, this approval or the refusal of an approval has
no legal effect.
India
Law stated as at 01-Apr-2011
The
Act sets out provisions relating to the remuneration of a whole-time director
or a managing director of a public company (Schedule XIII). If a listed
company or its subsidiary does not make profits and the remuneration exceeds
the limits set out in Schedule XIII, the prior approval of the central
government is required.
There
are no limits on the managerial remuneration of directors of private companies.
However, if a director is also an employee of the company (see Question 9) and his remuneration exceeds the prescribed limits
set out in section 217 of the Act read with Companies (Particulars of
Employees) Rules 1975, that must be disclosed in the directors' report.
Listed
companies must disclose the remuneration of the directors. In relation to a
private company or an unlisted company, if the director is an employee of the
company, the remuneration must be disclosed in the directors' report if it
exceeds the prescribed limits.
The
shareholders' approval is required for the remuneration of a whole-time
director or a managing director of a public company.
The Netherlands
Law stated as at 01-Dec-2012
The
CGC recommends that shares held by directors in a listed company should be
considered a long-term investment and that shares granted to a managing
director should in principle be based on performance criteria (achieving an
increase in turnover, for example). Share options should not be exercised
within three years of issuance and bonus shares should not be sold for at least
five years (lock-up). The CGC recommends that supervisory directors should not
be granted shares or share options in listed companies as remuneration.
UK (England and Wales)
Law stated as at 01-Apr-2011
The
remuneration of individual directors is a matter for the board to decide
(subject to dealing with any conflicts of interest that may arise). A Code
Provision requires the establishment of a remuneration committee comprising at
least three independent non-executive directors (or two if the company is
outside the FTSE 350), or an explanation why one does not exist.
The
committee should have full delegated authority to set executive directors' pay
packages and to decide the chairman's remuneration, with no reference back to
the board. This includes bonuses and incentive packages.
The
Code states that the pay of non-executive directors should be fixed by the
whole board, although this will commonly be done by a committee of the
executive directors.
All
UK companies (other than those categorised as being small) must disclose in
their annual report and accounts information on directors' remuneration, with
separate details for the highest paid director.
In
addition, listed companies must produce a directors' remuneration report
containing detailed information for each director including basic salary and
bonuses, share options, other long-term incentives and pensions, as well as any
compensation paid to former directors. The report must also disclose the
company's policy on director remuneration and a detailed summary of performance
conditions attaching to share options and other long-term incentives. The
Listing Rules contain further requirements for listed companies.
A
resolution to approve the directors' remuneration report must be proposed at
the company's annual general meeting, although failure to pass the resolution
has no effect on the report or the remuneration paid or payable to directors.
At most it is an embarrassment and a signal to the board to review and amend
its remuneration policies.
Most
employee share schemes and other long-term incentive schemes need to be
approved by shareholders.
United States
Law stated as at 01-Dec-2012
Directors are not required by law to own shares in the
corporation. Share and stock option ownership by directors is often encouraged,
and sometimes required by companies’ corporate governance guidelines (or
bye-laws), to align the directors’ own interests with those of the
corporation’s other shareholders. Federal securities law requires disclosure of
transactions by directors in the shares of the company in which they serve as a
director and imposes disgorgement of rights on sales of shares by directors
under certain circumstances.
Management rules and authority
12. How is a company's internal management regulated?
For example, what is the length of notice and quorum for board meetings, and the
voting requirements to pass resolutions at them?
France
Law stated as at 01-Apr-2011
The procedures for convening board meetings are freely
defined in the bye-laws and the frequency of such meetings is not determined by
law. Directors can either agree to meet at regular intervals or allow the
chairman to call meetings as necessary. However, the supervisory board must
meet at least four times per year in order to examine the management board's
quarterly report.
A
quorum of at least half of the present (including via videoconference) board of
directors or supervisory board members is required.
Decisions
are adopted on the basis of a simple majority of members present or
represented, although a higher majority can be stipulated in the bye-laws for
matters of particular importance.
The
quorum of the management board can be freely determined in the bye-laws.
Except
in certain circumstances (for example, the approval of the company's accounts)
or unless prohibited in the bye-laws, directors or supervisory board members
can attend board meetings via video or telephone conferencing.
Germany
Law stated as at 01-Apr-2011
The usual way for a management board to carry out
business is by written resolution passed at a board meeting and signed by all
members. As an alternative, oral, telephonic or electronic resolutions, as well
as resolutions by circulation, are possible. If the management board consists
of more than one member, a unanimous decision is required in relation to all
issues, unless the articles of association or the bye-laws provide for
different requirements, (for example, majority requirements or conferring
certain management powers on one management board member).
All
other aspects of board meetings are subject to the bye-laws of the management
board, which are also recommended by the DCGK but are not legally required.
India
Law stated as at 01-Apr-2011
Indian law does not prescribe the minimum length of
notice for a board meeting. However, there is a requirement to give prior
notice of a board meeting to all the directors.
The
quorum is two directors or one-third of the total number of directors,
whichever is higher. All resolutions at a board meeting can be passed by simple
majority, subject to certain exceptions.
The Netherlands
Law stated as at 01-Dec-2012
The
general meeting determines managing and supervisory directors' remuneration, although
the articles may provide otherwise. Remuneration for directors is not
mandatory. The articles of listed companies usually provide for the
determination of directors' remuneration by the supervisory board or its
specialised remuneration committee. A listed company must produce a policy on
the remuneration of managing directors at the responsibility of the supervisory
board, this policy must be approved by the general meeting. The CGC recommends
that the remuneration policy includes a clawback provision, whereby the
supervisory board may reclaim variable remuneration granted to managing
directors based on incorrect (financial) information.
Subject
to the DCC and unless disclosing such information can be traced back to one
natural person, all companies that are not exempted from the obligation to
publish the company's annual accounts must state in the explanatory notes to
their annual accounts the aggregate amount of remuneration for:
· The current and former supervisory board.
· The current and former management board.
The
notes should also specify the share option rights, loans, advance payments and
guarantees granted to the current supervisory board and management board.
In
addition to the above, public companies, except for a company limited by shares
whose articles exclusively provide for registered shares and contain transfer
restrictions, must state the amount of remuneration for each managing director
(including details of any shares and share options they hold in the company).
The
notes should specify the loans, advance payments and guarantees granted to each
member of the current supervisory board and management board of that company.
For
listed companies, the CGC:
· Recommends that the supervisory board prepares a
remuneration report on the company's remuneration policy in the previous and
the next financial year, including a description on specific severance payments
or extraordinary compensation awarded to managing directors during the current
financial year and the supporting arguments.
· Requires that the main elements of a managing
director's service contract, such as the amount of fixed salary and variable
remuneration components, are made public immediately after it is concluded.
See above, Determination
of directors' remuneration.
UK (England and Wales)
Law stated as at 01-Apr-2011
The internal management of a UK company is governed by
its articles of association. Therefore, a company is free to make its own rules
for internal management which may vary from one company to another.
There
is usually no fixed notice period in the articles for the calling of a meeting
of the board or of a board committee. Instead, it is for the board to decide
the length of notice required, and how notice may be given (whether in writing
or by word of mouth).
Similarly,
the quorum required for a board meeting is usually left to the board to decide,
although it is common for the articles to provide a default position of a
quorum of two if no figure is set by the board.
Any
notice should give an indication of the business to be considered.
The
articles may also allow an absent director to appoint an alternate to take his
place at a board meeting. The articles will dictate whether an alternate must
be another director, or whether the appointor has complete freedom to choose.
The
articles provide whether a valid board meeting may comprise directors who are
not physically present but who join the meeting by telephone or video link.
The
articles usually state that the business of the board is to be decided by
majority vote. Some companies may have requirements in their articles for a
certain majority to be achieved, or for particular directors who may represent
certain shareholders, to vote in favour of a resolution for it to be passed.
The
articles usually allow a resolution of the directors to be passed without a
board meeting if all the directors have agreed to it in writing.
United States
Law stated as at 01-Dec-2012
Generally,
unless otherwise restricted by the corporation’s certificate of incorporation
or bye-laws, the board can set the directors’ compensation, subject to its
common law fiduciary duties. This compensation may include cash, the
corporation’s shares or options on, or other derivatives of, the shares.
Director compensation is generally determined by the board compensation or
nominating/corporate governance committee.
Public
companies are required by the federal securities laws to disclose their
directors’ remuneration in their annual proxy statement or annual report filed
by the corporation with the SEC. There are separate requirements relating to
disclosure of share ownership.
SEC
rules require that investors receive a complete and accurate description of a
corporation’s director and executive compensation practices, including a
detailed discussion and analysis of its compensation decisions and its
philosophy on compensation in a section called “Compensation, Discussion and
Analysis” (CD&A).
NYSE
and Nasdaq listed companies must obtain shareholder approval of equity
remuneration plans covering directors. However, shareholder approval of
directors' cash compensation is not typically obtained.
In
recent years, shareholder activists have pressed companies to adopt certain
compensation-related measures, including "say-on-pay", a policy
allowing shareholders to annually pass a non-binding advisory resolution
regarding the pay of certain executive offices. In 2011, in response to the
Dodd-Frank Act, which mandated a wide range of corporate governance reforms,
the SEC adopted rules requiring that non-binding shareholder proposals be put
forth on all of the following:
· A say-on-pay vote on executive compensation.
· A vote on the frequency of the management say-on-pay
vote.
· A vote on “Golden Parachute” arrangements, which are
triggered in connection with certain change in control transactions.
13. Can directors exercise all the powers of the
company or are some powers reserved to the supervisory board (if any) or a
general meeting? Can the powers of directors be restricted and are such
restrictions enforceable against third parties?
France
Law stated as at 01-Apr-2011
Unitary
structure. The board of directors determines
the company's strategic direction and supervises its implementation. The CEO
has all powers to act in the company's name under all circumstances and
represents the company in its relations with third parties.
Dual
structure. The management board has all powers to act
in the company's name under all circumstances and its chairman represents the
company in its relations with third parties. The supervisory board operates as
a permanent supervision body over the management board.
The
powers of the CEO or management board can be restricted by the bye-laws or via
board resolutions. However, such restrictions are unenforceable against third
parties.
Germany
Law stated as at 01-Apr-2011
Management
board members are responsible for the management of the company's business and
can generally exercise all the powers of the company for that purpose. However,
the AktG reserves certain powers to the shareholders' meeting,
particularly in relation to fundamental decisions of the company (for example,
changes to the articles of association and decision on the company's
liquidation) (see Question 23). The AktG also reserves certain powers
to the supervisory board in relation to the appointment of the management board
members (see Question 7, Appointment of
directors) or actions that the company takes
against the management board. In addition, the supervisory board has approval
rights in relation to certain transactions as specified in the articles of
association or determined by the supervisory board (for example, transactions
of a certain size or importance to the company).
A
restriction of the powers of the management board of AGs is not valid in
relation to third parties. However, their powers can be restricted internally.
Violations of these internal restrictions can give rise to damages claims for
the company and dismissal. Shareholders' meetings of GmbHs can issue specific
instructions to their management to restrict the management board's powers.
India
Law stated as at 01-Apr-2011
The
directors of a company acting through the board can exercise all powers
relating to the management of a company's affairs, subject to the following:
· Certain powers require the shareholders' approval.
· Restrictions on the directors' powers under the
memorandum or articles of association of a company.
There
are certain powers which can be exercised by the board only at an actual board
meeting.
See
above, Directors' powers. If a director acts contrary to the applicable
restrictions, his actions will not bind the company.
The Netherlands
Law stated as at 01-Dec-2012
The management board adopts resolutions that are
passed by a simple majority of votes cast by its directors, unless the articles
state otherwise. The articles can provide that board resolutions:
· Must be adopted by a unanimous vote or by a qualified
majority of votes.
· Require the prior approval of another corporate body
of the company (see Question 14, Directors' powers).
The
articles can require a plenary meeting or a quorum for the management board to
adopt resolutions and may also set a notice period for board meetings. In
addition, the articles may provide for the adoption of resolutions outside
formal meetings and the use of electronic voting.
Each
managing director has one vote. The articles can give more than one vote to a
director who can be specified by either name or office. A single director
cannot cast more votes than the other directors combined.
UK (England and Wales)
Law stated as at 01-Apr-2011
The
articles of a UK company usually have a provision along the following lines:
"Subject to the provisions of the Companies Act and these Articles and to
any directions given by special resolution, the business of the Company shall
be managed by the Board which may exercise all the powers of the Company."
(A special resolution of shareholders requires the support of those holding 75%
of the company's shares by nominal value.) The Listing Rules require
shareholder consent for certain transactions.
There
is no supervisory board.
The
articles of a company may restrict the power of the directors and require them
to get shareholder support before taking certain steps. Any breach of those
terms will usually be a matter between the company and its directors and
shareholders, with third parties remaining unaffected. That is because, as far
as a third party dealing with the company in good faith is concerned, the
Companies Act 2006 provides that the power of the directors to bind their
company is free of any limitation in the company's constitution.
United States
Law stated as at 01-Dec-2012
A corporation’s certificate of incorporation and
bye-laws typically regulate internal management of the corporation and where
these documents are silent state law provides default rules.
Under
Delaware corporate law, a majority of the total number of directors constitutes
a quorum, and a vote of the majority of the directors present at a meeting at
which a quorum is present is required to take any valid actions. However, these
requirements can be altered by the certificate of incorporation or bye-laws,
with certain restrictions. The directors can also take valid actions without a
meeting (that is, by written consent), unless the certificate of incorporation
or bye-laws provide otherwise.
14. Can the board delegate responsibility for specific
issues to individual directors or a committee of directors? Is the board
required to delegate some responsibilities, for example for audit, appointment
or directors' remuneration?
France
Law stated as at 01-Apr-2011
In both unitary and dual structures, the board of
directors and supervisory board can delegate responsibility for specific issues
to specially-created committees whose members may or may not be directors or
supervisory board members. These committees cannot be involved in the company's
management or indirectly limit the statutory powers of the relevant board or
the CEO. In accordance with corporate governance codes of conduct, many listed
companies have created committees of this kind (for example, audit and
compensation committees).
Germany
Law stated as at 01-Apr-2011
Bye-laws of the management board often contain a broad
power of delegation, permitting the management board to delegate any of its
powers to individual members or committees. However, the supervisory board
committees play a more important role. Depending on the size of the supervisory
board (see Question 3, Number of directors or
members), audit committees and nomination
committees are recommended by the DCGK. A nomination committee can also prepare
remuneration issues, but the final decision must be taken by the full
supervisory board (see Question 11, Determination of
directors' remuneration).
India
Law stated as at 01-Apr-2011
The board can delegate responsibility for specific
issues to individual directors or a committee of directors. Every listed company
and unlisted public company with a paid-up share capital of more than INR50
million must have an audit committee. The audit committee must:
· Periodically discuss with the auditors internal
control systems and the scope of the audit, including the auditors'
observations.
· Review the half-yearly and annual financial statements
before submission to the board.
· Ensure compliance with the internal control systems.
Since
the directors are normally appointed at a board meeting (see Question 7, Appointment of directors), there is typically no committee formed for the
appointment of directors.
A
company may have a remuneration committee. A remuneration committee should
consist of at least three directors, all of whom should be non-executive
directors (the chairman of the committee must be an independent director).
The Netherlands
Law stated as at 01-Dec-2012
Generally,
the management board has full and unrestricted power to represent and bind the
company. The Flexible Private Company legislation introduced the right of a
different company body to give specific instructions to the management board,
if provided for in the articles (see Question 37). The managing board must follow these instructions,
unless the interest of the company or its business dictates otherwise.
The
articles can make management board resolutions subject to the approval of a
company body, such as the supervisory board or the general meeting. In large
companies, a number of management board resolutions are subject to the approval
of the supervisory board.
Generally,
a share-related decision, for example the issue of shares, reduction of issued
capital, acquisition of shares by the company or cancellation of shares,
requires the approval of the general meeting, or is subject to the previous
approval of the general meeting.
For
matters not covered by the articles or the DCC, the DCC contains a catch-all
provision stating that these matters are decided by the general meeting.
The
powers of individual managing directors can be restricted by the articles, that
is, a system can be used requiring the signatures of two or all directors for a
company to be bound. The power of representation of managing directors can
never be limited for a certain amount or for certain actions. A restriction of
the powers of individual managing directors by the articles is enforceable
against third parties, provided this restriction is registered with the Trade
Registry of the Chamber of Commerce (Trade Registry).
If
a management board resolution requires approval by a company body and this
approval has not been given, the managing directors will still validly
represent and therefore bind the company.
UK (England and Wales)
Law stated as at 01-Apr-2011
The articles of a company usually allow delegation by
the full board to committees which may consist of one or more directors and
other persons who are not directors. The delegation may relate to a specific
matter or be general in respect of a particular type of business. The terms of
the delegation may be contained in the articles, in terms of reference approved
by the board or, in the case of individual directors, in their service
contracts.
A
Code Provision recommends that the board form audit, remuneration and nomination
committees, with the first two having delegated powers from the board and the
last required only to make recommendations which the board may or may not
choose to act upon.
United States
Law stated as at 01-Dec-2012
State
corporate law and the corporation’s certificate of incorporation typically
provide that the board can exercise all of the corporation’s powers. However,
certain actions and transactions require shareholder approval under state
corporate law, such as mergers and amendments to the certificate of
incorporation.
The
board’s powers can be restricted by the corporation’s certificate of
incorporation or bye-laws, and are subject to statutory limitations.
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