Atty. Lope E. Adriano

December 19, 1980 Atty. Lope E. Adriano Pelaez, Adriano & Associates Padilla Bldg.,Emerald Avenue Ortigas Commercial Center Pasig, Metro Manila Sir : This refers to your letter dated December 15, 1980 requesting opinion on the questions posed therein. LibLex It appears that your client, the Marinduque Mining and Industrial Corporation, a stock corporation also registered with the Board of Investments as a pioneer enterprise, wishes that some financing institutions with which it has loan agreements be represented in its board of directors. However, there is not enough available board seats and under such a situation, you wish to be informed if they may legally be constituted as "ex-officio" directors of the board, with all the powers (such as attending and taking part in deliberations in board meetings) and privileges (including allowances, per diems and the like) of regular directors except the right to vote and if in the affirmative, whether said designation may be effected by mere resolution of the company's board of directors or by amendment of its by-laws. Please be informed that both the Corporation Law (Act 1459, as amended) and the Corporation Code of the Philippines (Batas Pambansa Bilang 68) do not provide for the office of an "ex-officio" director. However, in business practice, such term has acquired a settled meaning as one who becomes a director of the corporation by virtue of his title to an office and not because of an election by the stockholders or members. But please note that in this jurisdiction, an "ex-officio" director does not have the right to vote, although he possesses all the other powers and privileges of regular directors. In view of the foregoing, our answer to your first query is in the affirmative. Relative your second query, we opine that the designation of "ex-officio" directors may be effected by a resolution of the stockholders. Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department