Canlubang Automotive Resources Corporation

November 5, 1984 Canlubang Automotive Resources Corporation c/o Atty. Victor Africa Fortune Bldg.,Legaspi St. Legaspi Village, Makati, Metro Manila Sir : This refers to your letter dated August 31, 1983 requesting further clarification on our opinion dated May 10, 1983 allowing non-directors to become members of the Executive Committee and posing the hereunder queries: 1. What would be the QUORUM of an Executive Committee? Would a majority of the membership thereof be sufficient? In other words, can the presence of the non-director members alone constitute a quorum without or with a minimum number of the director members? Or should there still be a majority of the director members present? 2. What would be the VOTE REQUIREMENT for such an Executive Committee? Would a majority of the quorum (as specified in No. 1, supra) be sufficient? Or is the vote of a majority of the director members needed? In the latter case, would "majority" refer to: (a) Majority of the director members present; or (b) Majority of the director members total number? Relative to your first query, please be informed that "the general rule for quorum requirements for the executive committee is the same as that for board of directors. A majority of the group constitutes a quorum".(2 Fletcher, Cyc. Corps.,at 600).Thus, in the absence of any provision to the contrary under existing laws, a quorum of the Executive Committee constitutes a majority of the entire membership of said committee. Anent your second query, please be further informed that Section 35 of the Corporation Code specifically provides for the vote requirement in the executive committee. The pertinent provision reads, thus: "SECTION 35. Executive Committee : The by-laws of a corporation may create an executive committee composed of not less than three members of the board, to be appointed by the board. Said committee may act, by majority of all its members ,on such specific matters within the competence of the board, as may be delegated to it in the by-laws or on majority vote of the board except with respect to: (1) approval of any action for which shareholders' approval is also required; (2) the filling of vacancies in the board; (3) the amendment or repeal of by-laws or the adoption of new by-laws; (4) the amendment or repeal of any resolution of the board which by its express terms is not so amendable or repealable; and (5) a distribution of cash dividends to the shareholders. (emphasis supplied) Applying the aforequoted law to the instant case, it can thus be said that "majority" vote requirement for an executive committee shall be interpreted to mean majority of all the committee members regardless of the classification of membership into director/members or non-director/members. This is basically premised on the cardinal rule of statutory construction that if the law does not qualify, no further qualification should be made thereon. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner