Atty. Jose P. Garcia

October 23, 1989 Atty. Jose P. Garcia Claret School of Quezon City Mahinhin Street, U.P. Village Diliman, Quezon City Sir : This refers to your letter dated August 9, 1989, inquiring on the legality of the position of an ex-officio member of the Board of Trustees. You alleged therein, that you filed in behalf of your clients, the Claretian Fathers, mended articles of incorporation and by-laws of several non-stock, non-profit corporations whose members and board of trustees are mostly religious priests belonging to the Congregation of Claretian Fathers. The pertinent amendment thereto reads as follows: "That the head or his duly authorized representative of the Superior of the Filipino Corporation of Claretian Fathers shall be an ex-officio member of the Board of Trustees and shall enjoy all the rights and privileges pertaining to the members of the Board of Trustees. He shall have the right to inspect and examine the books of accounts and financial records of the Corporation." However, the legality of the above proposed amendment was questioned by the Corporate and Legal Department. Hence, you are requesting for a ruling of the matter. The pertinent provision of the Corporation Code provides: "SECTION 23. The board of directors or trustees . Unless otherwise provided in this Code, the Corporate powers of all corporations formed under this Code shall be exercised all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the Corporation, who shall hold office for one (1) year and until their successors are elected and qualified." (emphasis supplied). The rule set forth in the aforecited provision is clear that the board of directors are to be elected . The term "ex-officio" means a person who becomes a director of the corporation because of his title to the office, and not because of an election by the stockholders or members .Thus, the Commission in several occasions ruled that such position cannot be provided for in the by-laws. ( SEC Opinions dated August 24, 1962, September 20, 1976 , October 29, 1985 and September 1, 1987). However, the Commission in some instances allowed as an exception, a provision in the by-laws appointing an "ex-officio" member of the board provided there is an express provision therein that the appointee shall have no voting right .The status of an "ex-officio" member of the board therefore is only an honorary member whose role would be only to act as an adviser during its meeting. LexLib Please be advised accordingly. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner