Metropolitan Bank and Trust Company

September 16, 1986 Metropolitan Bank and Trust Company Metrobank Plaza Sen. Gil J. Puyat Makati, Metro Manila Attention : Messrs . Antonio V . Viray and Severino S . Tabios Gentlemen: This relates to your letter, dated August 29, 1986, requesting the opinion of this Commission, as to whether or not a corporate executive who is not a director can be a member of the executive committee of a corporation. cdll Anent thereto, please be informed that while under Section 35 of the Corporation Code of the Philippines, 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, yet, "there seems to be no reason who a committee or " other person " could not be a delegate of the board quite apart from the authorization that the board may appoint committees. For example, it is common to have a management committee composed of Key executives, some of whom are not members of the board and others of whom are not even elected officers of the corporation". Ballantine & Sterling, California Corporation Laws, Vol. I (1982 ed.), sec. 87.02 at 5-37 to 5-39. Thus, non-members of the board may be appointed as members of the executive committee provided there are at least three (3) members of the board who are members of the committee. (SEC opinion, dated May 18, 1983). However, please be advised that subject to statutory limitations which may not be delegated to committees, a properly constituted committee composed of directors has all the authority of the board to the extent provided in the resolution of the board or by-laws. (Ballantine, Supra., Vol *, Chap. 3, sec. 311 at 29). On the other hand where the executive committee is made up of, or includes persons who are not directors, such delegate committee shall be subject to the normal restrictions and requirements relating to undue abdication of authority by the board. Thus, while the committee may manage the day to day operation of the business of the company, the business affairs thereof shall be managed and all corporate powers shall be exercised under the ultimate direction of the board. (SEC opinion, Supra.). Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman