Atty. Samuel F. Baldado

April 20, 1995 Atty. Samuel F. Baldado Baldado & Gloria 7th Flr.,PBCom Building 6795 Ayala Ave.,cor. Herrera St., Makati, Metro Manila S i r : This refers to your letter of April 10, 1995 inquiring whether a non-resident alien can be elected as: a. Chairman of the Board b. Vice Chairman of the Board (if so, can he possibly act as Chairman to preside over a particular meeting where the original chairman is absent) c. Chairman of Executive Committee of the said corporation. As stated in your letter, the duties and functions of the Chairman and the Vice-Chairman of the Board are as follows: "a. The Chairman of the Board who shall be a member, thereof, shall preside at all meetings of the stockholders and of the Board of Directors. He shall have general supervision of the officers, employees and agents of the Corporation and shall perform such other duties as may be required of him by the Board of Directors. In addition to his per diem, the Board of Directors may provide a regular monthly compensation for his services. b. The Vice Chairman of the Board who shall be a member of the Board of Directors shall perform the duties of the Chairman in case of the latter's absence or inability .He shall also perform such power and duties as the Board of Directors may confer on him." (Emphasis supplied) While presence in the Philippines is necessary for the corporate officers to effectively perform their duties, it may be considered only a sound corporate practice and should not be imposed as a requirement taking into consideration that with the present modern and advanced communication and transportation facilities, continuous stay in the business area is not necessary in the management of the business. It is only in the case of the "secretary", who, under Section 25 of the Corporation Code must be a resident, and the "treasurer", as matter of policy, that the Commission, imposes the residency requirement in view of the nature of their functions and duties. However, it has to be emphasized that in firms engaged in wholly or partially nationalized business, foreigners, regardless of whether they are resident or non-resident, are banned from being elected appointed to management positions pursuant to the ruling of the Department of Justice Re: Opinion No. 37, Series of 1976, although they can be elected directors in proportion to their actual participation or share in the capital of the corporation in accordance with the opinion of the Department of Justice Re: Opinion No. 161, Series of 1994 rendered in relation to CA No. 108, otherwise known as the Anti-Dummy Law, as amended by P.D. No. 715. Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner