• SEAOil can’t have 3 presidents – SEC

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    IF the public were to look at the corporate organizations of listed companies, they would not find any that has more than one president. A chairman of the board who, of course, is an elected director, could also be appointed by the board as CEO.

    For instance, Eduardo Cojuangco Jr. is chairman and CEO of San Miguel Corp. since July 7, 1998 while Ramon Ang is the vice chairman since Jan. 28, 1999 and president and chief operating officer since March 6, 1998.

    Another example is Ayala Corp which, like SMC, has only one president. Jaime Augusto Zobel de Ayala is chairman and chief executive officer while younger brother Fernando is president and chief operating officer.

    Note that both SMC and AC have only one president.

    Here comes a company that should have gone public and share its ownership with the public but has not. Instead, it wants to have not only one or two presidents but three. Put in another context, this company opts for each of its three businesses to be headed by a president without incorporating them as separate and independent units or subsidiaries as stock corporations registered with the Securities and Exchange Commission.

    The good thing about this company is that it is not yet public and has not listed its shares on the Philippine Stock Exchange. Otherwise, it would have been paying more executives than other public companies such as SMC and AC.

    If interested in how the SEC acted on this company’s inquiry on whether what it plans to do is legal, please continue reading.

    Seaoil Philippines Inc. (SPI) has wanted to reorganize its management team with a chief executive officer remaining “as the highest ranking officer and the face of the public.” This was what lawyer Emily Sibulo-Hayudini told the Securities and Exchange Commission in a letter inquiry dated Sept. 4, 2015.

    Lawyer Camilo S. Correa agreed with Seaoil’s corporate chart as far as the election of the company’s CEO is concerned. But he rejected the suggestion that instead of one president, the company be allowed to have three, which would be incorporated in the proposed amendments to the company’s by-laws.

    In response to Seaoil’s legal poser, Correa said the company’s proposal would be a violation of the law. He said in a legal opinion that “…considering the title of ‘President’ of a corporation is reposed definite and prescribed qualification and functions, SPI may not amend its by-laws to designate three corporate officers as “President/s.”

    Correa justified the SEC opinion by citing Section 25 of the Corporation Code, which says “immediately after the election, the directors of a corporation must formally organize by the election of a president, who shall be a director….” The same provision also provides that “any two or more positions may be held concurrently by the same person except that no one shall act as president and secretary or as president and treasurer at the same time.”

    Apparently, Seaoil wanted to upgrade the status of the heads of its three major units or businesses, namely commercial sales, retail sales and lubes/motor additives.

    “These three lines of business cater to different customers of the company,” Seaoil said in justifying its plan to have three presidents. “It was thought that having three presidents to handle the day to day operations of each business line would be of utmost advantage not only to the company but most importantly to its customers.”

    Apparently, Seaoil wanted each of the three different departments to be headed by a president instead of simply a department manager. Anyway, the company said all three presidents would be “reporting directly to the CEO.”

    Correa’s conclusion may be weak at first reading. But actually it is not if one were to go by the law he cited against Seaoil’s election of three presidents. Under the Corporation Code, he said “there is no required designation of title of corporate officers, only that there shall be a president, a treasurer and a secretary.”

    As the “face of the corporation,” Corea said, “… a corporate president is reposed with duties and responsibilities provided by the law and jurisprudence, which can be further expanded by its by-laws.”

    The position of president, Correa said, is “not merely a title of prestige or status.”
    According to him, the public looks up to him or her because the post “also serves as a basis for its stockholders and other persons/entities transacting with it to determine whether such person is clothed with authority to perform the duties conferred by the law and the functio n given by the by-laws within the general objectives of the corporation’s business.”

    esdperez@gmail.com

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