tutes vary, but under Model Act, a vacancy may be filled by either the shs or dirs.
1) Compare - removal: some statutes require that vacancies created by removal of a dir be filled by the shs unless the articles or bylaws provide otherwise.
2.TENURE OF OFFICE
a) Term of Appointment - under most statutes, office is held until the next meeting, although on a classified board, dirs may serve staggered multi year terms.
b) Power to Bind Corporation Beyond Term - unless limited by the articles, the board has the power to make contracts biding the corp beyond the dirs 'term of office.
c) Removal of Director During Term - at common law, shs can remove a dir for cause (eg, fraud, incompetence, dishonesty) unless an article or bylaw provision permits removal without cause. a dir being removed for cause is entitled to a hearing by shs before a vote to remove. a number of statutes permit removal without cause.
1) Removal by Board - board can NEVER remove a dir unless authorized by statute;
2) Removal by Court - there is a split authority as to whether a court can remove a dir for cause.
I) Statutes - some statutes permit courts to remove a dir for specified reasons. Usually, a petition for removal can be brought only by a certain percentage of shs or the attorney general.
3.FUNCTIONING OF BOARD
a) Meetings - absent a statute, dirs can act only at a duly convened meeting consisting of a quorum. In most jurisdictions, a meeting can be conducted by telephone or other means whereby participants can hear each other simultaneously. Most statutes also allow board action by unanimous written consent without a meeting.
1) Notice - although formal notice is unnecessary for a regular meeting, special meetings require notice to every dir of date, time, and place. Usually, notice can be waived in writing before or after a meeting. Attendance waives notice unless the dir attends only to protest the meeting.
2) Quorum - a majority of the authorized number of dirs constitutes a quorum. Many statutes permit the articles or bylaws to require more than simple majority or less than that.
3) Voting - absent a contrary provision, an affirmative vote of a majority of those present, not a majority of those voting, is required for board action.
b) Effect of Noncompliance With Formalities - today, most courts hold that informal but unanimous approval of a transaction is effective, as is a matter receiving the explicit approval by a majority of dirs without a meeting, plus acquiescence by the remaining dirs.
c) Delegation of Authority - the board has the power to appoint committees of its own members to act for it either in particular matters or to handle day-to-day management between board meetings. Typically, these committees cannot amend the articles or bylaws, adopt or recommend major corporate changes (eg, merger), recommend dissolutio...
