The Revised Corporation Code (“RCC”) provides for the procedures on the nomination and election of directors in a corporation.
Section 23 of the RCC provides that “[e]xcept when the exclusive right is reserved for holders of founders’ shares under Section 7 of this Code, each stockholder or member shall have the right to nominate any director or trustee who possesses all of the qualifications and none of the disqualifications set forth in this Code.”
On the attendance and the right to vote of stockholders at the meeting for the election of directors, Section 23 of the RCC provides that “there must be present, either in person or through a representative authorized to act by written proxy, the owners of majority of the outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote. When so authorized in the bylaws or by a majority of the board of directors, the stockholders or members may also vote through remote communication or in absentia: Provided, That the right to vote through such modes may be exercised in corporations vested with public interest, notwithstanding the absence of a provision in the bylaws of such corporations. A stockholder or member who participates through remote communication or in absentia, shall be deemed present for purposes of quorum. The election must be by ballot if requested by any voting stockholder or member.”
Furthermore, regarding the election proper, the same section of the RCC states:
“In stock corporations, stockholders entitled to vote shall have the right to vote the number of shares of stock standing in their own names in the stock books of the corporation at the time fixed in the bylaws or where the bylaws are silent, at the time of the election. The said stockholder may:
(a)vote such number of shares for as many persons as there are directors to be elected;
(b) cumulate said shares and give one (1) candidate as many votes as the number of directors to be elected multiplied by the number of the shares owned; or
(c) distribute them on the same principle among as many candidates as may be seen fit:
Provided, That the total number of votes cast shall not exceed the number of shares owned by the stockholders as shown in the books of the corporation multiplied by the whole number of directors to be elected: Provided, however, That no delinquent stock shall be voted.
Unless otherwise provided in the articles of incorporation or in the bylaws, members of nonstock corporations may cast as many votes as there are trustees to be elected but may not cast more than one (1) vote for one (1) candidate. Nominees for directors or trustees receiving the highest number of votes shall be declared elected.” (Emphasis and underscoring supplied)
Lastly, in SEC-OGC Opinion No. 14-10 (Re: Cumulative Voting in Condominium Corporation. 2 June 2014), the Securities and Exchange Commission (the “SEC”) had occasion to expound on the methods of cumulative voting, namely: cumulative voting for one candidate, and cumulative voting by distribution. The SEC explained that “[u] nder the first method, a stockholder is allowed to concentrate his votes and “give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares shall equal.” By way of example, supposing a stockholder owns 200 shares of stock and there are five directors to be elected, he is entitled to 1,000 votes all of which he may cast in favor of any one candidate. On the other hand, by the second method, a stockholder may cumulate his shares by multiplying also the number of his shares by the number of directors to be elected and distribute the same among as many candidates as he shall see fit. To illustrate, a stockholder with 100 shares of stock is entitled to 500 votes if there five directors to be elected. He may cast his votes in any combination desired by him provided that the total number of votes cast by him does not exceed 500, which is the number of shares owned by him multiplied by the total number of directors to be elected.”
