Board Matters

FACT: FOUNDATION BOARD

Summary:

  • GSIS Foundation members elect 10 directors to its Board
  • The Foundation’s Articles stipulate which GSIS Association directors will be appointed to the Foundation Board; the Association cannot choose
  • The members of the Foundation are not the same as the members of the Association
  1. Article 12 of the GSIS Foundation’s (“Foundation”) Articles stipulates that its members may elect up to 10 members to its board and that 5 of its other directors are appointed by the Association. Article 13 further stipulates that these 5 appointed directors need to be the Chairman, First- and Second Deputy Chairmen, the Chairman of the Finance Committee and the Chairman of the Building Committee of the Association.
  2. At the AGM for the Foundation, its members voted on 8 candidates for the 10 available seats on its Board. Only 3 of those 8 candidates received more votes for than against and were so elected to the Board.  Two of the 5 candidates who did not get elected were later appointed to the Foundation’s Board by the Management Committee of the Association in accordance with Article 13 because they were the Chairman and First Deputy Chairman of the Association.
  3. The Requisitionists claim that these two directors “used [their] right under Article 74 [of the GSIS Association’s articles] to appoint 5 directors to have themselves re-appointed”. This is not correct.  Article 74 does not give any right to anyone: it demands that the Association’s Chairman and First Deputy Chairman are nominated to the Foundation’s Board, upon which they are “automatically appointed” to their nominated positions by the operation of Article 13 of the Foundation’s articles.
  4. The Requisitionists’ request for a resolution to withdraw the nomination of the two directors is problematic for a number of reasons. Firstly, the Association’s Articles vest the duty to nominate directors to the Foundation’s Board on the Association’s Management Committee (made up of its directors), not on its members. Secondly, a “withdrawal” of nomination at this stage will not cancel the two directors’ appointment, which has already occurred under Article 13. Thirdly, neither the articles of the Foundation nor those of the Association grant the Association’s directors the power to remove the Foundation’s directors.
  5. The members of the Association and the Foundation are not the same people. For example, the members of Association include many former parents and alumni who generally don’t hold debentures and are thus not eligible for Foundation membership.  The Foundation members include corporate members with multiple debentures (and thus votes) while the Association does not allow corporate entities as members.  In fact, there are about 1,300 Foundation members versus over 2,100 Association members.
  6. The members of the Association have the right to elect its Board. It is a duty of the Board to elect from its members those who will serve on its Management Committee (Art. 52.4).  The members of the Foundation should not indirectly decide who can be on the Management Committee of the Association by voting against candidates for their own Board.  That would be the tail wagging the dog.