How to Remove a Corporate Officer or Director in the Philippines

Philippine corporate law treats “removing a director” and “removing an officer” as two different procedures with two different decision-makers. Confusing the two is the single most common mistake we see — a board that tries to fire a fellow director by board resolution alone, or a stockholder group that thinks it can vote out the corporate treasurer directly. Neither works, because the Revised Corporation Code of the Philippines (Republic Act No. 11232) puts directors and trustees under stockholder control, while ordinary officers answer to the board.

Directors and Officers Are Removed Through Different Bodies

A director or trustee is elected by the stockholders or members, so only the stockholders or members can remove one — the board itself has no power to oust a sitting director, even by unanimous vote of the other directors. This is the rule under Section 27 of the Revised Corporation Code.

A corporate officer — typically the president, treasurer, corporate secretary, and any other position created by the bylaws — is elected by the board under Section 24 of the same law. Because the board appoints officers, it generally also has the power to remove them, subject to whatever process the bylaws specify and to any employment-related protections that may separately apply to that individual.

Step by Step: Removing a Director Under Section 27

The law sets out a fairly rigid sequence. Skipping a step is the most common reason a removal later gets challenged and unwound.

• 1. Trigger the meeting. A special meeting to remove a director may be called by the corporate secretary on order of the president, or upon the written demand of stockholders representing at least a majority of the outstanding capital stock (or a majority of members, for a nonstock corporation). If the secretary refuses or fails to call it, the demanding stockholders may issue the call themselves after notice to the rest of the stockholders.
• 2. Give previous notice of the specific intent to remove. The notice of the meeting must state that removal of a named director will be taken up. A general notice of a stockholders’ meeting is not enough — the stockholders must be told in advance that this specific action is on the agenda, so they can decide whether to attend or send a proxy.
• 3. Hold the vote at a regular or special meeting. Removal can happen at a regular annual meeting or at a special meeting called for the purpose, as long as the notice requirement above was met.
• 4. Secure the two-thirds vote. The director is removed only if stockholders holding at least two-thirds of the outstanding capital stock (or two-thirds of the members) vote in favor. A simple majority is not enough, no matter how large.
• 5. Respect minority representation rights. Removal “without cause” is allowed, but it cannot be used as a tool to strip minority stockholders of a board seat they are entitled to under cumulative voting rules. If the removal target was elected through minority votes exercising that right, expect the removal to be challenged on this ground.
• 6. Document and report the change. Once removal is approved, the change in the board’s composition should be reflected in the corporation’s next General Information Sheet filed with the Securities and Exchange Commission, and minutes of the meeting should be kept as part of the corporate records.

Separately, the Securities and Exchange Commission itself has residual authority to order the removal of a director or trustee who was elected despite being legally disqualified, but only after due notice and hearing — this is an SEC enforcement action, not something a company can invoke on its own as a shortcut around the stockholder vote.

Step by Step: Removing a Corporate Officer

Because officers are creatures of the board, the process is ordinarily simpler on paper, but it deserves just as much care in practice.

• 1. Check the bylaws first. Some corporations write a specific removal procedure into their bylaws (notice period, cause requirement, required vote). Where the bylaws are silent, the board’s general power to elect officers is read to include the power to remove them, generally by the same majority vote that would elect an officer.
• 2. Call a board meeting with the removal on the agenda. As with any board action, quorum and voting requirements under the bylaws must be followed, and the minutes should record the resolution clearly.
• 3. Adopt a board resolution. The resolution should identify the officer, the effective date of removal, and — if the board wishes to state one — the reason. A reason is not always legally required for pure officers, but documenting one helps if the removal is later questioned.
• 4. Elect a successor or designate an officer-in-charge. Certain officer positions (president, treasurer, corporate secretary) are required by law to be filled, so the board should act promptly to name a replacement or interim officer.
• 5. Update filings and third parties. Banks, regulators, and counterparties who relied on the old officer’s authority (signing authority on accounts, SEC filings, permits) need to be notified so that the removed officer’s authority is formally withdrawn.

The Employment-Law Overlap: Why This Gets Contested

The tricky part is that many officers are also, in a practical sense, employees who draw a regular salary and report to work daily. When they are removed, they sometimes file an illegal dismissal complaint with the labor arbiters, arguing they were terminated without due process. Whether that complaint belongs in a labor tribunal or in the regular courts depends on whether the position is a true “corporate office” — one created by the corporate charter or bylaws and filled by election of the board or stockholders — as opposed to an ordinary employee position that merely carries an impressive title.

Philippine jurisprudence has repeatedly drawn this line: if the office and the manner of selection are rooted in the bylaws, a dispute over removal is generally treated as an intra-corporate controversy properly filed with the regular courts (specifically the branches designated to handle intra-corporate cases), not a labor case. If the position was never created by the bylaws and the person was simply hired and later given a title, removal can be challenged as an ordinary illegal dismissal case instead. Because the classification changes which forum has jurisdiction — and which remedies are available — this distinction is worth confirming with counsel before, not after, the board acts.

Practical Checklist Before You Call the Meeting

• Confirm whether the person is a director/trustee, a bylaw-created officer, or both (many presidents hold both roles, which is why they can only be removed as a director through the stockholder process, even though the office of “president” itself is a board-elected position).
• Pull the bylaws and check for any removal-specific provisions before assuming the default rule applies.
• Draft the notice carefully — vague notices are the most litigated defect in director-removal cases.
• Calculate the actual vote needed based on outstanding capital stock, not just shares represented at the meeting.
• Prepare a succession plan so the corporation is not left without a required officer even for a short period.
• Keep every notice, proxy, and minute — removal disputes are almost always fought over paperwork, not over whether removal was justified on the merits.

Getting the process right the first time avoids a much costlier fight later: a removal that is procedurally defective can be annulled regardless of how legitimate the underlying reasons were, forcing the corporation to reinstate the director or officer and start over.

Frequently Asked Questions

Can the board of directors remove a fellow director on its own? No. Only the stockholders (or members, for a nonstock corporation) can remove a director, by a two-thirds vote of the outstanding capital stock at a meeting called specifically for that purpose under Section 27 of the Revised Corporation Code. The board has no independent power to oust one of its own members.

Do you need a valid reason (cause) to remove a director? Not necessarily. Removal can be with or without cause, but removal without cause cannot be used to strip minority stockholders of board representation they are legally entitled to under cumulative voting, and the notice and two-thirds vote requirements still apply either way.

Can a corporate officer sue for illegal dismissal after being removed? It depends on whether the position was created by the corporate bylaws and filled through election by the board or stockholders. If so, a challenge to the removal is generally treated as an intra-corporate dispute for the regular courts rather than an illegal dismissal case for the labor arbiters.

What happens if the removal notice does not specifically mention removal? A stockholders’ meeting notice that only announces a general or annual meeting, without stating that removal of a named director will be taken up, does not satisfy the previous-notice requirement, and a removal voted at that meeting can be challenged and annulled on that ground alone.

This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.

If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.