Chapter 1203: The Board of Directors
Under the Western corporate structure that was introduced, the chair of the board had the authority to convene board meetings and could remove anyone within the company from their post, except for directors and supervisors. That was because directors and supervisors were not company employees; they were the company’s owners and arbiters.
Major shareholders might convene a general shareholders’ meeting to elect members of the board of directors.
The chair of the board was elected by the board itself and must obtain the approval of more than half of the directors.
In general terms, the shareholders’ meeting determined the composition of the board, while the board held the company’s decision-making power, and the number of shares determined one’s influence within the shareholders’ meeting. That was because the more shares one had, the greater the risk borne, and thus the greater the say.
At times, a major shareholder would serve as the chair of the board, thereby controlling both the shareholders’ meeting and the board. This created the illusion that the chairman was the most powerful position.
This was like the fifth-generation Grand Master controlling the Golden Tower Council because no one dared to oppose him. But the sixth-generation Grand Master did not control the Golden Tower Council, so the situation became far more complicated.
In reality, if the chairman were not a major shareholder, they would not have the final say.
The largest shareholder of the Nanyang United Trading Company was the Poluo Daoist Mansion.
Zhang Yuelu believed that the Daoist Mansion should appoint a Daoist priest to serve as the chairman and directly participate in the company’s decision-making and management, wielding decisive authority.
However, Qi Xuansu held a different view. In the end, the two reached a compromise. The Daoist Mansion, as the major shareholder, would not directly participate in management but would instead appoint personnel to form a supervisory board to restrain the board of directors. By procedure, the supervisory board would also be elected by the shareholders’ meeting.
Qi Xuansu partially agreed with Zhang Yuelu on one point. The board of directors must remain under the control of the Daoist Mansion, and appointments to the board must be handled with great caution.
In the groundwork Qi Xuansu had laid, the Poluo Daoist Mansion held 30% of the shares, the Fenglin Trading Company held 20%, and Du Yuhua held 1%. Together, they totaled 51%, enough for absolute control. Moreover, figures such as Qi Muyu and the Ziwei Hall would not openly oppose Qi Xuansu. With another 10% added to his side, Qi Xuansu enjoyed an overwhelming advantage.