Today’s post is devoted to what may seem an unlikely question: should the articles of incorporation define “officers”? This is an unlikely question because it is the bylaws that typically identify the titles of officers and their duties. Cal. Corp. Code § 312(a). Nevertheless, it occurs to me that in at least one circumstance, a corporation may wish to define who is and who isn’t an officer.
When a corporation includes a mandatory indemnification provision in its certificate of incorporation, that provision typically extends to directors and officers. The reference to “directors” should in virtually all cases be beyond dispute. There also isn’t likely to be a question about whether the President, Chief Financial Officer or Secretary are officers. After all, Section 312(a) requires that a corporation have these positions. But what about inferior officers? Some corporations, particularly those in the financial services industry, may have scores or even hundreds of vice presidents. These corporations may want to consider whether it is necessary or desirable to mandate that each of these “officers” have the benefit of mandatory indemnification.