AB 2557: Corporations: directors.

Existing law, the Nonprofit Corporation Law, regulates the organization and operation of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations.

The Nonprofit Corporation Law, with respect to nonprofit public benefit corporations and nonprofit mutual benefit corporations, requires directors to be elected for terms of not longer than 4 years, as fixed in the articles or bylaws of the corporation, except in certain circumstances. This law, with respect to nonprofit religious corporations, allows the articles or bylaws to provide for the tenure of directors, and in the absence of any provision in the articles or bylaws, provides for a one-year term. The Cooperative Corporation Law regulates the organization of consumer cooperatives, worker cooperatives, and various other types of cooperatives. This law also requires directors to be elected for terms not longer than 4 years, as fixed in the corporations articles or bylaws, subject to certain exceptions and conditions.

This bill would permit all or a portion of the directors of any of the above types of corporations, if authorized in the articles or bylaws for the specific corporation, to hold office ex officio by virtue of occupying a specified position, either within or outside of the corporation. The bill would require the term of office of ex officio directors to coincide with their respective term of office for the position entitling them to serve on the board of directors, and to meet other specified conditions regarding their resignation or removal. The bill would also make various nonsubstantive and clarifying changes to these laws.