(1) A board of directors shall consist of one or more members, with the number stated in or fixed in accordance with the bylaws.
(2) The bylaws may establish a range for the size of the board of directors by fixing a minimum and maximum number of directors. If a range is established, the number of directors may be fixed or changed from time to time within the range by the shareholders or the board of directors.
(3) Directors are elected at each annual meeting of the shareholders except as provided in section 7-108-106.
Source: L. 93: Entire article added, p. 778, § 1, effective July 1, 1994. L. 2003: (1) amended, p. 2319, § 239, effective July 1, 2004.
ANNOTATION
Law reviews. For article, "Legislative Update", see 11 Colo. Law. 2142 (1982). For article, "Colorado Expands Protections For Corporate Directors", see 16 Colo. Law. 1387 (1987).
Annotator's note. Since § 7-108-103 is similar to § 7-5-102 as it existed prior to the 1993 recodification of the "Colorado Business Corporation Act", articles 101 to 117 of title 7, cases construing that provision and its predecessors have been included in the annotations to this section.
Directors named by incorporators are directors by operation of law. The persons who are named by the incorporators in the articles of incorporation as directors for the first year are created such directors by operation of law and not by election of the stockholders after the corporation is formed. Humphreys v. Mooney, 5 Colo. 282 (1880).
Otherwise selection of the directors of a corporation belongs to the stockholders. It is in a sense an individual right in them, as distinguished from a power of the corporation in its single aggregate capacity. Arkansas Valley Sugar Beet & Irrigated Land Co. v. Fort Lyon Canal Co., 173 F. 601 (8th Cir. 1909); People ex rel. Arkansas Valley Sugar Beet & Irrigated Land Co. v. Burke, 72 Colo. 486, 212 P. 837 (1923).
Their right to vote for directors is specifically prescribed by this section and does not proceed from any act, contract, or bylaw of the corporation. Arkansas Valley Sugar Beet & Irrigated Land Co. v. Fort Lyon Canal Co., 173 F. 601 (8th Cir. 1909).
However, denial of voting rights to one class of common stock in an election for directors of a corporation does not violate public policy. Hampton v. Tri-State Fin. Corp., 30 Colo. App. 420, 495 P.2d 566 (1972).
The statute plainly permits shareholders to set the number of directors, and a bylaw that removes that right is contrary to law. Harding v. Heritage Health Prods. Co., 98 P.3d 945 (Colo. App. 2004).
This section operates as a restriction upon the jurisdiction of a court to control corporate elections; a court has no jurisdiction, under the guise of either supervision or regulation, to direct the stockholders to proceed in electing directors in any other way than that which this section has provided. People ex rel. Arkansas Valley Sugar Beet & Irrigated Land Co. v. Burke, 72 Colo. 486, 212 P. 837 (1923).
And so stockholders who refuse to obey the provision of a decree rendered by a district court requiring them in nominating and voting for directors to observe the provisions of that decree, which is contrary to the way which this section provides, are not guilty of contempt. Arkansas Valley Sugar Beet & Irrigated Land Co. v. Lubers, 72 Colo. 513, 212 P. 848 (1923).
Fiduciary duty to minority stockholder was not breached when the directors interfered with shareholder's management contract with the corporation since the shareholder was acting in his capacity as an independent contractor under the management contract with the corporation rather than as a stockholder. Bithell v. Western Care Corp., 762 P.2d 708 (Colo. App. 1988).