What is required for directors to enter into service contracts longer than two years?

For directors to enter into service contracts longer than two years, member approval is necessary. This requirement is rooted in the principle of corporate governance, which seeks to protect the interests of the shareholders by ensuring that significant decisions, such as long-term contracts with directors, are made transparently and with the consent of those who have a stake in the company.

Member approval serves to uphold accountability and reflects the democratic aspect of corporate governance, allowing shareholders to have a say in major strategic commitments that could significantly impact the company's future. It ensures that directors cannot unilaterally bind the corporation to lengthy agreements without considering the shareholders' perspectives and interests.

In contrast, majority shareholder consent may suggest some flexibility based on ownership stakes, but the broader membership's approval is typically required to safeguard the interests of minority shareholders and ensure inclusive decision-making. Legal counsel review, while important for compliance and risk management, does not replace the need for member approval. Similarly, a director vote may inform internal decision-making processes, but it does not involve the broader accountability to the shareholders that member approval embodies.

In summary, requiring members' approval for contracts longer than two years emphasizes accountability and democratic governance in corporate decisions impacting the company and its shareholders.