How are dividends declared according to the Revised Corporation Code?

Dividends are declared by the Board of Directors from the surplus profits of the corporation, which reflects a fundamental principle of corporate governance. According to the Revised Corporation Code, the authority to declare dividends lies primarily with the board, as they are tasked with managing the financial resources of the corporation in the best interests of the shareholders.

The Board assesses the corporation’s profitability and decides whether there are sufficient retained earnings or surplus profits available to be distributed as dividends. This process ensures that the financial health of the corporation is considered and protects the interests of both the corporation and its shareholders.

In contrast, the other options do not align with the Revised Corporation Code's stipulations. Shareholders may have a voice in company matters, but the power to declare dividends does not rest with them in the context of voting during meetings. While automating dividend calculations based on revenue might seem appealing, dividends are not automatically distributed in this manner as they depend on various financial analyses and board resolutions. Lastly, confining the authority to declare dividends to the CEO overlooks the established governance structure and the broader responsibilities of the Board of Directors.