The Securities and Exchange Commission (SEC) hopes to obtainEnsure independent directors Publicly listed companies have term security.
SEC Chairman Francisco Ed. Lin told reporters Friday that they are currently considering issuing a new memorandum on corporate governance, including term safety regulations for independent directors.
Mr. Lin said independent directors should have term security for their tenure over a nine-year period so that they can comment on company policies. Been removed from their posts.
“We’re still talking about this because what I want is a new memorandum on matters related to corporate governance, which includes like the tenure of independent directors, and even their term safety … we think it’s term safety within that nine-year limit.”
He added: “If you are an independent director and are fighting for what you think is right, but that is not consistent with what the controlling shareholder says, you will put your term in danger.”
The independent director is a member of the company’s board of directors, but has no material relationship with the company, its parents, subsidiaries or branches, and is independent of management.
According to the corporate governance code for publicly listed companies issued in 2016, the SEC recommends that the board of directors should have at least three independent directors or at least one-third of the board of directors.
Mr Lin said he also wants to strictly enforce the nine-year term limit for independent directors under current rules rather than allowing companies to apply for exemptions.
“What happened in some cases is that they (the company) went to the SEC to seek exemptions from that nine-year term limit. That’s why you see some independent directors over the nine-year limit. I want to limit (term limit).”
“There is no talent monopoly. There are talent in the market.”
According to the Corporate Governance Code, an independent director may serve for nine years. However, if the term of the independent director is extended by nine years, the board must provide meritorious reasons and seek shareholder approval.
“If the current independent directors really want to help, they can become independent directors of other companies, especially those smaller companies that will benefit from wisdom and experience. The SEC may want to give this by giving Term restrictions on independent directors,” Mr. Lin said.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the SEC’s proposal will further improve the country’s corporate governance standards.
“This will help ensure checks and balances with high-level decisions while avoiding collective thinking,” he said in a Viber message.
“This will also help align with the ever-changing regulatory landscape of higher environmental, social and governance standards,” he added.
Talk to GOCC
Meanwhile, Mr. Lin said the SEC has been holding talks with the Philippine Stock Exchange (PSE) on potential Phil on theIppine government-owned and controlled corpusCan be listed on the stock market (GOCC).
He added that GOCC should be “worth listing” to avoid unnecessary risks for investors.
“It’s an ongoing work. We’ve been talking about it all the time. What we do is discuss it with PSE because it’s not a question that lists all the GOCCs.”
“We’ll be sure. I want to haveflist,” he added.
Currently, there are no GOCCs listed in the Philippines.
In a report last April, the Organization for Economic Cooperation and Development said state-owned banks such as the Philippine Land Bank and the Philippine Development Bank are potential candidates for listing on PSE.
Meanwhile, Mr. Lin said the Securities and Exchange Commission (SEC) is moving towards a minimum public floating point number (IPO) (IPO), but pointed out that there is no final decision yet.
“We’ll still talk about it. If we can implement it earlier, the better,” he said.
PSE hopes to have six IPOs this year. But so far, local exchanges have seen only one public listing, and in April, Cebu-based fuel retailer and issuer Top Line Business Development Corp. – rmdochave
