SEC to firms: allow remote stockholders, board meetings beyond pandemic
As the Philippines starts to shift to a postpandemic way of life, the Securities and Exchange Commission (SEC) has called on corporations to allow shareholders or members to participate in meetings virtually, not just an interim measure but as an alternative mode moving forward.
The SEC urged corporations to encourage greater stakeholder involvement in their governance by allowing shareholders or members to participate in meetings virtually, even after the pandemic.
“The provisions of the Revised Corporation Code for the virtual participation of shareholders or members, directors or trustees, and officers in meetings allow for greater stakeholder involvement in corporate governance,” SEC chair Emilio Aquino said in a press statement on Saturday.
“Stronger stakeholder engagement brings in more insights that could translate to well-grounded decisions and innovations, as well as promoting transparency and accountability in decision-making. All these will ultimately redound to the benefit of the corporation,” he added.
The SEC had issued the implementing rules of the corporate code through SEC Memorandum Circular No. 6, Series of 2020 alongside the imposition of travel restrictions and other stringent public health protocols to curb the outbreak of COVID-19.
However, the SEC clarified that allowing participation in corporate meetings through remote communication or in absentia was not an interim measure meant to be in effect only during the pandemic. Moving forward, it said corporations may continue holding meetings through remote communication or other alternative modes.
Under the guidelines, the corporate secretary may send notice of meetings to directors or trustees through email, messaging services or such other manner provided in the corporation’s bylaws or by board resolution. The notice must include, among others, all pertinent materials for discussion which shall be numbered and marked in such a manner that the director or trustee can easily follow and participate in the meeting.
The company is mandated to develop internal procedures for the conduct of board meetings through remote communication or other alternative modes to address administrative, technical and logistical issues.
Directors who intend to participate in a meeting through remote communication must notify in advance the presiding officer and corporate secretary. They will be deemed present for quorum purposes.
