Business leader Jose “Titoy” Pardo has finished his two-year term extension as independent director of the Philippine Stock Exchange (PSE), bringing to 11 his total years of service to the local bourse, both as independent director and chair.
Now the former Trade and Finance Secretary is up for another reelection during the upcoming PSE stockholders meeting and board elections on Aug. 5.
Pardo has just been too valuable to the exchange, having not just the institutional memory, moral suasion and gravitas to lead the boardroom of the demutualized stock exchange, which has come a long way from the “old boys’ club” image of decades ago, but is still facing numerous challenges in the horizon.
As such, the PSE has sought regulatory clearance to extend Pardo’s term for two more years and exempt him from the maximum term limit.
Based on the Code of Corporate Governance for publicly-listed companies in the country, an independent director can hold such position only for nine years, but may continue to qualify as a non-independent director. The same circular, however, allows an independent director to exceed the term limit in “exceptional cases.”
The board must provide a “meritorious justification” for the reelection, which was what was invoked by the PSE in 2021 when the PSE first petitioned for Pardo’s two-year extension. The same will be invoked to obtain a fresh term.
The Securities and Exchange Commission has prescribed that any term beyond nine years will be “subjected to particularly rigorous review, taking into account the need for progressive change in the board to ensure an appropriate balance of skills and experience.” But it seems that there won’t be any issue among regulators or shareholders.
However, this may be the last term extension that Pardo would agree to, unless persuaded otherwise, as he would like to groom a successor soon.
Meanwhile, as Gilbert Teodoro has accepted the post of Defense Secretary, there will be vacancy in the board, which will be filled by no other than Peter Favila, who recently finished the maximum two terms at the Monetary Board.
The retired banker (a former Philippine National Bank and Security Bank president) is no stranger to PSE, as he had already become its chair nearly two decades ago.
—Doris Dumlao-Abadilla
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