SEC: virtual attendance in board, stakeholders' meetings allowed beyond pandemic

Published March 14, 2022, 3:55 PM

by James A. Loyola

The Securities and Exchange Commission (SEC) is calling on corporations to allow shareholders or members to participate in meetings virtually to encourage greater stakeholder involvement in their governance.

The Commission reiterated the provisions of the Revised Corporation Code of the Philippines which allow for the participation of directors or trustees, officers, and shareholders or members in corporate meetings through remote communication.

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The SEC issued the implementing rules through SEC Memorandum Circular No. 6, Series of 2020, as travel restrictions and other stringent public health protocols were imposed to curb the outbreak of COVID-19.

The Commission, however, clarified that allowing participation in corporate meetings through remote communication or in absentia was not an interim measure meant to take effect only during the pandemic.

Moving forward, corporations may continue holding meetings through remote communication or other alternative modes, as provided under the Revised Corporation Code.

SEC Chairperson Emilio B. Aquino

“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 Chairperson Emilio B. Aquino said.

He added that “Stronger stakeholder engagement brings in more insights that could translate to well-grounded decisions and innovations, as well as it promotes transparency and accountability in the decision-making. All these will ultimately redound to the benefit of the corporation.” 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.

Directors or trustees who intend to participate in a meeting through remote communication shall notify in advance the presiding officer and corporate secretary.

They shall be deemed present for the purpose of attaining quorum. During the roll call, they shall state their location, specify the device they are using and confirm that they can clearly hear and/or see the other attendees, among others.

In stockholders’ or members’ meetings, the written notice of meetings may likewise be sent to stockholders or members through email or such other similar manner as may be provided in the corporation’s bylaws.

Stockholders or members who participate through remote communication or in absentia shall be deemed present for purposes of attaining quorum.

In the election of directors, trustees and officers, stockholders or members may exercise their right to vote in person, through a proxy or, when so authorized in the corporation’s bylaws, through remote communication or in absentia.

In corporations vested with public interest, stockholders or members may vote through remote communication or in absentia in the election of directors, trustees and officers notwithstanding the absence of a provision in the corporation’s bylaws.

Corporations shall also adopt measures to ensure that all stockholders or members have the opportunity to participate in the meeting including an opportunity to read or hear the discussion substantially.

 
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