The Shareholders’ Association of the Philippines (SharePHIL) threw its weight behind the regulatory proposal to cap the tenure of broker directors at the national bourse, adding momentum to a reform aimed at curbing board entrenchment.

SharePHIL, an advocacy group for minority investors, said in a statement that it provides “firm support” for the Securities and Exchange Commission’s (SEC) plan to implement a 10-year cumulative term limit for broker directors at the Philippine Stock Exchange (PSE).

The move aligns SharePHIL with the coalition of the country’s most influential business guilds, including the Management Association of the Philippines and the Financial Executives Institute of the Philippines.

The SEC proposal seeks to refresh the leadership of the exchange, where broker-dealers—who both own and trade on the platform—have long held significant sway.

By mandating a departure after a decade of service, the regulator aims to prevent the concentration of power and ensure that the board remains receptive to new perspectives.

SharePHIL, which counts former SEC Chairman Francis Lim among its past presidents, noted that the initiative is critical for "meaningful board refreshment."

“By instituting these limits, the SEC is laying the groundwork for preventing entrenchment and ensuring that new perspectives are consistently integrated into the governance structure of the Philippine Stock Exchange,” the association said.

The local capital market has been under pressure to modernize its governance framework to attract more foreign capital. The SEC’s mandate under the Revised Corporation Code allows it to implement rules that mirror international best practices.

SharePHIL pointed to principles set by the International Organization of Securities Commissions (IOSCO), arguing that term limits are a globally recognized standard for ensuring fair sectoral representation and active shareholder participation.

The PSE has historically navigated a delicate balance between its role as a self-regulatory organization and its status as a publicly listed company. Critics of long-standing board tenures argue that the lack of turnover can lead to stagnation, particularly as the exchange faces 2026 targets to increase daily turnover and widen the retail investor base.

The endorsement from SharePHIL follows similar statements from the Institute of Corporate Directors, the Capital Markets Development Foundation Inc., and the Investment House Association of the Philippines.

This unified front from the private sector suggests a growing consensus that the status quo in the PSE boardroom may no longer be sufficient to support a “globally competitive” market.

The association called on listed companies, brokers, and the investing public to engage in the SEC’s public consultation process, framing the term limit as a "necessary measure" to reinforce investor confidence.