SEC Readies Rules on Independent Directors in Listed corporations.(Business)
Byline: ANA MARIE MACUJA
The Securities and Exchange Commission (SEC) is set to come up with rules concerning the supervision of independent directors in publicly-listed corporations.
The rules, according to SEC chairperson Lilia R. Bautista, will serve as guidelines to resolve disputes concerning the election of certain independent directors.
"We should come up with rules in case of controversies on the election of independent directors, of when there would be disputes," said Bautista.
The election of independent directors into the board of publicly-listed companies is provided both in the Securities Regulation Code (SRC) and the newly promulgated Code of Corporate Governance.
According to the SEC, the election of independent directors plays a critical factor in ensuring board independence. It added the Philippine corporate sector remains to have a concentrated ownership thus a need for independent directors.
Concentrated ownership and the presence of " Insider Boards" increase the opportunity for the Board and the Management to expropriate wealth from minority shareholders through risky investment practices, inadequate disclosure, or sometimes, outright looting. …