PSE chief nixes proposed term limits for independent directors

Philippine Stock Exchange Inc. (PSE) president and CEO Ramon Monzon has expressed reservations over a proposed memorandum circular from the Securities and Exchange Commission (SEC) that seeks to impose a mandatory nine-year term limit on independent directors while simultaneously granting them security of tenure.

- By RICHMOND MERCURIO

(Monzon)

“I told SEC chairperson Francis Lim that I am not in favor of it. Why are we going to require a company to keep or maintain an independent director for three years? The election of independent directors is held every year. But what if the independent director’s performance is not good? Or what if someone good becomes available? You have to stick with it?” Monzon told The STAR in an interview.

“But overall, the nine years look okay. But the problem, I told him, is that other jurisdictions are liberalizing. Us, on the other hand, are regulating. Anyway, he’s very open. He said put that in your comments since we have a public comment period up to Oct. 15,” the PSE chief said.

The SEC issued a draft memorandum circular late last month, which sets the rules on the duration of terms and amends its rules on term limits for independent directors.

The issuance is expected to strengthen the independence of independent directors, as well as to align with international best practices under Republic Act 11232, also known as the Revised Corporation Code of the Philippines.