Former Philippine Stock Exchange (PSE) Chairman Ma. Vivian Yuchengco asked the Securities and Exchange Commission (SEC) to withdraw the circular that caps the term of the bourse’s broker-director.
In a statement, Yuchengco said good governance requires directors to earn shareholders’ trust and regulators to respect shareholders’ rights.
‘A director’s repeated election does not give the SEC a reason to disregard that trust. It gives the SEC a stronger obligation to justify taking the choice away.’
Yuchengco and Eddie Gobing, a director, have petitioned the Court of Appeals to declare the rule unconstitutional.
Yuchengco and Gobing sat on the PSE board for 28 years and 25 years, respectively. SEC Memorandum Circular (MC) 17 restricts broker-directors to a maximum cumulative term of 10 years at any exchange.
‘The commission reiterates that MC 17 was promulgated pursuant to the regulatory powers vested upon it under Republic Act No. 8799, or the Securities Regulation Code (SRC), as well as Republic Act No. 11232, or the Revised Corporation Code of the Philippines,’ the SEC said in an earlier statement.
‘Accordingly, the memorandum circular directly advances the Commission’s mandate to uphold corporate governance standards, enhance market transparency, and strengthen integrity and accountability in the corporate sector. These are essential toward building a robust, dynamic and world-class Philippine capital market-capable of attracting global investment and driving sustainable economic growth.’
Yuchengco said a director who performs poorly should be replaced. A director who loses shareholders’ confidence should be voted out.
‘But why should a director whom shareholders trust be disqualified simply for having served them for 10 years?’
‘The SEC wants fresh perspectives and opportunities for others to serve. But an opportunity to seek election is not an entitlement to win. Other candidates should earn shareholders’ confidence by showing what they can contribute. Removing otherwise qualified competitors does not make an election more meaningful. It narrows the voters’ choice,’ Yuchengco added.