SEC says new rules on board directors expected this quarter – BusinessWorld Online
THE SECURITIES and Exchange Commission (SEC) plans to introduce new rules within the first quarter setting fixed terms for independent directors, as part of efforts to strengthen corporate governance and accountability in listed companies.
Under the proposed rules, independent directors — board members who represent shareholders and help oversee company management — would serve three-year terms, with a maximum cumulative service of nine years.
The SEC also plans to stagger terms so that not all seats are renewed at the same time.
“This ensures that boards remain balanced and independent while giving companies time to plan leadership transitions,” SEC Chairperson Francisco Ed. Lim said on Wednesday.
Currently, independent directors can serve up to nine years, with some companies allowed to extend their terms under special exemptions.
Mr. Lim said the SEC intends to enforce the nine-year cap more strictly going forward.
The changes aim to strengthen the role of independent directors in holding management accountable, protecting shareholder interests, and promoting transparency in company operations. — Alexandria Grace C. Magno