THE Securities and Exchange Commission (SEC) has issued guidelines for corporations that want to do stockholders’ meetings remotely while Luzon is under “strict home quarantine.”
After President Rodrigo R. Duterte ordered to lockdown the entire Luzon island starting yesterday due to the coronavirus outbreak, mass gatherings are similarly prohibited until April 13.
Annual stockholders’ meetings (ASMs) of publicly listed companies were originally scheduled in the next few weeks until June. With the prohibitions in place, the SEC issued Memorandum Circular No. 6 outlining the guidelines on the attendance and participation of stockholders for meetings that will be held remotely or through electronic communication.
Aside from ASMs, the memorandum covers board meetings and other regular and special meetings for stockholders.
“The Guidelines support the President’s declaration of a state of public health emergency throughout the Philippines to contain the outbreak of the new coronavirus disease, COVID-19,” SEC Chairperson Emilio B. Aquino said in a statement.
For board meetings, the company’s corporate secretary is tasked to send notices of meetings to directors and trustees via e-mail or other electronic messaging services. Companies are allowed to craft their own procedures for the conduct of the meeting, which will address administrative, technical and logistical concerns.
Attendance in meetings must be confirmed in advance. During the meeting, each of the attendees must specify their location and the device they are using on roll call. When needed to vote, directors and trustees may do so via e-mail, messaging services, or whatever procedure that has been agreed upon internally.
For stockholders’ or members’ meetings, the same rules apply for invitations. The notice of a meeting must indicate the requirements and procedures for participation and the matter and period for casting votes.
The presiding officer must initiate the meeting at the principal office of the corporation or in the city or municipality where it is located. Confirmation of participation from stockholders is required in advance.
As allowed by the Revised Corporation Code of the Philippines, stockholders may vote through remote communication or in absentia when authorized by a resolution of the majority of the board.
Like in board meetings, the companies are tasked to issue their own internal procedures for participation and voting in such meetings. This is expected to consider the number of shareholders and their locations and the importance of the matters to be discussed.
Such meetings are also required to be recorded for future reference, which the secretary will safe-keep.
“Aside from allowing directors, trustees, stockholders or members to participate in meetings through remote communication to minimize face-to-face interactions, the Commission encourages corporations to explore and implement all necessary measures to prevent the further spread of COVID-19,” Mr. Aquino said.
Prior to the SEC memo, the Philippine Stock Exchange, Inc. (PSE) had earlier advised firms to look into allowing remote participation in ASMs due to the virus outbreak.
As of Tuesday, records from the PSE Electronic Disclosure Generation Technology (EDGE) platform show the companies whose ASMs are scheduled this month are BDO Leasing and Finance, Inc. (March 20); Xurpas, Inc. (March 24); Chelsea Logistics and Infrastructure Holdings Corp. (March 26); and Phoenix Petroleum Philippines, Inc. (March 27). — Denise A. Valdez