The Securities and Exchange Commission (SEC) has issued a memorandum circular that orders all publicly-listed companies (PLCs) to secure shareholders’ approval on the appointment of external auditors, a move that is seen to boost the country’s ranking in the World Bank’s Doing Business list.
SEC’s Memorandum Circular No. 8 Series of 2018, posted on its website, orders all PLCs to seek shareholders’s approval “on any change/s in the company external auditor”.
Aside from this, the agency also ordered all PLCs to have an audit committee that is composed only of board members.
The memo said that the orders are pursuant to Administrative Order No. 38 or the Task Force to Initiate, Implement Ease of Doing Business Reforms
Although Armando A. Pan, Jr., officer-in-charge of the Office of the Commission Secretary, said the securing of shareholders’ approval is already being practiced by some 93% of PLCs, the memo circular intends “to raise Phils’ ranking in the area [of] Protecting Minority Investors and the country’s overall rank”. — Janina C. Lim