SHAREHOLDERS of corporations will now receive notices to regular meetings at least three weeks before schedule, as the Securities and Exchange Commission (SEC) works to increase participation from minority investors.
The SEC recently issued Memorandum Circular No. 3, Series of 2020 requiring companies to send its invitations for shareholder meetings at least 21 days before the event.
This is a longer period of time from the previous requirement of sending written notices at least two weeks prior to the meeting.
“The longer notice period will allow stockholders or members to prepare for, participate more effectively in their regular meetings and cast votes in matters concerning the corporation such as the election of directors,” SEC Chairperson Emilio B. Aquino was quoted as saying in a statement over the weekend.
The memorandum abides by the provision of the Republic Act No. 11232, or the Revised Corporation Code of the Philippines, which requires sending a written notice of regular meetings to shareholders at least 21 days prior to the meeting.
In the event that the meeting is postponed, the SEC also requires that companies send a written notice of the postponement at least two weeks before the original date of the meeting. The letter must contain the new schedule of the meeting.
These written notices must mention all necessary information and deadlines that would demand shareholder participation, such that if a shareholder may not attend, he or she may still vote either remotely, in absentia or through a proxy.
“This is in line with the mandate of the Commission to promote good corporate governance, protect minority investors, and make the Philippine corporate sector more competitive globally,” Mr. Aquino said.
The memorandum took effect last week upon its publication in two newspapers on Feb. 27. — Denise A. Valdez