SEC asks firms to do videoconferencing for board, stockholders’ meetings

DAVAO CITY (MindaNews / 18 Mar) – The Securities and Exchange Commission (SEC) here has asked companies to utilize remote technologies like videoconferencing for their board and stockholders’ meetings in lieu of face-to-face interactions to help prevent the spread of the coronavirus disease (COVID-19).

Katrina Jamilla Ponco-Estares, OIC director of the SEC-Davao Extension Office, urged the companies to follow SEC Memorandum Circular No. 6, Series of 2020, allowing the “use of modern technology in corporate events” to maximize “company outputs while at the same time helping fight to curb the outbreak.”

She said the SEC would allow corporations to hold meetings through alternative channels for the purposes of approving “the provisions in their bylaws or internal procedures, which will govern participation in board meetings and stockholders’ and members’ meetings.”

Estares said these measures would mitigate the impact of the COVID-19 threat on the operations of their firms.

Under the SEC Guidelines, Estares said the corporate secretary may send notice of meetings to directors or trustees for board and stockholders’ meetings through email, messaging services or such other manner provided in the corporation’s bylaws or by board resolution.

The notices will include all pertinent materials for discussion which shall be numbered and marked in such a manner that the directors or trustees can easily follow and participate in the meetings but those who intend to participate in a meeting should notify in advance the presiding officer and corporate secretary, noted Estares.

The companies are asked to formulate internal procedures for the conduct of board meetings through remote communication or other alternative modes “to address administrative, technical and logistical issues.”

The guidelines provide that in the election of directors, trustees and officers, stockholders or members may exercise their right to vote in person, through a proxy or, when so authorized in the corporation’s bylaws, through remote communication or in absentia.

It added that the right to vote of stockholders or members may also be exercised through remote communication or in absentia when authorized by a resolution of the majority of the board. The resolution, however, shall only be applicable for a particular meeting.

Companies vested with public interest, stockholders or members may vote through remote communication or in absentia in the election of directors, trustees and officers notwithstanding the absence of a provision in the corporation’s bylaws, it said.

Corporations shall issue their own internal procedures, taking into consideration the number of shareholders or members and their location, the importance of the matters to be discussed and voted upon in the meeting, promotion of minority rights and other factors consistent with the protection and promotion of shareholders’ or members’ rights.

The internal procedures will provide, among others, mechanisms to verify the identity of stockholders or members and who among them have the right to vote during the meeting, and to enable stockholders or members to vote during the meeting and ensure that the integrity and secrecy of the votes are protected.

Corporations shall also adopt measures to ensure that all stockholders or members have the opportunity to participate in the meeting, including an opportunity to read or hear the discussion substantially, the guidelines said. (Antonio L. Colina IV / MindaNews)