SEC drafts ‘future-ready’ governance training rules
The Securities and Exchange Commission (SEC) is moving to tighten corporate governance standards, drafting guidelines to update mandatory training requirements for board members and key officers of companies.
In a draft memorandum circular issued for public comment on Feb. 5, the regulator outlined new rules covering the conduct of corporate governance training and the accreditation of institutional training providers, resource speakers and in-house corporate governance programs.
The initiative aims to create a more comprehensive and future-ready framework to strengthen governance practices among Philippine companies.
The proposed guidelines will apply to all publicly listed companies, public companies, registered issuers and accredited institutional training providers.
The proposed guidelines introduce stricter accreditation standards and expand mandatory training topics to align with evolving global and domestic governance expectations, while enhancing compliance and documentation requirements.
The draft rules require first-time directors and key officers to undergo training on global and regional governance standards, including the revised Organization for Economic Cooperation and Development Principles of Corporate Governance, Association of Southeast Asian Nations Corporate Governance Scorecard and environment, social and governance and sustainability reporting.
The training must also cover critical governance areas such as board responsibilities, protection of minority shareholders, financial oversight, reporting and audit, compliance and ethics, as well as illegal activities including insider trading, short-swing transactions and conflict of interest.
Topics like related party transactions, director liabilities, confidentiality obligations and competition law will likewise form part of the initial training.
Subsequent training programs may be customized based on company needs and conducted onsite, online or through hybrid formats.
Companies may organize the training themselves or engage SEC-accredited corporate governance institutional training providers. The proposed accreditation fees will range from P2,000 to P50,000, while the validity period for accreditation of training providers may be extended to five years from the current three years.
Resource speakers will also be required to secure accreditation under the new framework, although certain accredited directors or officers who regularly conduct or attend governance training may be exempt from the requirement.
To enforce compliance, the SEC is proposing penalties for violations, including fines ranging from P1,000 to P50,000 and possible suspension or revocation of accreditation after due notice and hearing. The regulator has invited stakeholders to submit comments on the draft circular on or before Feb. 28.
The proposed reforms form part of the SEC’s broader push to improve transparency, accountability and governance standards in the Philippine corporate sector.
