SEC to issue new, consolidated guidelines  on corporate governance training

The Securities and Exchange Commission (SEC) is updating its guidelines on mandatory training programs for board members and key officers of companies, as part of efforts to strengthen good corporate governance practices among businesses.

The Commission on February 5 issued for public comment the draft memorandum circular providing for new guidelines on the conduct of corporate governance training and the accreditation of institutional training providers, resource speakers, and in–house corporate governance training.

The proposed guidelines consolidate and update existing memorandum circulars on corporate governance training, with the goal of providing a more comprehensive and future-ready framework that supports the Commission’s push to strengthen corporate governance.

Through the draft rules, the SEC seeks to introduce more rigorous accreditation standards and expand mandatory training content to reflect current global and domestic governance expectations. It also looks to enhance compliance monitoring and documentation to ensure that governance training is completed and delivered with quality, consistency, and relevance.

The proposed guidelines cover all publicly-listed companies, public companies and registered issuers, as well as accredited institutional training providers.

Under the proposed rule, mandatory topics for the training of first-time directors and key officers must include the revised Organisation for Economic Cooperation and Development Principles of Corporate Governance, ASEAN Corporate Governance Scorecard, Code on Corporate Governance, Integrated Annual Corporate Governance Report, and the environment, social and governance, and sustainability reporting.

Board responsibilities, protection of minority interests, financial oversight, reporting and audit, compliance and ethics, illegal activities, such as insider trading, short-swing transactions, and conflict of interest, related party transactions, director liabilities, confidentiality obligations, and competition law must also be part of the initial training.

Regulatory updates relevant to the company’s industry, including policies issued by the SEC and the Bangko Sentral ng Pilipinas, among others, must be considered when designing a training program.

Subsequent training sessions, which must be tailored to a company’s needs, may expound on the mandatory topics and other corporate governance related areas.

These trainings, which may be conducted through onsite, online, or hybrid mode, may be organized by the company itself, or by a corporate governance institutional training provider, and can be accredited by the SEC.

The aforementioned accreditations are proposed to have corresponding processing fees ranging from P2,000 up to P50,000. The validity of accreditation of institutional training providers (ITP) was also proposed to be increased from three years to five years.

Aside from the accreditation of ITPs and in-house corporate governance training, resource speakers of ITPs, through the initial or amended application for accreditation of ITPs, must likewise secure accreditation from the Commission under the proposed guidelines.

An accredited resource speaker who is a director and/or officer of a company that holds continuing accreditation and has conducted at least one training in a year, as well as those who attended foreign training, with proof of attendance disclosed in the company’s annual corporate governance report, are exempted from the training requirement.

The Commission also proposes penalties for any violation of the provisions of the rules, with fines ranging between P1,000 up to P50,000, as well as suspension/revocation of SEC accreditation after due notice and hearing.

The public may submit their comments on the proposed rules through this link (https://docs.google.com/forms/d/e/1FAIpQLSd2_73-B1VWbnZqAh1lj4iZ551sItSlDZNTdPS5S8oacgGBig/viewform?usp=publish-editor) on or before February 28.