UNVEILING THE CHANGES IN THE STOCKHOLDERS’ MEETING UNDER THE REVISED CORPORATION CODE

Change is inevitable, and in the corporate world, change is necessary to adapt to this fast-paced world. The Revised Corporation Code of the Philippines, also known as RA No. 11232, brought significant adjustments in the corporate landscape in 2019. With the evolving needs of the stockholders, the Revised Corporation Code aims to bring efficiency and enhance stockholders’ participation, transparency, and corporate governance.

As a transformative step forward, the Revised Corporation Code brings a host of new features that modernize and enhance the corporate landscape. Here are some of the notable changes in conducting Stockholders’ Meetings under the Revised Corporation Code:

Remote Participation and Electronic Communication

While face-to-face meetings remain the traditional way of conducting meetings, the Revised Corporation Code introduced new ways to conduct meetings to enable the full participation of Shareholders and for them to conveniently cast their votes through electronic means. The Securities and Exchange Commission (SEC) issued Memorandum Circular No. 6 to provide guidelines on the attendance and participation of Directors, Trustees, Stockholders, Members, and other persons of the Corporation in regular meetings. Under Section 10 of the Memorandum Circular, the directors, stockholders, or members who physically cannot attend meetings may participate through remote communications or other means of communication. This provision allows shareholders to engage and vote in meetings through teleconferencing, video conferencing, or other electronic means. Through this, distance is no longer a barrier to ensuring broader shareholder inclusion and participation.

In the Annual Stockholders Meeting (ASM) or Annual General Meeting (AGM), which is held every year as fixed in the Bylaws of the company, the Revised Corporate Code provides that if there is no fixed date for the meeting, it shall be conducted on any date after April 15 of every year as determined by the Board of Directors or members. If a stockholder or member intends to participate in the meeting through remote communication, he/she shall inform the Corporate Secretary ahead of time and the Corporate Secretary shall note it in the Minutes of the meeting.

Notice and Quorum Requirements

Remember the times when you had to wait for days for the mail to be delivered to your doorstep? Well, no more waiting because RCC promotes the use of technology to facilitate efficient communication and prompt delivery of notices. This mandates that the Stockholders must receive timely and comprehensive notices of the meeting. The notice must contain necessary information such as the time, date, location, and agenda of the meeting. Previously, the Corporation Code required a timeframe of two weeks before notice of the meeting was sent to the directors. The Revised Corporation Code expanded the period to 21 days, giving the Stockholders enough time to prepare, review important documents, and make informed decisions.

The RCC also introduced a simplified and modern way of obtaining a quorum in a meeting. This allows faster decision-making and prevents unnecessary delays caused by quorum constraints. Now, stockholders or members who wish to participate through remote communication or in absentia shall be considered present to obtain the quorum requirement.

Agenda of the Stockholders’ Meeting

To increase shareholder participation in Stockholders’ Meetings, Section 49 of the Revised Corporate Code enables stockholders to propose the holding of a special meeting and items to be included in the agenda. Through this, the stockholders are given the opportunity to suggest specific items that they believe are important matters for discussion with other shareholders. The Revised Corporation Code not only empowers stockholders to take an active role in the decision-making process in the meeting but also ensures that their voices are heard and considered in shaping the direction of the company.

Proxy Voting

Stockholders or members who cannot attend the meeting in any form can appoint a proxy as their substitute. The proxies shall be in writing, signed by the stockholder or member, and submitted to the Corporate Secretary before the scheduled meeting. With the Revised Corporation Code, proxies are now allowed to vote on behalf of the Stockholder or member through remote communication or in absentia as long as they cast their votes before the tally of votes is finished.

Conclusion The Revised Corporation Code of the Philippines has revolutionized the landscape of stockholders’ meetings and incorporated instrumental changes that will bolster transparency and strengthen corporate governance. This progressive provision ushered in a new era for stockholders’ meetings and hopefully, will pave the way for more improvements in the future to promote good corporate governance.