PSE opens nominations for 2004 board

The Philippine Stock Exchange (PSE) has opened the nominations for the 2004 board of directors with the final list of candidates expected by Feb. 18.

In a notice to brokers, the PSE said all nominations should be received by Feb. 13 to give the bourse’s Nominations and Elections Committee (Nomelec) enough time to select the qualified candidates.

The PSE is scheduled to hold its annual stockholders meeting on March 13.

The Securities and Exchange Commission (SEC) earlier directed the PSE to appoint an outside director in the Nomelec to ensure transparency and fairness in the election of independent directors for the local bourse.

Jose P. Aquino, head of the SEC’s Markets Regulation Department, said all three members of the recently-constituted Nomelec are brokers – Rodolfo Cruz (HK Securities), Shirley Bangayan (A&A Securities) and Remy Tigolo (SB Equities).

Aquino cited a circular issued by the SEC last year requiring the inclusion of an independent director in the composition of the Nomelec.

He said none of the incumbent independent directors wanted to be part of the Nomelec due to professional commmitments and that most of them were planning to run again.

SEC chairperson Lilia R. Bautista said the PSE, however, could seek exemption from the rule should it fail to find an acceptable independent director.

The Nomelec shall review the qualifications of the nominees for independent directors and prepare the final list of all candidates, which shall be submitted to the SEC.

Under the Securities Regulation Code, eight of the 15 board seats are reserved for non-broker directors.

The SEC defines an independent director as a person who is independent of management and free from any relationship which would materially interfere with his exercise of independent judgment in carrying out his responsibilities as director of any corporation such as the PSE.

Last year, the Nomelec, then headed by Aquino, figured in a conflict with brokers when it reappointed four incumbent independent directors and disqualified nominees of the group led by stockbroker-businessman Robert Coyiuto Jr.

Several brokers said the Nomelec’s decision favored the group of President Macapagal-Arroyo’s sister-in-law Alicia Arroyo, who subsequently won as PSE chairman.

The group of Coyiuto said the SEC should not have interfered in the nominations process as there are existing laws that should be complied with.

The Nomelec and SEC, however, defended the shortlisting process which they said was in compliance with the circular issued by the corporate watchdog agency in November last year, which provides the basis for selection of independent directors in corporations including the demutualized PSE, in accordance with the Code of Corporate Governance.

The circular provides that the independent directors should not be allowed to solicit votes for himself or be subject to election by stockholders.

The group of Coyiuto alleged that the election rules are in violation of the Corporation Code, which mandates an election. They said the Nomelec should not have appointed the independent directors but rather allowed brokers and other participants to vote. – Zinnia Dela Peña