Former Philippine Stock Exchange chair Ma. Vivian Yuchengco is urging the Securities and Exchange Commission (SEC) to withdraw a circular that sets term limits for the bourse’s broker-directors, stating the move weakens fundamental corporate governance principles and shareholder rights. In her statement, Yuchengco emphasized that good governance depends on directors earning and retaining shareholders’ trust, while regulators must respect that electoral choice. She noted that repeated re-election should not be dismissed by the SEC, but rather reinforces the commission’s duty to clearly justify why such a choice should be overridden. Along with fellow director Eddie Gobing, Yuchengco has also filed a petition with the Court of Appeals to have the rule declared unconstitutional; both bring extensive board experience, with Yuchengco having served 28 years and Gobing 25 years.
The dispute centers on SEC Memorandum Circular No. 17, which restricts broker-directors at any exchange to a maximum cumulative term of 10 years. The SEC stands by the measure, confirming it was issued under authority granted by the Securities Regulation Code (Republic Act No. 8799) and the Revised Corporation Code of the Philippines (Republic Act No. 11232). The commission explained that the circular supports its core mandate to improve corporate governance standards, enhance market transparency, and strengthen overall integrity and accountability—all essential steps toward developing a robust, dynamic, and world-class Philippine capital market that can attract global investment and fuel sustainable economic growth.
Yuchengco countered that directors should only be replaced if they perform poorly or lose shareholders’ confidence, not solely based on length of service. She raised the question of why trusted, effective directors should be disqualified simply after reaching the 10-year mark, calling on the SEC to provide a clear answer. She also addressed the stated goal of bringing fresh perspectives and opportunities for new leaders, noting that the chance to run for office does not guarantee victory. Other candidates, she argued, should earn shareholders’ confidence by demonstrating their potential contributions, while removing qualified, proven incumbents only limits voter options and does not make elections more meaningful.
Corporate and Market Significance
This case carries substantial weight for the Philippine business and investment landscape. It places a critical spotlight on the balance between regulatory oversight and the fundamental right of shareholders to elect leaders they trust and value. The outcome will set a precedent regarding whether fixed tenure limits inherently strengthen governance, or if they risk eroding board expertise and continuity. It also stands to influence how local and international investors view the stability, independence, and operational flexibility of Philippine exchanges and corporate boards, directly impacting market confidence and investment appeal moving forward.
