PHILIPPINE Stock Exchange (PSE) long-time broker director Vivian Yuchengco on Thursday urged the Securities and Exchange Commission (SEC) to withdraw its new term-limit rules for directors representing brokers, arguing that shareholders should decide who remains on corporate boards.
Yuchengco questioned SEC Memorandum Circular 17, Series of 2026, which bars broker-representative directors from serving beyond 10 cumulative years.
“A director who performs poorly should be replaced. A director who loses shareholders’ confidence should be voted out. But why should a director whom shareholders trust be disqualified simply for having served them for ten years?” Yuchengco said.
She argued that length of service alone should not determine a director’s eligibility, saying shareholders should be able to weigh a director’s performance, experience, and contribution through elections.
“Removing otherwise qualified competitors does not make an election more meaningful. It narrows the voters’ choice,” Yuchengco added.
She explained that broker-representative directors occupy only five of the PSE’s 15 board seats and cannot form a majority on their own.
“The PSE could have zero directors representing brokers if shareholders chose other candidates,” she said.
Yuchengco acknowledged that broker representation could raise potential conflicts of interest but questioned whether a mandatory 10-year cutoff was necessary to address them.
“What specific failure will this rule correct that fair elections, independent oversight and firm enforcement cannot?” she said.
“Length of service alone supplies no answer. An ineffective director can do damage well before ten years. An experienced director can continue contributing long afterward. A calendar measures neither competence nor integrity,” Yuchengco added.
She said the SEC should explain why the restriction is necessary before limiting shareholders’ choice of corporate leadership.
“The SEC should withdraw the circular. Good governance requires directors to earn shareholders’ trust and regulators to respect shareholders’ rights,” Yuchengco said.
The statement comes as the dispute over the SEC’s broker-director term-limit rule continues. In August, broker directors asked the Court of Appeals to annul the SEC rule.
