By: Atty. Gregorio B. Austral, CPA
The use of technology in corporate board meetings
Even before the COVID-19 pandemic, a significant innovation for corporate board
meetings was introduced by the Revised Corporation Code (R.A. No. 11232). Before,
members of corporate boards must be physically present during board meetings to
participate in the deliberation of the agenda and to vote on important matters for the
corporation. BOD members are not allowed to send proxies because they cannot
delegate the functions of a board member to another person. Attending meetings via
teleconferencing was just an exception to the rule when allowed under the bylaws of
the corporation.
Pursuant to SEC Memorandum Circular No. 6, Series of 2020, directors or
trustees who cannot physically attend or vote at board meetings can participate and
vote through remote communication such as videoconferencing, teleconferencing, or
other alternative modes of communication that allow them reasonable opportunities to
participate. However, directors or trustees still cannot attend or vote by proxy at board
meetings.
If a director or trustee intends to participate in a meeting through remote
communication, he/she shall notify in advance the Presiding Officer and the Corporate
Secretary of his intention. The Corporate Secretary shall note such fact in the Minutes
of the meeting.
Corporations may issue their own internal procedures for the conduct of board
meetings through remote communication or other alternative modes of communication
to address administrative, technical and logistical issues.
Unless the Revised Corporation Code or the articles of incorporation or bylaws of
a corporation provides for a greater majority, a majority of the directors or trustees
shall constitute a quorum.
A director or trustee who participates through remote communication shall be
deemed present for the purpose of attaining quorum.
There is also another innovation on sending notices of meetings, which may now
be sent to all directors or trustees through electronic mail, messaging service or such
other manner as may be provided in the bylaws or by board resolution.
When so provided in the bylaws or by majority of the board of directors,
stockholders or members who cannot physically attend at stockholders’ or members’
meetings may participate in such meetings through remote communication or other
alternative modes of communication. The same rule applies in the determination of the
quorum during stockholders’ meeting wherein a member attending through remote
communication is deemed present during the meeting.
With these developments, corporations will no longer be hostage to the obsolete
methods prescribed in Batas Pambansa Blg. 68, the Corporation Code of the Philippines,
which has withstood advancements in technology for several decades.