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GOVERNANCE IN THE
PHILIPPINE SETTING
Archie D. Guevarra, CPA
February 26, 2019
• Points of Discussion
• Legal theory of Philippine Corporate Law
• Corporate Social Responsibility within the
Philippine Corporate Governance System
• Jurisprudence on Philippine Corporate
Governance
• Some of the Salient Corporate Governance
Provisions under the Revised Corporation
Code
Philippine Corporate Law as a direct transplant of American
Corporate Law which is a product of a common law system
operating within a hybrid legal system.
JURISPRUDENCE ON PHILIPPINE
CORPORATE GOVERNANCE
Board of Liquidators vs Kalaw
Where similar acts have been approved by the directors as a matter of
general practice, custom, and policy, the general manager may bind the
company without formal authorization of the board of directors.
JURISPRUDENCE ON PHILIPPINE
CORPORATE GOVERNANCE
Boman Environmental Dev't. Corp. vs. Court of Appeals
The requirement of unrestricted retained earnings to cover the shares is based
on the trust fund doctrine which means that the capital stock, property and
other assets of a corporation are regarded as equity in trust for the payment of
corporate creditors.
JURISPRUDENCE ON PHILIPPINE
CORPORATE GOVERNANCE
• Election of independent directors which must constitute at least 20% of
the board for corporations vested with public interest; (Sec. 22)
• Additional criteria for disqualifications (Sec. 26)
• Inclusion of SEC’s right to remove directors or trustees; (Sec. 27)
• Prohibition of directors/trustees in their participation on the determination
of their per diem/compensation (Sec. 29)
• Annual report of the total compensation of each directors/trustees (Sec.
29)
• Creation of special committees of temporary or permanent in nature
(Sec. 34)