We will stand our ground – SEC chair

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March 30, 2026 | 12:00am

On case over independent director term limits

MANILA, Philippines — The Securities and Exchange Commission (SEC) said it would stand firm following a case filed by media giant GMA Network Inc. against the commission’s circular imposing term limits for independent directors of publicly listed companies.

“We will stand our ground. Our people clamor against political dynasties – so our public companies must reject boardroom entrenchment. No double standards,” SEC chairperson Francis Lim said in a statement over the weekend.

“We must raise our governance standards to restore investor confidence. Our stock market has been falling behind. The time to act is now – and we call on everyone to step up for the sake of our capital markets,” he said.

In a disclosure last week, GMA said it filed a petition for certiorari before the Makati Regional Trial Court, seeking to nullify and set aside SEC Memorandum Circular 7, Series of 2026, “for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction and for being violative of Sections 1 and 22, of Article III of the 1987 Constitution.”

“By the petition, petitioner GMA assails the constitutionality of SEC MC Circular 7, Series of 2026 and asserts to sustain direct injury by virtue of the issuance of the assailed circular for the very limited time afforded to it before the holding of its 2026 annual stockholders meeting, as it will be forced into a position of scrambling to replace its two incumbent IDs (independent directors), former chief justice (Artemio) Panganiban and Dr. Jame Laya, without the opportunity of conducting an exhaustive vetting process,” the company said.

GMA’s petition also seeks for the issuance of a temporary restraining order, writ of preliminary injunction and/or other injunctive remedies to enjoin the SEC from implementing and/or enforcing the circular and “to prevent any irreparable injury to petitioner due to the infringement of their Constitutional rights as a consequence of the issuance of the said assailed circular which took effect on Feb. 1, 2026.”

The SEC has set a term limit for independent directors to strengthen director independence and align with international best practices.

Through MC 7 issued by the SEC on Jan. 26, an independent director will be elected for a term of one year and will serve a maximum cumulative term of nine years in the same company.

An independent director who has served the maximum cumulative term will be barred perpetually from re-election as an independent director of the same company, without prejudice to serving as a non-independent director or officer of the same firm without any cooling-off period.

In case an independent director is elected as non-independent director or officer of the company within the nine-year term limit, the circular states than he or she can be elected again as an independent director of the same company only after observing a cooling off period of two years from the date he or she ceases being a non-independent direct or officer.

This is provided that the cumulative service as independent director has not yet reached the nine-year maximum limit.