Five (5) annual shareholders’ meetings (ASM) between April 25 and June 26, 2014 were attended by three members of SharePHIL. The ASMs took place at different times and at different venues in Manila and Quezon City.
From these ASMs, only two of the meetings were able to provide the shareholders a copy of the agenda. Those who were not able to receive the copy of the agenda were able to retrieve the same from the website of the company hosting the ASM or from the PSE website. Four of the companies issued a copy of the Annual Report to the shareholders prior to the start of the meeting. In addition, only two of the meetings (or 40%) provided the shareholders a copy of the list of the acts of the board and the management for approval by the shareholders.
The other documents that these members received for the meeting are as the following: 1) resolution regarding the results of the organizational meeting of the board; 2) resolution on the acquisition of another company; 3) CSR initiatives; 4) minutes of the last ASM; and 5) proposed resolution regarding corporate address. Four or 80 percent of the companies provided these documents only during the meeting itself.
While a quorum was met for all meetings conducted, 3 or 60% of the meetings have irregularities as observed by the members, where there are some key persons who are absent, and announcements are not done in compliance with rules of regulatory bodies. In two out of the five meetings, the Chairman of the Board presided, while both the Vice Chairman and the President was the presiding officer of the other meetings. Only two of the meetings provided sufficient disclosures on the acts of the board and management, and in 3 out of 5 meetings, shareholders raised questions regarding the acts of both the board and management, and of those three, only two received satisfactory responses from the presiding officers.
While most of the meetings did not require actions for approval of the shareholders, there are meetings in which shareholders acted upon the amendments on the articles of incorporation (2), removal of directors (1), issuance of share dividends (3), matters requiring approval of minority
shareholders (2), and other major actions (1). The presiding officer in two meetings properly recognized the questions raised by the shareholders, although there was one presiding officer who seemed to be impatient, as observed by one of the members.
In terms of the quality of annual report, only one company was perceived to have an excellent report, while the rest have very good (2) or good (2) remarks. 80% of the meetings disclosed the business risks that the companies are facing and the results of the company’s operations for the
preceding year, while 3 out of 5, or 60% were able to disclose the details of the company’s business plan for the coming year.
As to the election of the board of directors, four companies were able to disclose the qualifications of candidates to the board of directors prior to the election proper, with two companies electing eleven (11) members in their respective boards. All companies who conducted their ASMs were able to elect independent members in their board of directors, ranging from 2 to 4 members. All shareholders were able to approve the appointment of independent auditors, but there are concerns that the audit committee should be the one providing the endorsement over the approval process.
Regarding the comments of the observers, there is a strong need to provide the materials to the shareholders on an earlier date prior to the ASM. In addition, the major acts of the board and management should be made visible prior to approval, as well as a detailed statement about the
potential risks that these companies might face in the next year. Lastly, endorsement of the appointment of independent auditors should be done by the audit committee and not by the presiding officer.