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Seventeenth Congress
Second Regular Session

HOUSE BILL No. 6206

Introduced by Representative Maria Lourdes Acosta-Alba

EXPLANATORY NOTE

This bill seeks to professionalize the practice of corporate directorship in
government-owned and -controlled corporations (GOCCs) and government
financial institutions (GFI), amending for the purpose Republic Act No. 10149,
otherwise known as the “GOCC Governance Act of 2011.”

In the corporate world, the board of directors of any company,
corporation or association, including government-owned and -controlled
corporations, plays a central function. An effective board of directors must
comprise of highly qualified and competent directors capable of exercising
objective and independent judgment. Company executives and external
stakeholders share a common understanding of the role and responsibility of the
board of directors and ensure that it enjoys appropriate autonomy, authority and
accountability.

To raisc investor confidence, develop capital market and help achieve
high sustained growth for the corporate sector and economy, this measure
mandates the Governance Commission for GOCCs (GCG) to develop a
professional corporate directorship course or program and require candidates for
director in GOCCs and GFls, including those in ex-officio capacity, to pursue
the program. After completion, the candidates for director are also required to
take the qualifying examination. Failure in the examination will not qualify the
candidates for appointment. However, candidates for director in their ex-officio
capacity are no longer required to take the qualifying examination. The Bangko
Sentral ng Pilipinas will identify and accredit the learning institutions which can



provide the professional corporate directorship course and conduct the
corresponding qualifying examination.

The directors of GOCCs and GFs are also required to attend a mandatory
continuing education on corporate governance annually, similar to the
Mandatory Continuing Legal Education for lawyers. This is to ensure that the
appointed directors are updated on good corporate governance and
knowledgeable on how to protect stakeholder interests, strengthen business
relationships, increase access to external financing and lead to better operational
performance.

In view of the foregoing, approval of this bill is highly and earnestly

recommended.
ae ACOSTA-ALBA —~


Seventeenth Congress
Second Regular Session

HOUSE BILL No. _6206

Introduced by Representative Maria Lourdes Acosta-Alba

AN ACT
PROFESSIONALIZING THE PRACTICE OF CORPORATE
DIRECTORSHIP IN GOVERNMENT-OWNED AND -CONTROLLED
CORPORATIONS AND GOVERNMENT FINANCIAL INSTITUTIONS,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 10149,
OTHERWISE KNOWN AS THE “GOCC GOVERNANCE ACT OF 2011”

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 16 of the Republic Act No. 10149 is amended to
read as follows:
“Section 16. Fit and Proper. — All members of the Board,
the CEO and other officers of the GOCCs including appointive
directors in subsidiaries and affiliate corporations shall be qualified
by the Fit and Proper Rule to be determined by the GCG in
consultation and coordination with the relevant government
agencies to which the GOCC is attached and approved by the

President.


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To maintain the quality of management of the GOCCs, the
GCG, in coordination with the relevant government agencies shall,
subject to the approval of the President, prescribe, pass upon and
review the qualifications and disqualifications of individuals
appointed as officers, directors or elected CEO of the GOCC and
shall disqualify those found unfit.

In determining whether an individual is fit and proper to
hold the position of an officer, director or CEO of the GOCC, due
regard shall be given to one’s integrity, experience, education,
training and competence.

THE GCG SHALL DEVELOP A PROFESSIONAL
CORPORATE DIRECTORSHIP COURSE AND REQUIRE ALL
GOCC CANDIDATES FOR DIRECTOR, INCLUDING THOSE
IN THEIR EX-OFFICIO CAPACITY, TO TAKE THE COURSE.
TO BE ELIGIBLE FOR APPOINTMENT, A CANDIDATE FOR
DIRECTOR, EXCEPT THOSE IN THEIR EX-OFFICIO
CAPACITY, SHALL PASS A QUALIFYING EXAMINATION.

THE BANGKO SENTRAL NG PILIPINAS SHALL
IDENTIFY AND ACCREDIT THE LEARNING INSTITUTIONS
WHICH OFFER THE PROFESSIONAL CORPORATE
DIRECTORSHIP COURSE AND CONDUCT THE

CORRESPONDING QUALIFYING EXAMINATION.


ALL MEMBERS OF THE BOARD, THE CEO AND
OTHER OFFICERS OF THE GOCCS, INCLUDING
APPOINTIVE DIRECTORS IN SUBSIDIARIES AND
AFFILIATE CORPORATIONS, SHALL UNDERGO AN
ANNUAL MANDATORY CONTINUING EDUCATION ON
CORPORATE GOVERNANCE.”

SEC. 2. All charters of the GOCCs under existing laws and all other

laws, executive orders including Executive Order No. 323, Series of 2000,

administration orders, rules, regulations, decrees and other issuances or parts

thereof which are inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SEC. 3. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,