Zobel then owned 6,050 SMC shares, which were more than the required 5,000 shares to qualify for nomination and election to the board of San Miguel. No problem with this.
Garcia and De la Paz were nominees of the Government Service Insurance System, with 178.354 million SMC shares, or 6.29 percent, and the Social Security System, with 147.111 million SMC shares, or 5.25 percent, respectively. Sy represented SM Investments Holdings Corp., which he and his family control, and which owned 153.499 million SMC shares, or 5.39 percent.
The same filing also listed SMC’s significant stockholders, such as CIIF Companies, 24.48 percent; ECJ Companies, 19.21 percent; and Kirin Brewery Inc. of Japan, 15.55 percent. As corporate stockholders, they elected their nominees to SMC’s 15-man board as allowed by the number of shares they owned. In many instances, they elected more directors because of the proxy votes entrusted to them by minority stockholders.
In short, SMC then did what the public wanted to know from the filings in connection with the annual stockholders’ meeting: who were nominated and the number of shares that got them elected. Its information statement is used here because it identified for the public the association of each independent director and justified the election of nominees for directorship.
For instance, businessman Eduardo Cojuangco Jr. was an SMC director and chairman of the board because he owns ECJ Companies, which was entitled to three board seats. He remains SMC chairman and chief executive officer.
Today, the public would be missing the kind of filing that would tell them who nominated whom. It is up to them to decipher the association of nominees as they are listed in the definitive information statements.
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It appeared the appointment of independent directors has affected the proportionate representation on the board of significant stockholders that they may be nominating less than they may be entitled to nominate and elect.
Will somebody care to review the selection of independent directors? Do they really assume their role as protector of the interests of the public stockholders? It is only the PSE and the Securities and Exchange Commission which could scrutinize the functions and the performance of independent directors who enjoy the same pay and perks received by regular directors.
In fairness to listed companies, they identify in their PSE posting the persons who nominate independent directors and the qualifications of the nominees. But the public may need more such as the nominees’ assurance that they would fully disclose their participation in board meetings. Transparency would justify their presence in the policy-making body of listed companies.
Not that Due Diligencer agrees with the selection and appointment of independent directors. It only suggests full disclosure of their performance inside the boardrooms so that the public would know their stand on issues affecting the minority stockholders. It still maintains that it is time to get rid of independent directors. Let the majority stockholders elect them as their nominees.