The Market Monitor Minding the Nation's Business
By Riza Lozada
Major lender Metropolitan Bank and Trust Co. (Metrobank) reduced to 12 from 14 its number of directors to improve compliance with corporate governance best practices.
The bank’s board has approved the amendment in the company’s by-laws to reflect the reduction of the number of directors, as brought about by certain developments in the business strategies of the bank and the changes in regulations and best practices, Metrobank said in a statement.
The proposed amendment is subject to the approval of the stockholders during its annual meeting on April 27 and, after that, of the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission.
The amendment to the number of directors will result in Metrobank aligning with the international standard of 12 directors as the ideal board size for publicly listed companies.
Metrobank said that, over the past three years, divestment in non-core banking assets and the closing of international offices, as necessitated by Basel 3 requirements, resulted in the reduction in the number of investments that need directorial oversight.
The bank also cited the general difficulty in recruiting willing and qualified directors for the bank and its subsidiaries and affiliates due to regulations becoming more complex, requiring a higher degree of expertise from the candidates.
Metrobank informed the Philippine Stock Exchange that “restrictions on the term limits of independent directors” as one of the reasons that changed its number of directors.
“Instances when qualified potential candidates for independent directors have to beg off due to existing directorships with the bank’s borrowing clients, because interlocking directorships have the unwelcome effect of such companies infringing on directors, officers, stockholders and related interests (Dosri) rules and those on related parties of the bank, or worse, compromising the independent directorship position in those companies,” Metrobank said.