[Last updated: 1 January 2024, unless otherwise noted]

Under the laws, the applicant company is required to have at least two independent directors or such number of independent directors to constitute at least 20% of the members of the board, whichever is lesser. An "independent director" is a person who, apart from his fees and shareholdings, is independent and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in the carrying out his responsibilities as a director of any listed company.

Pursuant to SEC Memorandum No. 19, Series of 2016 or the Code of Corporate Governance for Publicly-Listed Companies (CG Code for PLCs), the SEC prescribes that the board of PLCs should have at least three independent directors, or such number as to constitute at least one-third of the members of the Board, whichever is higher. Recommendations under the CG Code for PLCs, however, are not mandatory requirements but serve as objective criteria intended to identify features of corporate governance good practice for covered companies (that is to say, listed companies).

PLCs are vested with public interest and the CG Code for PLCs explains that the presence of independent directors in the board is aimed towards ensuring the exercise of independent judgement on corporate affairs and proper oversight of managerial performance, including, prevention of conflicts of interests and balancing competing demands of the corporation.

The CG Code for PLCs also recommends that a PLC must have a Corporate Governance Committee, which is tasked, among other things, with determining the nomination and election process for the company’s directors. The Manual on Corporate Governance of a PLC should also include a formal and transparent board nomination and election policy that allows the acceptance of nominations from minority shareholders and reviews nominated candidates for directors and independent directors.

In addition to the election of independent directors, the CG Code for PLCs likewise prescribes that the board should appoint or set up the following key officers and board committees. Based on the current policy of the SEC, the appointment of a Compliance Officer and Chief Audit Executive is effectively required for PLCs.  PLCs are also effectively required to have an Audit Committee and a Corporate Governance Committee, to comply with certain corporate governance requirements.