Term limit for lenders’ independent directors non-extendable, BSP says

THE BANGKO SENTRAL ng Pilipinas (BSP) has reminded banks to comply with the maximum nine-year cumulative term limit for independent directors of BSPsupervised financial institutions, which follows previous issuances on corporate governance and reputational risk management.

In Memorandum No. M-2021-025, the central bank highlighted the provisions of both the Manual of Regulations for Banks and the Manual of Regulations for Non-Bank Financial Institutions which gives independent directors a maximum term of a cumulative period of nine years.

“After which, the independent director shall be perpetually barred from serving as independent director in the same BSP-supervised financial institution but may continue to serve as its regular director,” the circular said.

“All BSP-supervised financial institutions are hereby advised that pursuant to Monetary Board Resolution No. 371 dated March 31, 2021, the BSP shall not approve requests for exemption from the said term limit for independent directors,” it said. —