Philippine Rules on Teleconferencing or Videoconferencing

Pursuant to the provisions of the Electronic Commerce Act and Section 25 of the Corporation Code, the Securities and Exchange Commission of the Philippines has previously issued Memorandum Circular 15-01 providing for the guidelines on teleconferencing and videoconferencing of the Board of Directors of a corporation in the Philippines.

Under the Corporation Code, directors or trustees cannot attend or vote by proxy at board meetings. Acting as a body, the Board must meet personally when discussing and deciding issues of primary importance concerning the operation of the corporation. This requirement of personal attendance is satisfied through the use of electronic devices which allow a member or director to attend a meeting despite not being physically present in the meeting room, the important factor being that he or she is able to contribute in said meeting.

Under the said circular, the following guidelines must be followed:

1. The Secretary of the meeting shall assume the following responsibilities:
1. to safeguard the integrity of the meeting via teleconferencing or videoconferencing


2. to find good teleconferencing or videoconference equipment or facilities


3. to record the proceedings and prepare the minutes of the meeting


4. to store for safekeeping and mark the tape recordings and/or other electronic recording mechanism as part of the records of the corporation in the Philippines


2. The Secretary shall send out the notices of the meeting to all directors in accordance with the manner of giving notice as stated in the corporate by-laws.


3. The notice shall include the following:


1. Inquiry on whether the director will attend physically or through teleconferencing or videoconferencing;


2. Contact number/s of the Secretary and office staff with whom the director may call to notify and state whether he or she shall be physically present or attend through teleconferencing or videoconferencing;


3. Agenda of the meeting;


4. All documents to be discussed in the meeting, including attachments, shall be numbered and duly marked by the Secretary in such a way that all the directors, physically or electronically present, can easily follow, refer to the documents and participate in the meeting.


4. If the director chooses teleconferencing or videoconferencing, he or she shall give notice of at least five days prior to the scheduled meeting to the Secretary. The latter shall be informed of his or her contact number/s. In the same way, the Secretary shall inform the director concerned of the contact number/s he or she will call to join the meeting. The Secretary shall keep the records of the details, and on the date of the scheduled meeting, confirm and note such details as part of the minutes of the meeting.


5. In the absence of an arrangement, it is presumed that the director of the corporation in the Philippines will physically attend the Board meeting.


6. At the start of the scheduled meeting, a roll call shall be made by the Secretary. Every director and participant shall state, for the record, the following:


1. Full Name


2. Location


3. For those attending through teleconferencing or videoconferencing, he shall confirm that


1. he can completely and clearly hear the others who can clearly hear him at the end of the line


2. state whether he has received the agenda and all the materials for the meeting


3. specify type of device used



Thereafter, the Secretary shall confirm and note the contact numbers being used by the directors and participants not physically present. After the roll call, the Secretary may certify the existence of a quorum.




7. All participants shall identify themselves for the record, before speaking and must clearly hear and/or see each other in the course of the meeting. If a person fails to identify himself, the Secretary shall quickly state the identity of the last speaker. If the person speaking is not physically present and the Secretary is not certain of the identity of the speaker, the Secretary must inquire to elicit a confirmation or correction.
   
   If a motion is objected to and there is a need to vote and divide the Board, the Secretary should call the roll and note the vote of each director who should identify himself.
   
   If a statement of a director/participant in the meeting via teleconferencing or videoconferencing is interrupted or garbled, the Secretary shall request for a repeat or reiteration, and if need be, the Secretary shall repeat what he heard the director/participant was saying for confirmation or correction.




8. The Secretary shall require all the directors who attended the meeting, whether personally or through teleconferencing or videoconferencing, to sign the minutes of the meeting to dispel all doubts on matters taken up during the meeting.
   
   All of these requirements must be met in order for a teleconference or videoconference to be considered as a valid meeting. It is therefore critical that the following rules be followed strictly.