Definitions and Clarifications
- Husband and wife are considered as one person for limitations on concurrent positions.
- Secondment refers to the temporary assignment of an employee from one organization to another, with employment maintained by the original employer.
- Officers include members of management committees or subcommittees performing functions typical of regular officers.
Interlocking Directorships
- No concurrent directorships allowed between banks, or between a bank and a QB, except by Monetary Board authorization.
- Concurrent directorships allowed without approval in cases involving:
- Banks of different categories, provided not more than one has quasi-banking functions.
- A bank and an NBFI.
- A bank without quasi-banking functions and a QB.
- A bank and its subsidiaries (banks, QBs, NBFIs).
Interlocking Directorships and Officerships
- No concurrent directorships and officerships allowed between banks or between a bank and a QB or NBFI, except by Monetary Board approval.
- Allowed without prior approval between a bank and its subsidiaries (banks, QBs, NBFIs) excluding investment houses.
Interlocking Officerships
- Generally prohibited between banks or between a bank and a QB or NBFI, including secondments, due to risks of conflicts of interest and poor governance.
- Exceptions allowed with Monetary Board approval, including:
- Between a bank and up to two of its subsidiaries (excluding investment houses).
- Between two banks or a bank and a QB/NBFI if at least 20% equity is owned by a holding company or related bank/QB for managerial or technical assistance.
- Concurrent officerships in non-management positions (e.g., corporate secretary, internal auditor) allowed between a bank and subsidiaries or among related financial institutions with at least 20% shared equity ownership.
Conditions on Concurrent Officerships
- Positions must not involve functional conflicts of interest.
- Officers holding top executive roles (President, CEO, COO, CFO) cannot hold similar positions concurrently.
- The officer, spouse, close relatives, or entities controlled by them must not own more than 20% of the subscribed capital stock of financially related institutions.
- Full-time positions require adequate justification to the Monetary Board.
Corporate Governance and Oversight
- The Corporate Governance Committee must conduct annual performance evaluations of the board and senior management.
- When a director or officer holds multiple positions, the committee must assess capacity and performance and recommend necessary changes.
Application to Government Representatives
- Provisions apply to government or government-owned entity representatives unless existing laws provide otherwise.
Implementation and Effectivity
- Provisions incorporated into the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).
- Effective fifteen calendar days after publication in the Official Gazette or widely circulated newspaper.
- Adopted by the Monetary Board on December 28, 2007.