The Securities and Exchange Commission (SEC) has taken a decisive stride toward strengthening corporate governance in the Philippines by issuing Memorandum Circular No. 25, Series of 2026, which revises and tightens the rules on corporate governance training for board members, key officers, and institutional training providers.
The new framework introduces stricter accreditation standards, expanded mandatory training content, enhanced compliance monitoring, and more rigorous reporting requirements.
The SEC now requires all board members and key officers of publicly listed companies (PLCs), public companies (PCs), and registered issuers (RIs) to attend corporate governance training at least once every calendar year, with first‑time directors and executive officers required to undergo initial training before their election or appointment.
Molding Fit and Proper Directors and Officers
The Commission recognizes that corporate governance is no longer a static compliance requirement but a dynamic competency that must evolve alongside regulatory developments, market expectations, and emerging risks.
The revised rules consolidate and update previous circulars, creating a more comprehensive and future‑ready framework.
SEC aims to introduce more rigorous accreditation standards and expand mandatory training content to reflect both domestic and international governance expectations, including updates from the Organisation for Economic Co‑operation and Development (OECD), ASEAN Corporate Governance Scorecard, and sustainability reporting frameworks.
The overall goal is governance that is not only compliant but also strategic, ethical, and responsive to global trends.
Details of the Stricter Rules
The memorandum introduces important amendments and new provisions.
It expands the mandatory curriculum for first‑time directors and key officers to include modern regulatory priorities such as ESG reporting, sustainability metrics, minority shareholder protection, director liabilities, competition law, and illegal activities including insider trading and short‑swing transactions.
It also imposes stricter accreditation requirements for institutional training providers (ITPs) and resource speakers, including maintaining a minimum training evaluation rating of four out of five and remaining in good standing with the SEC.
Furthermore, it introduces more detailed reportorial requirements, such as submitting notices of training at least ten business days before the program and notices of completion within ten business days after the training ends.
The rule also increases penalties for non‑attendance and non‑compliance, with fines escalating from ₱10,000 to ₱30,000 per director or key officer for repeated violations.
The amendments collectively aim to ensure that governance training is not merely a formality but a substantive exercise that enhances board competence and accountability.
Covered Entities under the New Rules
The coverage of the memorandum is broad and clearly defined: applying to all publicly listed companies, public companies, registered issuers, and accredited institutional training providers.
The guidelines consolidate existing rules and introduce a more comprehensive framework that supports the SEC’s push for stronger governance practices across the corporate sector.
This means that corporations of significant public interest—those that raise capital from the public, hold public funds, or influence market stability—are now subject to more stringent governance training requirements.
The memorandum also affects training providers, resource speakers, and corporations that choose to conduct in‑house training, all of whom must comply with new accreditation and reporting standards.
Significance of Sound Corporate Governance
Corporate governance, at its core, refers to the system of rules, practices, and processes by which a corporation is directed and controlled. It encompasses board oversight, accountability mechanisms, ethical leadership, transparency, and the protection of stakeholder interests.
Good governance ensures that corporations operate responsibly, manage risks effectively, and make decisions that align with long‑term value creation.
In the Philippines, where many corporations play critical roles in financial markets, infrastructure, and public services, corporate governance is essential to maintaining investor confidence, market integrity, and economic stability.
A corporate governance training program is important because it equips directors and key officers with the knowledge and competencies needed to fulfill their fiduciary duties.
Board members are responsible for overseeing financial performance, ensuring compliance with laws and regulations, managing risks, and protecting shareholder interests.
Without proper training, directors may be ill‑prepared to navigate complex regulatory environments, emerging risks such as cybersecurity threats, or evolving expectations around sustainability and ESG reporting.
Training programs also help prevent governance failures that could lead to financial losses, reputational damage, or regulatory sanctions. Through mandated annual training, the SEC ensures that corporate leaders remain updated, competent, and accountable.
Trainings Available through Accredited Institutions
Corporations can avail training from SEC‑accredited Institutional Training Providers (ITPs) or conduct accredited in‑house training programs.
Accredited providers must meet rigorous standards, including maintaining high evaluation ratings, complying with reportorial requirements, and ensuring that training content aligns with SEC guidelines.
Accreditation fees range from ₱2,000 to ₱50,000 depending on the type of provider, and accreditation validity has been extended from three years to five years to encourage long‑term compliance and quality assurance.
Resource speakers must also secure accreditation, although exemptions exist for directors or officers who have conducted at least one training session per year or those who have attended foreign training programs disclosed in annual reports.
Training providers seeking accreditation must meet several requirements. They must submit a formal application, pay the required processing fees, maintain a minimum evaluation rating, and comply with reportorial requirements before and after training sessions.
They must also ensure that training content covers mandatory topics and reflects current regulatory updates. Resource speakers must demonstrate expertise in corporate governance and comply with accreditation standards unless exempted.
These requirements ensure that training programs are delivered with quality, consistency, and relevance, preventing substandard or outdated governance education.
Businesses and Corporations’ Cooperation will Benefit the Country
Sound corporate governance manifests in several ways: transparent financial reporting, effective risk management, ethical decision‑making, protection of minority shareholders, and adherence to regulatory standards.
When corporations demonstrate strong governance, they build trust with investors, customers, regulators, and the public. This trust translates into tangible outputs such as improved financial performance, reduced compliance risks, enhanced market reputation, and greater resilience during economic downturns.
Good governance also fosters innovation and long‑term strategic thinking, enabling corporations to adapt to changing market conditions and global trends.
Effective corporate governance in private corporations benefits the Philippines as a whole, both directly and indirectly.
Strong governance enhances investor confidence, attracting foreign investment and strengthening capital markets. It reduces the likelihood of corporate scandals, fraud, and financial instability, which can have ripple effects across the economy.
Good governance also promotes ethical business practices, protects consumers, and supports sustainable development. As corporations adopt higher governance standards, they contribute to a more stable, transparent, and competitive business environment, ultimately supporting national economic growth.
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