Board members’ mandatory continuing education

Holding a seat at the boardroom table has, for a long time, been more than ceremonial. It is a position of serious responsibility that demands competence in law, business, and corporate governance.

This is specially true for independent directors, whose objectivity and oversight are essential to the health of an organization.

But how do these directors, independent or otherwise, stay sharp, informed, and prepared to make critical decisions amid constantly shifting legal and commercial environments?

The answer lies in staying updated with developments that shape modern corporate governance.

Under Policy No. 1 of the Code of Corporate Governance for Public Companies and Registered Issuers, Recommendation 1.3 requires corporations to implement a formal training policy for their directors.

First, directors must undergo at least eight hours of orientation, while all directors are expected to complete a minimum of four hours of annual continuing training.

These sessions are not mere formalities — they are structured to ensure that directors remain capable, informed, and accountable.

To reinforce this, the Securities and Exchange Commission (SEC), exercising its supervisory power under Section 5 of the Securities Regulation Code, issued Memorandum Circular 20, Series of 2013.

This circular requires all key officers and board members of publicly listed companies (PLC) to attend a corporate governance program at least once a year.

An SEC-accredited provider must conduct the training, and a certificate of attendance must be submitted within 10 days of completion.

Moreover, under Memorandum Circular No. 2, Series of 2015, the SEC requires that all corporate governance speakers and resource persons must have relevant expertise and training. These speakers are also mandated to participate in annual roundtable discussions conducted by the Commission, further ensuring that they remain updated and credible sources of learning.

Currently, there are 10 accredited institutional training providers offering programs ranging from in-person seminars to online courses. These institutions include law firms, auditing firms, foundations, and business chambers. Only SEC-accredited speakers conduct these sessions, ensuring quality and consistency in instruction.

These continuing education efforts are more than box-checking exercises. They are rooted in the deeper fiduciary duties of directors. This fiduciary duty extends to ensuring the corporation’s long-term viability and value. The board is expected to oversee business strategy, monitor implementation, and reconcile stakeholder interests with prudence and foresight. Sound strategic direction requires directors who are not only competent but also continually learning.

Recommendation 1.1 of the Code emphasizes that boards should be composed of individuals with a “collective working knowledge, experience, or expertise” relevant to the company’s industry. Boards must regularly ensure that their members remain qualified, both individually and collectively, in line with the company’s evolving strategy and operating environment. Like any other serious profession, board directorship demands consistent education.

Training empowers directors to ask the right questions, challenge assumptions, and make meaningful contributions to decision-making.

The SEC, through its monitoring and regulatory powers, will continue to ensure compliance with these corporate governance requirements and will expand the requirement of attending continuing legal education to publicly-held companies.

As companies face growing challenges, from regulatory shifts to market volatility, a board that is engaged, well-informed, and strategically aligned is a necessity. Directors, equipped with updated knowledge and sharpened judgment, are the cornerstone of sound corporate governance and the silent drivers of long-term success.