~~,......._...,...,.,..,=.,~~............. • ~-===·=""-=r=:.r.e_=:~l:!==- -==---=-~-=::.:~= The Special Protection of Children Against Abuse, Exploitation, and Discrimination Act (Republic Act No. 7610, June 17, 1992), wherein Section 3l{b) provides that when the offender is a corporation, partnership or association, the officer or employee thereof who is responsible for the violation of this Act shall suffer the penalty imposed in its maximum period. Experts believe that the prevailing theory on corporate governance under the present Corporation Code is the doctrine of maximization of stockholder value, where the board of directors and management owe fiduciary duties to stockholders and to seek the maximum amount of profits for the corporation.60 On the other hand, the Securities and Exchange Commission (SEC) appears to have changed that by virtue of SEC Memorandum Circular No.9, Series of 2014 (dated May 6, 2014) that presently adopts a more encompassing definition of corporate governance (CG) as follows: "Corporate Governance- the framework of rules, systems and processes in the corporation that governs the performance of the Board of Directors and Management of their respective duties and responsibilities to stockholders and other stakeholders which include. among others. customers, employees, suppliers, financiers, government and community in which it operates." (Emphasis supplied) It must be emphasized that SEC MC No. 9, S. 2014 amended SEC Memorandum Circular No. 6 Series of 2009 (took effect on July 15, 2009), otherwise known as the Revised Code of Corporate Governance,61 particularly the concept of corporate governance, which is formerly defined in this manner: "Corporate Governance- the framework of rules, systems and processes in the corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to the stockholders. " Certainly, SEC MC No. 9 presently amplifies the stakeholder theory in corporate governance, in contrast to SEC MC No. 6 that primarily considers the maximization of stockholder value. More emphatically, the current state of corporate governance is envisioned to be inclusive of other stakeholders, such as customers, employees, suppliers, financiers, government and community in which it operates. It appears that the government requires covered institutions to be wary of its operations' impacts both to its stockholders and stakeholders. Still, one concept of corporate governance has remained, that is, transparency as the core essence thereof. The more transparent the internal workings of the corporation are, the more difficult it will be for management and dominant stockholders to mismanage the corporation or misappropriate its assets. 62 The present rules, as per the 2014 amendment, require the extent of disclosure as follows: "It is therefore essential that all material information about the corporation which could adversely affect its viability or the interest of its stockholders and other stakeholders should be publicly and timely disclosed. Such information should include, among others, earnings results, acquisition or disposition of assets, off balance sheet transactions, related party transactions, and direct and indirect remuneration of members of the Board and Management. 60 Villanueva, C.L. (2009). The Law and Practice on Philippine Corporate Governance. Quezon City: Central Book Supply, Inc. 61 The Revised Code of Corporate Governance applies to registered corporations and to branches or subsidiaries of foreign corporations operating in the Philippines that (a) sell equity and/or debt securities to the public that are required to be registered with the Securities and Exchange Commission, or (b) have assets in excess of Fifty Million Pesos and at least two hundred (200) stockholders who own at least one hundred (100) shares each of equity securities, or (c) whose equity securities are listed on an Exchange; or (d) are grantees of secondary licenses from the Commission. The Revised Code has the force and effect of law. A fine of not more than Two Hundred Thousand Pesos (P200,000) shall, after due notice and hearing, be imposed for every year that a covered corporation violates the provisions of the Code, without prejudice to other sanctions that the SEC may be authorized to impose under the law; provided, however, that any violation of the Securities Regulation Code punishable by a specific penalty shall be assessed separately and shall not be covered by the above mentioned fine. 62 Article 8, SEC Memorandum Circular No. 6 Series of 2009, otherwise known as the Revised Code of Corporate Governance 30