Atty. Victor P. Lazatin

August 9, 2001 SEC OPINION ATTY. VICTOR P. LAZATIN ACCRA Law Offices ACCRA Bldg.,122 Gamboa St. Legaspi Village 0770 Makati City Dear Atty. Lazatin : This is in response to your letter dated July 16, 2001 requesting this Commission for an opinion on whether board meetings conducted through the use of modern technology such as tele-conferencing and video-conferencing may now be allowed in the light of technological developments and business globalization trend. In a meeting held today, the Commission En Banc has ruled that the Commission must respond to the exigencies of the times and the technological developments of the 21st Century thereby modifying its previous opinion requiring "actual presence" of directors or trustees during board meetings. In view of the foregoing and in accordance with Section 16 of the Electronic Commerce Act (RA 8792), which provides in part that, ". . . no contract shall be denied validity or enforceability on the sole ground that it is in the form of an electronic data message or electronic document or that any or all of the elements required under existing laws for the formation of contracts is expressed, demonstrated and proved by means of electronic documents", the Commission, likewise, is of the opinion that the intended benefits of the above-referenced law may be made to apply to Section 25 of the Corporation Code, which conversely requires the presence of the directors in board meetings. However, we would like to emphasize that participation of directors in meetings through teleconferencing and videoconferencing may be deemed acceptable only when adequate safeguards have been accordingly set in place. Meetings of this nature should be properly recorded and the appropriate tapes and discs properly stored for safekeeping. Should there be a need to come up with proper guidelines, the Commission shall issue the same at the appropriate time. Very truly yours, (SGD.) LILIA R. BAUTISTA Chairperson