Next president urged: Continue corporate governance reforms

As soon as the May 9 elections are over and the new Philippine president is named, the Institute of Corporate Directors (ICD) intends to present the new leader with a position paper pushing government to continue corporate governance reforms.

At the same time, the group will also urge the business community to step up and “take to heart” good governance practices within their companies.

“The business side also has to keep up with their responsibilities for governance. How can we demand good governance from the government if we don’t practice it in our own businesses? So we’ve got to keep up with the times,” ICD chief executive officer Ricardo Nicanor N. Jacinto said in a forum yesterday.

He said they were still preparing the position paper that will be presented to the country’s new leader.

“Basically, it will contain what we think needs to be done to continue the momentum that we’ve started here. Not so much on regulation, which I think has been more than adequately addressed, but more on what practices can we adopt to be able to encourage people,” he told reporters after the forum.

“At the end of the day, people will want to see living examples of what we’re talking about,” he added.

During his presentation, Jacinto noted that the Philippines has had some gains in strengthening corporate governance.

He said the country, which ranked second to last in 2012 among the Association of Southeast Asian Nations (Asean) members,  had the second highest number of publicly-listed companies with improved corporate governance practices last year.

Out of the 50 companies assessed based on the Asean Corporate Governance Scorecard, 11 were from the Philippines last year. The top three Philippine companies were Aboitiz Equity Ventures, Inc. (AEV), Ayala Corp. and Ayala Land, Inc. (ALI) while the most improved were GT Capital and Asia United Bank.

Jacinto commended President Benigno S. C. Aquino III for creating the Governance Commission for GOCCs (government-owned and controlled corporations), or GCG.

The commission, which he described as a super-regulator for state-owned enterprises, has rationalized and “collapsed” a lot of GOCCs, especially those that are dormant.

Jacinto said the GCG was behind “some of biggest deals,” such as the Land Bank and Development Bank merger.

As of yesterday, 38 GOCCs have been shut down. Only 102 GOCCs still exist, Jacinto said.

“The government is setting the example. We’d like to see them continue and build on this. There are a lot of things that, unfortunately, were not completed in the last six years. That will be for the next GCG chairman because the current chairman is co-terminus with the president,” he added.

Corporate watchdog Securities and Exchange Commission (SEC) has also drawn up a five-year blueprint for corporate governance.

Among others, this road map restricts the tenure of independent directors to nine years, implements board diversity considering that women currently comprise only about 10 percent of all corporate directors in the country, and adopts a “whistle-blowing” policy.