Summary
Highlights
The first segment provides an overview of corporate governance in the Philippines, tracing its evolution from its initial legal framework (Batas Pambansa Bilang 68 of 1980) to the current Revised Corporation Code. It touches upon significant events like the Asian Financial Crisis of 1997 and its impact on corporate governance. The section also introduces the role of the Securities and Exchange Commission (SEC) in shaping the local corporate governance landscape, including the historical shift in focus between shareholders and stakeholders as reflected in different versions of the Code of Corporate Governance (2002, 2009, 2016).
This part delves into practical aspects by analyzing the corporate governance reports of two publicly listed Philippine companies: Ayala Land Inc. and China Banking Corporation. The presenter explains the 'comply or explain' approach introduced in the 2016 Code of Corporate Governance for Publicly Listed Companies (PLC) and demonstrates how these companies adhere to or explain deviations from the recommendations. It also compares the Philippines' corporate governance standing with other Southeast Asian countries, citing the ASEAN Corporate Governance Scorecard Awards.
This section outlines the basic corporate governance structure commonly adopted by companies in the Philippines, emphasizing the flexibility given to establish arrangements based on factors like operational complexity and risk profile. It details the roles of the SEC, the Philippine Stock Exchange, shareholders, the board of directors (including independent directors), corporate secretary, compliance officer, and various board committees. The presentation further illustrates these structures by comparing the board compositions and committee setups of Jollibee Foods Corporation, Apex Mining Company, and Bank of the Philippine Islands.
This segment exposes two significant corporate scandals that shaped corporate governance in the Philippines: the BW Resources Corporation stock manipulation case and the involvement of RCBC in the Bangladesh Bank cyber heist. For BW Resources, the exposé covers the stock price manipulation, political corruption, and the subsequent regulatory reforms like the Philippine Securities Regulation Code (SRC). For the RCBC case, it details the cyber heist, the human error involved, and the bank's measures to address the issue, including board reorganization and payment of penalties, highlighting the impact of weak internal controls.
The final part discusses the challenges and issues encountered in implementing effective corporate governance. It reiterates the definition of corporate governance and its benefits, such as improved access to finance, lower capital costs, and reduced risk of scandals. The challenges highlighted include the complexity arising from the intertwining of ownership and management, increased accountability to stakeholders, and common issues like conflicts of interest, oversight failures, accountability gaps, lack of transparency, and ethics violations. The section concludes by emphasizing the continuous need for review and revision of the corporate governance code to adapt to evolving business landscapes.