MANILA, Philippines — The Philippines has joined Indonesia, Malaysia, Singapore, Thailand, and Vietnam in adopting of the ASEAN Corporate Governance Scorecard through the Institute of Corporate Directors (ICD).
“We feel that now is the time for the Philippines to stop playing at the PBA and join the Asian Games of corporate governance. Hopefully, in the next five to seven years, we can join the Olympics of corporate governance. This is what it is all about today,” said ICD president Rex Drilon.
The ASEAN CG Scorecard is part of the ASEAN Corporate Governance Initiative of the ASEAN Capital Markets Forum and is funded by the Asian Development Bank (ADB).
The objective of the Scorecard is to rank ASEAN publicly-listed companies (PLCs), raise corporate governance standards and practices of ASEAN PLCs, and showcase and enhance the visibility as well as the “investability” of the ASEAN PLCs.
The ASEAN CG Scorecard shall supersede the national CG Scorecard for PLCs that ICD has been implementing for the past 7 years.
This means that PLCs’ governance practices will now have to be screened by more than 190 questions compared to ICD’s old scorecard of 110 questions.
The ASEAN CG Scorecard also has two levels. Bonus points will be added to the PLCs who have applied best practices or practices that go beyond compliance.
The second level has penalty points as well and these will be applied on PLCs, which demonstrate poor governance. The second level of the ASEAN CG Scorecard shows its strong emphasis on companies doing good governance beyond compliance, which has been ICD’s long-standing advocacy among Philippine PLCs.
There are still similarities to the old CG Scorecard. The ASEAN CG Scorecard still adopts the OECD Principles of Corporate Governance including rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency, and responsibilities of the board of directors.
The ICD began participating in the ASEAN Corporate Governance Initiative when its Chairman, Dr. Jesus P. Estanislao FICD was nominated by the Philippine SEC to the ASEAN Corporate Governance Group of Experts.
The ICD, an institute composed of its Fellows, has been at the forefront of Philippine corporate governance reforms for the past 12 years. –JAMES A. LOYOLA, Manila Bulletin
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