SEC Raises Corporate Governance Bar for Listed Firms

SEC Commissioner McJill Bryant T. Fernandez opens the 3rd SEC-ICD-GGAPP for publicly listed companies on March 6 via Zoom.

The Securities and Exchange Commission (SEC), in partnership with the Institute of Corporate Directors (ICD) and the Good Governance Advocates and Practitioners of the Philippines (GGAPP), successfully conducted the 3rd SECICD-GGAPP Joint Corporate Governance (CG) Roundtable for Publicly Listed Companies (PLCs) on March 6 via Zoom.

With the theme, “Elevating Philippine CG Standards,” the event equipped PLCs with sufficient knowledge and updates on the Revised ASEAN Corporate Governance Scorecard (2023 ACGS). It also provided PLCs with tools that could help them make adequate and reliable disclosures, with CG practices embedded into their policies, which could consequently improve scores and rankings in the ACGS assessment.

SEC Commissioner McJill Bryant T. Fernandez emphasized the importance of corporate governance and how it can be achieved within an organization. He also mentioned the 2023 ACGS, which was made to further align evolving CG standards.

“Corporate governance is an ever-changing space and elevating corporate governance can only be achieved through a collective effort and commitment by all stakeholders to ensure that we remain at par with and go even beyond the standards set,” Commissioner Fernandez said in his opening remarks.

The CG Roundtable comprised the following key discussion topics: ACGS Updates; Best Practices and Challenges in the Adoption/Implementation of Corporate Governance in PLCs, and ACGS Best Practices.

For the first topic, Roberto T. Bascon, Jr. of ICD discussed the latest updates on the ACGS. He shared the results of ICD’s ASEAN CG Performance of Philippine PLCs for 2023 (ICD Report), how an assessment process works, and the 2023 ACGS.

Mr. Bascon emphasized that while the ICD Report showed consistent improvement from 2019 to 2023, there was a minimal decrease in last year’s assessment. The total average score of the 276 PLCs and top 100 PLCs assessed declined by 0.9 and 0.04, respectively. As such, most PLCs need to focus on certain areas where they can further strengthen and improve.

Along with the review of the G20/OECD Principles of Corporate Governance, the ACGS underwent its second comprehensive review and was later approved and launched in October 2023. The 2023 ACGS focused on new ACGS items like sustainability governance, material topics, climate change (climate-related risks and opportunities), and sustainability performance linked with incentives, among others, which are aimed to address emerging concerns related to sustainability and resilience.

The second topic focused on best practices and challenges in the adoption/implementation of corporate governance in PLCs through a panel discussion moderated by Mr. Reginald H. Tiu of GGAPP. The panel included subject experts such as Atty. Jocelyn Villar-Altamira of the Manila Electric Company, Ms. Marvi Tolentino-Uy of SM Investments Corporation, and Atty. Jon Edmarc R. Castillo of Monde Nissin Corporation.

The panel focused on how a PLC will improve and excel in the ACGS, amid common challenges, such as how to ensure that a PLC’s CG policies are compliant with related laws and regulations.

For the last topic, Mr. Bascon highlighted ACGS best practices and how website optimization plays a significant role toward effective corporate governance in terms of transparency and disclosure, accessibility, stakeholder engagement, and compliance with relevant regulations and standards.

The event concluded with closing remarks from Atty. Vincent Edward R. Festin of GGAPP, who highlighted the importance of corporate governance as an added value for corporations. He noted that mainstreaming CG will rest on a professional’s ability to find the nexus in making his CG related compliance requirements eventually become value-added tools for the corporation.

The CG Roundtable underscores the Commission’s dedication to upholding the highest corporate governance standards in the Philippines through the adoption of international best practices built on transparency, accountability, and integrity. The Commission looks forward to continuously working with ICD and GGAPP to enhance every PLC’s corporate governance journey and at the same time, address the needs and realities of the Philippine corporate setting.