The country is again aiming to top the Asean Good Governance Scorecard (AGCS), since its entry on the list last year.
The AGCS serves as the assessment of publicly listed companies (PLCs) from different Southeast Asian countries. This initiative by the Association of Southeast Asian Nations (Asean) is to promote good corporate governance, which would help companies access capital or reduce cost of capital, as the 2015 Asean Economic Community draws near.
“Those scorecards are supposed to be filled up by Asean countries then they will be considered whether they are in the top 40 Asean companies, or not,” Teresita Herbosa, chairman of the Securities and Exchange Commission, told The Manila Times.
Herbosa said that since there is Asean linkage, investors can now decide “if it is good to invest in a Thai company, Malay company or a Filipino company.” The list will serve as a basis of investors trying to explore new business possibilities in Asean.
“[The list] will be used to rank companies in the Asean region, conducted by the Asean Capital Markets Forum,” Herbosa said.
“If the Philippine companies do not try to upgrade their practices, [investors]would try to find other Asean companies,” she added.
Herbosa said that Philippine companies placed among the top on the list last year, but added that the country needs to be “competitive,” which is why the SEC requires all PLCs to submit an annual corporate governance report (ACGR) to check if each company is doing well with its operations.
She clarified that the local ACGR is only looking at the compliance of companies, and not ranking them like the AGCS.
In the case of noncompliance to pass ACGR with the SEC, there would be an administrative sanction or fine because it is “a violation of the exchange’s rules.”
“We have to help our companies rank in the [Asean corporate governance] scorecard, that is why we are requiring them to pass their reports [to monitor and review activities of companies],” Herbosa said.
Eduardo Martinez-Miranda, senior investments officer of International Finance Corporation (IFC), said that the country needs good corporate governance for better economic performance, rather than depending on good stock market performance.
“Technically when market is good, we should not proud out. Environment and social issues and good corporate governance is still important to us,” he said.
Kristyn Nika M. Lazo