SEC Chair calls for tough standards

SEC Chair Lilia Bautista called on the private business sector to impose on itself the same tough standards of transparency and governance that they expect from government. Speaking before a forum organized by FINEX to discuss the local implication of the Enron scandal, Ms. Bautista reminded the financial executives that they have a sacred obligation to protect public investors.

While she feels that accountants and the directors and officers of publicly listed corporations should be given a chance to establish rules and procedures under the concept of self regulation, government through the SEC is ready to step in if necessary. She cited numerous instances of conflict of interest situations in the private corporate setting. She wants rules governing conflict of interest in listed companies to be as tough as those being imposed on government officials.

The SEC Chair also endorsed proposals to give the Commission the right to implement a "fit and proper rule" similar to that being exercised by the Bangko Sentral on directors and officers of banks. This will allow the SEC to ban persons found to have violated the Corporation Code and related rules and regulations from being able to serve as director or officer of any other corporation.

This power being sought by the SEC Chair is along the lines of a similar rule also being considered by the US SEC Chairman to emphasize individual responsibility. Paying a fine is not enough, the US SEC chair observed in an interview with Business Week. "If you engage in serious misconduct, you're out of the game."

Related to that, Ms. Bautista wondered if the disclaimer which accountants routinely place on the cover page of their audit reports mean anything at all. She said that accountants together with corporate officers and directors must simply take responsibility for financial statements they file with the SEC and the stock exchange.

She also urged accountants to develop the proper policies governing the treatment of so-called special purpose vehicles such as the ones that did Enron in. These vehicles, she said, must not be used to hide the true state of the corporation from its shareholders.

The SEC Chair announced that they are almost ready to finalize a draft Code of Corporate Governance for registered issuers and public companies. She urged the finance executives to abide by the spirit of the Code rather than seek ways to go around it for paper compliance.

Well, it is good to see a proactive government regulatory agency we can trust. But even the best intentions of the SEC Chair and Commissioners will be unable to prevent a local version of Enron unless the professionals working in the private sector refuse to be a party to the crime of covering up less than stellar corporate performance, or worse, corporate skulduggery.

Ateneo and JG

I received a number of comments regarding the column last Monday on Ateneo and John Gokongwei's P200- million donation to its School of Management. One of them came from my son, PJ, who graduated from Ateneo last year. He e-mailed me from Los Angeles.

I was really happy that you wrote that column. I've been getting a lot of emails the past week on the Gokongwei School of Management. All the brouhaha really annoyed me. All these know-it-alls popping out from the woodwork! Instead of focusing on the issue at hand, the lack of funds for improving education, they all go into paragraphs of BS and rhetoric.

There really must be a problem since Ateneo is only in the 70s in the Asian university survey. We aren't even in the top tier! As if any of them made any effort to be of real help to the school! It's funny that you mentioned all the attention given to basketball while academics are left for dead. Kaya when I make my millions, I will donate to the economics department. At least I'll be giving to a good cause.

I am thinking that after I have made my fortune, I will go into teaching. If your noble pursuit is journalism, I think that mine is teaching. Rather than complain about the lack of quality education, I might as well be a part of the solution.

From reader Louie Fernandez, comes this comment.

I’d like you to know that not all Ateneans think alike. I agree 100 percent with your own response. Have a nice day.

Here is what reader Jose C. Briones, Jr., M.D. has to say.

Right on. I am an Ateneo alumnus, GS,HS,AB. My father was an Ateneo alumnus too. I agree, our Jesuit Christian education has been lost on these so-called Christian Snobs. Matakaw na mga hipocrito pa. Nuf said.

Finally, I also received a long e-mail from Dean Emmanuel Velasco, formerly of the UP College of Business Administration and now of the Ateneo School of Management. A barkada of my late sister, Mian, Manny V is an old friend of my family. Here are excerpts from Manny V's e-mail.

Thank you for your piece on the "John Gokongwei donation" to the Ateneo that appeared in today’s issue of The Philippine Star.

There were and still are many transitional issues to address in the restructured (Loyola) schools. Moreover there really was a need to generate additional resources for the new school. The J. G. Summit Group and Gokongwei Brothers Foundation donation came in on a very timely manner due confluence of events. The main one was Mr. John’s 75th birth anniversary and his from the active management of the Group.

Those who have studied abroad are quite familiar with "named" schools. Being the first and only one of its kind in the country, the naming of our School of Management as the John Gokongwei School of Management would necessary get varying types of reactions. (By the way, the Washington Sycip Graduate School of Business at AIM was launched a couple of weeks after and is not exactly named after the benefactor since the funds were raised by former SGV partners and friends of Wash).

On the whole the feedback I have gotten on the donation is very positive, even from the alumni. Many have stated the process of consultation should have been more involved. But this type of comment easily quieted down when the text of the speeches of Fr. Ben Nebres and O.V. Espiritu were emailed to them. Also they were assured that, true to the U.S. model, the Memorandum of Agreement assured the independence of the school (A J.G.Summit representative will sit in its Board of Advisers).

Just a final point – Mr. John and a couple of daughters were the only ones who went to the other school. There are many more (son, daughter, nephews and nieces) who went to the Ateneo, Xavier School and other Jesuit institutions. Connect this with the fact that the other principal donor is the Gokongwei Brothers Foundation.

Boo, keep up the good work, more power and regards to the family.

Teachers‚ pets

Dr. Ernie E claims these are actual comments made on students’ report cards by teachers in the New York City public school system. All teachers were reprimanded...but not for being funny.

1. Since my last report, your child has reached rock bottom and has started to dig.

2. Your child has delusions of adequacy.

3. Your son sets low personal standards and then consistently fails to achieve them.

(Boo Chanco's e-mail address is [email protected])