BSP okays performance scorecard for banks

MANILA, Philippines - The Bangko Sentral ng Pilpinas (BSP) has approved a performance scorecard for banks that would essentially measure the quality of corporate governance that banks practice in their institutions.

BSP Deputy Governor Nestor Espenilla Jr. said the policy-making Monetary Board approved the performance scorecard during its meeting last week.

“It’s part of our continuing efforts to improve the overall corporate governance in banks,” he told reporters during the weekend.

In line with the project, the BSP is set to issue a circular that would encourage banks to participate in the survey.

The survey would be conducted by the central bank with the help of the Institute of Corporate Directors (ICD).

The ICD is made up mainly of individual corporate directors and reputational agents committed to the professional practice of corporate directorship in the Philippines in line with global principles of modern corporate governance.

It is working closely with the Organization for Economic Co-operation and Development (OECD) and other global institutions.

Espenila said the survey would measure different corporate governance indicators such as the recognition of the rights of shareholders, equitable treatment of shareholders, the role of shareholders, quality of internal audit and transparency and board responsibility which would cover conflict of interest of board members.

The survey will cover universal banks and commercial banks, Espenilla said.

The BSP has been pushing for the improvement of corporate governance in banks. It has been monitoring the quality of corporate governance in bank and financial institutions and have put in place a number of regulatory measures geared towards raising the standards of governance in the financial sector.

Regulators believe that putting in place quality corporate governance standards in banks would lead to an overall improvement of the financial sector and the economy as well.