Top 100 listed firms add gains to corporate governance scores

MANILA, Philippines – The top 100 publicly listed companies in the Philippines continued to improve their corporate governance.

Based on the 2014 Asian Development Bank (ADB) Country Reports of the Asean Corporate Governance Scorecard (ACGS),  the average corporate governance scores of the top 100 Philippine listed corporations rose to 67.02 points in 2014 from 48.91 points in 2012.

Institute of Corporate Directors (ICD) founder and chairman emeritus Dr. Jesus Estanislao said: “The results demonstrate that our local PLCs are continuously striving to improve the corporate governance culture of their organizations.”

ICD is a non-stock, non-profit organization dedicated to the study and professionalization of Philippine corporate directorship.

It is the domestic ranking body for the ACGS in the Philippines under the auspices of the Securities and Exchange Commission.

Among the different corporate governance categories, the most dramatic improvement in average scores on a year-on-year basis were in the role of the stakeholders (from 2.8 points in 2012 to 5.48 points in 2014), disclosure and transparency (from 13.6 points to 16.57 points), and responsibilities of the board (from 16.4 points to 24.41 points).

A slight increase was also noted in equitable treatment of shareholders (from 10.7 points to 11.17 points) and rights of shareholders (from 5.6 points  to 6.79 points).

Despite the improving rankings, ICD said there is still considerable room for improvement in the country’s overall performance.

In terms of the average score for all 252 PLC, the score has slid to 51.1 points in 2013-2014 from 53.8 points in 2012.

“Part of the reason for the relatively low score of our PLCs is the lack of adequate disclosures compared to our counterparts in the South East Asian region,” Estanislao said.

The ADB report noted the lack of adequate disclosures, particularly on company websites as most companies fail to provide key information such as contact details as well as policies and procedures.

“There is a perception that potential investors have difficulty navigating or searching for information on our PLCs mainly due to the variety of formats and content employed from company to company. We hope that these issues will be addressed soon,” Estanislao said.

ACGS assesses the corporate governance performance of PLCs in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. It provides trend analysis to ascertain improving corporate governance standards in the South East Asian region.

The ICD aims to raise the level of the country’s corporate governance policy and practice to world-class standards.