In 2009, finance ministers of the Association of Southeast Asian Nations (ASEAN) endorsed the ASEAN Capital Markets Forum (ACMF) Implementation Plan for the development of an integrated capital market. The initiative started in 2011 with the following objectives:

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• to raise the corporate governance standards and practices of ASEAN publicly listed companies (PLCs),

• to give greater international visibility to well-governed ASEAN PLCs and showcase them as investable companies, and

•  to complement other ACMF initiatives and promote ASEAN as an asset class. Six ASEAN countries—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam—agreed to participate in this initiative. Subsequently, six international corporate governance experts, one from each participating country, were engaged to develop the Scorecard based on their national experience, validate it against international best practices, and finally implement it by assessing the PLCs in their respective countries.

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Hence, the development of the ASEAN Corporate Governance Scorecard (ACGS). The ACGS is a developmental tool based on international benchmarks such as the Organization for Economic Co-operation and Development (OECD) Principles of Corporate Governance, the International Corporate Governance Network Corporate (ICGN) Governance Principles, as well as industry-leading practices from ASEAN and the world. It evaluates the companies’ corporate governance practices in the areas of providing rights and equitable treatment to shareholders, how they relate to their different stakeholders, ensuring their transparency and accountability, and how the board fulfills its duties and responsibilities, and supports corporate governance.  It was updated in May 2017 considering the revised OECD Principles of Corporate Governance which were endorsed by the G20. This raised the bar in the assessment of PLCs. It adopted more stringent criteria for some existing items in the Scorecard and incorporated new recommended practices.

           

The Philippines officially launched its participation in the ASEAN Corporate Governance Scorecard on 11 September 2012. The Securities and Exchange Commission (SEC) has been working on the improvement of corporate governance practices in the Philippines since the adoption of the Scorecard. The SEC required all PLCs to issue an Annual Corporate Governance Report (ACGR), which is intended to consolidate all the governance policies and procedures of each PLC into one report for ease of reference. In December 2013, the SEC directed all key officers and members of the board of PLCs to attend a training program on corporate governance at least once a year. In November 2016, the SEC released the Code of Corporate Governance for PLCs, which was designed to raise the corporate governance standards of Philippine corporations to a level at par with its regional and global counterparts. The SEC has issued the Integrated Annual Corporate Governance Report (I-ACGR) in 2017, wherein the corporate governance recommendations of Securities and Exchange Commission (SEC) under the Code of Corporate Governance and Philippine Stock Exchange (PSE) were harmonized. The Republic Act No. 11232, Revised Corporation Code of the Philippines was implemented on February 23, 2019. It amended the old corporation code and promoted significant changes in the legal framework in the operation of private corporations in the Philippines to improve ease of doing business in the country. Sustainability reports are required from the companies to be attached in the Annual Reports in 2020.  

 

Being the Philippines’ Domestic Ranking Body (DRB), the Institute of Corporate Directors Philippines (ICD Ph) evaluate the corporate governance conformance of all listed companies based on the ACGS recommendations. The domestic assessment is conducted every year, while the regional assessment in which our Ph PLCs are independently assessed by the ASEAN DRBs happens every two years. It involves selecting and validating the Top 100 PLCs based on market capitalization and submitting their scores to the ASEAN Capital Markets Forum (ACMF).

 

With all these regional and domestic developments in the corporate governance, this workshop aims to present the most recent ACGS performance of the publicly listed companies, and to encourage better country performance. It hopes for the companies to give importance on how they disclose information to their different stakeholders. It will also be an opportunity to listen to the other PLCs on how to influence the board in adapting the recommended practices in corporate governance and how it was embraced across their companies. Proposed revisions in the OECD Guidelines will also be discussed.