Capital Market Readiness: Lessons from Companies That Prepared Early

Atty. Pedro H. Maniego Jr., FICD

Life Fellow

Institute of Corporate Directors

Many companies discover too late that capital market readiness cannot be built on demand. By the time investors, underwriters, or regulators begin asking hard questions, the most important work should already have been done. Part 1 argued that capital market readiness is no longer just a finance concern. It is now a board-level issue that depends on governance systems, disclosure discipline, investor trust, and the ability to withstand scrutiny in increasingly competitive regional markets. The practical question is: what should boards do before the market starts asking?

Investors Reward Preparation, Not Last-Minute Compliance

Capital raising is often described as a transaction. However, it is the result of years of preparation. Investors rarely reward companies that begin improving governance only when funding is needed. They place greater value on organizations that have already shown discipline in transparency, accountability, risk management, and board effectiveness. This helps explain why some companies access capital smoothly while others struggle, even when their operating performance appears strong.

Lessons from Philippine Experience

Monde Nissin Corporation offers a useful lesson. Before undertaking one of the largest IPOs in Philippine history, the company had already built governance systems, management structures, internal controls, and disclosure practices that institutional investors expect. Its public offering was not the start of its readiness journey—it was the payoff from work done years earlier. Investors were not only buying into products and brands. They were also responding to the credibility created by preparation.

A similar dynamic was visible at RASLAG Corporation, where I served as an independent director through its listing. Before RASLAG went public, the board made a deliberate choice to strengthen its governance framework, sharpen board oversight, and align disclosure practices with what public market investors expect. Waiting for rules or investor scrutiny to force the issue would have meant doing the work under pressure, instead of entering the market with stronger foundations already in place.

The benefit went beyond a successful listing. It supported the company's ability to access growth capital for renewable energy projects and long-term strategic plans, which is ultimately what governance discipline is for—not the listing day itself, but the years of capital access that follow it. The takeaway is straightforward: capital market success begins well before the offering.

The Hidden Cost of Not Being Ready

Across Asia and other active capital markets, the cost of being unready shows up in different forms, but the pattern is consistent. Sometimes it appears as heightened scrutiny that overtakes the offering itself. Shein’s long-pursued London listing drew sustained pressure from lawmakers and human rights advocates over supply chain transparency, and by mid-2025 the company had shifted course, filing for a listing in Hong Kong instead—evidence that scrutiny, once it builds, can redirect a deal entirely rather than simply delay it.

In other cases, the cost shows up as delay and friction rather than public scrutiny. Hong Kong regulators have warned sponsors about the declining quality of draft listing documents amid a surge in IPO applications, increasing the due diligence burden for issuers and advisers. In India, SEBI’s 2024 order involving Linde India underscored how related-party transaction issues can become a central governance concern, while separate scrutiny involving Paytm’s parent reinforced the regulator’s focus on disclosure and shareholder protection.

The issues are familiar: weak board oversight, inadequate disclosures, related-party transaction concerns, insufficient internal controls, succession uncertainty, and underdeveloped risk management practices. In many cases, financial performance is not the main obstacle. Governance readiness becomes the deciding factor. When these issues emerge during a transaction, fixing them can be expensive, disruptive, and time-consuming. Boards that get ahead of them preserve more options and negotiate from a stronger position.

A Practical Framework for Boards

Capital market readiness extends beyond IPO preparation. It matters for debt financing, private placements, strategic investors, acquisitions, sustainability funding, and other forms of capital access. Boards can begin by testing readiness across five areas:

• Strategy: Is the growth story clear, credible, and supported by execution?

• Governance: Does the board operate with independence, discipline, and the right mix of skills?

• Disclosure: Are communications timely, transparent, and strong enough for investor scrutiny?

• Controls and Risk Management: Are systems robust enough to support reliable reporting and informed decisions?

• Leadership and Culture: Does management show accountability, execution capability, and openness to challenge?

  
  

Weakness in any one area can erode confidence. Strength across all five builds credibility.

The New Governance Imperative

Every organization eventually reaches a point where capital matters—whether for expansion, acquisitions, sustainability investments, succession planning, or resilience during uncertainty. The companies that succeed are usually not the ones that start preparing when capital is needed. They are the ones that prepared earlier. That is why capital market readiness is no longer simply a finance issue. It is a governance issue, a strategic issue, and increasingly a competitive advantage.

For many boards, the challenge is not recognizing the importance of readiness, but knowing how to assess it systematically. Structured education and diagnostics can help leadership teams identify gaps before they become transaction risks. This is the context for the Institute of Corporate Directors launching Capital Market Readiness for Boards and C-Suite, a forthcoming course designed for companies considering an IPO, preparing for future fundraising, or seeking to understand what public-market discipline requires. The course will cover SEC reforms, investor expectations, ASEAN benchmarks, governance standards, disclosure discipline, board oversight, and practical readiness diagnostics.

The goal is not to push companies into transactions. It is to help leadership teams decide, with clarity and confidence, whether they are ready for the capital markets—and what they need to strengthen before they get there. Readiness is not a milestone a company reaches once, nor a box ticked before a banker enters the room. It is a board discipline, practiced consistently, year after year.