• Institute of Corporate Directors

Transforming from Conformance to Performance

Updated: May 29

2019 ACGS Golden Arrow Recognition Night

On the 11th of June 2019, the Institute of Corporate Directors (ICD) held its 1st Golden Arrow Recognition Night to honor the top performing Philippine companies based on the ASEAN Corporate Governance Scorecard (ACGS) results in 2018. Starting this year 2019, the companies’ level of compliance with the ASEAN corporate governance principles is symbolized by golden arrows, with five golden arrows representing the highest level of corporate governance (CG) performance.

The ACGS is an assessment tool used in six participating ASEAN countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, in order to improve the CG standards and practices of publicly-listed companies (PLCs). It also promotes well-governed ASEAN PLCs as an investment asset class.

Hon. Emilio B. Aquino, Chairman of the Securities and Exchange Commission (SEC) and Hon. George S. Ongkeko, Jr., Deputy Commissioner of the Insurance Commission (IC) graced the event. They respectively reminded companies that were being recognized that the ACGS recognition should be treated as the end-product of a company’s good governance practices, rather than a facade. Hon. Ongkeko added that while the insurance industry has a long way to go to catch up with the other industries, the improvements made in the past four years have been commendable. Hon. Aquino, on the other hand, highlighted that corporate governance should not be an interference in a company’s day-to-day activities, but rather as a compliment to their effort in taking care of the company entrusted to them. It was indeed, without a doubt that both gentlemen appreciated the significant improvements shown by the PLCs and the insurance industry as to how far they have come in terms of improving their ACGS results.

In 2018, 48 out of 247 PLCs (constituting about 19%) scored 80 points and above in the ACGS compared to a mere 6 PLCs scoring 80 points and above in 2013. Out of the highest possible score of 130, a company was able to achieve a score of 114.8 points in 2018, while the average score was 62.3 points.

Looking deeper into the details, while most of the PLCs improved in all four sections of the ACGS, it was noted that there was a decline in terms of the section for Equitable Treatment of Shareholders in 2018.

The possible reasons included the need for companies to publish a policy on the review and approval of material related-party transactions (RPT), have an independent party to validate counting of the votes during the annual shareholders meeting, and disclose transactions in company shares by any directors and other key officers.

For the insurance industry, out of the highest possible score of 128, a company was able to achieve a score of 105.2 points in 2018. The average score was 41.3 points. Again, looking deeper into the details, the industry seemed to be doing very well in terms of the section for Equitable Treatment of Shareholders, but special attention should be given to the section for Disclosure and Transparency. The assessment also highlighted the shortcoming of many companies to provide the Notice and Minutes of the recent meetings, and the need to disclose RPTs. In addition, most of the companies in the insurance industry also did not seem to explain their Board’s role in the oversight of key areas such as strategy, internal control, and risk management systems.

Beyond these scores, the importance of corporate governance cannot be overemphasized. At its most basic form, Shleifer and Vishny (1997) refers corporate governance as “the ways suppliers of finance to corporations assure themselves of getting return on their investment,” while Megginson and Netter (2001) defines it as a nation’s “set of laws, institutions, practices and regulations that determine how limited liability companies will be run and in whose interest.” Simply put, a good corporate governance system supports the continual process of mobilizing scarce resources such as capital or talents to their most promising uses. Therefore, a country’s corporate governance system has a huge effect that would define the expectations and willingness for global investors or even talents to make investments in its local companies. It is from such importance that the ICD was henceforth established to be the leading organization dedicated to the professionalism of Philippine corporate directorship as well as to raise the level of the country’s corporate governance policy.

Congratulations to the winners of the 1st Golden Arrow Recognition and we hope you will continue to serve as an inspiration for others to follow.

Read More:

See ASEAN Corporate Governance Scorecard Philippine Results 2018


• Shleifer and Vishny (1997), “A Survery of Corporate Governance,” Journal of Finance, Vol. 52, No. 2, PP 737-783.

• Megginson and Netter (2001), “From state to market: a survey of empirical studies on privatization,” Journal of Economic Literature, Vol. 39, PP 321–89.

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