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By: Dr. Carlos P. Gatmaitan, FICD Fellow Institute of Corporate Directors Another true story. In fact, this happens all the time in the realm of family-owned businesses, wherein many of whom are faced with a succession planning crisis. The dilemma is both inevitable and deeply personal. For many founding chairpersons, particularly those who have grown their enterprises from the ground up, turning over Board responsibilities and executive functions is not just a technical shift — it is an emotional and psychological struggle. The struggle they face lies in letting go of authority, legacy, and control while trying to ensure that what they built continues to thrive without them. This transition becomes even more complex when successors are chosen from the next generation or, more controversially, from outside the family circle. Succession becomes a defining governance challenge — fraught with the hard truth that not all heirs are ready, and not all founders are willing to accept that. The founder’s dilemma Founders often view their companies as extensions of themselves. This is why the decision to pass on leadership is laced with fear — fear of decline, mismanagement, or cultural erosion. The situation intensifies when the Board must confront the reality that family loyalty does not always equate to leadership readiness. Many chairpersons hesitate to relinquish power, not due to greed or ego, but out of sincere concern for continuity and the risk of decline under unprepared successors. However, the refusal to address succession proactively leads to stagnation, internal conflict, or even collapse. What could have been an opportunity for renewal and sustainability instead becomes a crisis of leadership. The power of family constitutions and shareholder agreements A well-written family constitution provides a foundational framework to guide family members in their roles as shareholders, Board members, or professional managers. These documents are not mere formalities; they reflect a family’s shared values, commitment to unity, and respect for professional governance. When anchored by a clear succession policy, they create predictability and reduce emotional decision-making. Likewise, a strong shareholders’ agreement delineates voting rights, share transfers, dividends, and dispute resolution mechanisms. This empowers family enterprises to professionalize their governance and resolve tensions before they escalate into open conflict. Learning from San Miguel’s succession A well-known example is the transition within San Miguel Corporation. Eduardo “Danding” Cojuangco, its influential leader and patriarch, recognized the importance of sustainable leadership. Rather than insisting on a family successor, he appointed Ramon Ang — a trusted, non-family executive with deep operational understanding and vision — as CEO and eventually president. This bold decision was rooted in meritocracy, not heredity. Ang’s tenure is now regarded as a turning point that led to expansion, diversification, and the strengthening of San Miguel’s institutional structure. Cojuangco’s trust in outside talent was not a betrayal of legacy — it was its preservation. This case underscores the value of hiring competent professionals to sustain the enterprise beyond the founder’s lifetime. The role of governance advisors Succession is not only about replacing people; it’s about evolving systems. This is where governance advisors become essential. Experienced advisors guide families in drafting policies, governance charters, and Board structures that promote long-term collaboration. They create a necessary structure that separates the Board of Directors with management, that separates the chairperson’s functions with that of the CEO, hence the destructive interference of a chairperson with the CEO. These are safeguards that reduce dependence on any one individual, ensuring that leadership is systemic and sustainable. Governance must be nurtured in a culture that appreciates performance, not one that punishes mistakes. A culture of fear, driven by legacy protection, does more damage than calculated risk-taking backed by preparation. Final thoughts The true legacy of a founder is not just the empire they built, but the foresight they showed in letting go at the right time, to the right people, with the right structures in place. In this light, succession is not a dilemma. After all, succession planning is the Chairman’s greatest opportunity to create the legacy that he or she deserves. Disclaimer: On June 15, 2025, “Succession: A chairman’s dilemma or opportunity” was published. It was authored by Dr. Carlos P. Gatmaitan, a fellow of the Institute of Corporate Directors. You can read here:

By: Dr. Karen V. De Asis, MICD Member Institute of Corporate Directors MANILA, Philippines — Most products and services are generally commodities, not brands. But owners and founders of companies are led to believe they are holding on to brands. Commodity products and services are hinged on low price. They are nonsustainable and innovations are vulnerable to imitations and copycat models. Awareness of some commodities in today’s world of social media rose through high-impact one-time narratives. Their type of storytelling may generate massive awareness but only for a limited time. Kevin Lane Keller, touted as the father of strategic brand management, defines a brand as a set of associations or brand elements that help differentiate one product or service from another and which customers hold in their memory over a sustainable period. Unlike commodity products and services, a brand has positive and consistently meaningful associations built over time that resonate with consumers regardless of generation. How can it happen that a pair of shoe, purse, retail shop or clothing patronized and loved more than a decade or centuries ago remains the favorite of a generation called Generation Alpha (born between 2010 and 2024) or Generation Z (born between 1997 and 2009)? Some models of these brands are even labeled as vintage, scoring much higher prices than regular brand items. Here are some insights that make brands stand apart from commodities. Brands are self-expressions A brand represents the identity of a user or consumer. It is borne of a unique narrative owned by that brand. This can come in the form of a proprietary design, aesthetics, or technology identified only with the brand that resonates well with the consumer. The 37-year-old Maison Margiela brand, founded in 1988 by Belgian designer Martin Margiela, is a fave among millennials and Gen Zs. This Paris-based minimalist fashion house and avant-garde fashion brand is best known for Tabi, a split-toe shoe design where the big toe occupies a separate space inside the shoe. Brand positioning Brands have clear-cut, identifiable statement and messaging in the minds of consumers, otherwise known as the brand positioning. The brand positioning statement is a summation of the vision and purpose of the brand that must resonate with targeted consumers. Brands have acquired personalities that clearly define who and what they stand for. Thus, brands are recognizable to different generation cohorts: boomers, Generation X, Generation Y or the millennials, Generation Z, and the Generation Alpha. A strong positive brand is inclusive with the right sustained positioning through time. Wokeism and inclusivity While a brand positioning statement is crafted with a target market in mind, good positioning appeals to consumer segments of different generational cohorts, chronological age, race, location or cultural ideologies. For example, in today’s marketing landscape, the cultural ideology of wokeism has come to attention, along with cancel culture or public shaming that occurs on social media. Wokeism first came to be in the 1920s. Originated by Jamaican activist Marcus Garvey, the term was largely a call for black liberation and social injustice. Today, wokeism is a cultural ideology far more associated with extreme liberalism and progressiveness. But regardless of cultural belief, a strong positive brand automatically becomes inclusive, bringing together people of different races, culture, and belief, celebrating its usage and ownership. For example, McDonald’s is famous worldwide for iconic menu items like Big Mac, Chicken McNuggets, quarter pounder and French fries and McDonald characters like Ronald McDonald and Hamburglar. McDonald’s is a familiar, heartwarming setting for many regardless of race, culture and belief. It’s the same with the Filipino restaurant franchise, Jollibee. Founded in 1978, it’s famous for its menu options that include Chickenjoy, Yumburger and peach mango pie as well as Jollibee, the character. The brand is cult-like, with 50 years of celebrating get-togethers. Any attempt toward massive public shaming on social media is disastrous to any proponent. Brand longevity Strong brands are sustained for the long term. Majority of the world’s top 100 global brands have consistently been part of the list because they have sustained their awareness through generations in many countries and regions. BMW, a 112-year-old brand founded in 1916, ranked No. 10 in Interbrand’s 2024 Top 100 global brands. BMW, at $52 billion, gained a 2-percent share increase from previous year. Its 2024 brand campaign, The Gift, celebrates multiple generations of BMW lovers, reminding them of the joy of driving a BMW following its iconic tagline “The Ultimate Driving Machine”. The original Louis Vuitton company was founded in 1854 as a French luxury fashion house. In 1987, it merged with Moet Hennessy to become LVMH. Through 174 years, it has remained as one of the most coveted consumer brand, generation after generation. Its LV monogram has now been extended from the original travel trunks and luggage to luxury retail bags, leather goods and accessories, ready-to-wear apparel and footwear, jewelry and perfumes, among others. Louis Vuitton in 2024 was the world’s No. 11 global brand, enjoying a 9-percent volume increase from previous year at $50.9 billion. In 2026, Louis Vuitton is expected to open its new extended product line in the hotel and travel industry with a gigantic shaped LV-monogrammed trunk that is actually a luxury hotel at 103 Champs Elysees, Paris, right beside its iconic LV store. Brand building: No easy feat Brands are no drop-down manna from heaven. They are the result of visionary thinking and leadership, hard toil and resoluteness in building a legacy name from one generation to the next. Visionary founders and their next generation of heirs must build a brand that fosters strong, differentiated, positive associations through time, people, generations and geographic locations. However, major challenges abound, including family or ownership disputes, short-term thinking and management of heirs and brand keepers, tempting aggressive buyouts—all of which are far from the purposive, visionary-like way of building a legacy brand. Owners of businesses with an opportunity to take their commodity products or services to the next level of building a legacy brand must strongly assess this directional opportunity for successful businesses and legacy brands do not come so often. —CONTRIBUTED The writer is chief brand strategist at MKS Marketing Consulting and a member of Global Strategic Consulting Network. She is an alumna of Oxford University’s Said Graduate School of Business Strategic Leadership and Strategic Marketing Executive Education Program and Stanford Graduate School of Business Strategic Marketing Executive Education. Feedback at karenvdeasis@gmail.com . Disclaimer: This article was originally published on May 30, 2025. It was authored by Dr. Karen V. De Asis, a member of the Institute of Corporate Directors. You can read the original article:

By: Ma. Aurora D. Geotina-Garcia, FICD Fellow Institute of Corporate Directors As we celebrate Women’s Month, it is timely to reflect on the role of mentorship and networking in empowering women and advancing their economic potential. Mentorship is often viewed simply as a tool for sharing advice and wisdom, but when done right, it can be a transformative experience that empowers women to take action, break barriers, and achieve long-term success. This is the philosophy that guides the work of the Philippine Women’s Economic Network (PhilWEN), a coalition of 5 women’s business organizations that share the belief that mentorship is not just about guidance—it’s about creating spaces for collaboration, inclusivity, and shared growth. Further, through the collective efforts of its member organizations, the coalition can build networks that not only cultivate personal development but also contribute to societal change. Breaking Barriers through Mentorship Mentorship, when approached inclusively, can help women overcome the unique barriers they face in their personal and professional lives. From PhilWEN’s point of view, mentorship can be the bridge that connects women across diverse backgrounds and sectors—whether they are entrepreneurs in micro, small, and medium-sized enterprises (MSMEs), CEOs, Board directors and professionals associated with large corporations, or women from marginalized communities. These mentoring relationships provide women with the resources and opportunities they need to grow, succeed, and lead, regardless of their socio-economic status or geographic location. Studies have shown that women with mentors are more likely to receive promotions, increase their income, and gain a sense of empowerment that drives sustainable success. Intersecting Mentorship with Networking The strength of mentorship lies not only in one-on-one guidance between the mentor and the mentee but also in the power of networking and collaboration. By connecting women from different industries, professions, and backgrounds, mentorship can create a dynamic, diverse, and resilient network that encourages cross-sectoral innovation and shared success. A report by McKinsey & Company in 2020 highlights that diverse teams outperform their less-diverse counterparts in decision-making and innovation. Through inclusivity, women can tap into a rich pool of knowledge and experience, which can lead to new business opportunities, collaborations, and solutions that might not have been possible in isolated environments . PhilWEN’s commitment to inclusivity ensures that every woman in its network, regardless of her background, has access to the tools and support she needs to thrive. Women in rural areas, marginalized communities, or those facing significant hardships, such as poverty and violence (referred to as Women in Especially Difficult Situations or WEDS), often lack access to mentorship and opportunities. Yet, by integrating them into broader networks, mentorship creates pathways to leadership and self-sufficiency. According to Sweden’s 2009 report on women’s economic empowerment, supporting women’s participation in networks should be seen as a fundamental element in all efforts aimed at empowering women. PhilWEN’s focus on supporting these women is part of a broader global effort to ensure that women facing adversity are not excluded from economic opportunities. Mentorship and Policy Reform While mentorship is powerful in advancing individual growth, it is even more effective when combined with advocacy for systemic change. At PhilWEN, we recognize that women’s economic empowerment doesn’t just rely on personal support and guidance—it requires policy reforms that address the structural challenges women face in the economy. An IMF (International Monetary Fund) study on women in the labor force in 2020 found that policy interventions that specifically target the economic inclusion of women can lead to more equitable growth . As such, PhilWEN actively engages in advocacy, working to shape policies that create an environment where women’s voices are heard and their economic needs are prioritized. This holistic approach of mentorship, combined with advocacy, ensures that women are not only equipped to succeed in their careers and businesses, but are also supported by policies that promote equal access to resources and opportunities. The inter-connectedness of mentorship and policy change is particularly vital for women in difficult situations. Mentorship can provide the tools and guidance necessary to break the cycle of poverty, while policy changes can ensure that women have access to legal, financial, and social support. In this way, PhilWEN’s work contributes to both personal and systemic transformation. The inclusive nature of the coalition ensures that no woman is left behind, whether they are from rural areas, marginalized communities, or facing significant challenges in their lives. Why do they Matter? As we look at the global landscape, the importance of mentorship and networking for women cannot be overstated. According to the 2024 Global Gender Gap report, women’s economic participation continues to lag behind men’s, with a significant gender gap in entrepreneurship, leadership roles, and employment. The World Economic Forum stresses that closing these gaps requires targeted efforts, including mentorship programs that address the unique challenges faced by women in the workforce. This is why PhilWEN’s work is so crucial—not only do we provide mentorship and networking opportunities, but we also work to ensure that women’s contributions are recognized and supported at the policy level. The power of mentorship and networking lies in its ability to create real, tangible opportunities for women while cultivating a culture of collaboration and inclusivity. Through networks and mentorship, women from all walks of life can connect, learn, and grow together. By ensuring that every woman has access to the resources, guidance, and support she needs, we can break down barriers, build resilient networks, and create an economy where women can thrive. The work of mentorship and networking is not just about offering advice—it is about making a collective commitment to creating a future where all women, regardless of their background or circumstances, have the opportunity to succeed. (The author is a member of the MAP Diversity, Equity & Inclusion Committee. She is Founding Chair of the Philippine Women’s Economic Network (PhilWEN) and Chair of the Governing Council of the Philippine Business Coalition for Women Empowerment (PBCWE). She is the first female Chair of the Bases Conversion & Development Authority (BCDA).  She is President of Mageo Consulting Inc., a company providing corporate finance advisory services. Feedback at < map@map.org.ph > and < magg@mageo.net >.) Disclaimer: On March 31, 2025, “Women Supporting Women: The Power of Mentorship and Networking” was published. It was authored by Ma. Aurora D. Geotina-Garcia, a fellow of the Institute of Corporate Directors. You can read the original article:

By: Leonardo J. Matignas, Jr., MICD Member Institute of Corporate Directors AS THE SAYING GOES, “prevention is better than cure.” This principle is especially true when addressing dishonest or illegal acts committed by individuals or organizations for unjust advantage — commonly known as occupational fraud. Occupational fraud involves the misuse of one’s position or access to an organization’s resources or information for personal or organizational gain. According to the Association of Certified Fraud Examiners’ (ACFE) “Occupational Fraud 2024: A Report to the Nations,” the average loss per case of occupational fraud is a staggering $1.7 million. Given these high stakes, it is essential for organizations to examine their governance frameworks and ensure that the four lines of defense described below are present and functioning effectively. 1ST LINE OF DEFENSE: A STRONG CODE OF CONDUCT A well-designed and actively maintained code of conduct or ethics forms the first line of defense. Every director, officer, and employee should be guided by a fundamental question: “When faced with a dilemma that tests their values, how will they respond?” Common ethical dilemmas include: When is a gift a bribe? When does a relationship pose a conflict of interest? To be effective, the code should emphasize positive behavior — what people should do — rather than merely listing prohibitions. It should not read like a list of “Thou shall nots,” but rather reflect the organization’s values and ethical expectations. The code must be a living document, embedded in daily operations through: • Ongoing communication and training (e.g., e-learning, workshops). • Annual individual acknowledgment and certification of compliance. • A confidential hotline for reporting violations or seeking clarification. • A robust Whistleblower Policy that protects anonymity and prevents retaliation. As I emphasized in my book on fraud and forensics: “No amount of super effective internal controls can prevent a person from doing the wrong thing if he or she truly wants to.” This underscores the critical role of the Human Resources or Talent team. Hiring strategies must go beyond traditional background checks to assess alignment with the organization’s core values and ethical standards. Remember Enron? According to a report by Vinson & Elkins, a Houston-based law firm, and as reported in The Wall Street Journal by Joan Lublin and John Emshwiller on Jan. 17, 2002, Enron’s board suspended the company’s ethics code twice in 1999. This was done to allow the formation of partnerships to conceal debt and artificially boost reported earnings. These actions also enabled executive Andrew Fastow to lead and participate in these partnerships — ultimately facilitating one of the most infamous corporate frauds in history. Had the board effectively upheld this first line of defense, the scheme might never have been carried out. Therefore, the overall effectiveness of this and subsequent lines of defense hinges on the diligence and competence of those charged with governance. 2ND LINE OF DEFENSE: EFFECTIVE INTERNAL CONTROLS If the first line fails, the second must act as a barrier and deterrent. This is where internal controls come in. Effective internal controls should: • Be well-designed and regularly updated. • Include preventive measures to reduce the opportunity for fraud. • Offer detective measures to ensure the continuing effectiveness of the preventive controls. Controls can be system-based, people-based, or a combination of both. System-based controls are often more reliable, as they reduce subjectivity and human error. Internal controls serve to reinforce the perception that: “If you attempt to commit fraud, the system or process will catch you.” This psychological deterrent can be just as powerful as the controls themselves. 3RD LINE OF DEFENSE: INDEPENDENT INTERNAL AUDIT Internal audit provides assurance that the first and second lines of defense are working as intended. Their responsibilities include: • Verifying adherence to the code of conduct. • Ensuring hotline reports are acted upon. • Reviewing compliance with the whistleblower policy, in particular regarding strict confidentiality. • Assessing whether internal controls are properly designed, consistently applied, and effectively mitigating the fraud risk. Contrary to popular perception, internal auditors do not design or implement controls. That responsibility lies with management under the oversight of the board usually through its audit committee. Internal audit, however, evaluates and tests those controls to identify gaps and weaknesses. When breaches occur — whether due to ethical lapses or control failures — internal audit investigates and provides recommendations to prevent recurrence. 4TH LINE OF DEFENSE: EXTERNAL AUDIT The external audit is the fourth and final line of defense. While external auditors operate with a broader objective and are not involved in day-to-day operations, they are also considered as a line of defense for material misstatements of the financial statements — whether caused by error or fraud, in accordance with the Philippine Financial Reporting Standards Accounting Standards. Although most occupational fraud is discovered through internal mechanisms, external auditors are still responsible for: • Designing audit procedures to identify material misstatement due to fraud, • Reporting concerns to those charged with governance (e.g., the audit committee) following professional standards, such as Philippine Standards on Auditing (PSA) 240, and guidance from the International Ethics Standards Board for Accountants (IESBA) on reporting non-compliance with laws and regulations. An essential part of the external audit process is open communication with the audit committee about how fraud risks are being addressed. CONCLUSION Boards must ensure that all four lines of defense are not only established but function effectively to prevent and detect fraud. A best practice is to integrate these lines into a comprehensive fraud risk management framework — also known as an anti-fraud program. The collapse of corporate giants like Enron, Tyco, and WorldCom serves as a stark reminder: fraud is often at the center of catastrophic organizational failures. These corporate scandals catalyzed a global shift toward stronger corporate governance and ethical oversight — a journey that continues to this day. Leonardo J. Matignas, Jr. is a retired partner of SGV & Co. (a member practice of Ernst & Young) and its first chief risk officer. He was also Ernst & Young’s ASEAN risk management leader until his retirement. He is a multi-awarded and internationally recognized authority on Enterprise Risk Management. Aside from being a Philippine CPA, he also holds a Fellow CPA Australia (FCPA) title which is the highest rank in CPA Australia and is recognized globally. He is also a certified internal auditor (CIA), certified fraud examiner (CFE), and has Certification in Risk Management Assurance (CRMA) — all of which are global certifications. It has been his advocacy to encourage Philippine accountants to explore various areas of expertise and certifications to stay relevant considering the changing business and professional environment. He sits as an independent director of Bank of Commerce and the chairman of its Audit Committee. He is also an independent director of PNB Holdings Corp. and the chairman of its Audit and Risk Management Committee. He released his first book, A Practical Approach to Enterprise Risk Management, before he retired. This is the first comprehensive book on ERM written by a Filipino author for the Filipino. His second book, Piercing the Numbers — Fraud and Forensics, was published in November 2023. Disclaimer: On April 25, 2025, “Occupational fraud: The four lines of defense” was published. It was authored by Mr. Leonardo J. Matignas, Jr., a member of the Institute of Corporate Directors. You can read the original article through this link:

By: Maria Victoria A. Betita, MICD Member, Institute of Corporate Directors Corporate Strategist and Digital Transformation Practitioner This isn’t another AI-is-the-future piece. You’ve read that one. Probably more than once. This is about now—how board members can use AI today: practically, strategically, and without needing a data science degree (or a 22-year-old intern). AI isn’t new—it’s just having a very loud moment. The AI universe includes everything from the recommendation algorithms on Netflix to the fraud detection systems at your bank. Machine learning has been around and even generative AI isn’t as fresh as it seems (GPT-3, the predecessor to today’s models, launched back in 2020). What’s different now is accessibility—what used to be buried in research labs is now sitting in your inbox, your search engine, and your PowerPoint slides. The rise of generative AI and advancements in natural language processing (NLP) have made it noticeably more useful. No longer just running in the background, it has stepped into everyday workflows, making itself harder to ignore. What’s interesting for us is figuring out where it fits into the board’s rhythm—prep, meetings, oversight, and yes, ethics. The Toolkit That Earned a Seat at My Table Let’s start with something practical—tools. I rotate between a few AI tools depending on what I need to get done. I wouldn’t call them magical, but they’re reliable enough—like a smart colleague who’s helpful most of the time but occasionally says something flawed. NotebookLM : Think of it as a smart research assistant who reads what you send them. It lets you upload your own documents (notes, reports, even random PDFs you’ve been meaning to get to), and then asks intelligent questions based on your own content. No guessing, no hallucinating. It also lets you search across everything you’ve uploaded— basically, a CTRL+F for your knowledge base. You can even transform your notes into summaries, FAQs, outlines... and yes, if reading feels like too much, there's a podcast mode where it reads your notes back to you. Equal parts productive and oddly soothing. ChatGPT, Gemini, and Copilot : I use these interchangeably depending on which one is behaving that day. Copilot integrates neatly with Office (useful for PowerPoint and Word), Gemini is snappy for brainstorming, and ChatGPT is my go-to when I need organized thoughts with many layers. Perplexity : This is what I use when I want to quote actual articles or research. It provides sources, which is helpful when you want to sound informed without appearing to have made it up. Quillbot : Excellent for paraphrasing my own rough drafts, and I also run text through it to see how much was likely AI-generated. A reality check when I’m blending my voice with machine assistance. I ran this article through it by the way – not that it should matter. Otter AI and Read AI : Meeting summarization without the manual notetaking. Not perfect, but they capture enough to ensure follow-ups don’t fall through the cracks. SlideGPT and Copilot for Presentations : They won’t replace a good deck designer anytime soon, but they help draft my speaker notes or frame a rough outline. If I need polish, I still go manual—but they do save time. Most of these have free versions—except Copilot, which is Microsoft’s enterprise-grade tool. Worth it if you’re deep into that ecosystem. What’s AI Actually Good for at Board Level? Let’s break it down: Prep Work : AI tools can streamline board meeting preparation by summarizing lengthy documents, highlighting key points, and spotting inconsistencies. There are some platforms out there that’s made for Board functions specifically - for example, Diligent Boards AI (which I have not personally tried) -- which offer features that condense complex materials into actionable insights and prepare targeted questions for meetings. This allows directors to focus more on strategic discussions rather than getting bogged down in extensive reading. A word of caution: it's essential to balance efficiency with due diligence; AI should complement, not replace, a director's thorough review of materials. Additionally, always ensure that sensitive information is handled within secure, enterprise-level AI environments to maintain confidentiality. Curating Intelligence : Want to know what regulators are up to in a specific sector? Or track how a competitor is positioning its AI strategy? Tools like Feedly (paired with AI) or Perplexity help filter the noise and bring in just the right level of context. Note-Taking & Meeting Summaries : I rarely worry about capturing every word in a meeting anymore. With Otter or Read AI running, I can focus on listening—and circle back to the summary later to ensure action items don’t get lost. Strategic Exploration : I’ve asked AI to simulate competitor reactions or explore “what-if” scenarios around new markets. Are the results perfect? No. But they trigger good questions—which is sometimes more valuable than a polished answer. Where AI Fits in the Board’s Bigger Agenda Beyond the time-saving bits, there’s a strategic layer that’s emerging: AI is a business lever. It’s not just an IT thing anymore. AI is not for techies. Boards should be asking: How is management using AI across the value chain? Where are the risks? Where’s the upside? It’s also a cultural signal. Are we experimenting? Are we learning fast? Boards don’t need to run pilots—but we should know whether the organization is stuck in fear or leaning into responsible innovation. And it’s definitely a governance issue. Who approves AI deployments? How do we manage transparency, bias, and unintended consequences? These are oversight questions now. A Few Things to Keep in Mind Let’s skip the policy language and keep it real: These tools sometimes hallucinate —especially when asked confidently. Just because it sounds right doesn’t mean it is right. Always verify the facts. They’re only as smart as the material you give them (and the questions you ask). Garbage in, garbage out still applies—only faster. Uploading confidential documents into a free AI tool? Not your best moment. Use enterprise or private instances for anything sensitive. Assume public by default unless you’re sure otherwise. Treat AI like a sharp intern: useful, fast, but not ready to run the show without supervision. And Yes—The Ethics Bit Still Matters AI ethics doesn’t need to be a TED Talk. But a few practical checks go a long way:  Transparency : Do we know how decisions are being made by the AI tools in our business? Can someone explain it clearly to the board? Bias & Fairness : Who’s testing the systems for unintended consequences? AI isn’t neutral by default—someone has to check. Accountability : If something goes wrong, who’s responsible? If AI recommends a course of action and a human approves it, where does the buck stop? Data Governance : Are we using data ethically, not just legally? That’s not a compliance- only question. It’s a reputational one too. At board level, these aren't just operational risks—they're trust risks. Wrapping It Up: What AI Can—and Can’t—Do AI won’t replace board judgment. It won’t challenge a shaky assumption in a forecast or detect body language in a tense meeting. But it will help you: Think faster Spot blind spots Ask sharper questions Save hours in prep and post-meeting follow-ups And for that, it deserves more than just a slide in the CIO’s quarterly update. It deserves a seat at the table—not as a director, but as a tool that helps directors stay ahead. If you’ve been curious, try any of the tools above. Don’t worry about mastering them. Just start small. Use them to help you think. Because better thinking? That’s still the board’s biggest job. Disclaimer: Vicky is not an AI expert, futurist, or tech evangelist. Just a practical user who likes tools that actually work and doesn’t have time for the ones that don’t. When not sitting through meetings, enjoying time with her family, or reading long reports, she’s quietly testing out AI tools to make thinking (and life) a little easier.

By: Dr. Carlos P. Gatmaitan, FICD Fellow Institute of Corporate Directors In the MBA world, Strategy Management involves the never-ending cycle — formulate, implement, evaluate. The triumvirate of equally important cornerstones for a successful strategic plan transcends to an organization’s sound strategic governance and sustainability process. Given that a well-structured strategic roadmap is essential for organizations to achieve long-term success, this article concludes that special emphasis should be given in taking the right first steps, highlighted by the following three subjects that are designed to ensure a proper direction towards sustainable success.  1. BOARD ASSESSMENT  Board effectiveness assessments are essential towards the systematic process of proper FORMULATION of sound strategic plans, involving strategic oversight, decision-making and good governance practices. Boards are responsible for navigating through evolving challenges in today’s dynamic business environment.  Structure is key, with highly-qualified directors empowered with Board Committee charters primarily on Audit, Risk and Governance and eventually on Related Party Transactions, Nominations and Elections and Membership committees as may be needed. Board Effectiveness Scorecard. A Board Effectiveness Scorecard provides a structured evaluation of a board’s performance across leadership, decision-making, risk management and stakeholder engagement. By using defined metrics and further introspection, this deep dive covers the entire Board as collegia body, committee and individual performance. Outputs include performance reviews, identification of strengths and weaknesses, actionable recommendations to align boards with best practices and regulatory requirements among others. Tailored governance strategies address leadership, decision-making, and risk management. These strategic, practical steps improve board performance and accountability while fostering sustainable growth, operational efficiency and stakeholder confidence. Board Director Qualifications, Expectations, Participation. At the end of the day, outcomes include active engagement of qualified directors, enhancing strategic discussions and governance oversight. By contributing expertise and insights, board members shall improve decision-making, accountability and overall effectiveness. Governance Guidance. Expert advice on governance structures, compliance, and decision-making ensures regulatory adherence and operational efficiency. Strong governance principles foster trust, sustainability, and strategic corporate growth. Board Development. Enhancing leadership, governance, and risk oversight through continuous training, performance evaluations, and strategic planning. Strong board development ensures adaptability, accountability and stakeholder confidence. 2. BUSINESS PROCESS/QUALITY MANAGEMENT Ensuring efficient, transparent operations aligned with regulatory standards enhances decision-making and risk management, ensuring successful IMPLEMENTATION. Business Process — Quality Management System. Structured workflows and performance monitoring enhance accountability, compliance and stakeholder confidence, driving operational excellence and continuous improvement. Business Process Analysis (BPA). Crucial for identifying inefficiencies, streamlining workflows, and optimizing resource allocation. It enhances operational efficiency, reduces costs, and improves decision-making. By evaluating key processes, organizations can prioritize improvements, align strategies with corporate goals, and enhance overall performance. BPA ensures agility, compliance, and sustainability, driving long-term business success and competitive advantage. 3. PERFORMANCE MANAGEMENT Integrating performance measures is needed for an effective EVALUATION as we deepdive into the effectiveness and efficiency of the business operations and processes. Setting clear goals, evaluating progress and providing feedback enhance employee productivity and accountability. Regular appraisals and coaching drive high performance and professional growth. Learning and Development. This applies throughout the enterprise from top to bottom. Training, mentorship and workshops enhance workforce skills and adaptability. Investing in continuous learning supports career growth and business competitiveness. A structured performance evaluation is essential for assessing employee contributions and aligning them with organizational goals. The process begins with goal setting, where clear, measurable objectives are established. Next, continuous monitoring tracks progress, providing timely feedback. Self-assessment and peer reviews allow employees to reflect on their performance, while managerial assessment ensures objective evaluation through key performance indicators. Finally, development planning identifies areas for growth and improvement, ensuring employees receive necessary training and support. The Board of Directors must understand this process, as accountability applies at all levels. Just as employees undergo performance assessments, boards should conduct self-evaluations to enhance governance, decision-making and leadership effectiveness. By applying these principles, the board fosters a culture of transparency, efficiency, and strategic alignment, ensuring both corporate leadership and workforce performance contribute to long-term success. Disclaimer: On March 9, 2025, “Structuring a strategic and sustainable roadmap” was published. It was authored by Dr. Carlos P. Gatmaitan, a fellow of the Institute of Corporate Directors. You can read the original article through this link:

By: Nelljay Kahlil Tuppal Intern, Research and Development Institute of Corporate Directors On March 6, 2025, the Institute of Corporate Directors (ICD) convened with the Securities and Exchange Commission (SEC) for a strategic meeting held at the SEC Headquarters located at Salcedo Village, 7907 Makati Avenue, Makati. This gathering served as a pivotal forum for in-depth discussions on critical aspects of corporate governance performance, particularly concerning publicly listed companies (PLCs) and the advancement of regulatory initiatives. The ICD delegation comprised distinguished members and key personnel, reflecting the institute's commitment to fostering robust corporate governance practices. Attendees from the ICD included: Chairperson Atty. Benedicta "Dick" Du-Baladad, FICD; President Senen "Bing" Matoto, FICD; Directors: Ms. Maria "Maricelle" Celeste Narciso, FICD; Mr. Donald Patrick Lim, FICD; Mr. Jose Tomas "Tom" Syquia, FICD; and Mr. Vaughn "Bong" Montes, FICD. Representing the ICD team were Executive Director Ms. Catherine Jalandoni, PEBDM Director, Ms. Carla Ronquillo-Solis, and CGA Manager, Ms. Thea Angara. The SEC was represented by Chairman Mr. Emilio Aquino and SEC Director of Corporate Governance and Finance Department, Atty. Rachel Gumantang-Remalante, underscoring the high-level engagement and importance of the meeting. A central topic of discussion was the ASEAN Corporate Governance Scorecard (ACGS), a regional initiative designed to elevate the corporate governance standards of PLCs. The dialogue focused on strategies to enhance the corporate governance performance of Philippine PLCs, aligning them with regional best practices. Furthermore, the implementation of the Sustainability Report (SuRe form), scheduled for the following year, was thoroughly addressed. This initiative signifies a significant step towards integrating sustainability into corporate reporting, reflecting the growing emphasis on environmental, social, and governance (ESG) factors. The meeting also highlighted the SEC's Communication Advocacy and Network (CAN) initiatives, which aim to strengthen corporate governance performance through enhanced communication and collaboration. These initiatives play a crucial role in disseminating information and fostering dialogue among stakeholders. The meeting, conducted at the SEC Headquarters, provided an ideal setting for these strategic discussions. The collaboration between the ICD and SEC underscores a shared commitment to equipping leaders with the necessary tools and knowledge to uphold the highest standards of corporate governance. Building on the foundation of previous engagements, such as the courtesy visit on January 22, 2025, the discussions aimed to further explore collaborative opportunities. The ongoing partnership between the ICD and SEC is vital for navigating the evolving landscape of corporate governance, ensuring regulatory compliance, and strengthening business relationships. This meeting reinforces the dedication of both organizations to championing effective corporate governance practices, ultimately contributing to a more transparent and accountable business environment in the Philippines.

By: Aubrey Camille J. Perez Research and Content Coordinator Institute of Corporate Directors On February 14, 2025, the induction of newly elected Trustees, Officers, and Board and Program Committee Chairs was held at the Dusit Thani Makati. This event marked leadership transitions and highlighted ICD's strong commitment to corporate governance. The program began with a warm welcome from the Executive Director, Ms. Catherine Jalandoni, GICD, followed by the opening remarks of ICD President, Mr. Senen Matoto, FICD. After delivering an inspirational message, Dr. Jesus “Jess” Estanislao, FICD, Chairman Emeritus, facilitated the induction of ICD trustees.  The newly elected members of the ICD Board of Trustees are: Chairperson : Atty. Benedicta Du-Baladad, FICD - Managing Partner and CEO of Du-Baladad and Associates Vice Chairperson : Ms. Imelda C. Tiongson, FICD - President and Execom Member of Opal Portfolio Investments (SPV-AMC) Inc. President : Senen L. Matoto, FICD - Independent Director of Yuanta Savings Bank Philippines, Inc. Treasurer:  Catherine L. Hufana-Ang, FICD - Managing Director and Chief Audit Executive of Ayala Corporation Amb. Jose L. Cuisia, Jr., FICD - Honorary Fellow of Institute of Corporate Directors (ICD) Atty. Jose Tomas C. Syquia, FICD - Private Law Practitioner / Securities Law & Procurement Consultant Mr. Donald Patrick L. Lim, FICD - Chief Operating Officer (COO) of DITO CME Holdings Inc. Mr. Henry Rhoel R. Aguda, FICD - Chairman of UBX and City Savings Bank Mr. Jonathan Juan D.C. Moreno, FICD - President & CEO of AF Payments Inc. Mr. Jose Antonio T. Mapa Jr., FICD - Chairman of Primecare Ventures Inc. Ms. Maria Celeste S. Narciso, FICD - Independent Director of Republic Glass Holdings Inc. Ms. Tomasa H. Lipana, FICD - Independent Director of SM Investments Corporation In her message, Chairperson Atty. Du-Baladad expressed gratitude for the support of ICD’s community and leadership. Even after celebrating its 25th anniversary, ICD remains unwavering in its commitment to strengthening governance across various sectors and engaging with the broader community. Under the board's leadership, initiatives such as a member help desk, a 24/7 chatbot for online support, a learning management system for board directors, and an ecommerce system for easier member management will be introduced. Additionally, ICD will open its office to members to foster stronger community engagement and expand learning opportunities. Plans to extend the impact beyond the membership, including collaborations with international organizations, the introduction of governance initiatives for MSMEs, and new recognition awards, were also announced. Chairperson Atty. Du-Baladad also highlighted key initiatives for the future, including focusing on corporate governance in both public and private sectors. A flagship project aiming to enhance capital markets and governance was also launched. The chairperson concluded by urging all members to actively participate in these efforts to ensure that ICD continues its role as a leader in corporate governance. Following the Chair’s message, she introduced the capital market project's flagbearer, Dr. Jesus “Jess” Estanislao. Dr. Jess provided an insightful analysis of the current global economic landscape, and pointed out the challenges posed by the tariff wars. Based on his experience and expertise, he discussed how these challenges could lead to economic repercussions (e.g., high inflation, unemployment, and less freedom of movement for goods, finance, and people). Dr. Estanislao also emphasized the need to leverage these crises to build on the country's existing economic foundations, particularly in the areas of natural resources and human capital. He emphasized the need for the Philippines to better utilize its workforce and boost the performance of SMEs. He also raised concerns about the country’s performance in ASEAN corporate governance rankings and called for a collective effort to improve the standards and performance of publicly listed companies. Dr. Estanislao encouraged ICD members to work together with financial institutions, government bodies, and governance experts to build a stronger financial and capital market base because this will ultimately improve economic growth in the Philippines. The program also included the recognition of immediate past officers. It also featured a keynote speech by Mr. Romeo Bernardo, Monetary Board Member of the Bangko Sentral ng Pilipinas, entitled “The Year of the Snake: Twists and Turns.” Mr. Bernardo explained how good corporate governance practices and the boards can help in navigating the economic landscape of the Philippines given its current condition. In conclusion, the induction of ICD’s new leadership marks a significant step in advancing corporate governance. With the commitment to enhancing governance practices and improving capital markets, ICD, with the help of its stakeholders, is set to lead key initiatives that will foster growth and development in the Philippines.

By: Marlon Jeffrey T. Tuy Intern, Research and Development Institute of Corporate Directors On March 6, 2025, the Institute of Corporate Directors (ICD) had the honor of hosting a courtesy visit from the distinguished leaders of Willis Towers Watson (WTW). The meeting provided an invaluable opportunity for both organizations to engage in a productive exchange of ideas and explore potential areas of collaboration to advance corporate governance practices within the Philippines. The WTW delegation, led by Mr. Roman Weidlich, International Leader for Work & Rewards, along with Mr. James Matti, Chairman of Health, Wealth & Career Philippines, Mr. Patrick Marquina, Head of Work & Rewards Philippine; Mr. Jet Soriano, Leader of Work & Rewards Philippines, and Mr. Lucien Cepeda, Associate Director of Work & Rewards, met with ICD’s leadership team, which included Ms. Catz Jalandoni, Executive Director; Ms. Lara Reyes, Head of the Governance, Research, and Advocacy Department (GRAD); Mr. Kenneth Lagera, R&D Assistant Manager, and Mr. Carlos del Rosario, Board Services Manager. Throughout the meeting, both parties emphasized their shared commitment to fostering the country's corporate governance growth. WTW expressed its enthusiasm for the possibility of collaboration, particularly through the exchange of intellectual resources and talent, with a focus on creating projects that would deliver both strategic insights and financial value for organizations operating in the Philippines. The discussion focused on areas where both ICD and WTW could collaborate, particularly in researching emerging trends within organizations, the future of work, and improving governance frameworks. Both parties recognized the value of combining their expertise to create meaningful insights and strategies for strengthening governance structures. Key topics like board diversity, succession planning, and climate change were identified as important areas for future research. Moving forward, both organizations expressed excitement about continuing their partnership and working together on future research initiatives. This courtesy visit marked an important step toward further strengthening the relationship between ICD and WTW, and both organizations are committed to continuing their joint efforts to drive innovation and excellence in corporate governance. ICD extends its sincere gratitude to the WTW team for their visit and looks forward to the continued success of their partnership in advancing corporate governance practices in the Philippines.

By: Nelljay Kahlil Tuppal Intern, Research and Development Institute of Corporate Directors The Institute of Corporate Directors held its much-anticipated Induction Event last February 14, 2025, where prominent economist Romeo Bernardo delivered a keynote address to a distinguished audience of corporate leaders, governance experts, and policymakers. The event was graced by key ICD leaders such as Chairman Emeritus Dr. Jess Estanislao, FICD, widely regarded as the Father of Corporate Governance in the Philippines; Chairperson Atty. Dick du-Balabad, FICD; Vice Chairperson Imelda “Ida” Tiongson, FICD; and President Bing Matoto, FICD. Other notable guests included Honorary Fellow Ms. Corazon “Cora” dela Paz-Bernardo, FICD, and Philippine Chamber of Commerce and Industry Chairman Mr. George Barcelon. Mr. Bernardo, in his speech, shared an overview of the Philippine economy, highlighting both the nation’s strengths and the emerging challenges. He aptly titled his address “Twists and Turns in the Year of the Snake”, drawing a parallel to the Chinese zodiac, symbolizing a year marked by unpredictability and geopolitical uncertainty. As the world enters 2025, Mr. Bernardo noted that, much like the snake, the year promises both hidden dangers and opportunities, with markets across the globe bracing for potential disruptions. “Much has already unfolded this early in 2025, and there are bound to be more twists and turns in the months ahead.” In the first part of his keynote, Mr. Bernardo provided an in-depth situation analysis of the Philippine economy. He acknowledged that, while the Philippines has made significant strides in recent years, challenges remain. Key economic indicators such as inflation and GDP growth are showing positive trends, with inflation decreasing significantly from 8.7% in 2023 to 2.9% in January 2025, and the country’s GDP growth expected to exceed 6% in the next two years. “Headline inflation decreased from a peak of 8.7% in January 2023 to 2.9% in January this year.” These improvements are largely attributed to strong remittance inflows from Overseas Filipino Workers (OFWs), the resilient BPO sector, and the government’s continued focus on infrastructure development. “The growth story will continue to be driven by OFW remittances, BPO revenues, and the government's infrastructure program, which has been kept at 5-6% of GDP.” However, despite these positive macroeconomic developments, Mr. Bernardo cautioned that the Philippine economy is not without its risks. “We also emerged from the pandemic having to face unprecedented geopolitical turmoil. The Russia-Ukraine war, the war in Gaza, and now Trump in the White House.” He highlighted the growing geopolitical fragmentation on the global stage, pointing to conflicts such as the Russia-Ukraine war and the ongoing tensions in Gaza, which continue to disrupt global trade and create uncertainty. Moreover, the specter of policy shifts under potential Trump 2.0 leadership and the US-China trade conflict presents added complexities for the global economy, and the Philippines could feel the ripple effects. “Perhaps the big question on everyone’s minds at the moment is just how far this trade war could go and how much of a blow this could be to the global economy and the Philippines.” The fear of tariff wars and supply chain disruptions further complicate the trade environment, as nations with closer ties to the US, like the Philippines, face new uncertainties about their economic positioning. Mr. Bernardo also drew attention to the potential challenges posed by inflationary pressures and financial market volatility, noting that geopolitical shifts and global supply chain disruptions remain significant threats to stability. “Inflation expectations also remain within target.” Despite efforts by the Bangko Sentral ng Pilipinas (BSP) to reduce the policy rate in the past year, Mr. Bernardo stressed that the BSP must remain cautious and data-driven as it continues to calibrate monetary policy in response to the unpredictable global economic landscape. “The BSP is attentive to the risks to our inflation outlook, which are broadly balanced until 2026.” With these risks on the horizon, Mr. Bernardo shifted focus to the central theme of his address: the role of corporate governance in ensuring that Philippine businesses remain resilient, agile, and competitive. “At the risk of bringing coal to Newcastle, let me share some of my thoughts on the role of the board and good corporate governance in the face of such heightened VUCA (volatility, uncertainty, complexity, and ambiguity) the likes of which we have not seen since the concept was introduced in the US Army War College in 1987.” He called on the members of the ICD to recognize that strong corporate governance is essential to navigating volatile and uncertain times, which is more relevant than ever in this VUCA environment. Drawing on his experience as an independent director, he emphasized three core principles that he believes should guide corporate governance in the years ahead. The first principle was board composition. Mr. Bernardo emphasized that the responsibility for good governance starts at the top and that having diverse boards with a mix of backgrounds—in terms of gender, age, culture, education, and professional experience—is essential for long-term resilience. “Good corporate governance is ultimately the responsibility of the board.” He underscored that diverse leadership perspectives enable boards to better understand risks, challenge assumptions, and seize opportunities in times of disruption. “A diverse board is not just about representation. It is a matter of resilience.” Companies with dynamic and adaptable leadership are those most likely to endure, much like species that survive through adaptation, as famously observed by Darwin. The second principle Mr. Bernardo outlined was culture. “Governance is more than compliance. For us, it is all about imbibing and nurturing a culture of integrity, fairness, accountability, and transparency cascaded from the Board, its management, and to all our employees.” Governance, he noted, is more than mere compliance with rules; it is about embedding values such as integrity, fairness, accountability, and transparency throughout an organization. He reflected on lessons learned from the Global Financial Crisis, where failed governance and unchecked conflicts of interest led to disastrous outcomes. “Without the right governance culture, even the best policies and structures will fall short.” The third and final principle was risk management. In today’s rapidly changing landscape, Mr. Bernardo emphasized that corporate boards must continually update and strengthen their risk management frameworks to account for emerging threats such as geopolitical instability, cyber threats, and technological disruptions. “Risk management is at the heart of corporate governance for banks.” as he quoted Governor Tetangco. He noted that businesses that approach governance strategically—by embracing transparency and accountability—are best positioned to adapt and thrive in a world of uncertainty. “[W]e all need to upgrade our risk management systems commensurate [with] the heightened threats,” Mr. Bernardo added. Concluding his address, Mr. Bernardo paid tribute to the ICD’s leadership in promoting corporate governance reforms in the Philippines, noting that the institute and its members have been at the forefront of creating stronger, more resilient corporate practices for the past two decades. “The choices we make today—who we bring to the table, how we structure our decision-making, and how we anticipate risks—will determine our ability to navigate the twists and turns ahead.” As the Year of the Snake unfolds, he expressed confidence that with strong governance, diverse leadership, and a steadfast commitment to resilience, Philippine businesses will not only survive but thrive, no matter the surprises the year may bring. Mr. Romeo Bernardo’s keynote provided invaluable insights on the state of the Philippine economy and the crucial role of corporate governance in navigating the challenges ahead. His message resonated deeply with the members of the Institute of Corporate Directors, emphasizing the importance of good governance as a strategic imperative to ensure that companies remain agile, resilient, and competitive in the face of an increasingly unpredictable world.

By: Dr. Carlos P. Gatmaitan, FICD Fellow Institute of Corporate Directors Welcome to this special  inaugural issue! This column covers good governance and sustainability initiatives in the Philippines. Rest assured, my dear friends, this shall not be an academic exposition but rather a true to life discussion on current situations surrounding a topic that has transcended into the DNA of the country’s top corporations and key stakeholders representing government, capital markets and civil society. The series shall ultimately proclaim that sound strategic governance and sustainability practices are critical factors for long-term growth for organizations. Consider this endeavor as a piece of the global phenomenon upon the turn of the century, catapulted by the inevitable Asian Crisis of 1997 and the infamous Enron corporate scandal — the primary case for corporate governance abuses. To answer the call, previous Secretary of Finance, Dr. Jesus P. Estanislao founded the Institute of Corporate Directors (ICD) and the Institute for Solidarity (ISA), which recently celebrated their 25th year anniversary. The ICD, in particular, has been at the forefront of advocating improved corporate governance practices in the Philippines, providing training, research and resources for directors and executives. Thankfully, incoming ICD chairperson Benedicta-Du Baladad and President Senen Matoto shall continue to advocate for governance reforms that promote good governance practices towards economic prosperity and social responsibility. Together with the ISA, which focuses on public governance and working toward creating a more inclusive and transparent government, these organizations have collaborated on the Dream Philippines 2046 project, a roadmap for the country’s governance and sustainability initiatives. In the global context, the United Nations Sustainable Development Goals (SDGs) maintains its universal role and serves as a critical framework for addressing good governance and sustainability priorities. The 17 SDGs continue to be a backbone for sustainability reports as required for publicly-listed corporations and with Securities and Exchange Commission (SEC) chairman Emil Aquino and SEC Commissioner Javey Francisco actively involved in the regulatory perspective on good governance, the Philippines has done its share in aligning governance regulations with the SDGs as well as the Global Reporting Initiative (GRI) and a handful of stakeholders in the global sustainability world, fondly called the alphabet soup of acronyms — all ensuring that corporate growth and sustainability, social welfare and corporate growth. They are walking the talk and have been central in the mix of things. Thankfully, the Philippine economy continues to grow (really) and we have finally met the United Nation’s upper-middle gross national income level of $4,086 after posting a record high of $4,230 last 3Q2024. We will continue to grow and Dream Philippines 2046 (Estanislao) will be a reality, hopefully sooner rather than later. For as long as the majority of Filipinos remain morally upright and we maintain our self-respect as a people capable of nationwide growth and greater service to our fellowmen, the Philippines shall have a climate conducive to economic stability and maintain its faith towards political maturity. Yes, we need faith and action to make this work… and it will! Kudos to those involved in merging good governance practices in this never-ending journey towards various stakeholders aside from the SEC and Philippine Stock Exchange. These include the Bangko Sentral ng Pilipinas, Insurance Commission, Governance Commission for GOCCs, Philippine Council for NGO Certification, among others. Various prominent advocates of governance reform from the private sector have played critical roles in shaping the discourse on corporate and public governance in the Philippines and shall be discussed further in this weekly series. Wonderful that the country’s top audit and advisory firms are deeply entrenched in the bandwagon as well. I recall Accenture’s ex-CEO Lito Tayag in the 1980s, a trailblazer in the governance of the Information Technology space when digitalization was at its infancy stage in the strategy decision-making arena back then. Well, all of the country’s top audit firms now have distinct advisory services and are the fastest-growing departments. From KPMG R.G. Manabat, PwC Isla Lipana, P&A Grant Thornton to SGV, they are all in. As a senior advisor in Reyes Tacandong & Co., I envision RT&Co as spearheading the country’s premiere Strategic Governance and Sustainability advisory group. All in the spirit of good corporate governance! Until next week… (Dr. Carlos Jose P. Gatmaitan is an Independent Director, Fellow of the Institute of Corporate Directors, Senior Advisor of Reyes Tacandong & Co., and Faculty at the Ateneo Graduate School of Business. Please share your thoughts and comments at corgov.associates@gmail.com ) Disclaimer: On  December 15, 2024, “Strategic governance and sustainability: Essentials for maximizing corporate value” was published. It was authored by Dr. Carlos P. Gatmaitan, a fellow of the Institute of Corporate Directors. You can read the original article through this link

By: Senen L. Matoto, FICD Fellow Institute of Corporate Directors About 25 years ago, in the aftermath of the earth shaking bankruptcy of the mammoth publicly listed Enron in the US and the dissolution of one of the world’s largest accounting and auditing firms, Arthur Andersen, which caught thousands of investors off guard and the eye of regulators, inspired by the OECD Principles of Corporate Governance, the renowned economist, former NEDA Secretary and former Finance Secretary and now more popularly known as the Father of Corporate Governance, Dr. Jesus P. Estanislao, started to promote corporate governance in the business community in cooperation with key government and quasi-government agencies such as the SEC, BSP and PSE. However, I distinctly recall thinking to myself that the private sector then, by and large, listened to the new corporate governance doctrine that Doc Jess was avidly preaching, feeling with a tinge of trepidation that these are more rules to follow. And probably with a sigh of reluctant acceptance telling ourselves, “Here we go again, more bureaucratic rules to comply with and forms to fill.” But with the SEC fully backing Doc Jess, the business community slowly started warming to the merits of corporate governance, particularly after a flurry of corporate scandals such as the US subprime mortgage crisis and, on the home front, BW rocked the business world. Today, the importance of adhering to the principles of corporate governance has been further brought to the forefront with the Institute of Corporate Directors under the continuing guidance of Doc Jess the past 25 years. Last week, the mantle of leadership of ICD was passed to a powerhouse new Board of Trustees led by Chairperson, Tax Lawyer Benedicta “Dick” Du-Baladad; Vice Chair, Fintech Expert Ida Tiongson; yours truly as President and CEO; Treasurer, Ayala Chief Audit Executive Cathy Hufana-Ang; and Ambassador Jose Cuisia, IT luminary Henry Aguda, Marketing Communication whiz Donald Lim, former PwC Country Head Tammy Lipana, Securities Lawyer Tom Syquia, former Pepsico GM Maricelle Narciso, Payments Solution Expert JJ Moreno and Management Consultant Tonton Mapa. The induction was marked by the new governance advocacy that Doc Jess has invited ICD to embark on, but this time with a focus on our capital market. All market practitioners are fully aware of the tepid state of our stock market that has been languishing for well over the past decade from the highs of the PSE Index 8500 plus to the current moribund 6000 level. Of course, we are all fully aware that the current tumultuous external environment of Trump’s MAGA moves and the continuing global armed conflicts in Ukraine and Gaza have not been conducive for business. But let’s face it, there is no denying that we definitely have our own set of homegrown problems in this Year of the Snake as echoed by the event’s keynote speaker, a friend and another noted economist who now sits as a Monetary Board Member, Romy Bernardo, from the political gerrymandering circus to something as basic as not having a respectable number of listed companies. Investing in the Philippines is unfortunately severely limited to literally only a handful of companies to choose from. We lag behind our neighbors in terms of number of listed companies; we have high friction costs; uncompetitive tax rates; cumbersome listing rules; non-existent secondary market support resulting in limited, if not eroded, upside valuations post-IPO; dismal investor financial literacy; and perhaps more fundamentally, a host of unconducive operating environment factors dissuading investments in important pillars of economic development such as in manufacturing and agriculture, making us basically a one-pony show which is the consumer sector vulnerably driven primarily by the millions of OFWs and the BPO industry. As a consequence, we are limited to perhaps a fraction of a percentage point in the assets allocation of the MSCI index, an insignificant blip in the investors radar screen. Now what can ICD possibly do to help? Well, we in ICD firmly believe that good governance is key to unlocking the confidence of investors and by promoting the principles of good governance to hundreds of private companies and encouraging them to go public so their corporation’s valuations can properly receive their due share will appeal to business owners. If investors are convinced that good governance principles are widely being practiced, there is no reason why we cannot have a thriving small companies index that has the potential to go multiple times its IPO valuation. But we need governance champions to be properly trained, exposed and hopefully taken on by corporations keen to professionalize and aspiring to go public. With a revamped and energized board ably assisted by our new Executive Director, Catz Jalandoni, we hope to see more aspiring directors become members of ICD and be counted as Governance Champions! Until next week… OBF! For comments, email bing_matoto@yahoo.com . Disclaimer: On February 18, 2025, “Corporate governance champions” was published. It was authored by Senen L. Matoto, a fellow of the Institute of Corporate Directors. You can read the original article through this link: