PwC GGAPP Philippines Corporate Governance Survey
Finding the true north Advancing corporate governance in the Philippines
www.pwc.com/ph Foreword
Message from the SEC Chairperson
My warmest congratulations to In addition, the SEC believes that the the Good Governance Advocates results of this Survey would be most and Practitioners of the Philippines beneficial in the implementation (GGAPP) on the success of its 2016 of the 2016 Code of Corporate Code of Corporate Governance Governance for PLCs. The new Survey. The GGAPP has been a Code aims to make Philippine consistent partner of the Securities corporate governance standards at and Exchange Commission (SEC) par with regional and international in its advocacy to promote good standards and this Survey would corporate governance for Philippine be a useful tool for providing both corporations. As actual practitioners the SEC and PLCs the necessary of good corporate governance from information on the focus areas to various publicly listed companies be addressed in the advancement of (PLCs), GGAPP has consistently corporate governance for Philippine provided the SEC invaluable insights corporations. Atty. Teresita J. Herbosa Chairperson, Securities & Exchange on the application of best corporate Commissions (SEC) governance and ethical practices. The promotion of good corporate Moreover, GGAPP has contributed governance is an uphill battle. greatly to both the SEC Philippine However, with partners such as Corporate Governance Blueprint GGAPP assisting SEC in instilling and the 2016 Code of Corporate the proper corporate governance Governance for PLCs. foundation in PLCs, it is certain that the time will come when corporate This recent initiative of conducting governance will be second nature to the 2016 Code of Corporate companies and due recognition will Governance Survey in partnership be given to the benefits of compliance with Isla Lipana & Co./PwC with good practices. Philippines highlights GGAPP’s desire to continuously contribute Congratulations once again to GGAPP to the development of appropriate and looking forward to a continuing and progressive rules, standards and partnership in the promotion of good practices on good governance. It is a corporate governance! testament to the group’s increasing role in the improvement of the Philippine corporate governance ecosystem.
ii Finding the true north: Advancing corporate governance in the Philippines Message from the PSE President
Congratulations to the Good companies that practice it are highly Governance Advocates and transparent about their business Practitioners of the Philippines thereby making the business easy (“GGAPP”) and Isla Lipana & Co. to assess and evaluate. This in turn / PwC Philippines (“PwC”) for enables the company to win the their successful conduct of the PH trust of its stakeholders including Governance Survey in the fourth investors, making it easy for such quarter of 2016. The Philippine Stock company to raise funds from the Exchange (“PSE”) fully supported this capital market. Companies practicing undertaking not only by promoting corporate governance usually and encouraging its roster of publicly outperform those that don’t. listed companies to participate but by participating in the survey as a Like most of the companies who participated in said survey, PSE is Photo not yet final listed company and meticulously answering the survey questions. happy that the results are finally out. The results will provide Philippine Ramon S. Monzon PSE believed this survey was very President and Chief Executive important to form a well-founded companies with a clearer path on Officer, Philippine Stock Exchange basis for assessing the present state their journey to faithful compliance (PSE) of corporate governance among with the new Governance Code. Philippine companies and their Mabuhay GGAPP and PwC! readiness to comply with the new Corporate Governance Code for Listed Companies, which took effect last January 2017.
Corporate governance is something PSE strongly subscribes to and it actively supports several initiatives to improve the corporate governance of publicly listed companies. Some companies equate corporate governance with increased costs and additional burden to their management not realizing that practicing it yields the opposite results. Because corporate governance is based on the principle of transparency and disclosure,
PwC GGAPP Corporate Governance Survey 2016 iii Foreword
Message from the ICD CEO
On behalf of the Board of Trustees More importantly, these documents and Fellows of the Institute of can also yield valuable lessons, Corporate Directors (ICD), I wish to which are used to form the basis of congratulate the Good Governance policies and programs that will guide Advocates and Practitioners of the regulators, companues, investors Philippines (GGAPP) and Isla Lipana and other members of the corporate & Co./PwC Philippines (PwC) on the governance ecosystem in working publication of their 2016 Corporate together to realize their common Governance survey. objective of making the Philippines one of the leading practitioners of Surveys such as this one provide corporate governance in the ASEAN important benchmarks and region. perspectives which, when added to other references which ICD has Mabuhay ang GGAPP at ang PwC! developed and worked on such as Ricardo Nicanor N. Jacinto the ASEAN Corporate Governance Chief Executive Officer, Institute of Corporate Directors (ICD) Scorecard, provide a clearer picture on the state of corporate governance in the country.
iv Finding the true north: Advancing corporate governance in the Philippines Message from the GGAPP Chairman
It is indeed a proud moment for both Finally, as Chairman of GGAPP, I GGAPP and PwC to finally launch this would like to thank our Knowledge Survey Report. Partner, PwC, for this initiative. None of this would have been possible This report was conceived as a way without the dedication and passion for individual companies to assess of their personnel. I would also where they may find themselves in like to thank Chairperson Teresita terms of compliance with the new J. Herbosa of the SEC, and former Code of Corporate Governance for President of the PSE, Mr. Hans Sicat Publicly Listed Companies. for their support and assistance.
It is our hope that through this report, We hope GGAPP and PwC’s modest companies will be able to steadily and effort at developing substantive progressively adopt more and more knowledge and information on of these best practices on Corporate corporate governance in the Atty. Vincent Edward Festin Governance in order to attain their Philippines will inspire others to Chairman, Good Governance objectives and also to positively Advocates & Practitioners of the contribute to enriching this body of Philippines (GGAPP) respond to the needs of their various knowledge further. stakeholders. Thank you very much. It is also our hope to conduct this survey annually in order to monitor adoption and progress. We trust that companies will find value in the survey and the insights generated therefrom and that more and more companies will respond to this survey.
PwC GGAPP Corporate Governance Survey 2016 v Foreword
Message from the GGAPP President
Last year, we in GGAPP had the Fortunately, we found a wonderful privilege of working together and like-minded partner in Isla with regulators headed by SEC Lipana & Co./PwC. Chairperson Teresita J. Herbosa and other organizations that The resulting survey provided us share our advocacy to improve the a tool to be able to benchmark corporate governance framework with our peers and extract a more of the Philippine capital market and realistic view of the readiness of the hammer out a new Code of Corporate participant companies to adopt the Governance for publicly listed new Code. companies (‘PLCs”). We are learning that although This Code recommends much has been achieved since 2002 internationally recognized best when the first Philippine Corporate practices that will hopefully heighten Governance Code was promulgated, Atty. Jocelyn C. Villar-Altamira the accountability of boards, enhance there are still gaps that need to be President, Good Governance addressed. Advocates & Practitioners of the the competence of directors and ensure the protection of stockholders Philippines (GGAPP) This survey is just the first step that and other stakeholders. hopefully will enable all of us to However, as practitioners in the make better informed decisions and field of governance in our respective take innovative measures to ensure companies and organizations, we continued adherence by all to the realize how difficult it is to comply corporate governance principles of with some of the recommendations of fairness, accountability, integrity and the Code. transparency.
PLCs, depending on various factors such as shareholder structure and industry, are in different stages of development as far as their governance frameworks are concerned.
vi Finding the true north: Advancing corporate governance in the Philippines Message from the PwC Philippines Chairman
Balancing short-term with long-term PwC is honored to embark with goals, creating sustainable value for GGAPP on this first-ever journey to stakeholders, achieving growth but capture on paper the actual practices helping inclusive growth. These are and intention of public companies the issues organizations commonly on corporate governance. These address, but moreso for those whose speak volumes about the leadership businesses are grounded on principles in the organizatiom and impact on of good corporate governance. the confidence of their investors and stakeholders. It is encouraging that the number of private companies embracing the It is our wish that this first Corporate concept of good governance and Governance Survey serves as a transparency is improving, as we have platform for greater awareness and observed. dialogue to continuously nurture a culture of integrity and values. Such For public companies, it is even a culture creates enduring wins, not Atty. Alexander B. Cabrera reassuring that the readiness Chairman and Senior Partner, only for the company, but for the Isla Lipana & Co./PwC Philippines to comply, and for some, actual country. compliance with governance principles, are already at a respectable level.
PwC GGAPP Corporate Governance Survey 2016 vii Contents
Then and now: Corporate Governance The 2016 Corporate in the Philippines Governance Survey
1 8
Where we are: Survey results The Board’s governance and analysis responsibilities Disclosure and transparency
12 14 27
The role and next steps for corporate governance Next steps and conclusion key players Conclusion
40 42 44
viii Finding the true north: Advancing corporate governance in the Philippines Cultivating a synergic Internal control and risk relationship with management framework shareholders Duties to stakeholders
31 33 36
Acknowledgments
46
PwC GGAPP Corporate Governance Survey 2016 ix Then and now: Corporate governance in the Philippines
Knowing about the beginnings of corporate governance (CG) in the Philippines is both a stepping-back and stepping-up exercise.
We step back to learn the groundwork, and we step up to reach a vantage point where we can see and understand the rationale for current corporate governance practices and initiatives.
It is easy to remember an event or an experience if details are weaved in to form a story.
In an interview with Dr. Jesus P. Estanislao, the founder of the Institute of Corporate Directors, we learned the story of the early years of corporate governance in the Philippines.
As you read our conversation with Dr. Estanislao, you will realize that he is more than an eyewitness. He is a protagonist in the CG story.
x Finding the true north: Advancing corporate governance in the Philippines PwC GGAPP Corporate Governance Survey 2016 1 Then and now: Corporate governance in the Philippines
Stepping back
Beginnings of Philippine Corporate Governance
PwC: When did you first think of me all the materials he brought. starting the conversation on CG or I read them and I became even pursuing the CG advocacy? more convinced that this was an undertaking I could commit Dr. Jesus P. Estanislao (JPE): During myself to. the East Asian financial crisis in the I noticed that a late 1990s, I had a front-seat view of b. Bangko Sentral ng Pilipinas (BSP) big part of the the rescue packages being prepared Governor Rafael Buenaventura reform program and put together for Thailand, and his Deputy at that time, Indonesia and South Korea. I was now Governor Amando “Say” associated with the then in Japan as Dean of the ADB Tetangco Jr. I briefed them on rescue packages was (Asian Development Bank) Institute. what I wanted to do, and asked if corporate governance. they might consider pushing CG As I looked closer, I noticed that a big part of the reform reform in the PH banking system. program associated with the rescue They were fully supportive, I found that this packages was corporate governance. indeed enthusiastic. particular reform As I looked closer, I found that this particular reform made sense, c. A small group of professionals, made sense, including including for the Philippines, since with whom I would meet for the Philippines, we had the same bad CG practices each week for other matters. since we had the same as Indonesia and Thailand. So after I suggested to them that they bad CG practices I came home, and I was looking for become a test group or a focus something really constructive to do, group to go over materials on CG as Indonesia and I decided to go for CG reform in the that I had adapted from the CG Thailand. Philippines. materials from Harvard. They were eager participants in that Dr. Jesus P. Estanislao Following that basic decision, I experimental group. Founder and looked around for initial possible Chairman Emeritus, allies. I found four: d. I contacted my friends over at the Institute of Corporate Directors World Bank, and they were only a. Jesus “Gigi” Zulueta Jr., who had pleased to invite me to a special just returned from a short course training program they were at the Harvard Business School going to test-run for a few select on corporate governance. He lent individuals. I signed up.
2 Finding the true north: Advancing corporate governance in the Philippines The story gives these lessons on how to strengthen the CG advocacy:
1. Identify key individuals who will lead.
2. Solicit support from local regulatory agencies.
3. Widen the network of individuals and institutions to support the advocacy.
4. Reach out to international groups.
5. Commit to continuous learning.
These themes will be discussed in the different sections of the report.
PwC: How did you start the CG I tapped into my network in the c. The Australian Aid Agency advocacy? business community to help me. (AUSAID) provided support, Along with Rex Drilon, Alicia “Baby” mainly in arranging and JPE: Armed with that knowledge Vergel de Dios, Gigi Zulueta and that facilitating a connection with the of CG and with willing individuals, initial band that offered themselves as Australian Institute of Directors including the BSP, that would help a test group for adapting CG materials (AIOD). ICD sent its initial batch me adapt global CG principles and into the Philippines, I was able to of potential trainers to Sydney suggested best practices to Philippine initiate ICD. But ICD needed technical for a week’s intensive program on conditions, I decided to set up the and financial help. The much-needed CG at the Australian IOD. Institute of Corporate Directors (ICD) help initially came from outside: as a vehicle for pursuing CG reform in We sent two batches, and there the Philippines. a. The World Bank (WB) group were a few occasional CG experts soon connected me with that would come from Australia to While ICD was going to get involved the International Corporate conduct a few training programs in in training, it was clear from the Governance Network, where I Manila. ICD made sure that its CG start that the bigger challenge was met the “who´s who” of global principles and suggested practices to undertake an initiative that would CG advocates, e.g. Ira Millstein, have global provenance, and much of address a bigger challenge: how to Lord Cardbury, etc. The World what ICD has been trying to do has introduce a corporate governance Bank through the WB Institute been simply to adapt those to local reform process in the Philippines. also provided ICD with a grant conditions. to get started and pursue its CG An advocacy is much bigger and more advocacy for a few years. demanding than being simply a CG b. The BSP came through and in training provider. I then organized effect required all directors of towards the end of 1999 an initial commercial banks at that time conference to introduce CG to a to undergo a special CG training. mixed group, which nonetheless was ICD was chosen as the service made up mainly of business sector provider by all commercial representatives. I had about 120 banks. persons attend that initial conference in the University of Asia & the Pacific (UA&P). From there, ICD just got going.
PwC GGAPP Corporate Governance Survey 2016 3 Then and now: Corporate governance in the Philippines
Stepping up
Code of Corporate Governance 2002 and 2009
Having learned about the early PwC: Why was there a need to revise Examples of this coordination and years of CG, we move ahead to the 2002 CG Code and come up with collaboration work where ICD was a reach the vantage point as we the CG Code of 2009 and a circular key player are the following: in 2014 to revise the definition of speak with Rex C. Drilon, Vice a. Crafting of the SEC Corporate Chairman of ICD. Corporate Governance and finally, the 2016 CG Code? Governance Blueprint 2020
Rex C. Drilon (RCD): The b. The third revision of the He shared with us the key CG SEC (Securities and Exchange Corporate Governance Code of initiatives in the recent years Commission), with some prodding 2016 leading to the 2016 SEC Code of from ICD and advocacy groups c. The appointment of ICD by SEC Corporate Governance. such as SharePHIL (Shareholders’ as the Domestic Rating Board Association of the Philippines) (DRB) of the ASEAN Corporate and GGAPP, restored the role of Governance Scorecard (ACGS) stakeholders in corporations, which was removed in the 2009 version of d. The conduct of ICD’s own the CG Code. Philippine Corporate Governance Scorecard Awards co-sponsored The 2016 CG Code embodies all the with SEC and PSE up to 2012 needed provisions that are required to (thereafter, ICD decided to make corporate governance principles drop this program and opted and practices in the Philippines to join the ASEAN Corporate aligned with the ASEAN Corporate Governance Scorecard (ACGS) Governance initiatives and many of Program of the ASEAN Capital the global best practices as suggested Market Forum, or ACMF) by OECD and G20 countries. e. The issuance of PSE’s 10 PwC: What were SEC’s and Guidelines for Well-Governed PSE’s roles, and in general, the PLCs using the network of ICD government’s? among the other institutes of RCD: ICD and its founder, Dr. corporate directors in Asia and Estanislao, closely coordinated the in consultation with global activities of ICD with the regulators experts in corporate governance. – SEC, PSE, BSP, the Insurance The key PSE officer who crafted Commission (IC) and, in the last the Guidelines was former ICD five years, with the Governance President Jonathan Juan “JJ” Commission for GOCCs (GCG). Moreno. This has become the
4 Finding the true north: Advancing corporate governance in the Philippines basis for the PSE’s annual Bell PwC: What are the three most Awards. significant provisions or topics of the CG Code of 2016? f. The establishment of the Good Governance Advocates and RCD: The key elements of the new CG Professionals of the Philippines Code for Publicly Listed Companies (GGAPP) and the Shareholders’ (PLC) are as follows: Association of the Philippines Jesus P. Estanislao a. The principle of “Comply or Founder & Chairman (SharePHIL). Explain”. Emeritus, Institute of Corporate Directors g. The aborted project with the b. There are 16 Principles in PSE to establish the Maharlika the new Code and a total 67 Board in the stock market Recommendations under to be composed of listed the 16 Principles. A PLC can companies committed to much opt to comply with all 67 higher standards of corporate recommendations or may governance. seek exemption from some of the recommendations, PwC: What are the trigger factors provided the PLC explains why for the 2015 Corporate Governance Rex C. Drilon it will not comply with said Vice Chairman, Blueprint and 2016 CG Code? recommendations, hence the Institute of Corporate “Comply or Explain” provision. Directors RCD: The changing times and the need for the country to align its c. The 16 Principles follow the governance principles and practices updated principles of corporate to the best practices in the world governance as recently revised by were the primary motivation of the Organization for Economic SEC and the regulated companies Cooperation and Development and the governance advocates like (OECD). ICD, GGAPP and SharePHIL to work together to craft the CG Blueprint for It is apparent that there are now more the future (2020) and update the CG participants in the CG conversation Code. compared to the time it started about 20 years ago.
Keep the conversation going.
Be part of the CG story.
PwC GGAPP Corporate Governance Survey 2016 5 Then and Now: Corporate Governance in the Philippines
Timeline of corporate governance in the Philippines
2002 CG Code
Late 1990s
East Asian Institute of Financial Crisis Corporate “I noticed that a big part of Directors the reform program “…an initiative that would associated with the rescue address a bigger challenge: packages (for Thailand, how to introduce a corporate Indonesia, and South Korea) governance reform process in was corporate governance.” the Philippines.”
- Dr. Jesus P. Estanislao - Dr. Jesus P. Estanislao
6 Finding the true north: Advancing corporate governance in the Philippines 2000s
2009 CG Code
The CG advocacy requires a mix of : 1. Leaders What lies ahead It is apparent that there are 2. Regulators’ support now more participants in the 3. CG advocates CG conversation compared to 4. International community the time it started about 5. Commitment to learning 20 years ago.
2014 Circular
2016 CG Code 2016 and The journey to align with the beyond ASEAN Corporate Governance initiatives and many of the global best practices as suggested by OECD and G20 countries
PwC GGAPP Corporate Governance Survey 2016 7 The 2016 Corporate Governance Survey
Survey objectives and design
This survey on the new Code Survey participants were • The Board’s Governance of Corporate Governance for asked to answer 125 Responsibilities (seven Publicly Listed Companies questions categorized into five Principles, 70 questions) (CG Code) aims to provide sections, with each section companies and readers insights corresponding to the key • Disclosure and on the following: themes of the new CG Code. Transparency (four Principles, 20 questions) • The current state of By far a longer and more corporate governance tedious set of questions • Internal Control System practices and compliance in compared to the normal and Risk Management the Philippines survey, the number of Framework (one Principle, questions is a modest attempt five questions) • Whether Philippine publicly to encompass the entirety of the new CG Code: five listed companies are ready • Cultivating a Synergic themes, 16 Principles, and to comply with the new CG Relationship with 67 Recommendations with Code Shareholders (one corresponding Explanations. Principle, 15 questions) • Changes that companies Distribution of questions across need to institute in order • Duties to Stakeholders the five key themes are as to comply with the new CG (three Principles, follows: Code. 15 questions)
8 Finding the true north: Advancing corporate governance in the Philippines PwC GGAPP Corporate Governance Survey 2016 9 The 2016 Corporate Governance Survey
51 respondents
The survey was designed and The respondent profile, in terms of Market capitalization (in PHP) delivered via an online platform, the organizational designation/role allowing respondents to answer by 1 of the officer specifically answering 4 accessing the online survey form. the survey, showed that 27 out of Link to the survey was published 6 the 51 responses were submitted via the PSE website, and individual by Compliance Officers. Other 28 emails sent to target respondents. 8 roles represented were Corporate With the questions requiring various Governance Officers and Corporate 4 types of responses and considerable Secretaries. With the significant amount of corporate information, the amount of corporate information minimum time needed to complete Not less than 20 million to 100 million More than 100 million to 500 million across the various areas of the survey was around 60 minutes. More than 500 million to 1 billion More than 1 billion to 5 billion governance and management, these More than 5 billion to 10 billion More than 10 billion Ideally, respondents should have a three corporate officers typically have full view of corporate governance for Out of over 200 companies access to the information by virtue of the company he/she represents. invited to participate, their designation/role. 51 responded. Publicly listed companies (as indicated in the SEC website) were invited to participate in the survey, with requests communicated through Industry breakdown Respondent’s profile company contact information and disclosures available for general use. Challenges were encountered Financial 17 # Answer % Count with the various listed companies’ information disclosure, but despite Industrial 10 1 Compliance 53% 27 this, the survey garnered 51 Property 8 officer respondents representing over 20% Services 8 2 Corporate 14% 7 of the listed companies as of the third governance Mining and oil 3 quarter of 2016. officer Holding firms 3 3 Corporate 12% 6 In terms of market capitalization, ETF 1 secretary more than 50% of the respondents represented institutions with SME 1 4 Investor relations 12% 6 capitalization of more than PHP10bn officer For the industry profile, the financial (biggest individual corporations 5 General manager 4% 2 services sector registered the largest and conglomerates). This category participation registering 33% of the 6 Others 6% 3 represents 42% of the 234 registered total respondents. The Industrial and Total 100% 51 companies. Out of the total 98 Services sectors, which comprise the companies in this category, 29% largest population in terms of number responded to the survey. of listed corporations, accounted for 20% and 16% respectively.
10 Finding the true north: Advancing corporate governance in the Philippines Description of five corporate governance themes
The new CG Code adopted themes • Internal control system and that reflect the key dimensions of risk management framework: corporate governance: highlights the importance of strong and adequate mechanisms • The Board’s governance to identify, assess, mitigate and responsibilities: pertains to the monitor key risks, as well as the essential expectations from the enabling management officers Board of Directors in the context and functions. of organization, leadership, competence, composition, • Cultivating a synergic responsibilities, company relationship with shareholders: and management oversight, specifies the key practices to performance, independence and promote and protect shareholder ethics. rights, including mechanism to resolve infringement on such • Disclosure and transparency: rights. elaborates the principles that promote sufficient • Duties to stakeholders: communication of, and access to defines the scope and relevant and significant corporate company responsibilities to its information for stakeholders, stakeholders, and the promotion related party transactions, of stakeholder engagement, corporate governance sustainability and social mechanism, non-financial responsibility. and sustainability reporting. This also covers external audit expectations on independence and quality.
PwC GGAPP Corporate Governance Survey 2016 11 Where we are: Survey results and analysis
12 Finding the true north: Advancing corporate governance in the Philippines PwC GGAPP Corporate Governance Survey 2016 13 Where we are: Survey results and analysis
The Board’s governance responsibilities
Establishing a competent Board Established selection and review criteria help ensure that directors are qualified to Board composition and qualifications perform their roles The Board, the primary driver of corporate governance, should exhibit the necessary competence collectively and individually. It should Most respondents The qualification criteria for directors, including establish a sound director selection agree that the minimum the grounds for their disqualification, are and review criteria that directors qualifications for reviewed: have the necessary expertise and directorship include: experience required to be stewards of the organization. Almost all Review frequency: respondents have indicated “Business Directorship criteria expertise and experience” and Business expertise “Educational attainment” as key and experience None of the above minimum requirements for a director, 98% 3 corresponding to the technical capabilities and academic credentials At least once every aligned to the organization’s strategy 2-3 years 2 and operations. Furthermore, with Educational the evolving needs of organizations to attainment benefit from industry knowledge and 96% At least once every 12 months 33 professional network opportunities, “Membership in external organizations” is also high on the list At least once every Membership 6 months 2 of director qualifications. in external 78% organizations On an ad hoc basis 11
Our leaders, fully engaged and vigilant, set the tone of governance and ensure that the mechanism for disclosure, protection of the rights of shareholders, the equitable treatment of shareholders, and the accountability of the Board of Directors and management are in place, while maintaining a collaborative and productive work environment that drives high performance and quality orientation, consistent with our commitment to deliver strong customer and shareholder value.
Ricardo R. Chua President and Chief Executive Officer, China Banking Corporation
14 Finding the true north: Advancing corporate governance in the Philippines Organizations not only evaluate the the lower half of the selection criteria Director sourcing qualifications of directors during the are the personal attributes such as selection and appointment process, cultural fit, age, gender and ethnicity. Organizations are becoming but also on a continuing basis. Almost cognizant of alternative means 69% carry out reviews of director The responses can be viewed using to source director candidates, to qualifications, including grounds for two perspectives: Organizations enhance transparency in the director disqualification, at least once every look at director qualifications sourcing and nomination process. 12 months. While the majority of the that have more direct relevance While nomination from shareholders respondents adhere to this practice, to the company’s industry/sector and the organization’s professional such practice needs to be more formal and operations, with less bias network remain the primary methods and frequent for the remaining 31%. against personal attributes such (including fellow board member as ethnicity, age and gender. recommendations), 47% of the Director selection criteria are However, this can also mean that respondents are using professional a combination of technical and while organizations have adopted search firms and external sources, personal attributes, but the policies to enhance board diversity with 43% assessing the adoption of traditional attributes remain the top (67% of the respondents, while the these methods. considerations: integrity, education, rest are considering to adopt one), prior business experience and organizations may not necessarily technical skills. Consistent with the translate these into director selection requirements of the new CG Code, the criteria that will consciously seek for majority of the respondents strongly candidates with diverse cultural fit, agree that integrity is the paramount ethnicity, age or gender. qualification sought for directors. Following integrity, the next set of top considerations revolves around the technical attributes of the director. At
The selection of directors continues to be anchored on traditional criteria—integrity, education, and experience
Considerations in selecting directors
Weighted Average
Integrity 11 8 41 4.73 (1)
Knowledge/education 2 12 37 4.61 (2)
Prior business experience 11 13 36 4.59 (2)
Technical skills 1 2 20 28 4.45 (4)
Membership in industry, business, or professional 3.98 (5) organizations 1 2 9 24 15
Cultural fit 3 9 16 14 9 3.33 (6)
Age 5 19 16 5 6 2.80 (7)
Gender 6 16 17 8 4 2.76 (7)
Ethnicity 8 16 17 6 4 2.65 (9)
Strongly Disagree Disagree Neither Agree Agree Strongly Agree nor Disagree
PwC GGAPP Corporate Governance Survey 2016 15 Where we are: Survey results and analysis
Board diversity The majority of the Boards are comprised of non-executive directors, The common manifestation of Board which typically range from as low as diversity efforts is through gender 4 to as high as 14. Almost 50% of the diversity: increasing the number of I don’t believe in just respondents have five to eight non- female board directors. As for the bringing in women executive directors. Executive director current female representation in the memberships range from one to three Board, 55% reported to have at least in the Board for the for most companies. one female non-executive director, sake of their being with five being the highest. From the To promote effective board executive directors, only 35% have at women. They must be performance and continuing least one female executive director, honest, very ethical, qualification of directors and key with three being the highest. able to speak up and officers (such as the Compliance Officer and Corporate Secretary), do what’s right for the training policies are adopted. organization. Given Suggested duration should be at least the opportunity, eight hours for first-time directors’ women perform orientation program, and four hours for director annual continuing very well. Also, they training program. No specific control the purse of duration was recommended for 55% 35% the family. So, it’s Compliance Officers and Corporate Secretaries but they should undergo good also to have the relevant training on corporate No. of respondents No. of respondents women point-of-view governance annually. Respondents with at least one with at least one in corporations. primarily indicate that directors strive female non-executive female executive to achieve the minimum of four hours director director Corazon de la Paz-Bernardo annually. These training programs Independent Director cover a wide range of topics, but typically concentrate on board responsibilities, risk management and internal controls.
16 Finding the true north: Advancing corporate governance in the Philippines Most directors and corporate officers undergo continuous training and meet the prescribed requirements of the Code
Training on the following areas is constantly being Training hours of directors, compliance provided: officer, and corporate secretary Director Officer 36 rank rank Board responsibilities 1 1
29 Risk management 1 2 Internal controls 3 6 Related party transactions 4 6 Protection of minority 5 3 shareholders Illegal activities of 5 3 corporations/directors/officers 12 13 Sustainability 7 9 5 Financial reporting and audit 7 8 4 3 Confidentiality 7 9 Insider trading 10 3 0-4 hours 5-8 hours 9-16 hours 17 to 24 More than Strategy 11 11 hours 24 hours Short swing transactions 12 12
Directors Compliance Officer and Corporate Secretary
The new CG Code recommends that the Corporate The Ethics & Compliance and Secretary and Compliance Officer are two separate Corporate Governance Officers act as individuals and are not members of the Board. However, 78% of the respondents confirm that these roles are held advisors. These are the people who do separately. While both roles are primarily responsible to the detailed work that is then sent and the corporation and its shareholders, 16% are considering brought to company leadership so that separating the roles: the Corporate Secretary is expected to primarily support the Board in the discharge of its they can make sound decisions and duties, while the Compliance Officer is in charge of very informed decision. the compliance function as part of management. 92% indicate that they are not members of the Board, while the Atty. Vincent Edward Festin remainder consider non-Board members for these roles. Chairman, GGAPP
PwC GGAPP Corporate Governance Survey 2016 17 Where we are: Survey results and analysis
Clear roles and At least 45 (88%) of Boards In at least 88% of the respondents, responsibilities of the periodically monitor and evaluate: the Board exercised oversight on key Board • Implementation of policies and personnel decisions involving: strategies • Oversight of CEO and Board involvement in governance and • Management performance management team performance management oversight • Quality of governance • Defining CEO duties and responsibilities • Key developments in the business and regulatory environment • Evaluating senior management Directors continue to appointments While 41 (80%) of Boards scrutinize • Selecting and appointing have an active role in most types of related party qualified CEO and management transactions, only 37 (73%) of officers ensuring long-term Boards scrutinize transactions with companies that they share a director, Boards have been working to ensure viability; however, i.e. interlocking directors. the establishment of an internal control system, with at least 76% (39) more needs to be At least 37 respondents (73%) agree performing the following: that a director’s renumeration should done. primarily be anchored on: • Overseeing and assessing the performance of the Chief Audit • Associated responsibilities Executive, Chief Risk Officer and • The achievement of financial Chief Compliance Officer performance targets • Monitoring the implementation • Completion of non-financial and conducting periodic reviews performance objectives of the governance framework • Reviewing the company’s human However, only 21 respondents resource policies (41%) consider the following as a key determinant of a director’s • Resolving situations that involve renumeration: conflicts of interests • Display of appropriate risk-taking • Ensuring an appropriate behavior compensation program for employees • Prevention of conflicts of interest • Maintaining a sound management succession plan
18 Finding the true north: Advancing corporate governance in the Philippines Succession plan Strategy and risk management are interlinked, and should be taken In coming up with succession plans together. Being able to oversee for management and key officers, strategy requires the appropriate the Board takes into account the We recognize that the foresight and management of following priority areas: attendant risks. Taking into account • Identification and appointment business of banking the representation of financial of key officers necessarily entails services (where those supervised by the Bangko Sentral ng Pilipinas are • Assessment of current leadership risk, and that proper required to have an ERM framework), competencies risk mitigation, not it appears that even non-financial • Skills and talent enhancement of outright risk avoidance, services have recognized the people in the organization is the key to long-term importance. This translates to an success. Our corporate ERM framework and even a specific Crafting of a policy for key officers’ Board Risk Oversight Committee. retirement age is considered by only governance structure 55% of the respondents and is the keeps pace with the Board charter last priority among the recommended areas. changing risks that the 65% of the respondents indicate bank faces and will be that their respective Board Enterprise risk management facing in the coming Charters include the Board’s roles, responsibilities, accountabilities Enterprise risk management’s years with a dynamic and the corresponding standards for (ERM) prominence as part of the risk management evaluating the Board’s performance. Board agenda has been increasing program that calls This also applies to the specific roles through the years, brought about and responsibilities of the Board by the evolving business, regulatory for the continuing Chairman. On the other hand, and external landscape, as well reassessment of risks the Board Charters may not be as the need to properly anticipate and controls and the appropriately disclosed to the public and respond to business risks. With as only 59% published their Board this, 78% of the respondents have timely reporting of these Charters on the company website. adopted and implemented an ERM risks to the Board of While this may reflect an area for framework anchored on business directors. improvement, the remaining 41% are strategy and risk tolerance, and considering adoption. the Board evaluates the continuing Mr. Ricardo R. Chua relevance and sufficiency of the ERM President and Chief Executive framework at least on an annual Officer, China Banking basis. Corporation
PwC GGAPP Corporate Governance Survey 2016 19 Where we are: Survey results and analysis
Establishing Board committees Board committees play a more active role in enhancing the effectiveness of Committee charters corporate strategy and operations Organizations are increasingly organizing Board committees to focus on key aspects of governance and boost overall Board effectiveness, Adoption rate of Board Committees with appropriate emphasis on audit, risk management and related party transactions. At least 71% of the respondents indicate that these Board committees have their respective 100% 98% 76% 61% charters to outline their mandate, Nomination and Audit committee Risk oversight Corporate composition and responsibilities, as remuneration committee governance well as the standards for evaluating committee committee the committee’s performance. Such charters are also published on the company websites. The remaining respondents are keen to adopt the same approach to drive clear 39% 37% 16% 18% understanding and expectations from Related party Executive Information Finance these committees. transaction committee technology committee committee steering Aside from the Board committees committee recommended by the new CG Code, organizations have instituted other committees to focus on specific areas of corporate governance and management oversight. Usually, the Executive Committee is delegated the responsibility of reviewing and approving management decisions or transactions on behalf of the I make sure that I know what’s going on with internal Board (subject to specified limits and audit side and also the activities of the external auditors parameters). The typical IT Steering to ensure that there will be no surprises as to where Committee oversees the development, the organization is going. And usually, my role has to implementation and monitoring of the IT strategy and plans, especially do with making sure that the risks are minimized or significant IT investments. Financing, addressed as best as we can in the organization. capital and investment decisions are the normal items tackled in the Corazon de la Paz-Bernardo Finance Committee. Independent Director
20 Finding the true north: Advancing corporate governance in the Philippines Audit Committee independence, allowing a more for Nomination and Remuneration/ objective assessment of management Compensation. Others choose to 98% (50) of the respondents performance and business operations, have a single Corporate Governance confirmed the existence of their while keeping the flow of information Committee that would perform dedicated Audit Committees, with between the Board and Internal Audit both nomination and remuneration almost all headed by an independent more open. functions in addition to addressing director as Audit Committee corporate governance matters. Chairman distinct from the Chairman Board Risk Oversight Committee Director membership ranges from of the Board. However, only 60% (30) the minimum of three members to Among the respondents, 76% (39) disclosed that their Audit Committee at most seven. Only 34% (11) of have their respective Board Risk Chairman is not a chairman of other those with Corporate Governance Oversight Committees, with almost board committees, while the rest Committees have met the required all having a Chairman separate from have concurrent chairmanships number of independent directors the Chairman of the Board. However, and represent an area for further (three members), but all committees similar to the Audit Committee consideration. This may be due to are chaired by independent directors. the limited number of independent Chairman, the majority of the directors that have the necessary Board Risk Oversight Committee 39% (20) of the companies have qualifications for committee Chairpersons hold concurrent not set up a separate Corporate chairmanships. chairmanships. Only 82% are Governance Committee. compliant with the recommendation There are also issues with regard to of having an independent director as Related Party Transactions membership in Audit Committees. Chairman. Committee membership Committee 32% (16) of Audit Committees fall ranges from the minimum of short of the recommended minimum three directors to at most seven. Consistent with the respondents of three qualified non-executive Independent directors comprise the profile concentrated on financial directors, with even three indicating majority for 66% of the respondents, services and large corporates/ they have no non-executive director with one company having no conglomerates, 39% have identified in the Audit Committee. 18% (9) independent director at all. and responded to the need to set of the Audit Committees did not up a Related Party Transactions have independent directors, with Almost all BROCs have at least one Committee. All committees have the majority having only one. These member who has proficiency in the at least two independent directors, statistics affect the independence of risk management discipline. and have an independent director as the Audit Committee, and should be Chairman. Corporate Governance Commitee reassessed to ensure effectiveness of the committee in discharging its The manner in which Corporate duties. On a different note, Audit Governance Committee functions are Committee did not include the CEO exercised differs from one company for 86% (43) of the respondents, to another. Some have established a while the rest are considering the separate committee to focus on the non-inclusion of the CEO in the observance and compliance with membership. 72% (36) of Audit corporate governance principles, Committees meet with the Head while retaining separate committees of Internal Audit at least quarterly. These reinforce the committee’s
PwC GGAPP Corporate Governance Survey 2016 21 Where we are: Survey results and analysis
Fostering commitment Concurrent directorships continue to be To perform their duties and responsibilities consistent with the one of the areas for debate at corporate company’s business and stakeholder Boards expectations, directors are required to devote the necessary time and attention to the organization they serve. This requirement is No. of concurrent directorships allowed confirmed by all respondents, expecting directors to attend and actively participate in meetings, with exceptions in justifiable cases. 6 or more In the same thread, 47% expect 8% directors to notify the Board in the event they will pursue a directorship in another company, and 47% Not are considering setting the same The majority of requirement in their respective allowed companies (53%) companies. 47% 4 to 5 35% allow directors to hold The majority of companies (53%) concurrent directorships allow non-executive directors to at multiple companies. hold concurrent directorships at multiple companies, while the rest have enforced restrictions to allow 1 to 3 directors sufficient time and focus 10% on the organization they oversee. Four companies should consider their stand on allowing more concurrent directorships than recommended by the new CG Code, although this may be related to related companies or those belonging to conglomerates who share non-executive directors.
At ICD we always say, “Independence depends on your willingness to speak out and say a point of view, which you believe honestly, contradicts everybody else in the room”. It could be a winning formula, it could be an ethical position, but the point is, are you willing to speak out? And that’s very difficult. You have the responsibility for the other investor in the room, the minority, especially. The contrary point of view is helpful, not because you want to do it for its own sake, but it’s always because people get better decisions, quality decisions from different perspectives. If you can add that perspective, that different perspective, the independent one, you’re adding a lot of value into the company that you serve.
Ricardo Nicanor N. Jacinto CEO, Institute of Corporate Directors
22 Finding the true north: Advancing corporate governance in the Philippines Reinforcing Board independence Since the 2002 Code, there continues to The new CG Code recommends various means to strengthen be regulatory emphasis on ensuring the the Board’s objectivity and independence of Boards independence, with sufficient emphasis on the appointment of qualified independent directors. The foremost recommendation At least 42 respondents (82%) affirmed that independent directors are covers the appointment of at least evaluated on the following: three independent directors, or such • Is independent from the management committee of the Board or the number comprising at least one-third related parties of the company of the Board membership, whichever • Holds no more than 2% of the outstanding shares of the company and its is higher. Unfortunately, 41% do not related parties meet the three-member requirement and this can dampen the objectivity • Is not related within the fourth degree of consanguinity to a director, of the Board. This places more officer, or substantial shareholder of the company and its related parties pressure on the current independent • Is not acting as a nominee or representative of any director of the company directors to influence overall Board and its related companies objectivity, and puts pressure on • Was not retained as a professional adviser, consultant, agent, or counsel of the non-independent directors to the company, its related companies, or substantial shareholder exercise their impartiality, especially on overseeing corporate matters and • Has previous business or relationship with the company within three years management performance. prior to his/her election • Has not engaged in any transaction with the company, its related In 2013, the US Council of companies, or substantial shareholders that were not conducted at arm’s Institutional Investors introduced a length and could materially impact his/her independence revised policy statement on board tenure, where it noted that directors with extended tenures should no One interesting area is the appointment of a lead director among the longer be considered independent.1 independent directors, if the Chairman of the Board is not independent, including if the CEO and Chairman of the Board roles are held by one person. While 69% (35) of the respondents have confirmed that these two roles are held by separate individuals, only 16% (8) have indicated that they have a lead director. 51% (26) are considering the adoption of this recommendation, 43 respondents allow potentially seeing the advantage of having a lead independent director independent directors to regardless of the independence of the Chairman. However, 33% (17) have hold a cumulative tenure of no plans for adoption. This may mean several things, among others: (1) the 83% seven or more years. appointed Chairman of the Board is already independent; (2) the current composition of the Board collectively provides proper mechanisms for resolution of conflicts of interest; or (3) the organization has yet to perceive the need to have one. 35 respondents affirmed that the role of the CEO and The above observation has some parallelism with the US context. Some the Board Chairman are companies under investor pressure evaluate the leadership structure and split 69% held by separate persons. the Chair and CEO roles. Boards with a combined Chair/CEO role have an independent lead or presiding director. 2
1 PwC Director-Shareholder Insights: Board composition – Key trends and developments, May 2016 2 PwC Director-Shareholder Insights: A look at board composition – How does your industry stack up?
PwC GGAPP Corporate Governance Survey 2016 23 Where we are: Survey results and analysis
Assessing Board performance Board performance is primarily
The conduct of Board performance evaluated through the conduct of evaluation presents a significant periodic self-assessments opportunity. While annual self- assessments are the norm for 63% of the companies, the remaining 37% do not utilize the insights and areas for 63% of the respondents conduct annual self-assessment in their improvement that a self-assessment companies at least once a year. can bring. It remains to be seen how the Board and organization assess its performance sans self-assessment. Self-assessment has 12 Likewise, third-party evaluations are yet to be conducted not fully adopted to provide a more independent and objective review of On an ad hoc basis Board performance. 6
A thorough and robust Board At least once every assessment process highlights the 1 performance of the Board collectively 2 years and individually. It should guide the organization in evaluating At least once a year the continued relevance of Board 30 composition, director competency, and qualifications. Subsequently, the Board should take action on the At least once every 2 6 months results of these assessments.
75% of the respondents have yet to conduct a third party evaluation of the Board’s performance
A third-party evaluation has yet to 38 be conducted
On an ad hoc basis 5
At least once every 1 3 years
At least once every 1 2 years
At least once a year 6
24 Finding the true north: Advancing corporate governance in the Philippines Various communication channels are used by the Board in disclosing information on Board performance
None of the above 16
Others 3
Company website 24
Investor relations office 10
Annual shareholders’ meetings 16
Formal communications/ reports 23
*Others consist of: (1) internal records and (2) matters taken up in the Board meeting for notation and confirmation
PwC GGAPP Corporate Governance Survey 2016 25 Where we are: Survey results and analysis
Strengthening Board ethics Boards have a critical role in developing It is important that any Board directive, or policy, is communicated or nurturing an ethical culture to the target audience, to articulate the “tone at the top” and to promote adoption and implementation. With this, the Board has adopted various means to advocate and instill one Main methods used to instill significant component of corporate corporate ethics in company values culture: ethics.
Avenues to disclose the Board’s Code of Business Conduct and Ethics 88% Communication and Awareness CompanyCompany website website 43 Campaign
Formal Formal communications/communications/ 20 reports reports 72% AnnualAnnual shareholders’ shareholders’ 71% 13 Ongoing Supporting meetings meetings Context and Monitoring and Accountability Methods Culture InvestorInvestor relationsrelations offceoffice 11
69%
Training and The majority of respondents (84%) Reinforcement disclose their Code of Business of the Code Conduct and Ethics.
If you’re able to convince the owners of companies to believe in good corporate governance and to respect shareholders’ rights, it will be much easier to build a culture of good corporate governance in those companies. If you approach CG from bottom to top, it will be a challenge because those people below will still have to convince the true decision makers on the value of good corporate governance. You may cry to high heavens but if the owners do not believe in it, it will be difficult to develop a culture of corporate governance in our country.
Atty. Francisco Ed. Lim President, Shareholders Association of the Philippines (SharePHIL)
26 Finding the true north: Advancing corporate governance in the Philippines Disclosure and transparency
Enhancing company disclosure policies and Most companies have established procedures policies and procedures on the
Across all recommendations disclosure of financial information considered, respondents affirmed the adoption of company disclosure policies and procedures covering The majority of companies (at least financial reporting, significant transactions, and ownership 71%) have already established formal information. One minor area for improvement though is the disclosure policies to guide the disclosure of financial on third party evaluation of transaction prices, where 86% have information and other significant corporate implemented the practice while the rest are considering adoption. matters to the following parties:
Government Shareholders Employees Self-regulatory regulators organizations
Suppliers Creditors Customers Communities
We promptly disclose major and market-sensitive information like dividend declarations, joint ventures and acquisitions, sale and disposition of significant assets, as well as financial and non-financial information that may affect the investment decision of the investing public, in the form of press releases in newspapers and reports in our internal publications.
Ricardo R. Chua President and Chief Executive Officer, China Banking Corporation
PwC GGAPP Corporate Governance Survey 2016 27 Where we are: Survey results and analysis
Disclosures on Board remuneration remain to be limited
At least 32 respondents (63%) have disclosed information pertaining to their Board members and key executives.
Types of information disclosed, out of At least 25 respondents 51 respondents: (49% of total) disclose • Membership in other Boards (50) the following information about remuneration: • Their qualifications (50) • Remuneration policy • Other executive positions (49) (41) • Shares they own in the company • Level and mix of (49) remuneration (26) • Training/seminars attended (47) • Link between • Whether or not they are performance and considered an independent remuneration (25) director (46) • Claims filed against them (32) Not more than 18 respondents (35% of total) also include: • Procedures for settling remuneration (18) • Retirement provisions (16) • Remuneration on an individual basis (14) • Termination provisions (14)
28 Finding the true north: Advancing corporate governance in the Philippines Increasing focus on non-financial and GRI G4 standards continue to be a sustainability reporting leading choice of Boards for reporting on corporate sustainability
15 respondents (29% of the total) have adopted G4 Framework by the Global Reporting Initiative (GRI) to report on sustainability and non- financial issues. Six respondents (12% of the total) have adopted Conceptual Framework Corporate governance of the Sustainability Accounting Standards Board (SASB). is all about making Five respondents (10% of the total) have instead adopted the Integrated sure that you get the Reporting Framework by the International Integrated Reporting Council best people possible to (IIRC). nurture a business, to However, 28 respondents (54% of the total) have yet to adopt nurture a company and any framework for reporting on sustainability and non-financial issues. make it sustainable. And when I say sustainable, In developing and publishing sustainability reports, respondents strongly agree on the inclusion of governance, ethics and integrity, materiality policies I’m talking about the and stakeholder engagement. Topics such as sustainability strategy and human literal definition which rights gathered the least concurrence from the respondents.
is the capacity to endure In the US, many have started to report Environmental, social and governance over the long term. (ESG) factors in response to increased expectations for more transparency. However, there is misalignment in the framework adopted and preferred by Ricardo Nicanor N. Jacinto companies and investors. 80% of corporates use GRI, while 43% of investors CEO, Institute of Corporate 3 Directors prefer SASB, only 21% prefer GRI. This should be an area to consider for Philippine companies assessing which framework to use, as the use of various frameworks makes the comparison between companies more difficult.
3 PwC’s ESG Pulse 2016
PwC GGAPP Corporate Governance Survey 2016 2929 Where we are: Survey results and analysis
Disclosures on sustainability reports In managing the appointment, reapptointment and removal of Sustainability strategy Organizational profile external auditors, Audit Committees have established processes which include:
3.84 4.16 • Recommendation by the Audit 1 5 1 5 Committee Materiality policies Stakeholder engagement • Approval by the Board of Directors • Ratification by the shareholders 4.06 4.12 1 5 1 5 • Disclosure to regulators Governance Ethics and integrity • Disclosure to the public via the company’s website
All the foregoing processes apply to 4.27 4.2 1 5 1 5 external audit appointment for all Economic impact Environment companies, 82% for reappointment and 80% for removal.
Promoting a 4.06 4.08 1 5 1 5 comprehensive and Labor practices Human rights cost-efficient access to relevant information
Organizations have increasingly used 3.96 3.63 their corporate websites as a publicly 1 5 1 5 accessible source of information, Society Product responsibility with 98% of the respondents indicating they do so, while the rest have plans to adopt such mode of communication. Likewise, the Annual 3.9 4.02 1 5 1 5 Corporate Governance Report posted on the corporate website remains Strengthening the external Audit Committee the results of the for most respondents to be the auditor’s independence audit. Likewise, external auditors are comprehensive source of corporate and improving audit reviewed regularly for their suitability governance information. and independence (92%, 47) and are quality imposed safeguards by organizations to prevent conflicts of interest due to A promising area based on responses the provision of non-audit services. is the Audit Committee’s oversight on Relevant to this, the majority of the performance and independence the respondents did not engage of external auditors. All respondents the external auditors for non-audit confirmed the Audit Committee’s services for the last three years, while active oversight on financial reporting 25% have received three or more audits, where typically the external non-audit services. auditors present and discuss to the
30 Finding the true north: Advancing corporate governance in the Philippines Internal control and risk management framework
Strengthening the internal control system Internal audit plays a critical role in and enterprise risk strengthening controls and mitigating management framework risks to the company
The internal audit function has been And in terms of periodic reporting of the Chief Audit Executive, 75% report a staple component of overseeing the to the Audit Committee at least on a quarterly basis (the default reporting design and continued operation of line of the Chief Audit Executive). This becomes an area for improvement key organizational and operational for the remaining 25%, especially the three responding that this does not controls. As such, all respondents apply. Constant communication between the Chief Audit Executive and have the internal audit function Audit Committee (and the Board) allows a more timely escalation and implemented in various forms: reporting of issues noted, business areas that need more oversight and focus, risks that have higher likelihood of occurring, and emerging risks that need attention and treatment. Internal audit structure used
Outsourced 5 RC02 - RC02 How does the Chief Audit Executive report to the following? Co-sourced 1
# Question Not Once a Once Once Once a Total applicable month every every year quarter six months 1 Audit 6% 3 27% 14 47% 24 14% 7 6% 3 51 Committee 2 Board of 35% 18 18% 9 35% 18 2% 1 10% 5 51 Directors In-house 45 3 Chief 18% 9 41% 21 35% 18 2% 1 4% 2 51 Executive Officer
PwC GGAPP Corporate Governance Survey 2016 31 Where we are: Survey results and analysis
78% of the respondents indicated that they have implemented Different avenues are used to disclose risk management systems for information on material risk exposures capturing the company’s risk exposure, while the remainder are considering implementing one for their organizations. Taking into account the representation of Companies use at least one of the following financial services companies who avenues to disclose material risk exposures to are required by their regulatory external parties agency to implement enterprise risk management and supporting infrastructure, it appears that A formal report, as part of a mandatory requirement companies are realizing the by regulators importance of identifying, assessing 75% and mitigating risk exposures which can adversely impact strategic and operational objectives. Although looking at it from a different A formal report, as part of the disclosure requirements perspective, organizations seem of an Exchange to have encountered difficulties in 71% addressing this requirement despite it being part of the old CG Code, with almost a quarter of respondents still yet to implement one. The company’s website as one of its voluntaty initiatives While a significant fraction of 65% companies have risk management systems in place, the main challenge relevant to this covers the robustness of such systems, and the quality and degree of implementation There were 2 companies, however, that did not use any that influences the Board’s and of the above avenues to disclose material risk exposures. management’s ability to manage known and emerging risks.
32 Finding the true north: Advancing corporate governance in the Philippines Cultivating a synergic relationship with shareholders
Promoting shareholder rights Boards regularly assess if policies and procedures allow the proper exercise of Treating shareholders fairly and equitably, as well as providing the shareholder rights conducive environment to protect and allow exercise of shareholder rights, At a minimum, 37 respondents (or can only be realized if the appropriate 73% of total) confirmed that the policies and platforms are in place. exercise of shareholders’ rights is being ensured by their Board through 73% At a minimum, companies are organized and effective application of encouraged to ensure proper established policies and procedures. articulation and dissemination of the basic shareholder rights, and empower shareholders to exercise the same through established processes. 50 out of 51 respondents (98%) have policies and procedures The scope of shareholder rights that allow shareholders to effectively exercise their right to vote... covers these elements, among others: But only 37 respondents (73%) have policies and procedures that • Pre-emptive rights allow shareholders to exercise the right to file derivative suits. • Right to vote • Right to inspect or examine corporate records • Right to receive dividends • Right to the issuance of certificate of stocks One of the interesting things that we are told by foreign • Right to transfer or dispose investors is that they like buying into certain companies shares as investors because of the strong guidance and vision • Appraisal rights of the founding family members who probably are • Right to file derivative suits somewhere still in the hierarchy of management and not • Right to participate in the just owners of the company. distribution of assets upon dissolution of the company Hans B. Sicat Former President & CEO, PSE Various mechanisms are put in place to allow shareholders to exercise the opportunity for direct shareholder respondents allow shareholders to their rights and actively participate in involvement. Respondents from suggest agenda items, while the the corporate governance processes. 98% (50) of the companies confirm remaining respondents intend to However, the Annual Stockholders’ that their respective Boards ensure adopt such mechanism. Meeting (ASM) proved to be the communication of sufficient most prevalent and established information to shareholders for mechanism, providing decision-making. 76% (39) of the
PwC GGAPP Corporate Governance Survey 2016 33 Where we are: Survey results and analysis
Poll voting (28) and showing of Shareholders are notified of annual hands (14) are other popular voting shareholders’ meetings through alternatives. different communication channels ASM minutes are aligned to regulatory reporting requirements Most respondents agreed that ASM Notice is disseminated through... minutes include these information: • Voting and tabulation of 01 02 03 04 procedures used (88%) Formal Newspapers of Company Disclosures to communications general • Opportunities given to website an Exchange to stakeholders circulation shareholders for asking questions (92%) • Matters discussed and resolutions reached (96%) • Record of voting results for each agenda item (90%) • List of persons in attendance (69%) • Dissenting opinions considered (76%)
Posting of ASM minutes
...with a usual notification period of: 11 • 1-2 months (65%) 17 • Less than 28 days (29%)
Shareholder voting needs to evolve with the changing times, such as through the use of technology. According to the 51 respondents, the most 9 popular form of voting is proxy voting (44) and the least popular form is the electronic or remote voting (7). 15
1 working day 2 to 3 working days 5 working days More than a week
34 Finding the true north: Advancing corporate governance in the Philippines The top three challenges that we face in the Investor Relations Office on a daily basis are: first, communicating financial results, whether it be good or bad; second, telling a good story that is, making our story known and ensuring that it is accurate; and, third, balancing the interests of both the shareholders and management.
The frequently asked questions from investors, shareholders, fund-managers, brokers are: our growth story and dividends. I guess those are the top two things that they commonly ask us.
Kristina Garcia Director for Investor Relations, Century Properties Group, Inc.
Minority participation in director debate, and directors are also open to selection process discussing the company’s use of cash Numerous with investors.5 When it comes to director developments have nomination, election and removal, As for related party transactions, helped promote 84% (43) of the respondents respondents in varying degrees have policies and procedures have indicated that related party shareholder enabling minority shareholders to transactions undergo the following communicate their inputs on director processes (notwithstanding the engagement, such nomination, while 94% (48) disclose minimal prevalence of a separate as IROs the experience and background Related Party Transaction of candidates for directorship. Committee): This reflects the growing need for • Disclosures of conflicts of interest of the respondents addressing the rights of minority by directors and key executives engage their shareholders, and how companies 45 (96%) shareholders through have responded to date. As with any the Investor Relations • Approval by the Board of 51 right, companies need to ensure that Office which: the exercise of these rights is within Directors as deemed necessary appropriate bounds. To implement (88%) • receives feedback, complaints, and queries from shareholders this, companies can consider adopting • Proper monitoring by the proxy access rules. management team on a day-to- • is responsible for managing the day basis (71%) company’s investor relations Proxy access rules allow shareholders program that meet certain ownership criteria • Ratification by majority vote to submit a limited number of director of shareholders for material or • has a dedicated email address candidates for inclusion on the significant RPTs (65%) and telephone number. company’s annual proxy.4 includes the Shareholder disclosures 44 appointment of an investor relations In terms of disclosure of company officer equity and holdings, 98% (50) 51 regularly share with shareholders the capital and control structure, Respondent companies have instituted the following mechanisms to assist and 90% (46) disclose all company shareholders who seek to address the violation of their right(s): holdings in other listed companies, including the respective objective Dedicated investor relations Email addressf or complaints (46) and rationale. The remainder of personnel (41) the respondents are considering adoption of these mechanisms. It is worth noting that company’s capital Complaints hotline (27) ADR/ Arbitration procedure (14) allocation plan is the center of long- term versus short-term investment
Escalation policy (2)
4 PwC Director-Shareholder Insights: Board composition – Key trends and developments, May 2016 5 PwC’s 2016 Annual Corporate Directors Survey PwC GGAPP Corporate Governance Survey 2016 35 Where we are: Survey results and analysis
Duties to stakeholders
Respecting the rights of stakeholders and effective There is higher emphasis on the redress for violation of consideration of stakeholders in stakeholders’ rights operational decision-making Companies do not operate in isolation: for them to realize their short and long-term goals and objectives, they have to work together with their stakeholders. Such stakeholders either affect or are affected by how the companies operate and make decisions. And in this context of interdependence, companies have to also support the rights and interests of their stakeholders—driven by legislation, contractual arrangements and It is clear that voluntary commitments of the stakeholders are companies themselves. relevant to operational decision-making. 78% When it comes to ensuring focus on how a company serves its customers and conducts its business, 92% (47) of the respondents have corresponding policies and and environment) in selecting rest consider establishing one procedures in place. While the suppliers and contractors. This in the future. Likewise, the structure, scope and composition of may indicate that aside from majority of the corresponding these policies and procedures may the capability of the suppliers/ insolvency procedures define vary, these typically revolve around contractors to deliver the specific mechanisms for disclosing customer interaction and touchpoints resource or service acquired, financial difficulties for mutual (from business development up companies look beyond the development of solutions to post-transaction support) and tangibles and consider how between the company and supporting operational processes. suppliers/contractors consider creditors. their respective stakeholders as As to dealing with suppliers and well. Only 78% (40) of respondents contractors, almost all respondents confirm having appropriate say they deal with them in a In the case of protecting the procedures to address professional and objective manner. rights of creditors, established community issues in the 92% (47) of the companies consider solvency framework for creditor localities where they operate. both economic and non-economic protection exists for 76% (39) The rest are considering factors (such as society, human rights of the respondents, while the establishing such procedures.
36 Finding the true north: Advancing corporate governance in the Philippines Encouraging employees’ Stakeholders need to be made more participation aware of their role in furthering Among all stakeholders, employees have the most direct impact on corporate governance (and get the most impact from) the company they work with. If employees do not carry out their Communications with Employees, in roles and responsibilities well, the stakeholders are primarily particular, have been company ceases to generate the value it intends to deliver. Likewise, conducted via: encouraged to actively they are the key pieces that bring participate in corporate corporate governance and strategy to 01 02 03 04 work on a day-to-day basis. governance through:
Training and Recognizing the need to foster development employees’ active participation in corporate governance, Boards have adopted various mechanisms in their respective organizations. Web-based media channels (100%) The top choices include: Formal reports (88%) • Training and development Increasing Policies programs (94%) representation Email and/or hotline (75%) • Health, safety and welfare policy (90%) Stakeholders’ relations office (53%) • Reward/compensation policy (86%)
While being the most direct way to engage employees in corporate governance is employee representation in the Board Employee engagement is not only (excluding executive directors), concentrated on programs addressing only 14% confirm implementing this employee welfare and development, process. but also on those emphasizing employee duty in cultivating a culture Work councils appear to gain traction of honesty, transparency and fair in promoting employee participation. dealing. Two mechanisms to address Other methods include employee these intentions are anti-corruption stock option or purchase plans, programs and whistleblowing long-term incentive plans and service programs. excellence awards.
PwC GGAPP Corporate Governance Survey 2016 37 Where we are: Survey results and analysis
Anti-corruption policies and Employee whistleblowing programs have to evolve in frameworks should light of increasing regulatory encourage employees to scrutiny report matters as needed
Only 33 respondents (65% Respondents’ employee whistleblowing of the total) report that their frameworks cover: company’s Anti-Corruption policy and program include Confidentiality safeguards 45 provisions that: Anti-retaliatory safeguards 37 • encourage employees to report corrupt practices Dedicated email facility 36 • assist individuals in identifying corrupt practices Confidential hotline 33 • endeavor to mitigate corrupt practices Direct access to independent director 31 • outline procedures on how to combat, resist and stop these Establishment of an ombudsman 16 corrupt practices • formalize the role of the Board in setting the tone and leading the execution of the policy.
Anti-corruption training programs are conducted:
Annually (14) Monthly (2)
On an ad hoc basis (32) Semi-annually (3)
38 Finding the true north: Advancing corporate governance in the Philippines Encouraging sustainability With the increasing opportunities for and social responsibility stakeholders to exert their influence and impact on companies, Boards and More companies are acknowledging management should provide more Talagang nabago ang the value of sustainability and social focus on environmental, social and lugar namin nung responsibility in fulfilling their duties governance (ESG) factors. More and dumating ang Manila to the broad stakeholder base, as the more, stakeholders are considering responses reflect various stages of ESG factors when they evaluate a Water at yung programa adopting recommended practices: company’s strategy, risk profile, and nilang Tubig para sa • 84% (43) confirmed that its plan to create long-term value.6 Barangay. Nag-unite the company value chain Not only do stakeholders in general process considers economic, ang mga tao dahil sa appreciate ESG as key factors; environmental, social, and pangangailangan ng investors, specifically, increasingly governance issues and concerns, recognize that ESG factors can be tubig. Yung dating while 78% (40) put high material to the investment process kanya-kanya, walang importance on complying with and returns. pakialaman sa isa’t isa, environmental regulations. nabago at nagkaroon ng • 67% (34) indicate the existence They see how ESG factors of a company shared value contribute to value creation and risk unity ang mga tao. framework that highlights the management, and that the influence responsibility of the company to of ESG factors on securing deals and Ms. Cora Fajilagot 7 President of Kaybagsik contribute solutions to address impact on valuation is growing. Neighborhood Association, global challenges. Brgy. San Luis, Antipolo, Rizal Beneficiary of Tubig para sa • All other respondents consider Barangay (Water for the Poor) adoption of these recommended Project of Manila Water practices.
6 PwC’s ESG Pulse 2016
7 PwC and Principles for Responsible Investment: The Integration of Environmental, Social and Governance Issues in Mergers and Acquisitions Transactions, December 2012
PwC GGAPP Corporate Governance Survey 2016 39 Next steps and conclusion
40 Finding the true north: Advancing corporate governance in the Philippines PwC GGAPP Corporate Governance Survey 2016 41 Next steps and conclusion
The role and next steps for corporate governance key players
Regulators information, the SEC can gauge areas compliance and identify priority areas with the highest rates of adoption for improvement. With its strong thrust to institute including the methods by which strong corporate governance in the companies illustrate their compliance Since the release of the new CG Philippines that is aligned to regional with the recommendations. Likewise, Code in November 2016, companies and global standards, the SEC a more thorough analysis can be done have been taking stock and working developed the “Philippine Corporate to assess adoption based on company towards either complying with Governance Blueprint 2015: Building type, size, industry, among others. the recommendations or assessing a Stronger Corporate Governance alternatives to be put forward. As Framework.” With the “Comply or Explain” shown in the readiness questions operative principle in the new CG across the 16 principles, almost As a result of this blueprint borne out Code, the SEC can also identify areas all have registered more than 50% of tedious work and expertise of SEC where companies are not inclined to adoption, with a significant part of and various stakeholders, the revised adopt the specific recommendations. the rest considering adoption at least CG Code was created. The CG Code is within a year. just one of the strategic priorities for As companies are required to explain, implementation up to 2020, with the SEC can obtain information on the Companies who are already adhering others complementing and building reasons for not complying, and to the ASEAN Corporate Governance on the CG Code to provide the develop assessments on the suitability Scorecard (ACGS) may have an breadth and depth of coverage for the and acceptability of explanations. advantage, as the ACGS is one of the corporate governance elements. The same approach can also be key reference materials used for the applied when companies put forward new CG Code. While this can apply to Guided by the blueprint, SEC, in alternatives adopted to address the larger corporates who have relatively collaboration with other regulators Principles and Recommendations. more developed CG practices, the for certain sectors, continues to mid- and smaller-tier companies champion good corporate governance As more concrete data are generated may encounter more challenges in while providing mechanisms to during the first year of the new CG adopting the new recommendations. increase multiple stakeholder Code implementation, insights can They need to judiciously translate involvement. They need to be derived and used by the SEC to the principle of proportionality to judiciously translate the principle enhance, tailor or introduce new their respective organizations, and and put forward clear descriptions action plans to the 2015 CG blueprint. put forward clear descriptions and and explanations in their Annual Likewise, the SEC should continue explanations in their Manual on Corporate Governance Reports. leveraging feedback from companies Corporate Governance. and advocacy groups to develop 2017 will see the submission of a comprehensive view of the CG Notwithstanding the above the new Manual on Corporate landscape and developments. circumstances, companies should Governance that incorporates the continue advocating the CG Code elements of the new CG Code. This, Private sector – beyond paper compliance and together with the preliminary insights Listed companies adopting tangible outputs. To a provided by this survey, will provide certain extent, leading companies can the SEC the first concrete view of During the first year of the new lend technical expertise, experience the level of compliance by publicly CG Code implementation, listed and lessons learned to those with less listed companies. It will also define companies have the opportunity to developed CG practices. the baseline for the company’s efforts objectively evaluate their level of for initial adoption. Armed with this
42 Finding the true north: Advancing corporate governance in the Philippines Companies should also use to their Advocacy groups advantage the institution of CG practices by communicating such to Regulators and companies alike the broader set of stakeholders. This require a steady support system to will not only solicit more involvement propagate CG practices and allow PSE serves as a bit of a and participation, this bodes well for a more collaborative approach carrot and stick. Things the corporate reputation, too. to building on the strengths and contributions of each other. This is like the Bell Awards Private sector – where advocacy groups can lend their serve as a good way to Non-listed companies expertise, experience and passion for benchmark individual CG. Although the new CG Code primarily companies so that they applies to publicly-listed companies, Advocacy groups should continue know where they are companies not covered by this to partner with the SEC and other relative to others in oversight and regulatory bodies regime should consider assessing corporate governance. The the applicability of the principles to propagate CG appreciation and recommendations, including and value. Likewise, they can be market in itself is also a other CG-related issuances by SEC effective conduits of feedback and good “stick” as companies information between SEC and and relevant regulators. While non- are increasingly required mandatory, these companies are organizations. Composed of company playing in the same field as PLCs, thus representatives and CG practitioners to be more transparent by exposing them to similar expectations alike, these groups can influence investors. of their own stakeholders. member companies to adhere to CG best practices as a way to “walk the Hans B. Sicat With the new CG Code aligned to talk” and strengthen CG culture. Former President & CEO, PSE regional and global best practices, it provides a ready benchmark for own They can also provide inputs on CG efforts, and adopt a more strategic the actual implementation of CG mindset (rather than compliance) for recommendations to SEC. Lastly, they its own long-term value creation and can provide a platform for sharing CG sustainability. practices among members and other organizations.
PwC GGAPP Corporate Governance Survey 2016 43 Next steps and conclusion
Conclusion
Current state of corporate Across five key themes, respondents • Cultivating a synergic governance have shown different degrees of relationship with shareholders: implementation and openness to With recommendations similar The results appear to paint a adopt: to the provisions of the 2009 promising picture of the companies’ • The Board’s governance CG Code, most respondents readiness to adopt the new CG code. responsibilities: Adoption is a have indicated that they value In the readiness questions covering work in progress for this most strong collaboration with selected recommendations of the comprehensive theme. Almost shareholders and protection their 16 principles, almost all areas have all however, have confirmed the rights, especially the minority registered more than 50% adoption existence of a dedicated Audit shareholders. with a significant number of the Committee. As of now, there is a • Duties to stakeholders: remainder considering adoption of very low readiness to allow third- Principles under this theme the recommendations at least within party experts to assess Board’s are relatively new, yet an the year. However: performance. overwhelming majority ensure • Majority of the respondents • Disclosure and transparency: that duties to stakeholders are were from companies with Over 90% of the respondents met, with existing mechanisms large capitalization (more than have existing practices in correspondent to the PHP10bn), indicating that disclosing financial information recommendations. the results represent more the and external audit. However, current state of CG for larger It is interesting to consider though the adoption is a challenge for perspective of various international corporates. Typically, these majority of the respondents companies have more developed institutions insofar as Philippine CG on disclosures regarding non- practices are concerned: CG practices and may participate financial and sustainability in the ACGS. However, this does issues. • World Economic Forum not intend to conclude the direct Competitiveness Report (2010- correlation of capitalization and • Internal control system and 2016): quality of CG practices. risk management framework: Most of the respondents -- The Philippines is ranked in • Regulated industries such as indicate the implementation the middle tier (66th) out financial services represent of internal control systems and of 138 countries in terms of one third of the respondents. internal audit. Enterprise risk “Corporate Governance” in These institutions are required management implementation is 2016, improving from 90th to comply with relatively more a work in progress, having been in 2010, but declined starting stringent CG requirements as significantly expanded from the 2014. imposed by their regulators. previous CG Code. -- The lowest attribute was for “Strength of Investors’ Protection” but fared better for “Strength of Auditing and Reporting Standards” (related to “Disclosure and Transparency”) and “Efficacy of Corporate Boards” (related to “Board Governance”).
44 Finding the true north: Advancing corporate governance in the Philippines Let’s all get together so that we can have a stronger voice, not just with the regulators but with our bosses and with our stakeholders and this is a step moving to right direction.
Atty. Jocelyn Villar-Altamira President, GGAPP
• CLSA-ACGA (Asian Corporate • While the elements of “Comply respondent turnout and the resulting Governance Association) CG or Explain” and “Principle of data pool. Watch 2016: Proportionality” allow companies This survey aims to push forward -- The Philippines ranked some degree of flexibility, considering the companies’ type, more conversations and the 10th out of the 11 markets momentum on CG by providing a assessed in the survey, size and complexity (among others), it should drive more starting platform. GGAPP and PwC ranking lower than ASEAN advocate the following: peers Singapore, Thailand insightful assessments and and Malaysia, but higher decisions towards embedding CG • More thorough and targeted than Indonesia. in the organization. studies on the various • All CG stakeholders should dimensions of the new CG code -- The Philippines’ “score fell and Philippine CG in general. because of slow progress work towards the general on reform and general CG acceptance and embodiment • Targeted surveys that can cover standards are well below of CG, advocate a consistent key stakeholders and officers for those other markets. ” yet tailored application of the CG, such as corporate directors, recommendations, and espouse compliance officers and C-suite -- The Philippines scored the importance and value of CG. executives. the highest for “IGAAP” (International Generally • The results of the survey should • Subsequent studies that should Accepted Accounting help increase the maturity focus on: of CG practices, contribute Principles), but needs -- The “why” and “how” for inclusive development in the CG improvement on “Corporate specific areas of interest Governance Rules/Practices”, environment, and drive better -- The detail, quality Corporate Governance perception from stakeholders and and rationale for the Culture and Enforcement. international institutions. adoption/non-adoption of In summary: Areas for further recommendations • While the various CG players consideration -- Alternatives put forward by companies and “explanation” have put forward meaningful The survey intended to cover as efforts to establish and promote for non-adoption of the many aspects of the principles and recommendations. CG practices, so much more need recommendations of the new CG to be done. Code. However, with the extent of • More effort is needed not only items covered by the new CG code for the adoption of baseline vis-à-vis survey administration recommendations by a few, but considerations, the questions also the broader acceptance covered the “what” of selected and adoption across various recommendations. The length of categories of listed companies. survey, time required to complete, the amount of information required and the appropriate officer(s) to respond were key parameters that drove the
PwC GGAPP Corporate Governance Survey 2016 45 Acknowledgments
Ricardo R. Chua Corazon de la Paz- Cora Fajilagot President and Bernardo President, Kaybagsik Chief Executive Officer, Independent Director Neighborhood Association, China Banking Corporation Manila Water Company Project Beneficiary
Atty. Vincent Edward Kristina Garcia Ricardo Nicanor N. Jacinto Festin Director for Investor Relations, Chief Executive Officer, Chairman, Good Governance Century Properties Group, Inc. Institute of Corporate Directors Advocates & Practitioners of (ICD) the Philippines (GGAPP)
Atty. Francisco Ed. Lim Hans B. Sicat Atty. Jocelyn C. President, Shareholders Former President & CEO, Villar-Altamira Association of the Philippines Philippine Stock Exchange President, Good Governance (SharePHIL) (PSE) Advocates & Practitioners of the Philippines (GGAPP)
46 Finding the true north: Advancing corporate governance in the Philippines Advisory group Rocky Saldajeno Judelyn Liaban Markets Senior Manager Mark John Pentecostes Alexander Cabrera Isla Lipana & Co./PwC Philippines Aria Traveros Chairman and Senior Partner, Business Services Philippines Isla Lipana & Co./PwC Philippines Design and layout Associates, PwC Philippines Benjamin Azada Dennis Bautista Managing Principal, Markets Senior Manager John Ryan V. Lara PricewaterhouseCoopers Consulting Isla Lipana & Co./PwC Philippines Melissa D. Monares Services Philippines Co. Ltd. Isagani S. Mondala Christian Gonzales Business Services Philippines Markets Senior Associate Rex Drilon Interns, Isla Lipana & Co./PwC Philippines Vice Chairman, PwC Philippines Institute of Corporate Directors Marc Thaddeus Bodo Estrella Bibat Markets Associate Sundara Raj Executive Assistant, Isla Lipana & Co./PwC Philippines Chief Executive Officer, Isla Lipana & Co./PwC Philippines PwC South East Asian Consulting Project management Diana Jaime Joazral Azam Yusof Grace Aries Administrative Assistant, Executive Director - Isla Lipana & Co./PwC Philippines Risk and Governance, Ethics and Independence Director, Isla Lipana & Co./PwC Philippines PwC Consulting Services (M) Sdn Interview contacts Bhd Allan Cao Maryanne Parel-Corpuz Assurance and Markets Director, Isla Vincent Edward Festin Executive Assistant to the President, Lipana & Co./PwC Philippines Chairman, GGAPP Philippine Stock Exchange Professor, Project support Ateneo de Manila Nancy Gallego Graduate School of Business Rafael Francisco Suarez Executive Secretary, Maria Regina Ciel Quiambao ACCRA Law Jocelyn Villar-Altamira Deals and Corporate Finance President, GGAPP Ma. Chimene Alvarez Associates, Assistant Vice President & Head of Compliance Officer, Isla Lipana & Co./PwC Philippines Corporate Governance and China Banking Corporation Compliance Office, Jackson Dulnuan Alexander Escucha Manila Electric Company Ianna Pinote Reyes Senior Vice President for Investor Assurance Associates, Charles Gamo and Corporate Relations Group, Isla Lipana & Co./PwC Philippines Member, GGAPP China Banking Corporation Director, Origination & Client Jay Armand Ogayon Mary Ann Ducanes Coverage, Seodel Hearty T. Pilapil Marketing Communications China Bank Capital Corporation Business Services Philippines Department Head, Assistant Manager, Research, data analysis and writing China Banking Corporation PwC Philippines Alvin Dave Pusing Thom Ryan Ortega Philip P. Lanuzo Senior Manager, Corporate Compliance Manager, Business Services Philippines PricewaterhouseCoopers Consulting Manila Electric Company Senior Associate, Services Philippines Co. Ltd. PwC Philippines Luis Juan Oreta Rochelle Dichaves Josephine Pagdanganan Tatiana Marie Arcenas Associate, Victoria Santos Carl Angelo Cabusas PricewaterhouseCoopers Consulting Prevelyn Gazmen Camille Caringal Services Philippines Co. Ltd. Gina Agapito Lea Blosom Castillo Romy Gonzales Editors Ma. Leanel Cordero Bernie Balingit Lie Catherine Galam Manila Water Company Team Tina Arceo-Dumlao Macris Jeresano Business Features Editor, Jemuel Jed Jorge Philippine Daily Inquirer PwC GGAPP Corporate Governance Survey 2016 47 www.pwc.com/ph
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Good Governance Advocates & Practitioners of the Philippines (GGAPP)
The Good Governance Advocates and Practitioners of the Philippines is an association of good governance advocates and practitioners from various publicly-listed companies, the public sector and other organizations who have come together to promote and assist in the development of good governance in the country.
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