Meet corporate governance standards or explain, BusinessWorld Online Edition, 12/21/2010. PSE released a guide book to help listed companies meet corporate governance standards, but there will be no sanctions on firms that fail to comply.
Under the bourse’s corporate governance rules, a listed company should develop and execute a sound business strategy, establish a well-structured and functioning board, maintain a robust internal audit and control system, recognize and manage enterprise risks, and ensure the integrity of its financial reports as well as its external auditing function.
Firms must also respect and protect the rights of shareholders, particularly those in minority or non-controlling groups; implement an internationally accepted disclosure and transparency regime; respect and protect the rights and interests of employees, the community, the environment, and other stakeholders; avoid abusive related-party transactions and insider trading; and develop and nurture a culture of ethics, compliance and enforcement.
The only sanction is we will disclose it to the investing public, who will decide their investment in the stock,” said PSE President and Chief Executive Val Antonio B. Suarez.
The PSE said its Corporate Governance Improvement Program complements the Code of Corporate Governance of the Securities and Exchange Commission. In the “CG Watch 2010” report by the Asian Corporate Governance Association and CLSA Asia-Pacific Markets released in September, the Philippines sank at the bottom of the list of 11 Asian countries in terms of corporate governance standards. See also, Institute of Corporate Directors (ICD)