BDO wins Golden Arrows for its Corporate Governance

2019 September – BDO Unibank, Inc. received three Golden Arrows from the Institute of Corporate Directors (ICD) during the ASEAN Corporate Governance Scorecard (ACGS) Golden Arrow Recognition ceremonies held recently at the Conrad Manila. Such recognition bodes well among foreign investors, as it signals long-term value creation.

 

The ACGS or Scorecard is a tool that assesses and ranks publicly-listed companies (PLCs) in six ASEAN countries—Indonesia, Malaysia, Singapore, Thailand, Vietnam, and the Philippines—based on their corporate governance performance. Its methodology is benchmarked against international best practices, including the Organization for Economic Co-operation and Development’s (OECD) principles of corporate governance: Rights of Shareholders, Equitable Treatment of Shareholders, Role of Stakeholders, Disclosure and Transparency, and Responsibilities of the Board.

 

In the Philippines, ICD, as the domestic ranking body (DRB), facilitates the review of the PLCs, followed by a peer review of the DRB from another country. Of the 247 listed companies assessed by ICD in 2018, only 48 companies or 19% achieved scores of 80 or higher and are considered as the top performing companies in the country under the ACGS.

 

According to BDO president and CEO Nestor V. Tan, the Bank puts a premium on good corporate governance as it is crucial to maintaining a healthy, financially-sound, and well-managed company.

 

“We are always looking out for our clients. To serve them in the best possible way, we constantly evolve our corporate governance practices to support the requirements of the changing business landscape, comply with new regulations, and align with international best practices,” Mr. Tan said on the Bank’s corporate governance efforts.

 

Apart from the country’s largest bank*, nine other companies in the SM Group were recognized by ICD. These companies include SM Investments Corporation, SM Prime Holdings Inc., BDO Leasing and Finance Inc., China Banking Corporation, Premium Leisure Corp., Belle Corporation, Pacific Online Systems Corporation, 2GO Group, Inc., and Atlas Consolidated Mining & Development Corporation.

 

 

Promoting ASEAN as an Investment Asset Class

 

The ACGS is a regional initiative jointly developed in 2011 by the ASEAN Capital Markets Forum (ACMF) and the Asian Development Bank. It aimsto raise the corporate governance standards and practices among ASEAN PLCs.

 

The adoption of international corporate governance best practices not only promotes long-term viability and resilience for ASEAN PLCs but also further elevates the Region as an investment destination.

 

Locally, the Securities and Exchange Commission (SEC) takes the lead in ensuring that listed firms not only adopt good corporate governance practices but even go beyond the standards. As such, PLCs are now required to come up with an annual corporate governance report (ACGR), which contains all of their governance policies and procedures. They are likewise required to comply with the Code of Corporate Governance, which promotes good governance as a culture and keeps them abreast with best practices.

 

 

Recommended Practices under ACGS

 

Benchmarked against the OECD’s principles of corporate governance, the following are the recommended practices under the Scorecard:

 

Rights of Shareholders: The PLC’s corporate governance framework should protect and facilitate the exercise of shareholders’ rights. Such include holding of an annual stockholders’ meeting where shareholder can ask questions and raise their concerns and timely payment of dividends.

 

Equitable Treatment of Shareholders: The PLC’s corporate governance framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders. Such include a clear policy prohibiting any director, officer, or employee from benefiting from knowledge not available to the general public, and disclosure of related party transactions.

 

Role of stakeholders: The PLC’s corporate governance framework should recognize the rights of stakeholders established by law or through mutual agreements and encourage active cooperation between corporations and stakeholders in creating wealth, jobs, and sustainability of financially sound enterprises. Such framework ensures protection of consumer and employee welfare, the adoption of anti-corruption programs and procedures, and whistleblowing policy.

 

Disclosure and Transparency: The PLC’s corporate governance framework should ensure that timely and accurate disclosure is made on all material matters regarding the corporation, including financial situation, performance, ownership and governance of the company.

 

Responsibilities of the Board: The PLC’s corporate governance framework should ensure the strategic guidance of the company by the board, the effective monitoring of management by the board, and the board’s accountability to the company and the shareholders. Such framework entails the adoption of the Code of Corporate Governance and the election of independent directors (50% of all the board seats) in PLCs.

 

*As of March 31, 2019, BDO Unibank, Inc. ranks as the country’s largest bank in terms of total assets, loans, deposits, and trust funds under management based on published statements of condition.

 

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