Listed firms’ corporate governance improves–ICD

A STUDY among Philippine listed companies showed that corporate governance practices have improved, according to the Institute of Corporate Directors (ICD).

In a briefing on Tuesday, Jesus Estanislao, ICD Philippines chairman, said a recent study commissioned by the Philippine Stock Exchange (PSE) showed that a company’s good score in the corporate governance scorecard results in a positive valuation of its share price.

The same study showed that Philippine investors “care about equitable treatment of shareholders . . . and are sensitive to changes in practices [affecting the] rights of shareholders, disclosure and transparency, and board responsibilities.”

Yvonne Butler, Palladium Group director, said good governance brings a very clear view of the organizational direction and strategy for companies, which results to in further growth.

She said firms that adopt the balanced scorecard framework have been relatively shielded from the global economic slowdown, or have recovered faster.

Estanislao said this study was conducted by the Hong Kong Baptist University using the ICD’s Corporate Governance Scores data from 2005 to 2008.

He said 169 listed firms in the Philippines participated in this study, which was also conducted in China, Hong Kong, Indonesia and Thailand.

ICD Philippines uses the Balanced Scorecard Collaborative System of the Palladium Group in determining the corporate governance scores of firms. Estanislao said this scorecard serves as a tool to get companies to raise their standard of compliance to corporate governance.

He said ICD Philippines has also come up with corporate governance scores for banks and financial institutions and government-owned and -controlled corporations, and next year will release corporate governance scorecards for family-owned corporations.  –Ben Arnold O. De Vera, Reporter, Manila Times