I passed by Ayala Avenue this morning and saw some words promoting good corporate governance posted by the Philippine Stock Exchange (PSE) on the LED monitor of the Insular Life Building. It's an interesting concept, and memories of my involvement in the capital markets came flooding back fast. While working for the government during Tita Cory's presidency, I had to deal with representatives of the World Bank and the US Agency for International Development (USAID) on the issue of strengthening the Philippine capital market. The issues were twofold--full disclosure and good corporate governance. We were all in quick agreement; the meetings were over fast, and as an instant solution, we actually copied the rules and standards of the NYSE for the Securities Regulation Code and the PSE. Homework finished!
As I look back, it's not just how the quarterly and annual reports are filled in and submitted to both the SEC and the PSE. Sometime during the meetings at the Philippine Association of Publicly Held Companies (PAPCI), I came to realize that good corporate governance just actually an iterative process of question and answer from stockholders who buy your stock--
What have you done with my money?
Were we profitable or not?
How come we lost money?
What in heavens name did you do?
Why should I retain you?
Maybe you should get fired!
=$@*&^+%#!
To the boards of directors of listed companies, if you can answer those questions without batting an eyelash, then I would suppose that you are on the right track.
And that, ladies and gentlemen, is Good Corporate Governance in a nutshell!
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