MANILA - The Securities and Exchange Commission (SEC) has ordered listed firms to make their annual corporate governance reports more accessible to the public.
The reform is in line with the corporate regulator’s goal of facilitating corporate governance experts’ review on local companies.
“In line with the peer review process that is being undertaken by corporate governance experts within the Southeast Asian region, all publicly listed companies are mandated to post their annual corporate governance reports (ACGR) in their respective websites,” SEC said.
This will provide corporate governance experts with adequate source materials for the peer review, SEC said in a memorandum circular.
“The posting of the ACGR shall be made in a separate entry from the company’s annual report,” it added.
ACGR is filed on a yearly basis together with the company’s annual report. It outlines a listed firm’s board of directors and their qualifications; code of business conducts and ethics; board meetings and attendance; remuneration matters; risk management systems; and internal audit and control.
The Philippine Stock Exchange defines corporate governance as “the framework of rules, systems and processes that governs the performance by the board of directors and management of their respective duties and responsibilities to the stockholders, with due regard to the stakeholders.”
SEC said a basic penalty of P10,000 shall be imposed for non-compliant companies.
“Continuous failure for the company to comply shall be subject to a monthly penalty of P1,000 until the said report is posted,” SEC said.
The Corporate Governance Watch 2012 report of investment house CLSA Asia-Pacific Markets increased the corporate governance score of the Philippines by four percentage points to 41 percent, allowing it to overtake Indonesia, which landed at the bottom of the list.
The 2010 Corporate Governance Report of ACGA and CLSA Asia-Pacific Markets placed the Philippines last among 11 Asian countries in terms of adherence to corporate governance standards.