Sentenced

How is patriotism distinguished from ultra-nationalism?

Before a select audience of the region’s management elite in Hong Kong a few weeks back, I had the privilege of catching Douglas Henck, vice-chairman of the Asian Corporate Governance Association (ACGA), deliver his summary of ACGA’s 2010 corporate governance scorecard for various Asian markets. 

For those of us not into corporate governance, ACGA is a member-based stakeholder association headquartered in Hong Kong that aims to work with regulators, companies, and investors in bringing about sound corporate governance practices in the region.

Comparing the present state of corporate governance in the Philippine market with our peers in the region is not for those who want a pep talk. To put it mildly, the actual report that Henck summarized caused quite a stir here late last year when it was released. Per ACGA’s metrics, we are now literally in the bottom of the region in terms of corporate governance. 

Having witnessed the local reaction to the report’s issuance firsthand as a fellow of Institute of Corporate Directors, I must say that while I sympathize with those who take issue with various points of the report, I also believe many of us have become too defensive about criticism of our practices here. ACGA, after all, is an outsider giving us feedback. At the very least, we owe it to ourselves to verify if such opinions are warranted and see where we can do better. The contrarian in me thus doesn’t see a problem in our country being labelled a cellar-dweller as long as the benchmarks used are measures we can work on. For then we have nowhere to go but up.

Love of country does not entail one to provide excuses for the individual or collective failures of our current leadership. Just as we should give credit where credit is due, it is simplistic for us to adopt the mantra advocated by some that we should always talk positively about the affairs of our country, particularly in the presence of foreigners. Just because we disagree with our government doesn’t mean we are engaged in treason. Addressing bad policy or inadequate enforcement does not make one a basher of his or her country. The sooner we come to grips with our challenges and demonstrate that we can address them constructively, the better for all of us. This in my view is genuine patriotism.

Which is why I found myself agreeing with much of Henck’s presentation until he came to say — despite being aware of the diversity of his audience — that he hoped there were no Filipinos around to hear him. 

Perhaps it was a lame attempt at humor, perhaps like many speakers he came to be a bit careless with his words at that point, perhaps he just needed to fill space while transitioning slides. Whatever his motives, there were three Filipinos in that audience.  

Henck crossed a line. From his perspective as a US citizen, I would have no problem discussing with him what I perceive to be the foreign policy errors of his government. It would certainly however be totally inappropriate for me to imply in any way that he should somehow be embarrassed to be an American because of such failings.

In fact, the ACGA report on our country did indeed contain what in my view is a major falsehood. Right at the Philippine section’s very start, literally in its second paragraph, is this sentence: “And as one local businessman told ACGA in an interview, ‘the only people who trade in our stockmarket are those with inside information.’”

Suspend your disbelief for a moment and actually try to figure out what ACGA is endorsing by this attempt to prove such a sweeping claim (i.e. that every single person invested in stocks traded in the Philippine Stock Exchange is engaged in insider trading) with anecdotal evidence from a single source (as ACGA describes him, “one local businessman”). In a country that prides itself with extended clans as well as “friends of friends and Facebook friends,” if truly all of us who have gleefully watched our stocks in the local bourse rise in its current bull run since last year is indeed criminally engaged in various forms of insider-trading schemes, don’t you think that every Filipino with a peso to spare but not yet invested in the market would now be banging on the doors of stockbrokers on the basis of “inside information” provided to them by their own “trusted sources”?

Insider trading is a major enforcement challenge not just in the Philippines but in all markets. A quick Internet news search on any search engine will come up with the US Federal Bureau of Investigation’s latest attempt at clamping down on the practice — and they have been collecting evidence on those cases for over three years. Even assuming that the quote was indeed properly sourced (there has been speculation by some that it was made up, as no one apparently wants to take credit for the claim despite the buzz it created in corporate governance circles when the report hit this country), deliberately emphasizing such an accusation by making it the centerpiece of the Philippine section’s introduction is problematic at best, and creates significant negative repercussions at worst:

• The claim’s very illogic puts into question the rest of the discussion that follows, regardless of how objective and appropriate the subsequent material is;

• The use of an anonymous source creates needless tensions between public and private stakeholders involved in corporate governance within the country, leading the former to unjustly suspect that the latter may have somehow been involved in providing the claim to ACGA, thus making it even more difficult for the latter to advocate for necessary reforms contained in the report; and

• The quote itself is substantively useless, as the report does contain properly sourced — and attributable — information from which to base its findings.  

Simply put, assuming ACGA actually did have a source for the claim, there was no need to use the quote given the material ACGA already had. If, as some have speculated, there was really no source, then making up such a claim goes beyond needless sensationalism and enters the realm of blatant racism.

So, how do you stay true to your patriotism in this case? In fairness to Henck, I tried to be as constructive as possible in pointing the above out, as he did not in fact write the report in question. If you have ever experienced being a presenter, however, being asked to clarify a specific sentence in a report you were only tasked to do a summary of is not exactly an ideal public speaking situation.

Ultimately, Henck had it easy. After all, it is those of us in the Institute of Corporate Directors and other private stakeholders here who have to pick up the pieces created by such an unfounded claim. 

We have our work cut out for us. That is why I ended up personally thanking Henck at the end of his presentation. For while I was originally concerned with a sentence in the report, it took another sentence to spur me to expressly take a stand. A sentence it seems is sometimes all it takes.

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Comments and suggestions? Please e-mail me at teddykalaw@facebook.com.