Estanislao: Local firms not keen on embracing change

CEBU, Philippines – A corporate governance activist urged Cebuano decision makers to go out of their "comfort zones" and start making serious efforts in establishing professional corporate governance system.

Institute of Corporate Directors (ICD) chairman emeritus Jesus P. Estanislao said that the onset of the ASEAN integration brings more pressure to Filipino companies to showcase their capabilities to the rest of the world.

Estanislao noted that despite the constant reminders of changing the "business culture", there are still a lot of Filipino companies that opt not to respond to obvious change.

"The reality is people do not want to change," Estanislao said in his recent visit to Cebu, warning business decision makers not to continue to do old things anymore, because it is crucial to make impression to the rest of the world.

"We should begin changing our past practices, and prove to the world that we can be the best like the rest," he said.

In fact, ICD is now connecting with the ASEAN companies to rally the promotion of implementing good government within each company, specifically the those that are publicly listed.

Corporate governance broadly refers to the mechanisms, processes and relations by which corporations are controlled and directed.  Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders) and include the rules and procedures for making decisions in corporate affairs.

It includes the processes through which corporations' objectives are set and pursued in the context of the social, regulatory and market environment. Governance mechanisms include monitoring the actions, policies, practices, and decisions of corporations, their agents, and affected stakeholders.

Corporate governance practices are affected by attempts to align the interests of stakeholders.

"We have to show the world that we are competitive and not 'basta-basta', he said.

Three years ago, IDC started the use the regional scorecard in assessing the corporate governance practices of listed Philippine companies.

Estanislao said the adoption of the Asean Corporate Governance Scorecard questionnaire is in line with efforts to set up a regional community and eventually link the different stock exchanges of Asean member-nations.

During the upcoming ASEAN Corporate Governance conference and awards this year, 10 companies from the Philippines, will compete with other 40 companies the ASEAN in corporate governance scorecard awards.