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Safeguards against corporate opportunism remains squarely with the independent directors

As shown hereunder, it seems clear that ultimately the Corporate Governance (CG) Code for Publicly-Listed Companies (PLCs) places the ability to prevent corporate opportunism squarely on the shoulders of the independent directors (IDs), whether such attempts at corporate opportunism be on the part of the controlling stockholders acting through a majority of the members of the Board, or through Management.

Dreaming wide awake

Twenty years ago, my partners and I opened EON in the midst of an Asian financial crisis. Not coming from a business background, we genuinely believed that if we just followed our vision, things would work out.

The hard truth about high-value crops

High-value commercial crops refer to “those crops that have competitive returns on investment when traded in fresh form vis–a–vis alternative investment opportunities. These crops are characterized by defined regular or niche market or potential domestic and/or export markets, command high prices, with value added or are good foreign exchange earners. High-value commercial crops are also called non-traditional crops. (High Value Crops Farmer Guidelines – Department of Agriculture (DA) – CAR).

Dichotomy between executive and non-executive directors dilutes oversight role of independent...

In contrast to the Revised Corporate Governance (CG) Code for Public Companies (PCs) which refers only to the role of independent directors in exercising independent judgment as against “management,” the CG Code for Publicly Listed Companies (PLCs), in defining an independent director clearly delineates between “management” and “controlling shareholder,” thus.

Independent directors for publicly listed companies

It is worth pointing out that the Securities and Exchange Commission (SEC), in formally adopting the Corporate Governance (CG) Code for Publicly Listed Companies (PLCs), effectively provides that the Revised Code of CG, “shall remain in effect for other covered companies, when applicable.” There currently exists, therefore, two separate and distinct CG regimes in the Publicly Held Companies (PHC) sector, namely.

Learning from Other Tax Systems

The Comprehensive Tax Reform Program seeks to implement a fairer, simpler, and more efficient tax system. Toward this end, it has implemented relatively lower tax rates under Tax Reform for Acceleration and Inclusion (TRAIN) Law and also targeting to lower tax on corporate income under Tax Reform for Attracting Better And High-quality Opportunities (TRABAHO). Unfortunately, this comes at the cost of increasing other tax rates.

Mixing it up in the boardroom

For most Filipino companies, diversity and inclusion (D&I) is hardly a top priority. Although Corporate Philippines generally welcomes women and LGBT into the workforce -- unlike other societies where they are overtly excluded -- there is hardly any effort to ensure that office rules and policies promote D&I.

The efficacy of oversight functions of independent directors

Since the Securities Regulation Code’s (SRC) promulgation, there have arisen many issues regarding the rationale or efficacy of the system of independent directors (IDs), with passionate advocates on both sides of the debate.

Culture and economics

I recently went on a trip to the Cordillera (someone told me it should be in singular, not plural), not Cordilleras as many people mistake it to be.

A new management structure for agriculture

By many metrics, Philippine agriculture trails its ASEAN peers by a mile. The peers are Indonesia, Malaysia, Thailand and Vietnam.

Is a military junta tenable?

This article will not delve on the legal issues of implementing a military government. It will discuss the foundation of military culture and its response in cases when the political status quo is challenged.

Modernizing Tax Administration

Instead of increasing excise taxes on fuel and coal which has inflationary impact on consumer goods, the government must prioritize modernizing tax administration to broaden taxpayer base and increase voluntary compliance.

Imaginary MBA 199: Seminar on Crazy Rich Asians

Description: An integrative course on understanding global social, economic and political environments of business from the perspective of contemporary Asian systems as influenced by China’s rise, particularly depicted in a 2018 film of the same title. An integrated business and film appreciation course useful for scenario planning, design thinking, behavioral economics, organizational behavior, game theory, and strategic finance/ marketing.

The Independent Directors

THE Securities Regulation Code (SRC) institutionalized within the PHC (publicly held corporation) sector the system of “independent director” (ID) which it defines as “a person other than an officer or employee of the corporation, its parent or subsidiaries, or any other individual having a relationship with the corporation, which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.”

The oversight functions of independent directors

THE corporate system of “Independent Directors” does not exist under the current version of the Corporation Code of the Philippines, where the aspect of “minority representation” is covered by the requirement of cumulative voting, which makes it mathematically possible for minority shareholders to pursue minority representation in the Board of Directors. This is understandable since the primary role of the Corporation Code (CC) since its enactment in 1980 is to be the “general enabling law” referred to in our Constitution by which private corporations of all types may be organized for private interests, covering all types of corporations, stock and nonstock, close or family-owned, and not merely limited to “publicly-held corporations” (PHCs).

Maximizing Shareholder Value

Under the GOCC Governance Act, the corporate governance standards for directors/trustees and officers of GOCCs have by expressed statutory imprimatur far exceeded those for the directors/trustees and officers in PHCs under the Corporation Code, the Securities Regulations Code, and the SEC Code of Corporate Governance, as follows.

TRAIN 2: A tax reform for businesses

PACKAGE 2 of the Tax Reform for Acceleration and Inclusion (TRAIN) has been met with protests, especially from the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BoI). One of the notable features which remains to be the most controversial portion of the Comprehensive Tax Reform Program is the incentive reform.

Duty of loyalty for officials of GOCCs and listed companies

The GOCC Governance Act requires of directors, trustees, and officers in the GOCC Sector to “[a]ct with utmost and undivided loyalty to the GOCC,” and to “[a]void conflicts of interests and declare any interests they may have in any particular matter before the Board.”

Corporate governance for GOCCs and listed firms

In the private corporate sector as currently governed by common law developments under the Corporation Code, the “business judgment rule” pervades in defining the duties, responsibilities, and liability of directors, trustees and officers. The rule proceeds from the corporate set-up of Centralized Management which grants to the Board the sole authority to determine policy and conduct the ordinary business of the corporation within the scope of its charter. As long as the Board acts honestly and in good faith, the courts will not interfere in their judgments and transactions; and that minority members of the Board and the stockholders cannot come to the courts to change the course of the administration of the corporate affairs.

Expansion of ASEAN food corporations

Many Philippine companies expand overseas to reach more consumers and increase revenues. Also, companies can utilize global markets to introduce unique products and services (https://www.bizjournals.com/).

Current management doctrines have long since become archaic

By and large, current management principles and practice are a throwback from a relatively placid era long gone. Their intellectual moorings are largely the handiwork of legendary management guru Michael Porter whose Five Forces model of the business enterprise, to this day, continues to dominate management thinking and practice -- three and a half decades since the publication of his classic work, “On Competition.”

Wanted: A detailed data of city poverty incidence

Poverty incidence monitoring is an important metric of local government performance.

Corporate governance for GOCCs and listed companies

The GOCC Governance Act formally characterizes the members of the Governing Boards and Officers of GOCCs as “fiduciaries of the State” with “the legal obligation and duty to always act in the best interests of the GOCC, with utmost good faith in all its dealings with the property and monies of the GOCC.”

Philippine fisheries dying

Philippine fishery production declined between 2010 and 2017. As a result, since 2010, the contribution of fishery to agriculture growth has been negative.

Sustaining leadership excellence in the AFP

On his deathbed, Alexander the Great’s comrades asked him, “To whom do you leave the kingdom?” To this, Alexander simply replied, “To the best and strongest.”

Disruption in taxation

Nothing is certain but death and taxes, while the only constant is change. Who doesn’t know that? And yet, it still hurts like the first...

Guardians of political stability

On March 22, during the celebration of the 124th Anniversary of the Philippine Army, former Commanding Generals across generations were honored with a parade...

The most inclusive province: Bataan

If poverty incidence is the metric of inclusivity, what province wins? Bataan. Surprised? Let us compare the scores of provinces with the least number of...

The corporate governance system for the GOCC sector

PRINCIPLES OF PUBLIC CORPORATE GOVERNANCE 1. Full Implementation of the Stakeholder Theory in the GOCC Sector The GOCC Governance Act recognizes that all GOCCs, whether chartered...

Memories of UP ‘masa’ dorm

Yakal is a dorm in UP Diliman. It was a “masa” dorm as it had double-deck beds good for four. It was known...


One of the greatest minds, Stephen Hawking, before he passed away, warned us anew on the dangers of artificial intelligence (AI). In several interviews,...

Board Qualifications and Disqualifications: The Fit and Proper Rule

The GOCC Governance Act mandates that the Governance Commission for GOCCs (GCG) shall formally issue a “Fit and Proper Rule” as “the standards for...

Banaue Rice Terraces Restoration: A case study on Tourism Sustainability

Let me start with a little scenario. Tomorrow, one family or barkada will take a trip to the mountain resort of Baguio and then the...

Should there be ‘independent directors’ in the GOCC sector?

While I was the incumbent Chair of the Governance Commission for GOCCs (GCG), I had a short conversation with Securities and Exchange Commission (SEC)...

Tourism: Bane or boon?

Since the government’s discovery of the missing marshlands of Boracay, a lot of talk and media has been devoted to tourism issues -- one...

Agriculture: Arroyo and Aquino years and Duterte’s trajectory

Bill Gates of the Gates Foundation supports many initiatives in developing countries. He has espoused the decisive role of agriculture in development. Of the...

The tale of two Mindanao regions

This article will examine the progress of two key regions in Mindanao: Davao and the Zamboanga Peninsula. Davao, in the east, faces the Pacific...

The Corporate Governance System for the GOCC sector compared with that...

The GOCC (government-owned and controlled corporation) Governance Act formally defines “Board of Directors/Trustees” as “the governing body that exercises the corporate powers of a...

Philippine Corporate Governance Regimes

THERE is a public perception that the system of corporate governance (CG) in the private sector is of “superior standard” when compared with public...

Communist insurgency: An anathema to a stable business environment

The theme of the Management Association of the Philippines (MAP) for 2018 is “Competing in the Age of Disruption.” Disruption will come from advancement...

Higher pay for tax collectors

With the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, a Certified Public Accountant (CPA) earning a net of P14,000 in...

Competing in the age of disruption

(Following is the inaugural speech delivered by the author who is the President of the Management Association of the Philippines for 2018) I stand before...

Guideposts for the successful execution of inclusive business strategies

Inclusive business strategies -- more commonly known as Inclusive Business Models (IBMs) -- are business solutions that provide access to economic opportunities to the...

How to book a return flight from crisis and live to...

The Philippines is no stranger to crises. The local tourism industry in particular has borne the brunt of these crises, ranging from acts of...

The Business Sector’s Hand in Quelling Geopolitical Uncertainty

Geopolitical threats often cause the business sector enormous uncertainty. The North Korean nuclear threat, the West Philippine Sea dispute, and the Marawi crisis are...