Philippines to Adopt ASEAN Corporate Governance Scorecard
Jul. 2 – In preparation for the integration of the ASEAN Economic Community (AEC) in 2015, the Philippines has begun to take additional measures to improve the corporate governance of its local companies by fully implementing the use of the ASEAN Corporate Governance Scorecard (ACGS). The ACGS is an ASEAN-wide scorecard used to evaluate companies throughout a country.
Specifically, the Philippines seeks to improve its ACGS performance following its low score in this year’s ASEAN Corporate Governance Report (ACGR). Of the ASEAN countries assessed through the ACGR, the Philippines had the second lowest average corporate governance score (48.9 percent). The only country that scored lower was Indonesia (43.4 percent).
The ACGS functions as a corporate governance rating system consisting of 179 questions used to rate a publicly listed company’s (PLC) corporate governance policies and practices compared to the internationally-held OECD principles of corporate governance.
Filipino Securities and Exchange Commission (SEC) chairperson Teresita Herbosa explained the need for the increased participation of Filipino PLCs in the ACGS, noting that “the participation of our PLCs in the ACGS would put them on par with other PLCs in the region.”
“The scorecard is used by investors to gauge the adherence of a PLC in pursuing corporate governance efforts,” she added.
The Philippine’s SEC has set the ambitious goal of having at least 20 Filipino PLCs ranked within the top 50 of ASEAN PLCs by 2015.
In the future, similar shifts and efforts to standardize the ASEAN PLC scorecard system may increase as the integration of the AEC draws closer. Specifically, Thailand is currently in the transition process, while Singapore and Vietnam are both considering implementing the ACGS.
Currently, only Malaysia, the Philippines and Indonesia have fully adopted the ACGS system.
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