Less than a year before it turns 25, the Institute of Corporate Directors (ICD) is very much on pace with its 2024 vision of being widely recognized as the key catalyst in effecting positive change in the Philippine corporate governance ecosystem towards inclusive and sustainable development.
With a clear-cut mission of advocating good governance and stewardship in the corporate sector to eventually benefit the society as a whole, ICD counts among its members top-level managers, directors, and key decision-makers of Philippine corporations, GOCCs, and non-government organizations.
In its sustained drive towards raising the bar of corporate governance in the Philippines, the ICD is holding today the ACGS and CGS Golden Arrow Recognition Ceremony at the Golden Ballroom of Okada Manila Hotel to honor the top Philippine publicly-listed companies and insurance companies based on the 2022 ASEAN Corporate Governance Scorecard and Corporate Governance Scorecard assessment results.
The ACGS and CGS measures the performance of companies in the areas of facilitating the rights and the equitable treatment of shareholders, how they relate to their different stakeholders, ensuring transparency and accountability through timely disclosure of material information, and how the corporate board guides the company strategically, monitors the management, and ensures the board’s accountability to the company and the shareholders.
The scorecard is composed of 184 questions based on publicly available disclosures on the companies’ websites. It aims to raise the corporate governance standards and practices of the country and to make well-governed Philippine publicly-listed companies and insurance companies attractive to investors.
The Golden Arrow is a prestigious and much-coveted award among the 284 companies currently listed in the Philippine Stock Exchange (PSE) because it shows their observable conformance with the Philippine code of corporate governance and the internationally-recommended corporate governance as espoused by the ACGS and CGS.
The Golden Arrow is awarded to companies that achieved a score of at least 80 points in the ACGS and CGS assessments.
Just like in previous Golden Arrow awarding rites, five levels of performance in corporate governance will be conferred to deserving companies. Each ascending level is depicted by an increasing number of golden arrows, as follows:
νACGS & CGS score of 80 to 89 points 1-arrow recognition
νACGS & CGS score of 90 to 99 points 2-arrow recognition
νACGS & CGS score of 100 to 109 points 3-arrow recognition
νACGS & CGS score of 110 to 119 points 4-arrow recognition
νACGS & CGS score of 120 to 130 points 5-arrow recognition
Working Together with PSE
ICD had the first Golden Arrow awarding rites in 2018 based on the 2016 ACGS and CGS assessment results and the prestige and honor of the annual ceremony have since reverberated among Philippine publicly-listed companies on their respective corporate governance framework.
“ICD assessors work together with the Securities and Exchange Commission (SEC) to monitor publicly-listed companies to encourage the companies’ strict adherence to the highest ethical standards at all levels of the business while ensuring transparency and accountability through timely disclosure of information such as annual reports and minutes of shareholders’ meetings, among others,” the ICD CEO said.
While the Golden Arrow awards is initially given to Philippine publicly-listed companies, ICD expanded it eventually to include one golden arrow for private limited companies and also for insurance companies.
“Without even looking at our own records, chances are the top 50 of the 284 publicly-listed companies in the PSE are Golden Arrow awardees because they adhere to corporate governance standards. They ensure that they are not offensive in environmental, health, safety, and labor relations standards and all that, so they have all these policies in place and enshrined within their corporate structure,” explains Dr. Gatmaitan.
More than the honor that the Golden Arrow brings to recipient companies, Dr. Gatmaitan said that there is a direct correlation between the companies’ adherence to excellent corporate governance standards to their success not only in terms of profitability, increased market value, but also access to more resources in terms of being an attractive proposition to investors, both local and foreign.
“That is why we want good corporate governance to cascade from PSE-listed companies down to MSMEs or even church and religious organizations because it will benefit the society and the Filipino people eventually,” he enthused.
Today’s ACGS and CGS Golden Arrow Recognition Ceremony is the second this year, and Dr. Carlos Jose ‘Charlie’ P. Gatmaitan, Chief Executive Officer of ICD, explained that the pandemic has set back the timeline of their annual awarding rites.
“The ACGS and CGS Golden Arrow Recognition Ceremony held last January 20, 2023 at the Sheraton Manila was for the 2021 ACGS and CGS assessment results. The one that we will be holding today is for the 2022 ACGS and CGS assessment results which means that we have caught up with our schedule already,” he explained.
He adds that they are looking to have next year’s Golden Arrow Recognition Ceremony based on the 2023 ACGS and CGS assessment results held in June 2024 to serve as a key highlight as ICD celebrates its 25th year.
Increasing ICD Membership
At present, ICD has a total of 501 members. Membership has grown three-fold when the organization recently started accepting corporate memberships from previously accommodating individual members only. Corporate membership entitles a company to have between three to five individual members in ICD.
Looking into the membership make-up, ICD noted that most of its members are actually based in Metro Manila or working for companies operating mostly in NCR.
The ICD CEO says that since part of their objective is inclusivity, they are working on getting more members coming from other parts of the country.
ICD is also not limiting itself to members coming from publicly-listed companies because corporate governance cuts across practically all corporate organizations, big or small. The organization has members from companies that are not yet listed in the PSE, government-owned and controlled corporation or GOCCs, and soon, coming from non-government organizations (NGOs) after recently forging an agreement with the Philippine Council for NGO Certification (PCNC).
“It just so happens that the best examples of corporate governance at this time are those from publicly-listed companies so ICD shares their best practices to its members for them to help effect or improve corporate governance in their respective companies or organizations,” Dr. Gatmaitan said.
“Through our programs, activities, and initiatives, ICD is trying to get more members to join us because of the underlying importance of public disclosure in the overall corporate governance picture. Corporate governance is not just about the timely submission of reports, having diversity and equity in the board, it also focuses on other key issues including digital transformation which is now the rule rather than the exception in today’s corporate governance,” he explained.
“Being a member of ICD means access to knowledge on what the standards of corporate governance that the world uses or adheres to at the moment to make sure that Philippine companies are up to par with it or at least catching up. Honestly, we are not yet as fast as we wish in being at par with global standards although there is a chance that we really can get there,” expresses Dr. Gatmaitan.
“We expect ICD members to increase by a thousand when the organization marks its 25th year next year,” he confidently stated.