L-R: ICD president Ricardo Nicanor Jacinto, vice chairman Rex Drilon II, GGAPP vice chairman Atty. Marlon Marquez and PwC Philippines chairman Atty. Alex Cabrera“There is a very low readiness to allow third-party experts to assess” the performance of boards of directors of publicly listed companies.
This was among the findings of the 2016 Code of Corporate Governance survey conducted by the Good Governance Advocates and Practitioners of the Philippines (GGAPP) in partnership with Isla Lipana & Co./PwC Philippines.
In assessing board performance, 63% of respondents conduct self-assessments at least once a year, 12% conduct self-assessment on an ad hoc basis and 24% have yet to conduct self-assessment as of the fourth quarter of 2016 when the survey was conducted.
Only 25% of respondents have subjected themselves to a third-party evaluation of board performance and less than half of these do so annually. The rest subscribe to third-party evaluation either on an ad hoc basis or once every two to three years.
Third-party evaluations are expected to provide a “more independent and objective review of board performance.”
The study further said: “A thorough and robust board assessment process highlights the performance of the board collectively and individually. It should guide the organization in evaluating the continued relevance of board composition, director competency, and qualifications.”
The same study showed that organizations “not only evaluate the qualification of directors during the selection and appointment process, but also on a continuing basis,” carrying out review of director qualifications, including grounds for disqualification, at least once every 12 months.
The full results of the study were presented at the Fellows’ Lunch of the Institute of Corporate Directors on October 16 by Atty. Alexander Cabrera, PwC Philippines chairman and senior partner, together with Atty. Marlon Marquez, GGAPP vice chairman.
GGAPP members promote and assist in the development of good governance in the country while Isla Lipana & Co./PwC Philippines provides global audit and assurance, tax and advisory services with 95 years of experience in the Philippines.(Story/Photos by: Carla Paras-Sison)