Corporate governance gets SEC priority

Corporate governance gets SEC priority

By JAMES A. LOYOLA
May 30, 2011, 12:30am

MANILA, Philippines — The Securities and Exchange Commission’s (SEC) new chairperson Teresita Herbosa is considering new measures that will “change the game” in the commission’s thrust to protect shareholders by making firms subscribe to higher standards of corporate governance.

In her keynote address during the Institute of Corporate Directors’ 2010 Corporate Governance Award, Herbosa said her plans will extend beyond the usual measures to promote and protect stockholder rights, competitiveness, transparency, and accountability.

“Corporation which have diligently and faithfully complied with the standards of corporate governance such as the platinum awardees should be given priority to SEC services,” Herbosa said. She said these firms are entitled to a “fast lane” in the processing and review of their applications and filings with the SEC.

“We hope that with this incentive, more corporations will aspire for platinum status,” Herbosa said.

Platinum awardees are firms that have received Gold awards for three years in a row. The Gold award is given to companies that have received a scorecard rating of 95 percent or higher by the ICD.

Aside from this incentive, Herbosa said the SEC will change its approach “from mere persuasion to stricter and more vigorous enforcement” to ensure that board directors are faithful to their responsibilities.

She noted that “the faithful discharge of the duties of a director is dependent largely on qualifications. It is imperative, therefore, for the SEC to closely review and evaluate the qualifications of persons elected to the position of director and, if justified, permanently or temporarily disqualify those not deserving to sit as such.”

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