Corporate Governance: Issues,

Opportunities and Challenges

VS.

Corporate governance in PH
improving but…
 Corporate Governance: Issues, Opportunities and Challenges
Challenges: Corporate governance principles and codes have been developed in
various countries based on different systems and situations. Some continental
European countries, including, Germany, Austria, and the Netherlands, require a two-
tiered Board of directors as a means of improving governance. In India, corporate
governance emphasizes the interest of shareholders and it relies on a single-tiered
Board of Directors that is normally dominated by non-executive directors elected by
shareholders. In the United Kingdom, the CEO generally does not also serve as
Chairman of the Board, whereas in the US having the dual role has been the norm,
despite major misgivings regarding the effect on corporate governance. The Japanese
and German models are somewhat different, although, Asian countries are not moving
towards identical systems of governance. Those countries are improving and
developed based on their different perspective and system of corporate governance,
however, they are common in recognizing the board of directors as the heart of the
system of corporate governance and board practices have been accepted as the most
important practices of governance.
Issues: The major issues all over the world included are duties of Directors,
composition and Balance of the Board, Remuneration and Reward of Directors,
Reliability of Financial Reporting and External Auditors, Board’s Responsibility for
Risk Management and Internal Control, Shareholders’ Rights and Responsibilities and
Corporate Social Responsibility and Business Ethics. Ahold, Enron, and WorldCom
are all suffered from Questionable ethical behavior at the top, aggressive earnings
management, weak internal control, Risk management, and shortcomings in
accounting and reporting. Indian organizations also witnessed various issues such as
lack of trust ship, transparency and disclosure, empowerment and accountability, and
control that led to ultimate corruption in the management and mismanagement in the
affairs of many companies. In terms of corporate governance, differences exist among
countries regarding the implementation of the address codes of corporate governance. 
Corporate governance in PH improving but…
Challenges: One of the challenges is that the reform momentum has not yet
reached all publicly listed companies. In terms of the average score for all
252 companies listed on the Philippine Stock Exchange, the country’s
overall score has dipped to 51.1 points in 2013 and 2014 from 53.8 points
in 2012. The drop in score suggests that despite the higher bar set for
publicly listed companies as far as corporate governance standards are
concerned, a lot of these companies don’t measure up.
Issues: The lack of adequate disclosure compared with the counterparts in
the South East Asian region is part of the reason for the comparatively low
score of the PLCs. The Philippines had fallen behind as most companies
fail to provide key information, such as contact details, policies, and
procedures, to name a few. Additionally, there is a perception that it is
difficult for potential investors to navigate or search for information about
our PLCs, primarily because of the variety of formats and content used
from company to company. High sincerity is also an issue in terms of
fighting for corruption. The capital market regulators of the country, the
SEC and PSE, were two of the institutions considered most sincere in
improving the country's governance.

How are they alike?

Corporate governance is the primary responsibility of every company, it is the method of promoting and
maintaining integrity, transparency, and accountability in the higher level of management. The lack of adequate disclosure
is the identified issue of corporate governance in the Philippines and some various countries. Lack of adequate disclosure is
one of the reasons why countries are facing problems in corporate governance. The system of corporate governance in the
Philippines and some various countries is characterized as a shareholder-based system. Some countries recognize that along
with the Board of Directors, the other participants and stakeholders do have significant roles in the governance systems.
Also, in the Philippines, the equitable treatment of shareholders and the rights of shareholders are observed in improving
corporate governance.

How are they different?

Both Articles discusses the effects of lack of disclosures and transparency. However, the scope of the journal article
is broader since it tackles issues from different countries. Some continental European countries, including, Germany,
Austria and the Netherlands, require a two-tiered Board of directors as a means of improving governance. While the news
article focuses on Philippines’ top-tier corporations in the last few years as capital market regulators in the region started
working more closely to promote best global practices. Average scores in all corporate governance categories improved. A
slight increase was also observed in the following: equitable treatment of shareholders (11.17 points from 11.06 and 10.7)
and rights of shareholders (6.79 points 5.5 and 5.6).