PHILIPPINE CORPORATE

GOVERNANCE
Corporate governance in the Philippines, like in many countries, refers to the system of rules,
practices, and processes by which a company is directed and controlled. Its primary goal is to
ensure transparency, fairness, and accountability in business operations, thereby protecting the
interests of shareholders, stakeholders, and the broader public.
 GOVERNANCE AND MANAGEMENT

Governance refers to the system of rules, practices, and processes by which a company is directed
and controlled. It encompasses the relationships among various stakeholders and sets the
framework for achieving a company's objectives.
Management is the day-to-day administration and operation of the company to achieve those
objectives. Effective governance ensures that management operates in the best interests of the
stakeholders, including shareholders.
 KEY PLAYERS IN CORPORATE GOVERNANCE

• Board of Directors: They are responsible for overseeing the company's management and
ensuring that it acts in the best interests of shareholders.
• Shareholders: They own the company and elect the board.
• Management: Responsible for the day-to-day operations.
• Regulators: Such as the SEC, which sets rules and regulations.
• Auditors: Ensure financial transparency and compliance.
 THEORETICAL PERSPECTIVE

The "Comply or Explain" principle is also significant, where companies either comply with
corporate governance codes or explain why they don’t.

• Agency theory
• Stakeholder theory
 MEMBERSHIP OF THE BOARD

• executive and non-executive directors

• independent directors - required to provide unbiased judgment and play a significant role in
ensuring corporate governance
 POLITICS IN THE BOARD

• Politics in the boardroom can occur when board members prioritize personal or political
interests over the company's well-being. In the Philippines, family-owned conglomerates are
common, and sometimes, board positions are influenced by family or political connections
rather than merit. This can lead to corporate governance challenges.