the relationship of compliance with the philippine stock exchange corporate governance guidebook and...
DESCRIPTION
As proven by financial collapses in the past, one of the most important factors affecting financial performance is corporate governance. For this reason, this thesis looks into the state of corporate governance in the Philippines and its effect on return on equity, one of the primary financial performance indicators. Studied are 150 publicly listed companies in the Philippines for reporting years 2012 and 2013. Corporate governance is quantified by measuring companies' percentage of compliance to the Philippine Stock Exchange Corporate Governance guidebook, while return on equity is obtained from the companies' financial statements. These two factors are then correlated to ascertain their relationship. The result shows that there is a significant smallpositive correlation between corporate governance and return on equity. This knowledge has the potential of influencing both companies and regulatory agencies to enforce stronger corporate governance measures, effectively aiding in the improvement of collective financial performance and acting as a safeguard for future financial collapses.TRANSCRIPT
THE RELATIONSHIP OF COMPLIANCE WITH THE PHILIPPINE STOCK EXCHANGE
CORPORATE GOVERNANCE GUIDEBOOK AND RETURN ON EQUITY
OF SELECTED PUBLICLY LISTED COMPANIES IN THE PHILIPPINES
FOR THE REPORTING YEARS 2012 AND 2013
A Thesis Presented to the
UST-AMV College of Accountancy
University of Santo Tomas
In Partial Fulfillment
Of the Requirements for the Degree of
Bachelor of Science in Accounting
By
Group 4: Section 5A10
Ricka Abigael Dumelod, Mark James Tayson, Marc Exequiel Teodoro
Dyan Merz Tolentino, Rhona Carla Torres
May 2015
Acknowledgment
This thesis has been a long journey for the researchers, and it would not have been
accomplished successfully without the help of all who lent their hand in this endeavor.
First and foremost, the researchers would like to thank God Almighty for providing the
strength and the will to continue despite the hurdles and shortcomings encountered.
The researchers also extend their deepest gratitude to their advisers, for sharing their
time, expertise and guidance throughout the duration of the study:
To Dr. Mary Rosaleen Agaton, thesis adviser, for teaching and reminding the
researchers what they needed to accomplish for the completion of the thesis;
To Dr. Luciana Urquiola, English adviser, for giving useful information, advice and
ideas for the improvement of the study;
To Atty. Angela Francesca Din, technical adviser, for the constant morale boost
and choosing to stay as the technical aviser of the researchers despite the inconvenience
it entails; and
To Ms. Mary Jane Castilla, thesis statistician, for teaching the researchers
procedures needed to conduct this study, for helping the researchers understand the
complex statistical results, and most importantly, for the patience, understanding, and
accommodation even beyond the designated consultation time.
Special thanks to Mr. Luis Chua and Mr. Hilario Tan for lending their expertise regarding
technical accounting matters, and for giving insight that has greatly assisted the theoretical
foundation of the study. Gratitude is also extended to AEV and PDLT for taking time to respond
to the interview, which served as corroborating information in formulating the conclusion of the
study.
Thanks also to the panelists, for giving this thesis an opportunity to be reviewed and
improved further.
To everyone not mentioned but has contributed directly or indirectly in the completion of
the study, thank you very much for making this possible.
This thesis is a fruit of persistence and hardwork, and having the opportunity to experience
it is heart-warming, mind-nurturing, and soul-enriching. To God be the glory!
University of Santo Tomas Alfredo M. Velayo College of Accountancy
CERTIFICATE OF ORIGINALITY
We, hereby declare that this submission is our own work and that, to the best of our
knowledge and belief, it contains no material previously published or written by another person
nor material which to a substantial extent has been accepted for the award of any other degree or
diploma of a university or other institute of higher learning, except where due acknowledgement
is made in the text.
We also declare that the intellectual content of this thesis/dissertation is the product
of our work, even though we may have received the assistance from others on style, presentation
and language expression.
_________________________ _________________________
Ricka Abigael R. Dumelod Marc Exequiel Teodoro
_________________________ _________________________
Mark James C. Tayson Dyan Merz S. Tolentino
_________________________
Rhona Carla M. Torres
Noted:
__________________________________________
Dr. Mary Rosaleen Agaton
_________________________
Date
University of Santo Tomas Alfredo M. Velayo College of Accountancy
APPROVAL SHEET
The thesis entitled
THE RELATIONSHIP OF COMPLIANCE WITH THE PHILIPPINE STOCK
EXCHANGE COPORATE GOVERNANCE GUIDEBOOK AND RETURN ON EQUITY
OF SELECTED PUBLICLY LISTED COMPANIES IN THE PHILIPPINES
FOR THE REPORTING YEARS 2012 AND 2013
Prepared and submitted by RICKA ABIGAEL R. DUMELOD, MARK JAMES C. TAYSON,
MARC EXEQUIEL TEODORO, DYAN MERZ S. TOLENTINO, RHONA CARLA M.
TORRES has been approved and accepted as partial fulfillment of the requirements for the degree
of Bachelor of Science in Accountancy.
___________________________________________
Dr. Mary Rosaleen Agaton
PANEL OF EXAMINERS
Approved by the College of Accountancy Thesis Committee on Oral Examination with a grade of
____ on May____, 2015.
_________________________________ __________________________________
Atty. Elizabeth V. Inoturan Asst. Prof. Nestor M. Noble, MBA
_________________________________ __________________________________
Mr. Noel E. Estrella, MBA Asst. Prof. Luciana L. Urquiola, Ph.D.
______________________________________________
ASSOC. PROF. PATRICIA M. EMPLEO, MBA, CPA
DEAN
Abstract
As proven by financial collapses in the past, one of the most important factors affecting
financial performance is corporate governance. For this reason, this thesis looks into the state of
corporate governance in the Philippines and its effect on return on equity, one of the primary
financial performance indicators. Studied are 150 publicly listed companies in the Philippines for
reporting years 2012 and 2013. Corporate governance is quantified by measuring companies'
percentage of compliance to the Philippine Stock Exchange Corporate Governance guidebook,
while return on equity is obtained from the companies' financial statements. These two factors
are then correlated to ascertain their relationship. The result shows that there is a significant small
positive correlation between corporate governance and return on equity. This knowledge has the
potential of influencing both companies and regulatory agencies to enforce stronger corporate
governance measures, effectively aiding in the improvement of collective financial performance
and acting as a safeguard for future financial collapses.
Table of Contents
Chapter 1: The Problem, Rationale and Background .................................................................................... 1
Introduction .............................................................................................................................................. 1
Research Questions .................................................................................................................................. 3
Theoretical Framework ............................................................................................................................. 3
Conceptual Framework ............................................................................................................................. 5
Significance of the Study ........................................................................................................................... 6
Scope and Limitations ............................................................................................................................... 6
Hypothesis................................................................................................................................................. 8
Assumptions .............................................................................................................................................. 9
Definition of Terms ................................................................................................................................... 9
Chapter 2: Review of Related Literature .................................................................................................... 11
Corporate Governance ............................................................................................................................ 11
Importance of Corporate Governance .................................................................................................... 12
Quantifying Corporate Governance ........................................................................................................ 13
Return on Equity ..................................................................................................................................... 15
Similar Studies ......................................................................................................................................... 15
Chapter 3: Research Methodology ............................................................................................................. 18
Research Design ...................................................................................................................................... 18
Study Locale ............................................................................................................................................ 18
Population and Sampling ........................................................................................................................ 18
Research Instrumentation ...................................................................................................................... 20
Data Gathering Procedure ...................................................................................................................... 21
Statistical Treatment of Data .................................................................................................................. 23
Chapter 4: Presentation, Analysis and Interpretation of Data ................................................................... 26
Chapter 5: Summary, Conclusions and Recommendations ........................................................................ 34
Summary of the Findings ........................................................................................................................ 34
Corporate Governance ........................................................................................................................ 34
Return on Equity ................................................................................................................................. 34
Correlation between Compliance with the PSE-CG Guidebook and RoE ........................................... 35
Conclusion ............................................................................................................................................... 35
Recommendations .................................................................................................................................. 35
References .................................................................................................................................................. 37
Appendix A: List of Publicly Listed Companies as of December 31, 2013 .................................................. 44
Appendix B: Certification of the Number of Publicly Listed Companies..................................................... 52
Appendix C: List of Publicly Listed Companies Used as Samples ................................................................ 53
Appendix D: Compliance Report on Corporate Governance (PSE-CG Survey) ........................................... 57
Appendix D.1: Template of the PSE-CG Survey ...................................................................................... 57
Appendix D.1: Scoring Guide for the PSE-CG Survey .............................................................................. 58
Appendix E: Interviews ............................................................................................................................... 59
Appendix E.1: Copy of the E-mail Sent to Publicly Listed Companies .................................................... 59
Appendix E.2: Transcript of E-mail Interview with the Philippine Long Distance Telephone (PLDT)
Company ................................................................................................................................................. 60
Appendix E.3: Transcript of E-mail Interview with the Aboitiz Equity Ventures, Inc. (AEV) ................... 62
Appendix E.4: Transcript ofOral Interview with Mr. Hilario Tan ............................................................ 63
Appendix E.5 – Transcript of E-mail Interview with PSE’s CG Department ............................................ 69
E-mail from the Researchers ............................................................................................................... 69
E-mail Response of the PSE CG Department ...................................................................................... 70
Appendix F: Some Reasons for Non-Compliance to the PSE-CG Guidebook Measures ............................. 72
Appendix F.1: PSE-CG Guidebook Measure Number 2.3 ........................................................................ 72
Appendix F.2: PSE-CG Guidebook Measure Number 2.6 ........................................................................ 73
Appendix F.3:PSE-CG Guidebook Measure Number 4.4 ......................................................................... 75
About the Authors ...................................................................................................................................... 77
1
Chapter 1: The Problem, Rationale and Background
Introduction
For the Philippines, the path towards economic integration of the Association of Southeast
Asian Nations (ASEAN) comes with both opportunities and challenges. On one hand, it allows
the nation to achieve its fullest potentials through the free flow of goods and services (Aldaba et
al, 2013). On the other hand, it threatens the stability of local industries by directly pitting them
against stronger ones from countries like Singapore and Malaysia ("ASEAN economic community
blueprint", 2008). Whether the country, as well as the entire region, will thrive relies heavily upon
the ability of each industry to compete (Mitton, 2002). Given this increased importance of
Philippine companies' financial performance, there is a need to learn more about the factors that
could affect it.
In 2012, Malik writes how one of the important factors to consider for economies to prosper
is good corporate governance (CG). This has proven itself true in the past, from the 1997 Asian
financial crisis (Ponnu&Ramthandin, 2008) to the collapse of Enron in 2001 (Heath & Norman,
2004). More recently, “lack of oversight” also contributed to the bankruptcy of Lehman Brothers
in 2008 (Trumbull, 2010). It is thus crucial for the Philippines to ensure that CG measures exist
and are enforced for its industries to survive (Saldaña, 2000). As Morales writes in 2013, there is
much room for improvement given that the Philippines is still behind its Asian neighbors in terms
of CG according to Asian Corporate Governance Association.
In order to incentivize managers to adopt strong CG measures, there has to be a clear
message that CG is consistent with the goal of maximizing profit. For this reason, the researchers
intend to show the extent by which CG affects financial performance. Given that these two factors
are wide in scope, the researchers further limit them into more specific areas. For the purposes
2
of this study, CG is limited to compliance with the Philippine Stock Exchange Corporate
Governance Guidebook (PSE-CG guidebook), as evidenced by each company’s Compliance
Report on Corporate Governance (PSE-CG survey). The guidebook consists of CG measures
that serve as recommendations to Philippine publicly listed companies (PLCs), based on both
international standards and the needs of the local environment ("CG guidelines for companies
listed on the Philippine Stock Exchange", n.d.). The researchers believe that compliance with the
guidebook is the most appropriate area of CG to be examined in this specific study, given that it
provides a benchmark by which CG of PLCs in the Philippines can be objectively compared.
Meanwhile, financial performance is limited to the company’s return on equity (RoE). RoE is
believed to be a holistic measurement of how efficient the allocation of capital is, supported by
the fact that it does not only determine the generated return of the company from the equity, but
also shows the success of the management in running the company (Moore, 2004).
The researchers intend to study the said topic to aid both investors and management. By
enhancing the knowledge of investors with regards to the extent by which compliance with the
PSE-CG guidebook affects RoE, they can make wiser investment decisions, i.e., investing on
companies that comply more. Moreover, the researchers aim to further encourage management
to adopt and enforce stronger CG measures by appealing to their profit incentives. For instance,
knowing that companies that comply more with CG guidelines are more profitable could influence
management to improve their board structure by ensuring that its Chairman and CEO positions
are held by different and unrelated individuals. Also, the overall goal of improving the CG of
Philippine companies is believed to be necessary in preventing future collapses and bolstering
investments and growth.
3
Research Questions
1. Describe the compliance with PSE-CG guidebook of the PLCs in the Philippines for the
following reporting years:
a. 2012
b. 2013
2. Describe the RoE of the PLCs in the Philippines for the following reporting years:
a. 2012
b. 2013
3. Identify the relationship that exists between the compliance with PSE-CG guidebook and
RoE of the PLCs in the Philippines for the following reporting years:
a. 2012
b. 2013
Theoretical Framework
Three theories prove to be relevant in this study – the stakeholder theory, the stewardship
theory, and the agency theory.
Introduced by Freeman in 1984, the stakeholder theory states that while companies have
a lot of stakeholders, its shareholders are the most important ones. Thus, management must put
their needs above all. This is coupled with the idea that since they are the company's owners, a
4
fiduciary responsibility exists to maximize shareholder value. The theory stresses the importance
of knowing what relationship exists between compliance with the PSE-CG guidebook and RoE.
Proving that a positive relationship exists between these two factors would mean that compliance
with the PSE-CG guidebook is necessary to reach the primary goal of maximizing shareholder
value.
In the stewardship theory, Donaldson and Davis (1991) argue that the interests of
management and shareholders are consistent with each other. Improving financial performance
helps management in earning more compensation, as well as shareholders in receiving greater
returns on investment. Following the theory's logic, management striving to comply with the PSE-
CG guidebook could mean upholding both their self-interests and the shareholders' interests.
Lastly, the agency theory, first proposed by Stephen Ross and Barry Mitnick in the early
1970s, states that shareholders and management acting as agents usually have a conflict of
interest in terms of the direction the corporation should take. The conflict persists especially
considering the characteristic of humans as self-interested individuals (Daily, Dalton & Canella,
2003). This agency problem may be solved through a variety of ways, one of which is “incentive
alignment” (Javed & Iqbal, 2006). The study aims to align these incentives by showing that
compliance with the PSE-CG guidebook benefit not only shareholders, but their agents as well
through better RoE.
5
Conceptual Framework
Illustrated inside the circles are the two core elements of this research – compliance with
the PSE-CG guidebook and RoE.
On the leftmost part of the conceptual framework, the list of guidelines that compose the
PSE-CG guidebook is found. The percentage of compliance with these guidelines will be the value
assigned to compliance with the PSE-CG guidebook. This is depicted by the black lines
connecting the list of guidelines and the green circle where “Compliance with the PSE-CG
guidebook” is written.
The researchers seek the value of both elements for reporting years 2012 and 2013. As
shown by the red arrows, the study looks into the extent of effect of compliance with the PSE-CG
guidebook and RoE for both reporting years.
6
Significance of the Study
It is crucial for investors to have knowledge regarding the factors that significantly affect
financial performance if they are to make informed decisions with favorable outcomes. By showing
how and to what extent compliance with PSE-CG guidebook affects RoE, this study aids in that
decision making process. This is especially true considering RoE as a direct measure of the value
to the stockholder. In light of this new knowledge, the investors may also use their power to
influence more compliance with PSE-CG guidebook, or even the adoption of better CG measures.
Moreover, by emphasizing the effects of compliance with PSE-CG guidebook to RoE, this
study gives useful information to companies about how they can further increase their profitability.
This allows them to reevaluate and improve their existing CG policies and their enforcement.
Better CG measures caused by both company initiative and investor influence provides
substantial benefits to the country as well as to its trading partners. More than preventing
collapses from happening again, improvements in this area can also boost economic growth
through greater investor confidence.
Scope and Limitations
This research looks into the extent by which compliance with PSE-CG guidebook affect
RoE. While CG is big in scope and may involve many different ways of measuring it, the
researchers limit this study into CG in terms of compliance with PSE-CG guidebook. Thus, only
the guidelines listed on PSE-CG guidebookare considered. These guidelines are as follows:
Guideline 1: Develops and executes a sound business strategy
Guideline 2: Establishes a well-structured and functioning board
7
Guideline 3: Maintains a robust internal audit and control system
Guideline 4: Recognizes and manages its enterprise risks
Guideline 5: Ensures the integrity of financial reports as well as its external auditing function
Guideline 6: Respects and protects the rights of its shareholders particularly those that
belong to the minority or non-controlling group
Guideline 7: Adopts and implements an internationally-accepted disclosure and
transparency regime
Guideline 8: Respects and protects the rights and interests of employees, community,
environment and other stakeholders
Guideline 9: Does not engage in abusive related-party transactions and insider trading
Guideline 10: Develops and nurtures a culture of ethics, compliance and enforcement
The study does not reflect all the other factors that may also be a part of CG. Similarly,
analyses regarding the companies' financial performance are limited to their RoE only.
The study was based on data gathered in October 2014. Furthermore, the study reflects
the CG and RoE for reporting years 2012 and 2013 of 150 out of the 257 PLCs in the Philippines
at that time.
The decision to limit the study into two reporting years only is brought by the fact that
financial statements and other data available in the PSE website only cover reporting years 2012
and 2013. Data for other years will necessitate collaborating with all 150 PLCs, the sample size
of this study. Most of these companies have restrictions on the financial data it can disclose. While
it may be preferable to study the relationship of compliance with PSE-CG guidebook and RoE for
more than two years, it is not practical to exhaust all the other means available in obtaining
financial statements for reporting years prior 2012 given the excessive costs and limited time for
8
thesis completion. This decision is supported by similar studies. For instance, a study
by Heenetigala in 2011 about CG practices and financial performance of companies in Sri Lanka
has "availability of data" as its standard for selecting its scope and limitations. The same thing is
true for a similar study by Uwuigbe (2011) about Nigerian banks, where "easy accessibility" to
data was considered.
Hypothesis
H0: Compliance with PSE-CG guidebook has no effect on RoE of the PLCs in the
Philippines for the following reporting years:
a. 2012
b. 2013
H1: Compliance with PSE-CG guidebook has a positive effect on RoE of the PLCs in the
Philippines for the following reporting years:
a. 2012
b. 2013
H2: Compliance with PSE-CG guidebook has a negative effect on RoE of the PLCs in the
Philippines for the following reporting years:
a. 2012
b. 2013
9
Assumptions
1. Compliance with PSE-CG guidebook can be measured.
2. RoE can be measured.
3. The correlation between CG and RoE can be measured.
Definition of Terms
Terms used in the study are conceptually and operationally defined for better
understanding of the readers.
Corporate governance (CG) – the system by which corporations are managed and controlled
(Shailer, 2004) created to help the entity reach its goals, as well as to protect the rights of internal
and external stakeholders (Baker, 2010)
Financial performance – the measure of profitability of an entity for a specified period of time
(Heenetigala, 2011)
Philippine Stock Exchange (PSE) – the only securities market in the Philippines (NASDAQ,
2015)
PSE Compliance Report on Corporate Governance (PSE-CG survey) – a CG disclosure
survey created by the PSE to assess the level of adherence of PLCs to CG practices written on
the PSE-CG guidebook (MERALCO, 2012)
PSE Corporate Governance Guidebook (PSE-CG guidebook) – consists of CG measures that
serve as recommendations to Philippine PLCs, based on both international standards and the
10
needs of the local environment ("CG guidelines for companies listed on the Philippine Stock
Exchange", n.d.)
Publicly listed companies (PLCs) – a company that has undergone an initial public offering
(IPO) and whose securities are offered for sale for the general
public on a stock exchange or in the over-the-counter market (Bacidore, Boquist, Milbourn,
&Thakor, 1997)
Return on equity (RoE) – the ratio of net income to total shareholders equity, reflecting asset
management, debt management, and profitability of the entity (Petty et al., 2012)
11
Chapter 2: Review of Related Literature
The recent years have seen a renewed interest in the CG practices of companies. This is
evidenced by the increase in institutional shareholder activism on issues that relate to CG, as
discussed by Amico in 2014. Issues such as management oversight and security, executive
compensation, and management disclosures and board composition have received increased
scrutiny from shareholders. Initiatives in management integrity by securities and banking
regulators have also been imposed in regions of Europe, North America and multiple emerging
markets.
Corporate Governance
Because of the rise of public interest regarding CG, it is necessary to realize what CG is
and why it is important. According to Shailer (2004), CG is the system by which corporations are
managed and controlled. This is done in order to help the entity reach its goals, as well as to
protect the rights of internal and external stakeholders (Baker, 2010). CG encompasses the rights
of shareholders, the equitable treatment of shareholders, the role of stakeholders, the
responsibilities of the board, and disclosure and transparency (Asian Development Bank, 2014).
The same factors, found in the ASEAN Corporate Governance Scorecard, are used in this study.
Similar to ASEAN Corporate Governance Scorecard, the German Corporate Governance
Scorecard (Strenger, 2004) also discusses which factors form part of CG. Seven relevant criteria
are chosen, namely, CG commitment, shareholders and general meeting, cooperation between
management board and supervisory board, management board, supervisory board,
transparency, and reporting and audit of annual financial statement.
12
Meanwhile, according to Fombrum (2006), a good CG consists of five things. First is a
non-executive independent board structure to well represent the shareholders or owners of the
company. Second is the establishment of strict audit and financial controls to ensure financial
oversight and timely compliance of reports. Third is executive compensations that are linked to
the company's performance. Fourth is assurance of the rights of shareholders through one vote
per share. Last is having just enough anti-takeover mechanisms to protect the company from
possible takeovers.
Lastly, Corporate Governance Quotient also points to what the components of CG really
are, as discussed by Barrett, Perrin, Schlaudecker and Todd in 2004. Eight core categories are
included - board structure and composition, audit issues, charter and bylaw provisions, laws of
the state of incorporation, executive and director compensation, qualitative factors, director and
officer stock ownership, and director education.
Importance of Corporate Governance
It is important to know what constitutes good CG due to a number of reasons. According
to McGee (2009), not subscribing to good CG principles makes investors hesitant to invest. This
is especially true with disclosure. If investors cannot predict how the company operates, the
probability of them investing is low. This idea is echoed by Puffer and MacCarthy (2003) in their
study about Russia as one of the riskiest countries for investment. According to the study, this
situation is mostly due to the country's problems of nondisclosure and non-transparency. IU and
Batten (2001) also discusses how disclosure leads to transparency, which leads to knowledge
and the ability to protect oneself from harm - an important factor in creating informed market
participants.
13
Disclosure and transparency not only helps companies in getting investors, but also
contributes in creating more efficient equity markets (Yu, 2011). This could be achieved through
allowing investors to be involved in an instantaneous efficient price discovery of relevant
information related to stock price. Informed investors are needed to avoid sub-optimum growth
due to inefficient allocation of resources because of price volatility (Mugaloglu, 2013).
Another reason why knowledge about CG is of importance is the fact that a lot of market
failures in the past, both domestically and internationally, have been caused by poor CG. The
Asian Crisis of 1997 is brought about by the mismanagement of resources through poor investing
and risky financing decisions (Saldaña, 2000). Even after the crisis, same problems from poor
CG still ensued. For example, Clayton Holdings failed to monitor minimal standards of almost
54% of their loans in 2007 and caused them $63 billion debt (Bryce, 2012). Similarly, Olympus
spent hundreds of millions of dollars on questionable and money-losing acquisitions (Burrough,
2012). It did not only damage the reputation of both companies, but it also caused a large sum of
losses and collapse for Lehman Brothers. Monte de Piedad and Savings Bank, on the other hand,
incurred 1.8 billion Philippine pesos of bad loans to public utility operators and drivers, had
anomalous loans and irregularities not reflected in the audit reports, and had not maintained bank
ledgers properly. This in turn led to their operations being suspended (Echanis, 2006).
Quantifying Corporate Governance
Because CG is important for companies to reach their goals, efforts have been directed
to quantify it. This is necessary in order to be able to assess its effects even better. The ASEAN
Corporate Governance Scorecard quantifies CG on a compliance basis and assigns weight to the
five CG areas - rights of shareholders for 10%, equitable treatment of shareholders for 15%, role
14
of stakeholders for 10%, disclosure and transparency for 25%, and responsibilities of the board
for 40% (Asian Development Bank, 2014).
The MICG-Uitm-RAM-Biz Aid Technologies Corporate Governance Rating has also been
used to quantify CG by Fombrun in 2006. This measurement uses a five-point likert scale, with
375 as the highest possible score. The eight principal CG attributes and their corresponding
weight are strategic planning and performance management (total raw score of 30, weight of 5%),
board, committee and management (total raw score of 85, weight of 15%), risk management and
internal control (total raw score of 40, weight of 15%), ownership structure and concentration (total
raw score of 35, weight of 15%), accountability and transparency (total raw score of 85, weight of
20%), shareholders and investor relations (total raw score of 40, weight of 15%), business ethics
and responsibility (total raw score of 30, weight of 10%), and intellectual capital (total raw score
of 30; weighing 5%). However, this method is specifically designed for Malaysian Public Entities.
The studies mentioned earlier discussing which components form part of CG are also
useful in the search for ways to quantify CG. The Corporate Governance Quotient, which is
included with the proxy analysis service supplied by the RiskMetrcis/ISS for their institutional
investor clients, calculated CG ratings based on 61 variables across eight core categories
(Barrett, Perrin, Schlaudecker & Todd, 2004). Meanwhile, the German Corporate Governance
Scorecard (Strenger, 2004) also measures CG. The first part contains five pages dedicated for
individual scoring process, while the second part contains the summary page giving the user a
review of the partial scores achieved for each criterion, as well as the total score. The scorecard
is divided into seven relevant criteria already mentioned.
15
Other methods used are the Corporate Library founded in 1999 by Nell Minow and Robert
A.G. Monks, the GMI Metric founded in 2000 by Governance Metrics International, and
Accounting & Governance Risk developed by Audit Integrity.
Return on Equity
The most compelling reason to enforcing strong CG measures is its effect on financial
performance, one indicator of which is RoE. Return on equity is a profitability ratio that measures
how effectively total shareholders’ equity turns into income. Profitability ratios show the ultimate
measure of performance: how companies generate profits (Brooks, 2010). It is computed by
dividing net income with total shareholder’s equity. A more comprehensive formula, the DuPont
technique, can also be used.
Many researchers point to RoE as one of the best indicators of financial performance. In
2010, Brooks states that RoE reflects the operating efficiency, financial leverage, and asset
management efficiency of a company. It is thus a holistic measurement of how efficient the
allocation of capital is. It does not only determine the generated return of the company from the
equity, but also shows the success of the management in running the company (Moore, 2004).
Similar Studies
Similar studies attempt to correlate CG and financial performance, one of which is by
Ponnu and Ramthandin (2008). The study seeks to find the relationship between the two factors
of the top 100 PLCs in Malaysia for the years 2005 and 2006. CG disclosures are interpreted
through the use of a governance rating customized for the Malaysian setting called the MICG-
16
Uitm-RAM-Biz Aid Technologies Corporate Governance Rating. In addition, financial
performance is measured through RoE and stock price performance, both of which can be found
on the companies' annual reports. To find the link between CG and financial performance,
correlation analysis is used. Final results of the study depict a positive relationship between CG
and financial performance.
Another study conducted in Pakistan by Javed and Iqbal (2006) correlates CG and firm
performance of 50 firms for the years 2003, 2004 and 2005. A complex multifactor CG rating
composed of 22 governance indicators is utilized to measure CG. These indicators are
encompassed into three sub-indexes with eight factors each. Weights are assigned by the
researchers with the aid of financial experts. Furthermore, firm performance is measured by the
total amount of assets, debt-to-total asset ratio, and average sales growth. Tobin Q is used as
valuation measure to correlate CG with firm performance. The results of the study document a
positive and significant relation of the quality of CG and firm performance.
Yu (2011) also conducted a study investigating the relationship between stock price
informativeness, a factor that drives financial performance indicated by stock price, and CG. Firm-
level data from 22 developed countries were used in measuring firm-specific stock return variation
and future earnings response coefficients. Results indicate that these financial performance
factors increases with the quality of a firm’s CG. The study used Gov7, an index developed in line
with Aggarwal et al. (2009) that measures the company’s overall CG quality; takeover index,
patterned on RiskMetrics database, which covers antitakeover defenses of a firm; audit index,
which practically covers disclosure and transparency quality; and board index, which reflects the
composition of the board. Results indicate that these financial performance factors increases with
the quality of a firm’s CG.
17
Meanwhile, a sample of 398 firms from Indonesia, Korea, Malaysia, Thailand, and the
Philippines revealed that CG had a strong impact on the financial performance during the East
Asian financial crisis of 1997-1998. Stock returns for one year is used, and CG is measured by
determining if it is listed in American Depository Receipt, and if it is audited by one of the Big Six
international accounting firms. This study of Mitton (2002) showed a significant positive
association between better stock price performance, and higher disclosure quality, higher outside
ownership concentration, and focused firms rather than diversified.
A similar study is also conducted by Uwuigbe (2011) that aims to affirm the correlation of
a company's financial health with regards to its CG policies. A sample of 21 Nigerian banks listed
in the Nigerian Stock Exchange was utilized for the years 2006-2008. Using Return of Equity and
Return on Assets as the defining factors of Financial Performance, the study correlated the
variables with CG represented by board size, board composition and directors' equity holdings.
The study resulted in (1) board size and (2) proportionality of independent directors being
negatively related to financial performance. Meanwhile, the rate of director's equity interest and
CG disclosure showed a positive correlation.
18
Chapter 3: Research Methodology
Research Design
The Quantitative-Correlation design is selected in determining the effect of compliance
with PSE-CG guidebook on RoE. Quantitative research design uses numerical data and
mathematical means to prove the hypotheses of the study (Harwell, 2011). Furthermore, the
correlational research design is used to determine the kind and extent of relationship that exists
between the two variables ("Survey and correlational research designs", n.d.).
Study Locale
The study locale is the University of Santo Tomas – Alfredo M. Velayo College of
Accountancy, school year 2014-2015.
Population and Sampling
The study population consists of all 257 PLCs in the Philippines as of December 31,
2013. The list of these PLCs is found on Appendix A, confirmed by a formal certification from
PSE found on Appendix B. Meanwhile, the cut-off date of December 31, 2013 is deemed
necessary, as the data considered in this study comprise of conditions existing during reporting
years 2012 and 2013.The decision to limit the study into two reporting years only is supported by
reasons already discussed in the Scope and Limitations portion of Chapter 1.
19
The sample size of this study is 150 PLCs,with the desired reliability of .95 and maximum
error of .05. In arriving at this sample size, the stratified random sampling technique is used. This
sampling technique divides the population into strata, that is, groups with shared characteristics,
from which samples are then selected randomly (“Stratified random sampling”, n.d.).
Using the Philippine Social Survey Council as basis, a sample size of 151 PLCs
representing different sectors is determined. However, this sample size is reduced to 150 due to
the unavailability of data of the only PLC representing the ETF Sector. The number of samples
chosen from each sector is given in Table 3.1 below.
Table 3.1
Number of Samples per Sector
N
Financials Sector 18
Industrial Sector 39
Holding Firms Sector 24
Property Sector 23
Services Sector 31
Mining and Oil Sector 15
ETF Sector 0
Total 150
The random sampling tool in Microsoft Excelis used to arrive at the list of PLCs selected
as samples in this study. This list can be found on Appendix C.
20
Research Instrumentation
Before testing their correlation, both compliance with PSE-CG guidebook and RoE of each
company need to be measured.
In measuring compliance with the guidebook, the PSE-CG survey is used. The survey lists
the guidelines presented in the guidebook, as well as more specific CG measures under each
guideline. Every year, companies are required to supply a binary response to this survey, that is,
a yes or a no, reflecting their compliance with a total of 75 CG measures provided. Furthermore,
this survey is duly signed by an independent director and a President/CEO of the company,
contributing to its reliability. This survey, as well as a scoring guide, can be found on Appendix
D. The percentage of "Yes" answers is the quantitative value assigned to compliance with the
guidebook. A study by Black, Jang, and Kim (2003) utilizes a similar method. With Korean public
companies as population, the authors looked into the effect to firm value of the number of
observant of CG measures studied.
Meanwhile, each company’s RoE is simply obtained from their financial statements. As
previously mentioned, RoE is computed by dividing net income over shareholders equity. For this
study, the amounts of net income considered in computing RoE are the companies’ audited net
income after tax and equity. For companies with a parent-subsidiary relationship, amounts
considered are those appearing in their separate financial statements, as it is a better reflection
of their own separate operations. For companies with fiscal years that do not end with December
31, the RoE considered is their RoE for the period ending at their respective fiscal year-ends. For
instance, the 2012 RoE of a company with a fiscal year that begins on April 1, 2012 and ends on
April 1, 2013 is their RoE during that period. The researchers did not convert these amounts to
the RoE that would have been reported had such companies elected to align their accounting
21
period with the regular calendar year, given that the difference would be immaterial. It would be
observed that the RoE’s of companies barely change across successive accounting periods, as
shown in Table 4.2 of Chapter 4. Thus, the costs of converting these amounts would outweigh
the benefits. Another reason for this treatment is to have a consistent data gathering procedure
among all companies studied, where RoE is taken from the Annual Reports submitted to the PSE.
Data Gathering Procedure
The researchers sent an e-mail to Ms. Martha H. Vinzons from PSE's Public and Investors
department to ask for the official list of PLCs as of December 31, 2013. Upon payment of data
fee for a total of Php240, a list of these PLCs grouped into sectors, as well as a formal certification,
was given to the researchers.Using Microsoft Excel 2007, a sample size of 151 PLCs was
selected from the total population of 257 PLCs based on the recommendations of the Philippine
Social Survey Council.
Data regarding each company’s compliance with PSE-CG guidebook and their respective
RoE was then gathered from the official PSE website (http://pse.com.ph) for the reporting year
2012, and from the newly launched PSE disclosure website (http://edge.pse.com.ph) called the
Electronic Disclosure Generation Technology (PSE-EDGE) for the reporting year 2013.
Specifically, the researchers downloaded each company’s accomplished PSE-CG survey, from
which their level of compliance with the PSE-CG guidebook will be known, and their Annual
Reports, from which their RoE will be taken.
22
The researchers were able to obtain data for all the PLCs that are part of the list of samples
except one – the First Metro Philippine Equity Exchange Traded Fund Inc., the only company
representing the ETF sector. This led to the reduction of the sample size from 151 to 150.
The researchers proceeded to counting the Yes answers of each company to the CG
measures listed in the PSE-CG survey. Partial compliance was not counted because the PSE-
CG guidebook requires full compliance with the guidelines.The count was verified by a member
of the group who was not assigned to do the first count. The percentage of Yes answers over a
total of 75 CG measures listed was then obtained.
Each company’s RoE is then obtained from their Annual Reports. Negative RoE was
replaced by zero, given that theoretically, “there is no such thing as negative RoE” according to
an accounting expert, Mr. Luis Chua (personal communication, January 23, 2015). This treatment
is also supported by Hoque’s study in 2006, which demonstrated that an inclusion of negative
RoE risks the whole credibility of it as a measure of performance. For this reason, recent studies
based on market performance have also excluded negative RoE and replaced them with zero. As
in the case with the PSE-CG survey, the RoE appearing in each company’s Annual Report is
recomputed by the researchers.
A list of the percentage of Yes answers to the PSE-CG survey and the RoE of each
company was submitted to the group’s statistician to test for correlation. Initially, the data resulted
to a small negative correlation for the reporting year 2012 and a small positive correlation for the
reporting year 2013. The result for the reporting year 2012 is inconsistent with the review of related
literature, prompting the statistician to advise the researchers to check the accuracy of the data
gathered. Upon checking, the researchers learned that the reason for the inconsistency was the
submission of the wrong file, where some of the companies’ data have not been encoded yet.
23
After submitting the correct file, both reporting years resulted to a small positive correlation
between the two variables studied, which is consistent with the review of related literature.
Finally, interviews were made to support the results and analyses presented in this study.
First, the researchers sent interview questionnaires to some PLCs through e-mail.
Representatives from two companies replied – the Philippine Long Distance Telephone (PLDT)
Company and the Aboitiz Equity Ventures, Inc. (AEV). Also conducted was an interview with Mr.
Hilario Tan, who has over 25 years of experience working in the areas of compliance and CG.
Lastly, the researchers sent an e-mail to the CG department of the PSE to obtain their opinion
regarding the verbal interpretation of the mean of the percentage of compliance with the PSE-CG
guidebook. Transcripts of such interviews are found on Appendix E.
Statistical Treatment of Data
Answering research question number 1 requires assigning a value to each company’s
compliance with the PSE-CG guidebook. To do this, the total number of Yes answers to the CG
measures listed in the PSE-CG survey is first obtained using simple addition. The percentage of
Yes answers over the maximum possible number of Yes answers is then computed. Percentage
allows the expression of ratios in terms of whole numbers(Bringhurst, 1997). The following
formula is used:
Formula for Percentage (Bringhurst, 1997)
24
The weighted mean of each company’s compliance percentage, as well as the weighted
mean of each company’s RoE for research question number 2, is then computed. Weighted mean
is a measure of central tendency; it represents the average of a given data (MacMillan, Preston,
Wolfe, & Yu, 2007). Used is the following formula:
Formula for Weighted Mean (MacMillan, Preston, Wolfe, & Yu, 2007)
The standard deviation statistic is also instrumental in answering both research
questions 1 and 2. Used as a measure of the dispersion or variation in a distribution, the standard
deviation statistic is equal to the square root of the arithmetic mean of the squares of the
deviations from the arithmetic mean (MacMillan, Preston, Wolfe, & Yu, 2007). In this study, it is
used to determine the representative value of each company’s results. Its formula is found below:
Where
Formula for Standard Deviation Statistic (MacMillan, Preston, Wolfe, & Yu, 2007)
25
Research question number 2 also requires the computation of each company’s RoE.
Return on equity is the ratio of net income to total shareholders equity, reflecting asset
management, debt management, and profitability of the entity (Petty et al., 2012). It is computed
as follows:
Formula for Return on Equity (Petty et al., 2012)
To answer research question number 3, each company's PSE-CG survey percentage and
their RoE are tested for correlation using the formula for Pearson Correlation. This is in line with
the method used in Ponnu's (2008) study about the relationship between CG and RoE of PLCs
in Malaysia. Pearson's correlation coefficient provides a global description of dependence
between random variables X and Y(Kreinovich, Ngyuyen, & Wu, 2013). This formula is illustrated
below:
Formula for Pearson Correlation (Lane, 2010)
26
Chapter 4: Presentation, Analysis and Interpretation of Data
This chapter presents the results of the study about the relationship of CG and RoE of the
PLCs in the Philippines for 2012 and 2013. The tables of the data gathered used for interpretation
and analysis are presented in the sequence based on the statement of the problems in Chapter
1.
Table 4.1
Compliance with the PSE-CG Guidebook of Selected PLCs in the Philippines
CG 2012 CG 2013
M 0.91 0.91
SD 0.09 0.08
VI High High
As seen in Table 4.1, the overall percentage of compliance of selected PLCs with the
PSE-CG guidebook is high for both reporting years 2012 (M = 0.91, SD = 0.09) and 2013 (M =
0.91, SD = 0.08). The verbal interpretation shown is according to the CG office of the PSE, as
shown in their e-mail response found on Appendix E. This means that most Philippine PLCs
comply with most of the guidelines presented in the PSE-CG guidebook. This positive result can
be attributed to the various ways the PSE incentivizes compliance with the guidebook. Though
penalties are not imposed for non-compliance, PLCs are required to explain the reason for such
failure ("CG guidelines for companies listed on the Philippine Stock Exchange", n.d.).In addition,
the PSE Bell Awards is held to recognize PLCs that show excellence in CG. One of the primary
criteria used by the panel of judges in determining the list of awardees is their compliance with
the PSE-CG guidebook (de Barras, 2014).
Furthermore, the researchers looked into the CG measures with the lowest level of
compliance, as seen in Table 4.1.1. Given their importance, these areas need special attention
27
to further increase the overall level of compliance. The researchers also examined the possible
reasons for non-compliance, so as to give meaningful information to anyone who might be
working on improving compliance with such measures.
Table 4.1.1
Least Complied PSE-CG Guidebook Measures for the Reporting Years 2012 and 2013
Frequency
PSE-CG Guidebook Measures 2012 2013
2.3 Have at least thirty percent (30%) of its directors as independent
directors. 58 56
2.6 Have its Chairman and CEO positions held separately by individuals
who are not related to each other. 84 75
4.4 Have a unit at the management level, headed by a Risk
Management Officer (RMO). 79 86
With n = 150, only 58 (38.67%) and 56 (37.33%) PLCs complied with PSE-CG measure
no. 2.3, to have at least thirty percent (30%) of its directors as independent directors, for reporting
years 2012 and 2013, respectively. This makes it the CG measure with the lowest level of
compliance in the survey.
Independent director is defined by the PSE as “a person who, apart from his fees and
shareholdings, is independent of management and free from any business or other relationship
which could, or could reasonably be perceived to, materially interfere with his exercise of
independent judgment in carrying out his responsibilities as a director” (Bautista, 2002). Their
independence is further assured by qualifications such as not being, and not being a relative of,
a major stockholder of the company, not having been employed in any executive capacity by the
same PLC within the last five years, etc. According to Stein and Plaza (2011), independent
directors are important,being objective actors that guarantee the protection of shareholder
interests, especially of those belonging to the minority (Jensen & Meckling, 1976).
28
A common reason given by companies with less than 30% independent directors such as
DMCI Holdings, Inc. (DMC), Petron Corporation (PCOR) and Universal Robina Corporation
(URC) is that they comply with Securities and Exchange Commission (SEC) memorandum
circular no. 6 series of 2009 to have at least two independent directors, or at least twenty percent
(20%) of its board size, whichever is lesser. This is also a regulation already incorporated in the
company’s by-laws. Meanwhile, some of the companies which did not comply with the guideline
are already considering an additional independent board of director, such as International
Container Terminal Services, Inc. (ICT).These explanations by non-complying PLCs are found on
their accomplished PSE-CG surveys, the relevant parts of which are found on Appendix F.1.
CG measure no. 2.6, to have its Chairman and CEO positions held separately by
individuals who are not related to each other, has been complied with by only 84 (56.00%) and
75 (50.00%) PLCs for the reporting years 2012 and 2013, respectively. The separation is
important to prevent the risks that could exist when one person has a monopoly of power over
the organization (DGA, 2004). This is explained by Jensen (1993) in his Presidential Address to
the American Finance Association. Given that the Chairman is in charge of hiring, firing,
evaluating, and compensating the CEO, separation is necessary to prevent him from prioritizing
his own interests over the interests of the company.
As seen in Appendix F.2, companies such as Aboitiz Equity Ventures, Inc. (AEV) and
Robinsons Land Corporation (RLC) report in their accomplished PSE-CG surveys that their
Chairman and CEO are held by separate related individuals. Family-owned corporations usually
have this kind of setting (H. Tan, personal communication, January 23, 2015). Other companies
such as Bloomberry Resorts Corporation (BLOOM) and First Gen Corporation (FGEN) have its
Chairman and CEO held by only one individual who is also the controlling shareholder.
29
Schmid and Zimmerman (2008) lists a variety of reasons for non-compliance with this CG
measure. For instance, information costs could arise from such separation. Specifically, critical
information which is beneficial for both CEO and Chairman may not always be transferred
between the two, leading to a less than optimum performance. Assigning the same person with
the Chairman and CEO positions can also reduce rivalry between the two, as well as incentivizing
good performance by the CEO through the possibility of being elected Chairman as well.
Lastly, only 79 (52.67%) and 86 (57.33%) PLCs complied with CG measure no. 4.4, to
have a unit at the management level, headed by a Risk Management Officer (RMO), for reporting
years 2012 and 2013, respectively. The importance of this CG measure is affirmed by OECD
(2014), stating that one of the insufficiencies leading to financial crisis is the failure of risk
management – adjusting corporate strategy to respond to the new risks that arise. This is a task
RMOs are assigned to fulfill. However, companies do away with this CG measure due to the
widespread belief that the assurance of risk prevention by RMOs is low. Companies such as
Megaworld Corporation (MEG), Empire East Land Holdings, Inc. (ELI), and Puregold Price Club,
Inc. (PGOLD) have their risk management functions performed by the company’s internal audit
unit, while Basic Energy Corporation (BSC) already hired a part-time risk management consultant
for this function. Information is taken from each company’s accomplished PSE-CG surveys and
can be seen on Appendix F.3.
30
Table 4.2
Return on Equity of Selected Publicly Listed Companies in the Philippines
RoE 2012 RoE 2013
M 0.11 0.10
SD 0.11 0.10
As seen in Table 4.2, the RoE of selected PLCs is consistent for reporting years 2012 (M
= 0.11, SD = 0.11) and 2013 (M = 0.10, SD = 0.10). This insignificant change in RoE also means
that the quantitative factors affecting it barely changed throughout the two-year period. Based on
the DuPont analysis, these factors include Net Profit Margin, Asset Turnover, and Financial
Leverage.
Net Profit Margin measures the overall performance of a company and provides the net
earnings of a company after deducting all expenses, including interest and taxes (Herciu, Ogrean,
& Belascu, 2011). It also reflects the management’s strategy in pricing by showing how much net
earnings is generated from a single peso of an asset. Meanwhile, Asset Turnover measures how
much sales is generated from each peso of an asset (Nanavati, 2013). It reflects the productivity
of a company’s assets for the period, as well as the degree of required capital to generate a peso
of sales volume. Lastly, Financial Leverage pertains to the extent of debt in a company’s capital
structure. A high level of financial leverage means that the company is relying more on debt rather
than stocks in financing its operations (Nanavati, 2013). The higher the financial leverage, the
higher the cost of debt is.
31
In table 4.3.1, the factor correlation analysis reveals that CG has a small positive linear
correlation with RoE (r= .246, p < .01) in 2012. For 2013, CG also has a small positive linear
correlation with RoE (r= .281, p < .01), as shown in table 4.3.2. Both results are statistically
significant. This result concurs with several studies where CG positively correlates with financial
performance. These studies include the ones by Ponnu and Ramthandin (2008) in Malaysia,
Javed and Iqbal (2006) in Pakistan, and Yu (2011), all of which are already discussed in the
Chapter 2 of this thesis.
Interviews held by the researchers also affirm this positive result. Both representatives
from the Philippine Long Distance Telephone (PLDT) Company and Aboitiz Equity Ventures
(AEV) state that good CG brings about business advantages by building reputation. By being
known as a trustworthy company by suppliers and customers alike, the assurance of long-term
relationships is increased. This, in turn, brings more revenues for distribution to shareholders or
as investment for bigger business opportunities. Both companies were awarded in the 2013 PSE
Bell Awards for their outstanding CG (Miraflor, 2013).
Table 4.3.1
Correlation between PSE-CG guidebook and RoE in 2012
Return on Equity
Corporate Governance Pearson Correlation .246**
Sig. (2-tailed) .002
Note:**Correlation is significant at the 0.01 level (2-tailed)
Table 4.3.2
Correlation between compliance with PSE-CG guidebook and RoE in 2013
Return on Equity
Corporate Governance Pearson Correlation .281**
Sig. (2-tailed) .001
Note:**Correlation is significant at the 0.01 level (2-tailed)
32
Another advantage stated by PLDT is the effect of good CG to a company’s credit rating.
According to them, one of the primary considerations of credit rating agencies in determining
credit worthiness is the company’s CG. If these agencies release a good credit score, companies
would find capital borrowing easier. This means that they would have more money for profitable
investments, or would incur less costs due to borrowing. Naturally, these have a direct effect on
a company’s financial status.
Lastly, PLDT also believes good CG can lead to avoidance of conflicts that would interfere
with how business are run. When conflicts are avoided, management has more time dealing with
the concerns that bring profit to the company, instead of trying to resolve those conflicts.
Furthermore, it helps promote goal congruence by making sure that each member of the company
are working with each other, instead of against each other to protect their own interests.
Though statistically significant, the result of the study shows that the correlation is small.
The interviews conducted by the researchers provide insight on why that is so. In an interview
with PLDT, they say that while they believe good CG has an effect on RoE, the extent is limited.
This is true given that RoE is also affected by many other risks and factors, such as business
“strategy, execution, research and product development, risk management, etc.” This is echoed
by a representative from Aboitiz Equity Ventures (AEV), who says that RoE is not a primary
consideration for their implementation of CG measures, although they believe that good RoE may
be an unintended consequence of good CG.
Another reason can be inferred from an interview with Mr. Hilario Tan. A recurring
statement made in the interview is how weak the state of CG is in the Philippines. This is
consistent with what Morales writes in 2013 when he compared the state of CG in the Philippines
with its neighboring countries. While the results of the study show that the level of compliance of
PLCs with the PSE-CG guidebook is high, this is not reflective of the entire state of CG in the
33
Philippines, given that the former is only a small part of the latter. The researchers believe that
this is a possible reason for the small correlation. Specifically, the fact that significant CG
measures are not yet part of the PSE-CG guidebook may be the reason why RoE is not affected
as much as it could be.
Mr. Tan draws attention to a number of CG deficits of the Philippines, such as the lack of
sufficient laws to protect minority shareholders. For instance, most minority shareholders in the
board of directors are appointed by the majority. This is counterproductive to the goal of protecting
minority shareholders since according to him, the majority usually appoints shareholders “who will
look independent, when in fact they are not.” Furthermore, he also points to the lack of efforts to
assure that companies work towards the goal of minimization of related parties in the board of
directors, stating examples such as Ayala, Metrobank, and SM.
The researchers believe that the reason for this deficits mentioned by Mr. Tan is twofold.
The first is the absence of teeth in the implementation and enforcement of CG policies that could
immensely improve the state of CG in the Philippines. Positive reinforcement, such as the creation
of the PSE Bell Awards previously mentioned, is used to incentivize compliance with the PSE-CG
guidebook, but negative reinforcement, which could prove to be more effective, is not. According
to the PSE website, non-compliance with the PSE-CG guidebook will not result to penalties being
imposed to companies. The second reason could be the lack of initiative from companies.
According to Mr. Tan, most companies do not have CG departments, which can significantly
improve their CG.
34
Chapter 5: Summary, Conclusions and Recommendations
This chapter presents the summary of the research paper, the conclusions derived and
the recommendations generated from the results of this study. This study is about the relationship
of compliance with PSE-CG guidebook and RoE of selected PLCs in the Philippines for the
reporting years 2012 and 2013.
Summary of the Findings
Corporate Governance
The data from which results were summarized in this chapter were gathered by using the
PSE-CG survey. This resulted to a weighted mean of 0.91 with a standard deviation of 0.09 in
2012, and a weighted mean of 0.91 with a standard deviation of 0.08 in 2013. Translated to its
verbal interpretation, the results show a high percentage of compliance based on the opinion of
the CG department of the PSE.
The least complied CG measures include having at least thirty percent (30%) of its
directors as independent directors, having its Chairman and CEO positions held separately by
individuals who are not related to each other, and having a unit at the management level, headed
by a Risk Management Officer (RMO).
Return on Equity
RoE is computed by dividing the company’s net income with its shareholder’s equity,
which are found on the company’s Annual Reports. This resulted to a weighted mean of 0.11 with
a standard deviation of 0.10 for both reporting years 2012 and 2013.
35
Correlation between Compliance with the PSE-CG Guidebook and RoE
This study used Pearson product-moment correlation coefficient to measure the
relationship between compliance with the PSE-CG guidebook and RoE. The factor correlation
analysis shows that CG has a small positive linear correlation with RoE(r= .246, p < .01) that is
statistically significant. This implies that in effect, as compliance with PSE- CG guidebook
improves, the company’s RoE increases. The same is true for 2013 (r= .281, p < .01).
Conclusion
Based on the study and its results, the researchers find that there is a positive correlation
between compliance with PSE-CG guidebook and RoE, as confirmed by the results of the
Pearson product-moment correlation coefficient model. The review of related literature and the
interviews conducted by the researchers also concur with the said results.
Though statistically significant, the correlation between the two factors is small. With the
interviews conducted, the researchers find two main reasons for the small correlation. The first is
from PLDT, stating that a lot of factors affecting RoE water down the effects CG has on it. Another
reason is inferred from an interview with Mr. Hilario Tan, who speaks of the deficits in CG in the
Philippines. The researchers believe that the since policies that could significantly improve CG
are excluded from the PSE-CG guidebook, its effect on RoE is decreased.
Recommendations
In order to increase the positive linear correlation of compliance with PSE-CG guidebook
and RoE, the researchers urge regulatory bodies to improve the implementation and enforcement
of CG policies in the Philippines. According to the interviews and review of related literature made
36
in this study, the state of CG in the country is weak compared to its neighbors. The researchers
believe that improving the kinds of CG measures that are enforced would increase its effect on
RoE, as well as other financial performance measures. This could be done by considering the
introduction or increase in the penalties imposed for non-compliance instead of giving mere
recommendations to companies. Furthermore, the creation of government bodies and company
departments specializing in CG can significantly benefit the achievement of this goal.
For further study, the researchers recommend the use of other ways to measure CG that
are more encompassing of its elements. Specifically, the use of the data from the ASEAN
Corporate Governance Scorecard (ACGS) is encouraged. The scorecard is a benchmark set by
the ASEAN Capital Markets Forum in order to obtain comparative information regarding the CG
practice of six ASEAN member countries, namely, Indonesia, Malaysia, Philippines, Singapore,
Thailand and Vietnam (Asian Development Bank, 2014). This information would be released in
November 2015, which is also the reason why this study was unable to use such method.
37
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44
Appendix A: List of Publicly Listed Companies as of December 31, 2013
Code Company Market Capitalization
Financials Sector
Banks
ASIA Asiatrust Development Bank, Inc. 728,092,575.00
AUB Asia United Bank Corporation 22,033,098,516.00
BDO BDO Unibank, Inc. 245,648,047,500.80
BPI Bank of the Philippine Islands 302,290,274,705.00
CHIB China Banking Corporation 84,232,037,822.00
CSB Citystate Savings Bank, Inc. 1,162,784,668.04
EIBA Export and Industry Bank, Inc. 4,923,830,641.60
EIBB Export and Industry Bank, Inc.
EW East West Banking Corporation 27,420,353,523.00
MBT Metropolitan Bank & Trust Company 207,369,720,536.30
PBB Philippine Business Bank 7,536,168,130.00
PBC Philippine Bank of Communications 20,370,389,740.00
PNB Philippine National Bank 93,685,475,880.00
PSB Philippine Savings Bank 33,635,348,740.00
PTC Philippine Trust Company 82,000,000,000.00
RCB Rizal Commercial Banking Corporation 54,215,492,115.00
SECB Security Bank Corporation 69,687,172,969.60
UBP Union Bank of the Philippines 80,819,224,920.00
Other Financial Institutions
AGF AG Finance, Incorporated 811,654,406.20
BKD Bankard, Inc. 2,980,524,300.00
BLFI BDO Leasing and Finance, Inc. 4,324,950,624.00
COL COL Financial Group, Inc. 7,873,320,000.00
FAF First Abacus Financial Holdings Corporation 930,696,000.00
FFI Filipino Fund, Inc. 357,702,750.00
I I-Remit, Inc. 1,754,427,308.92
MAKE Maybank ATR KimEng Financial Corporation 19,359,285,200.76
MED Medco Holdings, Inc. 143,500,000.00
MFC Manulife Financial Corporation 1,428,805,776,675.00
NRCP National Reinsurance Corporation of the Philippines 2,888,103,616.00
PSE The Philippine Stock Exchange, Inc. 21,981,141,000.00
SLF Sun Life Financial Inc. 827,838,960,480.00
V Vantage Equities, Inc. 5,186,484,098.51
Industrial Sector
Electricity, Energy, Power & Water
45
ACR Alsons Consolidated Resources, Inc. 8,430,610,000.00
AP Aboitiz Power Corporation 250,192,546,438.00
EDC Energy Development Corporation 99,937,500,000.00
FGEN First Gen Corporation 43,932,713,666.42
FPH First Philippine Holdings Corporation 29,671,268,207.10
H2O Calapan Ventures, Inc. 1,057,289,720.00
MER Manila Electric Company 282,901,774,955.00
MWC Manila Water Company, Inc. 44,317,278,236.00
PCOR Petron Corporation 130,876,458,778.12
PNX Phoenix Petroleum Philippines, Inc. 6,429,497,544.00
SPC SPC Power Corporation 6,659,655,523.35
TA Trans-Asia Oil and Energy Development Corporation 6,809,407,859.80
VVT Vivant Corporation 11,298,961,945.92
Food, Beverage & Tobacco
ANI AgriNurture, Inc. 2,839,173,096.10
BMM Bogo-Medellin Milling Company, Inc. 318,000,000.00
CAT Central Azucarera de Tarlac, Inc. 353,738,527.52
DMPL Del Monte Pacific Limited 29,432,821,611.70
DNL D&L Industries, Inc. 22,500,002,668.50
EMP Emperador Inc. 160,500,000,000.00
FOOD Alliance Select Foods International, Inc. 1,069,426,237.00
GSMI Ginebra San Miguel, Inc. 6,456,565,106.00
JFC Jollibee Foods Corporation 182,162,492,113.50
LFM Liberty Flour Mills, Inc. 2,427,475,336.60
LTG LT Group, Inc. 167,082,244,446.16
PCKH Pancake House, Inc. 3,566,931,825.00
PF San Miguel Pure Foods Company, Inc. 39,666,768,848.00
PIP Pepsi-Cola Products Philippines, Inc. 16,621,975,255.50
RCI Roxas and Company, Inc. 5,764,503,285.00
RFM RFM Corporation 17,540,241,456.30
ROX Roxas Holdings, Inc. 4,829,722,373.16
SFI Swift Foods, Inc. 217,730,025.96
SMC San Miguel Corporation 148,561,500,625.00
URC Universal Robina Corporation 246,727,868,622.30
VITA Vitarich Corporation 1,644,033,761.59
VMC Victorias Milling Company, Inc. 4,365,201,394.20
Construction, Infrastructure & Allied Services
ABG Asiabest Group International Inc. 2,000,000,000.00
CA Concrete Aggregates Corporation 914,919,849.00
CAB Concrete Aggregates Corporation
CMT Southeast Asia Cement Holdings, Inc. 6,793,796,270.57
DAVIN Da Vinci Capital Holdings, Inc. 967,499,973.34
46
EEI EEI Corporation 9,896,488,181.75
FED Federal Resources Investment Group, Inc. 327,192,000.00
HLCM Holcim Philippines, Inc. 100,007,536,732.00
LRI Lafarge Republic, Inc. 51,249,453,525.60
MWIDE Megawide Construction Corporation 23,091,965,778.00
PHN Phinma Corporation 3,114,074,352.00
PNC Philippine National Construction Corporation 854,779,319.10
SRDC Supercity Realty Development Corporation 88,000,000.00
T TKC Steel Corporation 1,720,200,000.00
VUL Vulcan Industrial & Mining Corporation 804,000,000.00
Chemicals
CIP Chemical Industries of the Philippines 2,162,286,210.00
COAT Chemrez Technologies, Inc. 3,996,825,239.04
EURO Euro-Med Laboratories Philippines, Inc. 6,168,210,810.00
LMG LMG Chemicals Corporation 582,567,969.76
MAH Metro Alliance Holdings & Equities Corporation 231,428,571.36
MAHB Metro Alliance Holdings & Equities Corporation
MCP Melco Crown (Philippines) Resorts Corporation 60,551,829,144.00
MVC Mabuhay Vinyl Corporation 1,454,880,675.60
PPC Pryce Corporation 500,000,000.00
Electrical Components & Equipment
CHIPS Cirtek Holdings Philippines Corporation 4,063,155,983.00
CIC Concepcion Industrial Corporation 6,400,478,049.00
GREEN Greenergy Holdings Incorporated 1,902,481,421.50
IMI Integrated Micro-Electronics, Inc. 4,085,195,220.00
ION Ionics, Inc. 312,649,872.08
PMPC Panasonic Manufacturing Philippines Corporation 2,743,439,949.80
Other Industrials
FYN Filsyn Corporation 783,735,491.00
FYNB Filsyn Corporation
PCP Picop Resources, Inc. 867,608,465.08
SPH Splash Corporation 1,201,173,857.10
STN Steniel Manufacturing Corporation 260,000,000.00
Holding Firms Sector
AAA Asia Amalgamated Holdings Corporation 1,599,999,962.00
ABA AbaCore Capital Holdings, Inc 1,592,967,014.50
AC Ayala Corporation 310,501,407,706.00
AEV Aboitiz Equity Ventures, Inc. 301,218,107,835.55
AGI Alliance Global Group, Inc. 264,961,561,858.20
ANS A. Soriano Corporation 16,725,000,000.00
APO Anglo Philippine Holdings Corporation 2,248,449,648.74
ATN ATN Holdings, Inc. 570,700,000.00
47
ATNB ATN Holdings, Inc.
BH BHI Holdings, Inc. 274,992,850.00
COSCO Cosco Capital, Inc. 65,092,266,727.56
DMC DMCI Holdings, Inc. 148,707,664,000.00
FC Fil-Estate Corporation 999,850,000.00
FDC Filinvest Development Corporation 40,996,885,542.80
FJP F & J Prince Holdings Corporation 1,687,545,991.55
FJPB F & J Prince Holdings Corporation
FPI Forum Pacific, Inc. 399,050,684.38
GTCAP GT Capital Holdings, Inc. 134,559,600,000.00
HI House of Investments, Inc. 3,806,241,958.26
JGS JG Summit Holdings, Inc. 270,512,738,377.35
JOH Jolliville Holdings Corporation 1,632,700,000.00
KPH Keppel Philippines Holdings, Inc. 297,122,495.50
KPHB Keppel Philippines Holdings, Inc.
LIHC Lodestar Investment Holdings Corporation 466,200,000.00
LPZ Lopez Holdings Corporation 18,353,276,784.00
MARC Marcventures Holdings, Inc. 5,373,007,867.05
MHC Mabuhay Holdings Corporation 708,000,000.00
MIC MineralesIndustrias Corporation 3,553,500,000.00
MJIC MJC Investments Corporation 8,126,996,016.75
MPI Metro Pacific Investments Corporation 112,428,426,608.64
PA Pacifica, Inc. 1,320,000,000.00
POPI Prime Orion Philippines, Inc. 946,859,753.20
PRIM Prime Media Holdings, Inc. 576,845,211.13
REG Republic Glass Holdings Corporation 1,773,370,643.20
SGI Solid Group, Inc. 2,149,419,560.00
SGP Synergy Grid & Development Phils., Inc. 19,291,740,000.00
SINO Sinophil Corporation 2,140,373,700.00
SM SM Investments Corporation 566,149,582,548.00
SOC South China Resources, Inc. 983,093,419.12
SPM Seafront Resources Corporation 244,500,000.00
UNI Unioil Resources & Holdings Company, Inc. 255,919,156.30
WIN Wellex Industries, Inc. 638,026,993.50
ZHI Zeus Holdings, Inc. 807,428,218.07
Property Sector
ALCO Arthaland Corporation 1,026,392,373.41
ALHI Anchor Land Holdings, Inc. 14,664,014,100.00
ALI Ayala Land, Inc. 350,788,843,622.25
ALPHA Alphaland Corporation 45,639,414,073.00
ARA Araneta Properties, Inc. 2,279,220,702.20
BEL Belle Corporation 51,952,163,371.08
BRN A Brown Company, Inc. 1,732,865,522.00
48
CDC Cityland Development Corporation 3,537,922,328.72
CEI Crown Equities, Inc. 1,060,799,996.88
CHI Cebu Holdings, Inc. 11,002,021,859.79
CPG Century Properties Group Inc. 12,784,578,875.64
CPV Cebu Property Venture & Development Corporation 4,776,978,000.00
CPVB Cebu Property Venture & Development Corporation
CYBR Cyber Bay Corporation 3,539,577,003.56
ELI Empire East Land Holdings, Inc. 13,502,103,233.64
EVER Ever-Gotesco Resources & Holdings, Inc. 1,050,000,000.00
FLI Filinvest Land, Inc. 34,192,160,903.46
GERI Global-Estate Resorts, Inc. 14,831,100,000.00
GO Gotesco Land, Inc. 180,800,944.93
GOB Gotesco Land, Inc.
HOUSE 8990 Holdings, Inc. 32,544,074,643.30
IRC IRC Properties, Inc. 1,349,850,101.40
KEP Keppel Philippines Properties, Inc. 822,720,920.00
LAND City & Land Developers, Inc. 1,654,950,419.90
MC Marsteel Consolidated, Inc. 336,050,400.00
MCB Marsteel Consolidated, Inc.
MEG Megaworld Corporation 103,565,010,203.28
MRC MRC Allied, Inc. 604,398,787.23
PHES Philippine Estates Corporation 527,625,687.95
PMT Primetown Property Group, Inc. 320,354,880.00
PRMX Primex Corporation 796,466,665.80
RLC Robinsons Land Corporation 81,712,860,472.60
RLT Philippine Realty and Holdings Corporation 2,141,211,334.55
ROCK Rockwell Land Corporation 9,113,975,675.02
SHNG Shang Properties, Inc. 15,578,464,058.49
SLI Sta. Lucia Land, Inc. 6,261,941,000.00
SMPH SM Prime Holdings, Inc. 408,361,692,147.48
STR Starmalls, Inc. 30,502,051,781.10
SUN Suntrust Home Developers, Inc. 2,002,500,000.00
TFC Philippine Tobacco Flue-Curing and Redrying Corporation 805,000,000.00
UW Uniwide Holdings, Inc. 346,560,813.36
VLL Vista Land &Lifescapes, Inc. 44,401,451,192.80
Services Sector
Media
ABS ABS-CBN Corporation 27,821,401,183.40
GMA7 GMA Network, Inc. 27,560,585,400.00
MB Manila Bulletin Publishing Corporation 2,125,245,535.54
MBC Manila Broadcasting Company 1,328,853,259.80
Telecommunications
49
GLO Globe Telecom, Inc. 217,435,833,000.00
LIB Liberty Telecoms Holdings, Inc. 2,548,503,165.13
PTT Philippine Telegraph and Telephone Corporation 263,999,580.24
TEL Philippine Long Distance Telephone Company 576,004,696,150.00
Information Technology
DFNN DFNN, Inc. 825,000,000.00
IMP Imperial Resources, Inc. 3,159,000,000.00
IMPB Imperial Resources, Inc.
IS Island Information & Technology, Inc. 141,686,711.87
ISM ISM Communications Corporation 3,487,513,391.18
MG Millennium Global Holdings, Inc. 786,250,000.00
NXT Nextstage, Inc. 363,603,240.49
TBGI Transpacific Broadband Group International, Inc. 465,321,213.00
WEB Philweb Corporation 12,864,863,069.72
YEHEY Yehey! Corporation 328,040,000.00
Transportation Services
2GO 2GO Group, Inc. 4,158,431,880.00
ATI Asian Terminals, Inc. 22,000,000,000.00
CEB Cebu Air, Inc. 28,388,913,510.50
ICT International Container Terminal Services, Inc. 207,460,386,720.00
LSC Lorenzo Shipping Corporation 732,127,771.32
MAC MacroAsia Corporation 4,871,965,550.00
PAL PAL Holdings, Inc. 148,522,342,334.08
TUGS Harbor Star Shipping Services, Inc. 732,338,681.80
Hotel & Leisure
ACE Acesite (Philippines) Hotel Corporation 358,537,420.80
BHI Boulevard Holdings, Inc. 1,716,000,000.00
DWC Discovery World Corporation 1,552,480,000.00
GPH Grand Plaza Hotel Corporation 2,461,599,855.00
WPI Waterfront Philippines, Inc. 887,142,072.32
Education
CEU Centro Escolar University 4,029,523,808.00
FEU Far Eastern University, Inc. 15,159,358,512.00
IPO iPeople, Inc. 8,987,198,652.00
STI STI Education Systems Holdings, Inc. 6,339,076,431.36
Casinos & Gaming
BCOR Berjaya Philippines, Inc. 24,745,300,873.50
BLOOM Bloomberry Resorts Corporation 91,178,182,787.16
EG IP E-Game Ventures, Inc. 390,000,000.00
LOTO Pacific Online Systems Corporation 4,310,796,870.00
LR Leisure & Resorts World Corporation 7,319,100,323.20
MJC Manila Jockey Club, Inc. 1,944,887,143.80
50
PHA Premiere Horizon Alliance Corporation 547,077,600.00
PRC Philippine Racing Club, Inc. 5,410,597,629.00
RWM Travellers International Hotel Group, Inc. 164,153,225,014.00
Retail
CAL Calata Corporation 1,223,411,800.00
PGOLD Puregold Price Club, Inc. 104,846,802,787.40
RRHI Robinsons Retail Holdings, Inc. 76,452,000,000.00
SEVN Philippine Seven Corporation 45,155,879,315.50
Other Services
APC APC Group, Inc. 4,652,606,478.14
ECP Easycall Communications Philippines, Inc. 393,000,000.00
NOW Now Corporation 533,497,731.75
PAX Paxys, Inc. 2,538,262,053.86
PHC Philcomsat Holdings Corporation 1,394,947,755.60
PORT Globalport 900, Inc. 17,248,388,000.00
Mining & Oil Sector
Mining
AB Atok-Big Wedge Company, Inc. 45,810,000,000.00
APX Apex Mining Company, Inc. 3,251,433,015.36
AR Abra Mining and Industrial Corporation 585,430,024.24
AT Atlas Consolidated Mining and Development Corporation 30,186,801,811.80
BC Benguet Corporation 1,184,199,267.28
BCB Benguet Corporation
COAL Coal Asia Holdings Incorporated 3,360,000,003.36
CPM Century Peak Metals Holdings Corporation 1,410,165,225.00
DIZ Dizon Copper Silver Mines, Inc. 403,189,103.70
GEO GEOGRACE Resources Philippines, Inc. 1,400,000,000.00
LC Lepanto Consolidated Mining Company 13,478,405,792.53
LCB Lepanto Consolidated Mining Company
MA Manila Mining Corporation 2,587,283,103.82
MAB Manila Mining Corporation
NI NiHAO Mineral Resources International, Inc. 1,396,890,000.00
NIKL Nickel Asia Corporation 38,291,222,044.00
OM Omico Corporation 383,418,510.65
ORE Oriental Peninsula Resources Group, Inc. 2,032,800,007.00
PX Philex Mining Corporation 39,101,008,858.56
SCC Semirara Mining Corporation 102,600,000,000.00
UPM United Paragon Mining Corporation 2,482,490,572.26
Oil
BSC Basic Energy Corporation 586,093,134.78
OPM Oriental Petroleum and Minerals Corporation 3,480,000,000.00
51
OPMB Oriental Petroleum and Minerals Corporation
OV The Philodrill Corporation 6,715,408,187.53
PERC PetroEnergy Resources Corporation 1,484,127,272.40
PXP Philex Petroleum Corporation 13,209,000,000.00
Preferred
ABC Allied Banking Corporation 50,000,000.00
SME
MFIN Makati Finance Corporation 699,465,270.00
RPL iRipple, Inc. 171,259,165.00
ETF Sector
ETF-Equity
FMETF First Metro Philippine Equity Exchange Traded Fund, Inc. 754,450,000.00
52
Appendix B: Certification of the Number of Publicly Listed Companies
53
Appendix C: List of Publicly Listed Companies Used as Samples
Number Code Company
1 2GO 2GO Group, Inc.
2 AB Atok-Big Wedge Company, Inc.
3 ABG Asiabest Group International Inc.
4 ABS ABS-CBN Corporation
5 ACR Alsons Consolidated Resources, Inc.
6 AEV Aboitiz Equity Ventures, Inc.
7 AGI Alliance Global Group, Inc.
8 ALCO Arthaland Corporation
9 ALHI Anchor Land Holdings, Inc.
10 ALI Ayala Land, Inc.
11 ANI AgriNurture, Inc.
12 AP Aboitiz Power Corporation
13 APC APC Group, Inc.
14 APO Anglo Philippine Holdings Corporation
15 BC Benguet Corporation
16 BDO BDO Unibank, Inc.
17 BH BHI Holdings, Inc.
18 BLOOM Bloomberry Resorts Corporation
19 BPI Bank of the Philippine Islands
20 BSC Basic Energy Corporation
21 CA Concrete Aggregates Corporation
22 CAL Calata Corporation
23 CDC Cityland Development Corporation
24 CEB Cebu Air, Inc.
25 CEI Crown Equities, Inc.
26 CHIB China Banking Corporation
27 CHIPS Cirtek Holdings Philippines Corporation
28 CIP Chemical Industries of the Philippines
29 COL COL Financial Group, Inc.
30 COSCO Cosco Capital, Inc.
31 CPG Century Properties Group Inc.
32 CPV Cebu Property Venture & Development Corporation
33 CSB Citystate Savings Bank, Inc.
34 DAVIN Da Vinci Capital Holdings, Inc.
35 DFNN DFNN, Inc.
36 DIZ Dizon Copper Silver Mines, Inc.
54
37 DMC DMCI Holdings, Inc.
38 ECP Easycall Communications Philippines, Inc.
39 EDC Energy Development Corporation
40 EEI EEI Corporation
41 EG IP E-Game Ventures, Inc.
42 ELI Empire East Land Holdings, Inc.
43 EMP Emperador Inc.
44 EURO Euro-Med Laboratories Philippines, Inc.
45 EVER Ever-Gotesco Resources & Holdings, Inc.
46 FDC Filinvest Development Corporation
47 FED Federal Resources Investment Group, Inc.
48 FFI Filipino Fund, Inc.
49 FGEN First Gen Corporation
50 FLI Filinvest Land, Inc.
51 FPH First Philippine Holdings Corporation
52 FPI Forum Pacific, Inc.
53 GEO GEOGRACE Resources Philippines, Inc.
54 GERI Global-Estate Resorts, Inc.
55 GLO Globe Telecom, Inc.
56 GMA7 GMA Network, Inc.
57 GSMI Ginebra San Miguel, Inc.
58 GTCAP GT Capital Holdings, Inc.
59 HI House of Investments, Inc.
60 HLCM Holcim Philippines, Inc.
61 HOUSE 8990 Holdings, Inc.
62 I I-Remit, Inc.
63 ICT International Container Terminal Services, Inc.
64 IPO iPeople, Inc.
65 IRC IRC Properties, Inc.
66 IS Island Information & Technology, Inc.
67 ISM ISM Communications Corporation
68 JOH Jolliville Holdings Corporation
69 KEP Keppel Philippines Properties, Inc.
70 KPH Keppel Philippines Holdings, Inc.
71 LAND City & Land Developers, Inc.
72 LFM Liberty Flour Mills, Inc.
73 LIB Liberty Telecoms Holdings, Inc.
74 LIHC Lodestar Investment Holdings Corporation
75 LOTO Pacific Online Systems Corporation
76 LPZ Lopez Holdings Corporation
55
77 LR Leisure & Resorts World Corporation
78 LRI Lafarge Republic, Inc.
79 LSC Lorenzo Shipping Corporation
80 LTG LT Group, Inc.
81 MA Manila Mining Corporation
82 MAC MacroAsia Corporation
83 MARC Marcventures Holdings, Inc.
84 MB Manila Bulletin Publishing Corporation
85 MBC Manila Broadcasting Company
86 MBT Metropolitan Bank & Trust Company
87 MCP Melco Crown (Philippines) Resorts Corporation
88 MED Medco Holdings, Inc.
89 MEG Megaworld Corporation
90 MFIN Makati Finance Corporation
91 MHC Mabuhay Holdings Corporation
92 MIC MineralesIndustrias Corporation
93 MJC Manila Jockey Club, Inc.
94 MJIC MJC Investments Corporation
95 MPI Metro Pacific Investments Corporation
96 MVC Mabuhay Vinyl Corporation
97 MWC Manila Water Company, Inc.
98 MWIDE Megawide Construction Corporation
99 NI NiHAO Mineral Resources International, Inc.
100 NOW Now Corporation
101 NRCP National Reinsurance Corporation of the Philippines
102 OM Omico Corporation
103 OPM Oriental Petroleum and Minerals Corporation
104 ORE Oriental Peninsula Resources Group, Inc.
105 OV The Philodrill Corporation
106 PAX Paxys, Inc.
107 PBC Philippine Bank of Communications
108 PCOR Petron Corporation
109 PERC PetroEnergy Resources Corporation
110 PGOLD Puregold Price Club, Inc.
111 PHC Philcomsat Holdings Corporation
112 PHES Philippine Estates Corporation
113 PHN Phinma Corporation
114 PNB Philippine National Bank
115 PNX Phoenix Petroleum Philippines, Inc.
116 PPC Pryce Corporation
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117 PSB Philippine Savings Bank
118 PTC Philippine Trust Company
119 RCB Rizal Commercial Banking Corporation
120 REG Republic Glass Holdings Corporation
121 RFM RFM Corporation
122 RLC Robinsons Land Corporation
123 RLT Philippine Realty and Holdings Corporation
124 ROCK Rockwell Land Corporation
125 ROX Roxas Holdings, Inc.
126 SCC Semirara Mining Corporation
127 SECB Security Bank Corporation
128 SEVN Philippine Seven Corporation
129 SGI Solid Group, Inc.
130 SGP Synergy Grid & Development Phils., Inc.
131 SHNG Shang Properties, Inc.
132 SM SM Investments Corporation
133 SMC San Miguel Corporation
134 SPC SPC Power Corporation
135 SPH Splash Corporation
136 SPM Seafront Resources Corporation
137 SRDC Supercity Realty Development Corporation
138 STN Steniel Manufacturing Corporation
139 STR Starmalls, Inc.
140 TEL Philippine Long Distance Telephone Company
141 UBP Union Bank of the Philippines
142 UPM United Paragon Mining Corporation
143 URC Universal Robina Corporation
144 V Vantage Equities, Inc.
145 VITA Vitarich Corporation
146 VLL Vista Land &Lifescapes, Inc.
147 VUL Vulcan Industrial & Mining Corporation
148 VVT Vivant Corporation
149 WEB Philweb Corporation
150 YEHEY Yehey! Corporation
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Appendix D: Compliance Report on Corporate Governance (PSE-CG Survey)
Appendix D.1: Template of the PSE-CG Survey
58
Appendix D.1: Scoring Guide for the PSE-CG Survey
Maximum
Score
Percentage
Guideline 1: Develops and executes a sound business strategy
4 5
Guideline 2: Establishes a well-structured and functioning board
10 13
Guideline 3: Maintains a robust internal audit and control system
5 7
Guideline 4: Recognizes and manages its enterprise risks 6 8
Guideline 5: Ensures the integrity of financial reports as well as its external auditing function
8 11
Guideline 6: Respects and protects the rights of its shareholders particularly those that belong to the minority or non-controlling group
13 17
Guideline 7: Adopts and implements an internationally-accepted disclosure and transparency regime
9 12
Guideline 8: Respects and protects the rights and interests of employees, community, environment and other stakeholders
6 8
Guideline 9: Does not engage in abusive related-party transactions and insider trading
7 9
Guideline 10: Develops and nurtures a culture of ethics, compliance and enforcement
7 9
Total 75 100
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Appendix E: Interviews
Appendix E.1: Copy of the E-mail Sent to Publicly Listed Companies
Good day!
We are 5th year students from University of Santo Tomas – Alfredo M. Velayo College
of Accountancy conducting a thesis entitled "The Relationship of Compliance with the
Philippine Stock Exchange Corporate Governance Guidebook and Return on Equity of
Selected Publicly Listed Companies in the Philippines for the Reporting Years 2012 and
2013".Your company is a part of our sample size, and in line with this, we would like to ask you a
few questions regarding our topic.
1. Based on your experience, what is the rationale behind the company's application
of corporate governance (CG) aside from compliance with regulatory requirements?
2. What are the factors considered in selecting CG measures and implementation?
3. Among these factors, which is of most priority?
4. Is Return on Equity (RoE) a factor?
Your response will be highly appreciated, as it will be instrumental for the completion of
our study, a necessary requirement for our graduation this May 2015. We hope you can reply by
March 31, 2015 to give us ample time to include the interpretation of your answers in our research.
Thank you, and have a nice day.
Many thanks,
Dyan Merz Tolentino
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Appendix E.2: Transcript of E-mail Interview with the Philippine Long Distance Telephone (PLDT)
Company
Based on your experience, what is the rationale behind the company's application of
corporate governance (CG) aside from compliance with regulatory requirements?
CG, when conducted and observed soundly, brings about business advantages that
enhance a company’s bottom line. First, a recognized and credible reputation for sound CG has
been found to have a positive correlation to share price. This means that share price rises as a
company’s reputation for CG improves. Second, good CG also has an impact on a Company’s
credit rating since credit rating agencies also look at CG measures that have been implemented
in order to determine a company’s credit worthiness. What this means is that a company’s access
to capital through borrowing is made easier.
In addition, underpinning typical CG measures are the values of integrity, transparency,
accountability and fairness. When observed, these values promote efficient and honest use of
resources, whether financial, human, information or otherwise, which in turn leads to appreciable
monetary gains for the company. It is expected that sound CG encourages the avoidance of
conflicts of interest at all levels of the company which leads to responsible and effective
performance of duties and functions of personnel. It has also been observed that companies that
practice sound CG gain the trust of its suppliers and vendors, are able to retain talent for longer
periods of time, and retain and grow their customer base, all of which lead to indubitable
advantages for the business of the company.
What are the factors considered in selecting CG measures and implementation?
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With regard to CG measures that are required by law or administrative issuance, there is
no discretion given to companies and the only option is to comply. For example, there are rules
imposed on the number and/or percentage of independent directors, establishment of board
committees, required disclosures, required policies (i.e. CG Manual), training, etc. In all of these,
companies must comply. There are however, certain areas of CG where some discretion is given
to companies to determine what are the best measures to adopt and implement. The usual criteria
used to determine how to observe and implement would be the following: ability to contribute to
the development of the right corporate culture, relevant and/or high impact risks, business
opportunities and the ability to create value for shareholders, meeting responsibilities to
stakeholders, applicability to the company’s context and present structures, etc.
Among these factors, which is of most priority?
It would be difficult to identify a particular factor. All of the factors cited above should be
considered in the light of the company’s vision, its objectives as well as its current situation and
plans for continued and sustained growth.
Is Return on Equity (RoE) a factor?
If by ROE one refers to “net income returned as a percentage of shareholders equity”,
then the answer would be “yes“ but only to a certain extent. This is because shareholders are an
important stakeholder group and should be given every opportunity to make a fair return from
their investment. However, it would be difficult to trace which portion of the ROE is due to sound
CG practices. ROE is influenced also by many other factors and risks. A company’s CG practices,
in the end, serve to enhance, but not determine ROE. Stated otherwise, a company should attend
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to equally important aspects of the business in terms of strategy, execution, research and product
development, risk management, etc.
Appendix E.3: Transcript of E-mail Interview with the Aboitiz Equity Ventures, Inc. (AEV)
Based on your experience, what is the rationale behind the company's application of
corporate governance (CG) aside from compliance with regulatory requirements?
Aboitiz Equity Ventures (AEV) adopts corporate governance principles because it firmly
believes that good governance equates to good business, not just in terms of profit but more
importantly on the company's resulting relationships with its shareholders, customers, and other
stakeholders. AEV looks at corporate governance as an essential component of sound strategic
business management, and hence adopts a long term view in adopting CG practices. This is in
keeping with AEV's mission "To create long-term value for all its stakeholders".
From these relationships, AEV builds good reputation and trust which are paramount in
the way AEV does its business. These core values have been passed on from generation to
generation of the Aboitiz family and Aboitiz employees which started with Don Ramon Aboitiz, the
patriarch of the Aboitiz family.
What are the factors considered in selecting CG measures and implementation?
The following factors come into play (in no particular order) in adopting CG practices:
1. Company core values (Integrity, Teamwork, Responsibility, and Innovation)
2. CG best practices, whether local or foreign. AEV actively benchmarks its practices
with the CG practices of comparable local and foreign companies, and it also
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participates in the ASEAN CG Scorecard assessment to benchmark its practices
with ASEAN's best practices.
3. Regulatory requirements
As with other companies, AEV follows the principle of "tone at the top", meaning that the
AEV Board of Directors, upon their appreciation of the necessity for the company to apply a
particular CG practice, gives its mandate for its adoption. To make this adoption process effective,
the Board is constantly updated of evolving corporate governance practices, both local and
abroad, through the Board Corporate Governance Committee.
Among these factors, which is of most priority?
Although it's difficult to pinpoint particular factors which contribute the most in AEV's
adoption of CG practices, as it is more likely a combination of the different factors given above,
we would have to say that AEV's core values are the prime consideration. Otherwise stated, CG
principles which are aligned to the company's core values have a good chance of being adopted.
AEV does not adopt CG principles just for bragging rights, rather the adoption must make
business sense for the company.
Is Return on Equity (RoE) a factor?
ROE is not a factor we look at when adopting or improving AEV's CG practices, although
good ROE may be a necessary consequence of the company's adoption of CG principles.
Appendix E.4: Transcript of Oral Interview with Mr. Hilario Tan
Mr. Hilario Tan is a Senior Financial Management professional with over 25 years of
international experience in corporate financial operations management, compliance and
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corporate governance, finance and accounting, capital management, and setting up management
reporting systems. He has been the Chief Financial Officer of Abzu Gold Ltd since December
2014, and has been one of its Directors since February 16, 2015. He has worked in various
industries such as Fast Moving Consumer Goods (FMCG), Chemicals Manufacturing, Financial
Services, and Academe. Mr. Tan is an Atlantic Gulf and Pacific Co. Scholarship Awardee from
1991 to 1993; Master Degree holder in Business Management from Asian Institute Management;
third-place in October 1996 CPA Licensure examination; and Magna cum Laude in Bachelor of
Science in Commerce, Major in Accounting from Chang Kai Shek College from 1982 to 1986. All
information are taken from Mr. Tan’s LinkedIn and Bloomberg profiles.
Why can we not use the instruments used by studies conducted abroad to measure CG in
our study of Philippine companies?
Iba ‘yung kanilang regulatory environment. Mag-iiba ‘yung dynamics ng corporate
governance, so you cannot just copy. For example, sa US, marami silang laws to protect minority
shareholders.May mga laws sila for example, yung Sarbanes-Oxley Law – wala tayo nun e. And
because of that, kung kinopya mo lang s’ya, it doesn’t follow na kung ano yung magiging result
niya, it will work here.
Is RoE one of the considerations in implementing CG policies?
Wala namang ganoong department sa mga companies e. Even for example, sa board of
directors, may audit committee. Sinong pauupuin mo sa audit committee? Eh karamihan ng part
ng BOD ay anak ng may-ari, wala namang muwang sa accountancy or internal audit or external
audit. So may uupo doong isa, siguro, retired CFO, pero siya lang magsasalita doon kasi siya
lang naman ang nakaka intindi ng accounting side. Ang alam ko na may effect on the corporate
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governance side pagdating sa talagang company, nang mabawasan ang irregularities, is a strong
internal audit team. Yon. Kasi ang internal audit team can focus on financial and operational audit.
Sa PNG, ang kanilang internal audit, ang focus lang nila doon, ay business or operational audit,
hindi financial audit. Kasi ang habol mo doon ay operational effectiveness and efficiency na eh.
Tapos tinitignan mo pa ay business sense, hindi accounting sense. Yun yung advantage doon.
Ang talagang ano diyan, kung titignan mo si SM, ang una niyang CFO, former audit partner
ng SGV na nag-aaudit sa SM, si Shaw. After nya, ang pumalit sakanya, galing ding SGV, tapos
ini-strengthen nila yung accounting side atsaka internal audit side. Si Metrobank din, strong ang
kanyang internal audit team. Ang internal audit team nya, lahat galling sa SGV yun – former
auditor nila. Yung mga malalaking companies ngayon na magaganda, ang iniistrengthen nila,
ayun yung internal audit. Kasi yun ang mas malaking impact. Pero ang hindi pa masyadong naii-
strenghten ng companies is yung management accounting side. Yung management reporting.
Yung parang ginagawan mo ng responsibility report, mga ganoon, mga variance
analysis.Maraming company weak pa doon. Kasi karamihan ng mga nagiging controller galing ng
audit firm e. Eh sa audit firm ba, ano bang gingagawa mo? Audit ka lang. Kapag lumabas ka,
financial reporting, which is, level na pang-external, not internal. So ang problema usually ng
galing audit, paglabas nya, de kahon siya. Alam niya IFRS. Pero ang importante sa labas,
business sense. Kapag ginawa mo itong activity na ito, or decision na ito, ano ang impact? Ano
ang impact sa cash flow, sa tax, ‘yung dalawa naman madalas, atsaka yung performance
measure.
Will CG compliance affect RoE?
Ang sagot ko ay hindi. Kasi ang RoE ay really affected by business model nung company.
May business na very profitable regardless, may business model na hindi. For example, kapag
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ikaw ay monopoly or oligopoly, monopoly ka like Meralco, or PLDT (but PLDT is now competing
with a substitute which now makes it an oligopoly). Kung nasa monopoly or oligopoly ka, talagang
malaki kita doon, especially kung nagkukunchaba kayo, for example nag-cacartell kayo, for sure
malaki kita nyo, ‘di ba. Kasi ilan lang kayong players. Pagdating naman dun sa competitive
industries, dog eat dog ‘yan talaga, matira matibay. Ang point diyan talaga, ang RoE mo pwede
tumaas, kahit wala kang corporate governance.Kasi eventually ang importante naman sa RoE is
how you make profit. You can increase your RoE even if you do things that are immoral or
unethical. For example, SM ka. Si SM, majority ng tao n’ya, 80-90% ng tao n’ya, nasa agency,
hindi nya tao e, ‘di ba. Anytime na gusto n’ya paalisin, lipat lang, palit lang. Now do you see na
‘yung kanyang ganoong practices are unethical? Di naman issue sakanila ‘yun, ang issue, legal
ba siya? For as long as makakalusot sila sa government, sa regulatory agency, that’s fine with
them. Pero kung titignan mo ‘yung morality nung ginagawa nila, hindi, ‘di ba. Even for example,
Banco de Oro, ganoon din. Lahat ng papasok na entry level, agency.
So ang sa akin, when you say corporate governance, whose interest are you trying to
protect? Kasi just because na pinoprotectahan ang interest ng minority, it doesn’t follow na
tataasang RoE eh. Kasi ang RoE is not a function of corporate governance; it is a function of
effective execution of strategy, and it is a function of your full understanding of your business
model, how to make profit in that business model.
Can you elaborate on the clause regarding the protection of minority shareholders?
Sinabi mo kasi corporate governance. Ano ba focus mo dun? Protection of minority
shareholders or what? Kasi if protection of minority shareholders, I don’t think sa Pilipinas, it
works. Kasi kung minority shareholder ka, sino nag-appoint sayo? Ang nag-a-appointng minority
shareholder, kung meron man, ay majority pa din e. And majority will not appoint minority
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shareholder who is independent. Mangyayari n’yan, they will just appoint somebody who will look
independent when in fact they are not. Kasi kapag ni-nominate kang majority tapos eventually,
kaya ka minority shareholder doon at nasa board ka, kasi ang tumulong sa’yo malagay doon ay
majority naman eh, hindi ‘yung minority, kasi ang minority, sabog (kalat). Kung titignan mo naman
sa Philippines, for example, ang mga publicly listed, ang naka float lang talaga sa publicly listed,
maliit na percent lang ‘yun. It will not even make you buy two seats at the board. So kung
maglagay man sila ng independent doon, tao yun ng majority.
Can you elaborate on the clause regarding the transparency and frequency of issuing an
audited financial statements?
Kung gaano ka-transparent. Sa Philippines naman kasi hindi ganoon ka-transparent eh.
Kapag sinab imong transparent, you mean may audited FS, right? Pero how it was treated sa
audit is another issue. Kung gusto mong sabihin na may audited FS, fine, may audited FS. But
the transparency kasi nung financial data, hindi mo ‘yan makikita sa audited FS eh. Nasa details
‘yun eh. Ang details, walang access doon ang creditor, walang access d’yan ang potential
investor. Kasi audited FS lang nakikita mo saka interim. But if you want to see the nitty gritty of
the business, wala ‘yun doon.Nasa management accounting report yun. For example, anong
segment ‘yung kumikita, anong product ang kumikita, hindi mo ‘yun makikita sa FS. Trabaho ‘yun
ng controller or management accountant. Tapos hindi ‘yun accessible sa general public, sa mga
investors. Unless umuupo ka sa mga board meeting, nakikita mo part of it. But even ‘yung nakikita
sa board meeting is high level eh. Hindi mo nakikita kung bakit ganyan ‘yung ano, for example
bakit ganyan ‘yung segment level information, or product level, hindi mo ‘yun makikita sa board
level ng mga information. ‘Yun ang problema doon. Madali kasing sabihin na transparent, pero
ang question is, ano ang transparent?
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Can you elaborate on the clause where related parties in the Board of Directors is not
allowed?
For example, sa Philippines, ano ang pinaka-progressive growing na companies? Kung
titignan mo family-owned eh. Ayala is still family-owned. SM is still family-owned. Metrobank is
still family-owned. Puro family-owned. Bakit? Kasi sa kanila, ang tingin nila sa kanilang business
is long-term. Multi-generation. Hindi katulad nung iba na kung publicly listed sya na hindi family-
owned, walang titingin d’yan sa long term. Meralco is still family-owned. Kapag tinignan mo lahat
‘yan, family-owned yan. Baka ang tignan mo pa RoE of publicly listed companies na family-
owned. Baka ‘yun ang mas maganda mong tignan.Kasi, sila, ego booster din nila ‘yun eh, parang
“oh eto ang legacy ko to the future generations of my family.” Kaya sa tingin ko doon ang may
correlation namataas. Siguro ang ipaliwanag mo sa ano, baka ang mas may impact pa sa RoE
yung ownership type ng publicly listed. Dapat i-segregate mo lahat ng family-owned sa not family-
owned. Kasi kung hindi family-owned yan, ang tendency diyan, may self-interest, tapos ang
interest na ‘yan is short term. Ang goal lang n’yan ay tumaas ang stocks kasi mayroon siyang
stock options, para pakinabangan na nya. Ang tignan mo diyan, is ‘yung controlling interest ng
company. Is it one family or is it diverse? Kasi kung one family yan, papansinin mo, mas maganda
‘yung growth nya. Kasi talagang kontrolado ‘yan sa loob, with all the structures.
Is it safe to assume that CG measures are done for compliance purposes only?
Yes. Kumbaga, minimum requirement sya to operate in that kind of business, on that kind
of environment.
69
Do investors check the companies’ compliance with the PSE-CG guidebook before
deciding to invest?
Sa akin kasi, kung yes or no yun, kung qualitative, you have to put weight on certain areas
eh. Kasi hindi lahat ng area equally weighted yan. Like kunwari, ako, tatanungin mo sa corporate
governance, sa akin, ang pinaka-importante is strong internal audit team reporting to the board.
Pero ‘yung board dapat matino.
Kapag nag no ka ba doon, is it good or bad? Hindi naman siya necessarily good or bad.
It doesn’t follow. Walang morality sa business. Karamihan ngayon sa mga companies amoral sila.
Ang mga amoral na owners, Chinese or Indian. Eh kapag tinignan mo Indian companies, Chinese
companies, ang bilis ng growth nila. Pero no morality involved. Kaya they could live with
corruption. Corrupt ang BIR, corrupt ang customs, they could live with that. So kung kailangang
maglagay, maglagay. I-budget. So ngayon kung nagmamalinis ka, ‘di ka yayaman, ‘di ka mag-
susucceed sa business. Ganoon din sa audit. Hindi ka mag-susucceed. Kasi kahit naman SGV
ka, may mga kliyente sa SGV, pikit mata pipirma ka eh. Yun ‘yung problema doon.
Appendix E.5 – Transcript of E-mail Interview with PSE’s CG Department
E-mail from the Researchers
Good day.
We're a group conducting a thesis entitled, "The Relationship of Compliance with the
Philippine Stock Exchange Corporate Governance Guidebook and Return on Equity of
Selected Publicly Listed Companies in the Philippines for the Reporting years 2012 and
2013."
We measured the Corporate Governance (CG) by getting the percentage of compliance
of 150 companies with the CG compliance survey conducted by the PSE. Results show that the
70
mean (or average) percentage of compliance of publicly listed companies ranges from 0.90 to
0.92 for 2012 and 2013. As someone from PSE, what do you think is the verbal interpretation of
this result (highly compliant, moderately compliant, or not compliant)? In line with this, we came
across the PSE bell awards. May we ask the criteria on how you recognize each company's CG
performance?
Your response will be highly appreciated.
Many thanks,
Dyan
E-mail Response of the PSE CG Department
Hello Ms. Dyan,
Thank you for your email and your call.
As you have clarified, the 90-92% is based on the per sub-guideline self-assessment
made by publicly listed companies. As discussed with you, the 90-92% average would
translate to high compliance based on their self-assessment. Please note, however, that
these answers are subjected to internal review for purposes of the Bell Awards. For the PSE Bell
Awards criteria and process, please refer to the PSE CG Guidelines
(http://www.pse.com.ph/stockMarket/pseCorporateGovernance.html?ref=guidelines) and the
PSE Bell Awards micro-site (http://www.pse.com.ph/stockMarket/pseCorporateGovernance.html
?ref=bellAwards).
Again, thank you for your email and call. Goodluck in your thesis!
71
Thank you,
Gerard
Joseph Gerard Agustine M. Razo | Governance, Risk, and Compliance Associate | Corporate
Governance Office | The Philippine Stock Exchange, Inc.
72
Appendix F: Some Reasons for Non-Compliance to the PSE-CG Guidebook Measures
Appendix F.1: PSE-CG Guidebook Measure Number 2.3
Bloomberry Resorts Corporation (BLOOM)
DMCI Holdings, Inc. (DMC)
First Gen Corporation (FGEN)
International Container Terminal Services, Inc. (ICT)
Petron Corporation (PCOR)
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SCC (Semirara Mining Corporation)
Universal Robina Corporation (URC)
Appendix F.2: PSE-CG Guidebook Measure Number 2.6
Aboitiz Equity Ventures, Inc. (AEV)
Bloomberry Resorts Corporation (BLOOM)
DMCI Holdings, Inc. (DMC)
74
First Gen Corporation (FGEN)
International Container Terminal Services, Inc. (ICT)
Megaworld Corporation (MEG)
Petron Corporation (PCOR)
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Robinsons Land Corporation (RLC)
SCC (Semirara Mining Corporation)
Universal Robina Corporation (URC)
Appendix F.3:PSE-CG Guidebook Measure Number 4.4
Basic Energy Corporation (BSC)
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DMCI Holdings, Inc. (DMC)
Empire East Land Holdings, Inc. (ELI)
Megaworld Corporation (MEG)
Puregold Price Club, Inc. (PGOLD)
77
About the Authors
RICKA ABIGAEL R. DUMELOD
Unit 906 Sunview Palace Condominium 1015 MH del Pilar St.
Ermita, Manila
09273659137 / [email protected]
EDUCATION
University of Santo Tomas 2010-2015
Bachelor of Science in Accountancy
UST High School 2006-2010
Secondary Education
MARK JAMES C. TAYSON
#8 Tongonan St. NPC Village, Tandang Sora. Quezon City 454-45-49 / 09176284186 / [email protected] EDUCATION University of Santo Tomas 2010-2015
Bachelor of Science in Accountancy
Saint Claire School 2006-2010
Secondary Education
MARC EXEQUIEL TEODORO 53 Luskot St. Brgy. Don Manuel, Quezon City 712-1457 / 09175496026 / [email protected]
EDUCATION
University of Santo Tomas 2010-2015
Bachelor of Science in Accountancy
Lourdes School of Quezon City 2006-2010
Secondary Education
78
DYAN MERZ S. TOLENTINO
358 M. Sta. Ana St., M. Sapa Sta. Maria Bulacan 09151296183 / 09154787728 / [email protected]
EDUCATION
University of Santo Tomas 2010-2015
Bachelor of Science in Accountancy
Holy Spirit Academy of Malolos 2006-2010
Secondary Education
RHONA CARLA M. TORRES
12A Geronimo Compd, Parklane St., GSIS Village,
Brgy Sangandaan, Project 8, Quezon City
(02) 4556864 / 09168588308 / [email protected]
EDUCATION University of Santo Tomas 2010- Present
Bachelor of Science in Accountancy
College of St. Catherine, Quezon City 2006- 2010
Secondary Education