The Global Corporate Governance Forum, in partnership with the Philippine Stock Exchange (PSE), Institute of Corporate Directors (ICD), and IFC Manila Office, convened a Business-Investor Dialogue in Manila on March 22, 2011.
The focus of the Dialogue was on the Maharlika Board, a special listing segment for companies that voluntarily commit to higher corporate governance standards, beyond those required by law. In exchange, companies that qualify will receive discounts on listing and maintenance fees paid to the PSE. It is part of the government’s program to promote the Philippines as a prime investment destination.
The proposed Maharlika Board, the first of its kind in Asia, draws inspiration from the highly successful Novo Mercado, which was launched in 2000 by BOVESPA, Brazil’s stock exchange. The Novo Mercado is credited with transforming Brazil’s previously laggard stock market into one of the most robust markets in the world. The Forum has been cooperating with the PSE to provide technical assistance in the design and launch of the project.
The event was attended by the Securities and Exchange Commission, local pension funds, and international investors, as well as senior business leaders of the largest publicly listed companies in the Philippines, industry associations, academia and underwriters.
The initial target for prospective listings will be mid-sized companies seeking an IPO with the recognition that the migration of existing listed companies would likely follow over time as the Maharlika Board becomes more established.
As with the Novo Mercado in Brazil, no listings on the Maharlika Board are expected at the launch in September 2011, but the objective would be to have obtained a firm commitment of at least 5 companies to list on the Maharlika Board.
The public sector pension funds indicated that as the number of companies listing on the Maharlika Board grows, this would likely become a key criteria for portfolio investment decisions. Maharlika Board would provide a clear signal from the Philippine market of its commitment to improved corporate governance in the business sector.
Forum’s Head Philip Armstrong was invited by ABS-CBN News Channel for a 7-minute live interview during their prime time Business Nightly segment. While the Philippines has laws that aim to address governance issues, Armstrong said foreign investors have raised concerns about the enforcement of these laws, particularly in areas related to conflict of interest, related party transactions, minority shareholder rights.
"Most investors want to focus on the fundamentals of the business, but corporate governance, in a sense, is a health check for a business. If corporate governance is in good shape, then the investors will then start looking at what really matters, which is the fundamentals of the business," he said. See the video interview.
The Maharlika Board project is supported by the Government of Japan.
The focus of the Dialogue was on the Maharlika Board, a special listing segment for companies that voluntarily commit to higher corporate governance standards, beyond those required by law. In exchange, companies that qualify will receive discounts on listing and maintenance fees paid to the PSE. It is part of the government’s program to promote the Philippines as a prime investment destination.
The proposed Maharlika Board, the first of its kind in Asia, draws inspiration from the highly successful Novo Mercado, which was launched in 2000 by BOVESPA, Brazil’s stock exchange. The Novo Mercado is credited with transforming Brazil’s previously laggard stock market into one of the most robust markets in the world. The Forum has been cooperating with the PSE to provide technical assistance in the design and launch of the project.
The event was attended by the Securities and Exchange Commission, local pension funds, and international investors, as well as senior business leaders of the largest publicly listed companies in the Philippines, industry associations, academia and underwriters.
The initial target for prospective listings will be mid-sized companies seeking an IPO with the recognition that the migration of existing listed companies would likely follow over time as the Maharlika Board becomes more established.
As with the Novo Mercado in Brazil, no listings on the Maharlika Board are expected at the launch in September 2011, but the objective would be to have obtained a firm commitment of at least 5 companies to list on the Maharlika Board.
The public sector pension funds indicated that as the number of companies listing on the Maharlika Board grows, this would likely become a key criteria for portfolio investment decisions. Maharlika Board would provide a clear signal from the Philippine market of its commitment to improved corporate governance in the business sector.
Forum’s Head Philip Armstrong was invited by ABS-CBN News Channel for a 7-minute live interview during their prime time Business Nightly segment. While the Philippines has laws that aim to address governance issues, Armstrong said foreign investors have raised concerns about the enforcement of these laws, particularly in areas related to conflict of interest, related party transactions, minority shareholder rights.
"Most investors want to focus on the fundamentals of the business, but corporate governance, in a sense, is a health check for a business. If corporate governance is in good shape, then the investors will then start looking at what really matters, which is the fundamentals of the business," he said. See the video interview.
The Maharlika Board project is supported by the Government of Japan.
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