Publicly-listed companies have yet to fully integrate all the good corporate governance into their practice but are slowly adopting rules, according to accounting group Price Waterhouse Cooper (PwC).
Alex Cabrera, PwC Philippines chairman, said there has been a “renewed focus” by companies towards sustainability and social responsibility based on the group’s study corporate filings under integrated annual corporate governance reports of companies submitted to the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE).
In a study covering filings of 246 companies in the PSE, PwC noted that around 51 percent of companies still do not meet the minimum requirement of at least three independent directors.
However, there are less companies that are unable to meet the requirements on the minimum number of independent director for board committees like audit, corporate governance, risk, and related party transactions (RPT), compared to the previous year.
Though Cabrera noted that for organizations that do not have a dedicated corporate governance or board risk oversight committee, the functions are performed by their respective audit committees.
Cabrera said risk management continues to be a challenge for most organizations.
About 96 percent of those surveyed meanwhile have and RPT policy, and 67 percent have a dedicated RPT committee.
Another 93 percent meanwhile disclose material RPTs.
While there is greater separation and independence between the board of directors and the management team, independence at the board level however has further decreased with 35 percent of companies surveyed have the role of chairman of the board and the chief executive officer are held by a single person.
Meanwhile, about 46 percent of these companies have yet to appoint a lead independent director, Cabrera said.
Cabrera also noted that the topic of sustainability and environmental, social and governance issues has become an even greater emerging priority among listed companies but implementation still continues to be a problem.