SWS - Jay Sandoval's Presentation

8/3/2019 SWS - Jay Sandoval's Presentation

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THIRD ANNUAL ONLINE SURVEYON CORPORATE GOVERNANCE

PRACTICES OF THE 100LARGEST PUBLICLY LISTEDCOMPANIES IN THE PHILIPPINES

Implemented by the Asian Institute of Management (AIM)and Social Weather Stations (SWS)

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Third Annual Corporate Governance Online SurveyFebruary 20 May 20, 2011

THIRD ANNUAL CORPORATE GOVERNANCEONLINE SURVEY

Respondents: Independent Directors (as of year 2009) of the 100

largest publicly listed companies in the Philippines (by revenue)

Questionnaire: 31 test statements about the ethical andcorporate governance culture of the company + 11 demographicitems

Methodology: Online survey (with email invitation, remindersand confirmation of completed survey)

Survey Period: February 20 to May 20, 2011

Among email invitations sent to 172 individuals, 53 responded(31% response rate) from 48 out of 100 companies

Respondent may answer for one or more companies wherehe/she serves as Independent Director; total 65 completedquestionnaires

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PROFILE OF RESPONDENTS3RDAIM/SWS Corporate Governance Online Survey

87% male

81% with post college education

75% from age group 60+; average age 66.1 years

Average 5.5 years Independent Director of company

Company Sector: Banking/Finance (23%), Electricity, Energy,Water and Power (14%), Holding Firm (12%), Food, Beverageand Tobacco (12%); else in other sectors

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Management in the company is conscientious aboutcomplying with the law. (Q4)

In the company, members of management are generallyethical. (Q5)

The board of directors of the company has clearlycommunicated to management that unethical behavior willnot be tolerated. (Q2)

In the company, the majority shareholder does not divert theassets or resources of the company for his own personal use.(Q22)

The company balances its profit motive with considerations ofwhat it should do to contribute to the welfare of society. (Q20)

95%

94%

89%

88%

82%

3%

5%

11%

9%

14%

0% 20% 40% 60% 80% 100%

Strongly Agree Somewhat Agree

Undecided Strongly/Somewhat Disagree

OPINION ON STATEMENTS ABOUT ETHICS (1/2)3RDAIM/SWS Corporate Governance Online Survey


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Having a code of ethics/conduct in the company has beenhelpful in promoting ethical conduct among employees. (Q10)

In the company, it is rare, if ever, for management to chargepersonal expenses to the company. (Q12)

The company requires all its employees to undertake ethicstraining. (Q9)

In the company's view, being ethical would result in losingground to competitors. (Q11)

74%

9%

68%

34%

9%

8%

20%

42%

9%

5%

9%

72%

0% 20% 40% 60% 80% 100%



OPINION ON STATEMENTS ABOUT ETHICS (2/2)3RDAIM/SWS Corporate Governance Online Survey


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91%

83%

77%

75%

72%

65%

5%

14%

22%

18%

25%

32%

2%

0% 20% 40% 60% 80% 100%



If an employee reports unethical conduct, the matter will beinvestigated. (Q7)

The company has adequate controls in place for detecting

fraud or other misconduct by its employees. (Q3)

The companys external auditors can be expected to report to

the board's audit committee any significant irregularities theyencounter. (Q31)

Employees in the company have adequate channels availableto them for reporting misconduct or irregularities, withoutfear of retribution. (Q6)

Misconduct in the company is adequately penalized by thecompany, regardless of the perpetrators position. (Q8)

The company is on the watch for related party transactionsand examines them very closely to ensure they are fair to the

company. (Q13)

OPINION ON STATEMENTS ABOUT SYSTEMS AND CONTROL3RDAIM/SWS Corporate Governance Online Survey


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Members of the company's board of directors understand

and take seriously their fiduciary obligation to always act inthe best interest of the company. (Q16)

The company takes seriously its obligations to make promptpublic disclosures of information that could affect the priceof its shares. (Q23)

In the company, the board of directors seeks to protect theinterests of the company's minority shareholders. (Q21)

94%

91%

88%

88%

78%

5%

6%

11%

11%

17%

0% 20% 40% 60% 80% 100%



The outside directors in the companys board participateactively in the boards deliberations. (Q18)

In the company, the outside directors designated'independent' are truly independent. (Q19)

OPINION ON STATEMENTS ABOUT BOARD PRACTICES (1/2)3RDAIM/SWS Corporate Governance Online Survey


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The companys board of directors has a succession plan for

when the current CEO retires or is terminated. (Q17)

The companys board of directors is adequately informed of

what is going on in the company. (Q14)

The companys board of directors has a clear vision for the

company and has a strategy for realizing that vision. (Q15)75%

68%

42%

23%

31%

29% 14%

0% 20% 40% 60% 80% 100%



OPINION ON STATEMENTS ABOUT BOARD PRACTICES (2/2)3RDAIM/SWS Corporate Governance Online Survey


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The company is committed to implementing good corporategovernance practices. (Q1)

The directors and upper management of the company haveinternalized the values underlying good corporategovernance. (Q24)

The companys corporate governance practices go beyond

minimum compliance with legal requirements. (Q26)

The rank and file employees of the company have internalizedthe values underlying good corporate governance. (Q25)

98%

77%

68%

35%

20%

26%

37%

3%

12%

0% 20% 40% 60% 80% 100%



OPINION ON STATEMENTS ABOUT COMMITMENTTO CORPORATE GOVERNANCE

3RDAIM/SWS Corporate Governance Online Survey

O O O S S O C S O CO O


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The companys corporate governance practices have had a

positive effect on the companys corporate culture. (Q29)

The management of the company understands that goodcorporate governance practices can improve the companysfinancial performance. (Q27)


positive effect on the companys relations with the

communities in which it operates. (Q30)


positive effect on business operations and performance.(Q28)

78%

72%

72%

69%

15%

20%

25%

26%

0% 20% 40% 60% 80% 100%



OPINION ON STATEMENTS ABOUT EFFECTS OF CORPORATEGOVERNANCE PRACTICES

AIM/SWS Corporate Governance Online Survey


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Of 31 test statements, % who Strongly agree:

6 statements: 91-98%

6 statements : 82-89%




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OVERALL RESULTS (1/3)3RDAIM/SWS Corporate Governance Online Survey


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98% : The company is committed to implementing good corporategovernance practices. (Q1)

95% : The board of directors in the company has clearly communicated tomanagement that unethical behavior will not be tolerated. (Q2)

94% : Members of the company's board of directors understand and take

seriously their fiduciary obligation to always act in the best interest ofthe company. (Q16)

94% : Management in the company is conscientious about complying withthe law. (Q4)

91% : The company takes seriously its obligations to make prompt public

disclosures of information that could affect the price of its shares.(Q23)

91% : The companys external auditors can be expected to report to theboard's audit committee any significant irregularities they encounter.(Q31)

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Test statements with highest % Strongly agree:


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42% : The companys board of directors has a succession plan for when thecurrent CEO retires or is terminated. (Q17)

35% : The rank and file employees of the company have internalized the valuesunderlying good corporate governance. (Q25)

34% : The company requires all its employees to undertake ethics training.

(Q9)

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Test statements with lowest % Strongly agree:


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Third Annual Corporate Governance Online SurveyFebruary 20 May 20, 2011 14

www.sws.org.ph

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E-mail: [email protected]

Documents

SWS - Jay Sandoval's Presentation