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Aebc 323 Module 1 Lesson 1 5
Aebc 323 Module 1 Lesson 1 5
Module 1 Lesson 1
Why Corporate Governance Matters?
Module 1 Lesson 2
Key Concepts and Principles of Effective Corporate Governance
Corporate Governance refers to the system of policies or rules, practices, and processes by which
an entity is directed and controlled. It provides framework for reaching company's objectives
which also involves balancing the interests of a company's stakeholders. It dictates corporate
behavior and shows entity's direction and business integrity.
Discovery
Good corporate governance enhances companies' strength in building trust with investors and the
community. It assist promoting financial viability by creating a long term investment
opportunity. Companies also demonstrate good corporate citizenship in the sense of
environmental awareness and ethical behavior. Corporate success and economic growth has been
ensured by corporate governance. It maintains investors' confidence which benefit the capital
efficiently.
Dream
Corporate governance benefits each stakeholders fairly. It ensures rights of the shareholders and
on how they can practice them. Since it controls and directs the business, corporate governance
will be one of the approaches that contains highest standards for business productivity. It will
primarily address stakeholders' concerns and is the way of raising capital through safe
investment. Corporate governance will be the key for higher market performance and the bible of
all people involved in the business. It results to good accountability and lesser risk and waste or
even corruption. It build and develops brands that will make the business perform in a wider
scope of market.
Design
Board of Directors conduct consecutive review and reading upon making of corporate
governance before implementation. Let this be a requirement that each decision makers of the
company including the owner and employee practice the content of the corporate governance.
Learn in every business transaction and involved people must look back to corporate governance
in times of conflict, uncertainties and being doubtful. Let the corporate governance controls the
business and all must be aware of its strengths in order to address business concerns properly and
effectively.
Destiny
Strong leadership is injected in running a business with good corporate governance. Management
skills must be practiced for it also affects value of decision making. Corporate governance is
organized, transparent, understandable, and fair. Owner-shareholder relationship is maintained
good. Employees are working and possessed high standards of productivity. Businesses increase
profitability, raised more capital, have long term investments and maintained good handling or
control of manpower. It opens new opportunities both for the owner and shareholders and also to
the employees. Thus, the company's existence competes globally and inherits strong foundation
of corporate governance.
BARACHINA/CLARO/DAYANGCO/ROSALITA BSAIS - 3A
Module 1 Lesson 3
Corporate Governance: Board as an Effective Instrument of the Organization
On November 22, 2016, the Securities and Exchange Commission of the Philippines issued
Memorandum Circular No.19 otherwise known as the Code of Corporate Governance for
Publicly-Listed Companies which take effect last January 2017 and replace the old
Memorandum Circulars but the old ones are still in effect when applied to the covered
companies. All publicly-listed companies are guided with different codes and the latest code
requires them to submit a new Manual on Corporate Governance to the regulators which is the
SEC and the said manual should be posted on the company’s website. The manual contains
principles of corporate governance which is presented in the latest code. It is a document that
contains corporate governance policies, programs, and procedures in the corporation as well as
rules, systems, and processes but mostly it serves as the foundation of the policies that the
company has which are legally required, and some are voluntarily made which response to the
company’s needs. The manual is designed to help practice good governance in the organization
which is guided by the principles. It serves as a report of the company about the performance of
the board of directors, management, and company in attaining the shareholder's desire which is
the maximization of wealth. It is a legal pronouncement that’s why it is required to be made
known to all directors and shareholders and stakeholders or any interested party so that they can
look for the corporate governance framework which is the Manual on Corporate Governance. It
must be submitted within 6 months from the effectiveness of the code. It must be signed by the
chairman and compliance officer to consider it as filed and there is a penalty for late or non-
submission and will accrue until they will file the said document. Also, it must be followed or
practice by the board, management, and company in attaining the goal which is growth.
The code has a lot of recommendations for the preparation of the manual and one of that is the
board should provide a policy in the manual on the training of directors including an orientation
program for first-time directors which is at least eight hours and relevant annual continuing
training which is at least four hours for all directors to have a competent board and the coverage
of the program are based on the company’s needs. It is also recommended to disclose in the
manual the board nomination and election policy that contains the processes and procedures in
the election and the assessment of its effectiveness. The policy on board nomination should
encourage shareholders’ participation and promote transparency of the board’s nomination and
election process and the nomination includes the review, evaluation, and monitoring of the
qualifications of the directors. The qualifications and grounds for disqualification are also
contained in the company’s manual. Additionally, the board should ensure that the shareholder’s
rights are disclosed in the manual to recognized and protect their rights. When looking at the
posted corporate governance manual of some corporations here in the Philippines, the contents
are the definition of terms which defines the terms used in the manual for the interested party to
easily assess the manual and also the corporate governance structure which lay down the
responsibilities of the board, management and the company to its stockholders and stakeholders.
BARACHINA/CLARO/DAYANGCO/ROSALITA BSAIS - 3A
Module 1 Lesson 4
What matters in the Boardroom: Performance, Priorities and Practices
Module 1 Lesson 5
Corporate Governance: Prospects and Challenges