Men dominate boards of PHL's Top 100 firms – report

Despite improvements in the past years, men continue to dominate the Philippines' Top 100 companies, according to a report on corporate governance released Thursday. The study conducted by the Asian Institute of Management — "2009 Corporate Governance Trends in the 100 Largest Publicly Listed Companies in the Philippines" — revealed that of 173 independent board seats in these top firms, only 11 or 6 percent are women. Independent board directors can autonomously judge a company's business decisions and strategies, and are usually not affiliated with the company. In percentage terms, the report noted that none of the Top 100 companies in 2009 had more than 50 percent women sitting as board director. Over a third of the Top 100 companies did not have a woman director on the board, although the most number of women directors in a company increased to seven in 2009 from five in 2008. Independent directors While the majority of companies in the study have complied with the Corporation Code rule on independent directors, most have not ventured beyond the minimum requirement, according to the report. The Revised Code of Corporate Government provides that publicly listed firms have at least two independent directors or 20 percent of board members. The report noted that in 2009, 70 percent of the Top 100 companies have two independent directors but only 24 percent went beyond the minimum requirement. Securities and Exchange Commission (SEC) chair Teresita Herbosa cited an earlier study which said that firms with more independent directors tend to evaluate decisions such as acquisitions more objectively. "If the board is dominated by outsiders, they tend to bargain strongly in cases of takeovers, or in getting premium value for stakeholders," Herbosa said. It is possible that companies stick to the minimum requirement because independent directors are hard to come by these days, the SEC chair said. "It is really quite difficult to find persons who are independent, not conflicted, and with suitable expertise," she said. "And even if you find one, he has no time for the position you are offering." The SEC chair also noted that some qualified individuals may not want to risk their reputations, so they turn offers for independent directorships down. "Most independent-minded persons want to be left in peace rather than risk getting into tight legal situations," she said. The report also highlighted this supposed "scarcity" of independent directors within the business community, saying that at least 14 independent directors in the Top 100 firms hold more than 16 concurrent board seats in other companies. The study pointed out that independent board directors tend to stay with the company for longer periods, with at least 7seve of 226 independent director seats in the country held for more than 20 years already. At least 20 of the seats have been held from 11 to 20 years, while 42 seats have been held for 6 to 10 years already. Term limits "The consequence of having an independent director serving in many boards is that there would be lack of time to devote to all these companies," Herbosa said. Herbosa said they are seriously looking to amend the Corporation Code to impose a certain cap on the terms of independent directors. "Usually, long length of service will diminish the independence of the independent director," she said. "Unfortunately, nobody else in the company can tell them to go." Herbosa cited the case of Singapore, where a proposed rule mandates that after 9 years of being an independent director, the director ceases to be independent. — VS, GMA News