Maharlika board launch deferred to 2012

The Philippine Stock Exchange has deferred to next year the launch of its Maharlika board, a separate board for companies embracing superior corporate governance, to pave the way for the review and fine-tuning of its framework.

The PSE had targeted to launch the Maharlika board by the fourth quarter of this year. However, PSE president Hans Sicat said the bourse’s management wanted to complete the one-on-one consultations with the companies that would potentially join this roster.

Sicat said the PSE was now talking to about 25 companies that might join the Maharlika board, which was envisioned to be a special listing for companies that subscribe to a more stringent set of corporate governance standards.

The Maharlika Board seeks to distinguish listed companies that will voluntarily abide by certain corporate governance practices beyond those already required by law.

“We are shifting our strategy on the launch of the Maharlika Board and prefer to launch it with qualified companies ready to list on the board,” Sicat said.

Sicat said the new board would neither favor the minority shareholders nor discriminate against the majority shareholders.

“It simply aims to ensure, among others, that the rights of the minority shareholders are recognized and protected, and that all shareholders of a company are given representation in the company’s board. To this end, the Maharlika Board Rules grant the minority shareholders the right to nominate the candidates for independent directors. The right to nominate and elect the independent members of the board, however, is not exclusively limited to the minority shareholders,” the PSE said in a statement.

Another important feature of the Maharlika board, according to the PSE, is that it adheres to the “one share, one vote” principle to ensure that all shareholders are given equal rights in terms of voting for members of the board and for all corporate actions requiring the approval of the shareholders. This feature of the rules seeks to do away with the types of shares that have more rights in terms of voting power than other classes of shares.

The PSE clarified that the companies listed on the Maharlika Board should not be considered as an “elite class” of companies. Companies not listed on this board should not be viewed by the public as “inferior” as the only difference is that potential Maharlika companies are willing to abide by a specific set of stringent rules, Sicat said.

“It is for this reason that listing on Maharlika is voluntary and that the board is not for every company,” the PSE chief added.