GOCCs’ corporate governance score improving

Corporate governance practices in state-run firms have improved even as half of the country’s 84 government-owned and/or -controlled corporations (GOCCs) scored way below average in 2016.

Based on the latest corporate governance scorecard results for 2016 released by the Governance Commission for Government Owned or Controlled Corporations (GCG), GOCCs scored an average of 53.27 that year, up from 51.09 in 2015 and 45.82 in 2014.

“Corporate governance in the GOCC sector has been improving since the year we pioneered this initiative [in 2014]. It is manifested in the improving average score of the GOCCs,” corporate governance officer Cyril Marie L. Benedicto of the GCG’s corporate standards office said in an e-mail to the Inquirer.

The top ranked GOCC in terms of corporate governance in 2016 was Philippine Crop Insurance Corp. (PCIC), with a total assessment score of 100.5.

The PCIC scored 15 points (out of a maximum score of 15) in stakeholder relationships; 35 points (out of 35) in disclosure and transparency, and 48.5 points (out of 50) in responsibilities of the board. It also got two bonus points such that its total score exceeded the maximum of 100 points.

Benedicto said the tool used in this assessment was the corporate governance scorecard, which had been benchmarked against the Organization for Economic Cooperation and Development’s principles of corporate governance for state-owned enterprises as well as the Asean corporate governance scorecard.

The other GOCCs that scored high were Philippine Deposit Insurance Corp. (96); Land Bank of the Philippines (95.5); Bases Conversion and Development Authority (94.5); Masaganang Sakahan Inc. (89.5); Government Service Insurance System (87.5); Philippine Amusement and Gaming Corp. (87.37); PNOC Renewables Corp. (86.5); Social Security System (86.5); LBP Leasing and Finance Corp. (85.5); PNOC Exploration Corp. (84); Development Bank of the Philippines (83.5); Philippine Reclamation Authority (82.5); National Power Corp. (82), and Philippine Ports Authority (80).

In all, 42 GOCCs scored above the average of 53.27.

However, the remaining 42 GOCCs languished below the average, with five agencies scoring below 10 points—Philippine Aerospace Development Corp. (9.5); Natural Resources Development Corp. (1); Civil Aviation Authority of the Philippines (0.5); Palacio Del Gobernador Condominium Corp. (0) and Nayong Pilipino Foundation Inc. (-2).

“While there are no sanctions yet (for low-scoring units), we give recognition to top GOCCs for achieving high scores,” Benedicto said.

“As for now, we are building awareness within the GOCC sector of the best practices and international standards of corporate governance. We are in the phase of encouraging our GOCCs to raise their level of corporate governance practices to be at par with international state-owned enterprises,” Benedicto added.—BEN O. DE VERA