The Philippines still lags behind most of its neighbors in protecting the rights of minority shareholders in corporations, making the country’s equity market less attractive to potential investors.
In a briefing on Monday, Shareholders’ Association of the Philippines (SharePhil) said the lack of shareholder “activism” in the country allowed corporations to ignore good corporate governance practices.
The result is that investors, who entrust their hard-earned money to company managers, rarely get a voice in decision-making or even the chance to question a corporation’s actions.
“Other countries have investor groups that are very active in participating in company affairs. When minority investor groups are solid, they get louder voices,” SharePhil chairperson Evelyn Singson said.
She said the main advocacy of the newly formed group would be to educate investors of their rights and duties as part owners of corporations.
The group wants to make sure that minority investors are no longer kept in the dark about the details of the operations of both listed and privately held companies, Singson said.
Also, lack of investor protection has made the country a less attractive investment destination compared to its neighbors, said Francis Lim, former president of Philippine Stock Exchange and one of SharePhil’s trustees.
“There is the perception that companies are not up to corporate governance standards,” Lim said.
SharePhil also stressed the need to educate new investors such as housewives, overseas workers and retirees on how to invest in stocks to make their money work for them and, in the process, help pump-prime the economy.