Shareholder rights

Given Facebook’s celebrated debut on Nasdaq on May 18 followed by the epic slide in the value of its shares in the succeeding days,  we are warned that initial public offerings (IPOs) should not be all spectacle and sorely lacking in transparency and good governance. Besides IPOs, some investors try to diversify their portfolio by also getting into “blue chips” since foreign currency deposits are not as attractive of late.

But what do shareholders really need to know besides average yields of the famous issues like telcos, property companies and food and beverage stocks? What are shareholder rights?

Is a P100 investment for one or two shares enough for someone to attend a stockholders’ meeting?

A few good men (and women) decided to form an association to spread the word about shareholders’ rights.

The group, called SharePHIL for short, is the Shareholders Association of the Philippines. The founding chair is Evelyn Singson, former Management Association of the Philippines (MAP) president (and only the second woman in MAP’s history to become president), the president is Cherry Bernaldo and there also is Francis Lim (former president of Philippine Stock Exchange or PSE) and Rex Drilon (president of the Institute of Corporate Directors, or ICD), among a few others who wish to share what they know about corporate good governance and transparency, brought to practical terms.

It is like Investment 101, if you will.

In a few meetings I have attended since its inception, I gathered that the trustees of SharePHIL wish to share their knowledge about investments and the rights of minority shareholders through seminars, fora and other methods to teach the ordinary Juan or Juana about capital markets and also about investments in private companies.

Private companies are not exempt from SharePHIL’s eyes. Though they are private and not subject to public test of governance, SharePHIL has the advocacy of teaching minority shareholders (anyone with no control or some control) what their rights are and as simple as what to ask during board meetings or stockholders’ meetings.

To start off the series of seminars it envisions to hold regularly, SharePHIL will bring an expert in the person of David Gerald, president of the Securities Investors Association Singapore on June 27 at the Dusit Thani Manila.

The group will have a panel of reactors in the persons of UP School of Economics Professor Winnie Monsod, Governance Commission for Government-Owned and Controlled Corporations chair Cesar Villanueva, and PSE Corporate Governance Office head Argel Astudillo. Former De La Salle University System chair Francis Estrada has been invited to be the moderator of the panel discussion.

Minority shareholders, fund managers, endowment finance advisers and everyone who wishes to invest in another company, be it public or private, are welcome to attend. Further, the group also wishes to invite spouses of CEOs, spouses of corporate officers, children of corporate founders who may not be aware of the rights of a minority shareholder in a private company or of small holders in a public issue.

SharePHIL is the first of its kind in the country. Together with the ICD, the Institute of Solidarity in Asia (ISA) and other business organizations, we hope to gather many investors to this forum with Gerald and the future seminars we will be running.

I am often asked by minority shareholders very basic questions that they have on their minds but were afraid to ask lest they be thought ignorant or ‘wet behind the ears’ when it comes to shareholder rights. This is the forum to go to. Ask and you shall receive the answer.

Further, besides private companies, SharePHIL will attend stockholders’ meetings of as many publicly listed companies as possible so we can share the collected knowledge with our members and their families.

No one is too small not to be concerned about shareholder rights. Every peso of investment is hard-earned money that we should steward and care for, especially if it is to be comingled with other people’s monies and put in investments we have no knowledge about.

Think Warren Buffett. He never invests in a business that is not sustainable or in a business he does not understand. And look what he has earned for many decades now.

Not everyone can be a Mark Zuckerberg or a Bill Gates and just wake up one day as a billionaire. Most of us have to work hard and long before we can even save up enough for our nest egg or for a “retirement kitty.”

Or some of us are just lucky to have inherited much without the knowledge of sustaining such wealth or fortune.

Everyone must be concerned about investments and where these investments are brought, here and abroad. Whether it’s a million pesos, or a million dollars, the questions are all important and need answers.

We hope SharePHIL will provide the answers to many questions from innocent investors. And only then can we say that our capital markets will grow because investors would be more informed and will make wise and guided decisions.

(The author is the vice president of the MAP and a regular member of SharePHIL. She is founder and co-owner of ECHOStore sustainable lifestyle, ECHOmarket sustainable farms in Serendra and Podium malls. Feedback at [email protected]. For previous articles, visit map.org.ph.)