Minority shareholders find their voice

A group of corporate governance advocates has launched an organization meant to serve as the voice of minority shareholders when dealing with policies of publicly listed corporations.

If successful, the new Shareholders’ Association of the Philippines (SharePHIL) will give rise to a new kind of shareholder activist, one that is not associated with today’s small group of nuisance stockholders who often raise oddball, sometimes humorous and often irrelevant questions during companies’ annual general meetings.

The group’s stated mission is to be “a major player in promoting domestic capital market development through advocacy, education and [the] enlightenment of shareholders.”

In a recent briefing, SharePHIL board adviser David Gerald explained that the organization will strive to continuously dialogue with the board of directors or CEOs of listed firms to help promote minority shareholders’ rights, which are often neglected in less developed capital markets.

Gerald—a Singaporean who founded the Securities Investors Association Singapore, or SIAS—described the group’s work as being of a different model from Western shareholder activists who often adopt an adversarial stance vis-à-vis corporate boards.

“The Asian model is different,” he said, explaining his philosophy of “boardroom before the courtroom.”

“We strive to have a dialogue with companies. If this doesn’t work, only then do we move to the name and shame campaign,” he said.

Like SIAS, leaders of SharePHIL expect the group to be a privately funded enterprise, with its seed fund likely to come from contributions of listed firms and other advocacy groups.

“We will be a private enterprise with no public funding,” SharePHIL president Rosario Bernaldo said in briefing in Makati City.

She added that, in addition to advocating for the rights of minority shareholders, SharePHIL would also engage actively in shareholder education to allow investors in capital markets like the Philippine Stock Exchange to better understand the dynamics of the investment scene.

Doing so, she said, would help deepen local capital markets by bringing in more participants from the retail level—the very people whose rights the group is representing.

Bernaldo added that SharePHIL is also putting up an online portal where shareholders of various listed firms can bring their concerns before the organization, which will then make representations on their behalf before the various corporate boards.

Other leaders of SharePHIL include Philippine Hoteliers Inc. vice chairperson and president Evelyn Singson (the group’s chairperson); Canadian Chamber of the Philippines governor Celso Vivas (vice president); Metro Pacific Investments Corp. president and CEO Jose Ma. Lim (treasurer) and Institute of Corporate Directors president Rex Drilon II (secretary).

Gerald stressed that under the model he developed, the shareholders’ advocacy group is able to successfully promote the welfare of small investors vis-à-vis larger listed corporations, despite being funded by those same entities.