An update on SharePHIL

In a fairly recent column, I pointed out that one key factor why the Philippines improved its corporate governance (CG) ranking in the Asian Corporate Governance Association (ACGA) CLSA report among selected Asian countries was the emergence of CG-oriented civil society organizations.

The ACGA-CLSA report specifically mentioned the Shareholders’ Association of the Philippines (SharePHIL), which was launched by CG-minded individuals on June 27, 2012.

SharePHIL was envisioned to be the voice of the minority shareholders. Unlike some shareholder groups in other jurisdictions, however, SharePHIL’s approach will be through friendly and constructive engagement with the management and boards of companies. Modeled after the Securities Investors’ Association of Singapore (SIAS), SharePHIL aims at resolving shareholder issues with companies in a non-adversarial manner. Only in extreme cases will SharePHIL lock horns with the companies and take them to court.

Despite its modest beginnings, SharePHIL was able to undertake several initiatives meant to have long-term impact during its first year of existence. For example, under its shareholders’ meetings program, SharePHIL members attended the stockholders’ meetings of several listed companies like the Ayala Land Inc., Bank of the Philippine Islands, Cebu Air, DMCI Holdings Inc., Meralco, Metrobank, Metro Pacific Investments Corp. (MPIC), SM Development Corp., Robinsons Land and San Miguel Corp.  These members raised meaningful questions in the course of the proceedings. Notably, SharePHIL members are lined up to attend shareholders’ meetings of other companies in the days to come.

Publications on shareholder rights

SharePHIL’s trustees and members published articles in newspapers of national publication on shareholder issues. Among the topics covered were Shareholder Meetings 101 (Fred Parungao, BusinessWorld, June 19, 2012); Shareholders’ Rights (Chit Juan, BusinessWorld, June 25, 2012); Governance—is it just lip service (Romy David, BusinessWorld, June 26, 2012); Making Internal Audit Function Work (Celso Vivas, BusinessWorld, July 1, 2012); SharePHIL: Partner of Investors (Vicente Dinglasan, BusinessWorld, July 10, 2012); Helping Investors Protect Themselves (Evelyn Singson, Philippine Daily Inquirer, July 9, 2013); Women and Reforms in Governance  (Ben Teehankee, BusinessWorld, Sept. 6, 2012); Investor Protection: Minding the Minority (Evelyn Singson, Manila Bulletin, Oct. 8, 2012); A fair Capital Market for Shareholders (Ben Teehankee, Manila Times, Dec. 18, 2012); and SharePHIL takes the Cudgels for Minority Shareholders (Francis Lim, Philippine Daily Inquirer, Jan. 10, 2013).

Advocacies on shareholder issues

As part of its membership meetings, SharePHIL also discussed issues that are of importance to minority shareholders. Discussions were spearheaded by no less than Securities and Exchange Commission (SEC) chair Teresita J. Herbosa on minding the minority as a shareholder topic; SEC director Justina Callangan on recent developments affecting shareholders’ rights; and MPIC president Jose Ma. Lim on good investor relations.

SharePHIL also participated in advocacies relating to investments in general. For example, it issued, along with other business groups, a public statement on the Peace Bonds tax issue. It also submitted a position paper, together with other business organizations, on the foreign ownership issue before the SEC.

Moving forward

There are other projects that are set to be unveiled during SharePHIL’s second year of existence. A big project, Shareholder’s Handbook, is now being finalized for publication. The handbook will cover topics such as basic rights and obligations of a shareholder, preparing for and attending shareholders’ meetings and understanding annual reports and financial statements. The project is envisioned to empower shareholders through investor education, which is a key pillar of SharePHIL.

SharePHIL is also presently arranging briefings for retail investors by listed companies. This project should see the light of day in the second half of this year.

Strategic partnerships with key institutions are also envisioned, particularly with the SEC and the Philippine Stock Exchange (PSE). Experience has shown that shareholders’ groups need the support of the regulators to be effective.

The SEC has been supportive of SharePHIL, and SharePHIL has been working on a strategic partnership with the PSE. As former president of the PSE and founding trustee of SharePHIL, I really look forward to a meaningful partnership with the PSE. Of course, as to whether or not we in  SharePHIL will succeed is something that only time can tell.

(The author, formerly the president and CEO of the Philippine Stock Exchange, is now the co-managing partner and head of the Corporate and Special Projects Department of the Angara Concepcion Regala & Cruz Law Offices. The opinions expressed in this column are solely his personal views. He can be contacted at: [email protected].)