This corporate governance advocacy group has been picking up shares in selected publicly listed companies and sending members to observe and raise pertinent questions during annual stockholders’ meetings. We’re referring to Shareholders Association of the Philippines (SharePHIL) led by veteran lawyer and former Philippine Stock Exchange president Francis Lim, who believes that shareholders’ meetings should be “truly meaningful” and should serve as a forum to intelligently discuss things about the company.
“We should veer away from our old practice where shareholders attend meetings only for the giveaways and snacks as to earn them the monicker ‘snackholders’. We have also noted that the quality of the questions asked during the meetings has shown some improvement. We will continue with our mission to educate our shareholders because we believe in shareholder empowerment through education,” Lim said.
SharePHIL has so far invested in 31 companies, 23 of whose shareholders’ meetings it has attended this year compared to 12 corporations observed in 2013 and five corporations in 2014.
Based on SharePHIL’s survey, there has been continuous improvement in the way corporate governance practices are applied in the conduct of shareholder meetings among publicly listed corporations. For instance, all companies are able to present their financial and operating results. But there is still room for improvement like major resolutions and acts of management must be presented prior to ratification; there must be adequate presentation, discussion on mitigation strategies to address business risks, and it is important the audit committee endorses external audit nomination.
SharePHIL also wants companies to present their business plans on the floor and there’s a need for more transparency, disclosure and accessibility of information on the corporate website, among others.
In eight out of 23 shareholders’ meetings observed by SharePHIL, there were questions raised on the acts of the board and management before a motion was put on the floor. However, more and more companies are now discussing acts approved by the board before being submitting them for ratification by shareholders. Eleven out of 23 observed companies disclosed business risks while 16 disclosed acts of management compared to only four in the last survey.
