GOOD GOVERNANCE OF PHILIPPINES

The autonomy and independence of each of the four institutes would need to be respected and

secured. It is best that at the enterprise level, both ICD and Institute for Solidarity in Asia stick to their

knitting: Institute of Corporate Directors serving both private and public enterprises in the corporate

sector; and ISA serving both national government agencies and local government units in the

government sector.

As enterprises start putting in the essential governance elements such as those specified in the

performance governance system, and as they start delivering breakthrough, transformative results

as a consequence, they launch outreach programs, especially in family governance (promoting

solidarity and team work) and in school governance (institutionalizing and sustaining alliances as

well as substantiating social responsibility).

The enterprises which do so may well be introduced into the governance programs of CFA (for family

advancement) and of CSG (for school governance). Mutual support and free exchange of learned best

governance practices would need to be secured and arranged for, through their common promotion

of personal governance.

Good governance of the Philippines becomes a shared responsibility on the part of all, especially of

enterprises and institutions that seek to transform themselves into “islands of good governance”.

Under this architecture, good governance of the Philippines is built from the ground up, instead of

dictated from the top down.

GOOD GOVERNANCE OF GERMANY

Since the peak of the financial crisis over three years ago and with the spectacular corruption cases

in “role model” enterprises such as Siemens and Daimler, the subject of corporate governance has

begun to arrive at management levels of both privately and publically owned German corporations.
This is not only affecting companies on the stock market. The directors, managers and boards of

larger SMEs are also suddenly confronted with critical investors, shareholders, staff, customers and

suppliers insisting on greater transparency, professional leadership and control structures, in short:

good governance.

Since 2002 Germany has embraced the so-called Corporate Governance Codex, which is intended to

fundamentally strengthen the confidence of major (international) investor in the management of

German companies.

For many years corporate governance was primarily linked to the management and information

policies of major businesses listed on the stock market. However, the trend towards globalization has

now forced exporting German SMEs to also grapple with the subject. These medium-sized businesses,

often defined as the backbone of the German economy, are facing fierce global competition. Exposed

to the unforgiving scrutiny of the world market on their corporate management, control, finance and

transparency systems, they will be forced to measure up to international standards in the future. In

their role as suppliers to major global corporations, the SMEs will find themselves required to fulfill

increasingly stringent criteria to prove themselves sustainably reliable business partners of superior

quality. In other words: they need to provide evidence of “good governance”.

We think that the best solution would be the introduction of company-specific corporate governance,

which the individual companies could use to document the priority which this factor has in their

firms. This seems to be a necessity in view of the rating requirements for Basel II and its many quality-

related steps, which need to be taken in order, to be classified as “investment grade”. When it comes

to future corporate succession, clear formulation and documentation of management and control

structures could pave the way to successful leadership. In addition, individual good governance

guidelines, such as mediation rules, could help to prevent or defuse any family disputes.
GOOD GOVERNANCE OF SINGAPORE

One way of looking at the regulatory framework for corporate governance in Singapore is to divide

the framework into two broad categories:

1. legal regulation (including quasi-legal regulation)

2. codes and best practice (in particular, the Singapore Code of Corporate Governance 2005).

The regulatory framework for corporate governance in Singapore is underpinned by corporate law

and securities regulations. These are reflected in common law rules as well as in statutory

enactments such as the Companies Act (cap 50, ‘the Act’) and the Securities and Futures Act (cap

289). This is supplemented by quasi-legislative enactments such as the SGX-ST Listing Manual (‘SGX

Listing Rules’), which applies only to companies listed on the bourse of the Singapore Exchange

Securities Trading Ltd (‘SGX-ST’), and the Singapore Code on Takeovers and Mergers. The key

aspects of corporate governance governed by law are discussed below. Compliance with legal rules

is mandatory in that a breach of these rules may result in civil or criminal sanctions or, in the case

of a breach of SGX Listing Rules, administrative sanctions such as censure, share trading

suspension, or delisting.

There are three aspects to the regulatory mechanisms relating to the structure and control of

companies. First, it is important to understand and provide access to information on the

shareholding and organizational structure of a company because this has an impact on who has

control over the company which, in turn, has an impact on how the company is governed. he law

therefore requires that companies keep registers of members, and these registers may be

inspected.
The law also specifies strict duties for company directors; these duties make them accountable to
the company and protect the company against an abuse of directorial power. Under the common
law these include:

 The duty to act with reasonable care, skill, and diligence

 The duty to act in good faith and in the interests of the company
 The duty to use powers for proper purposes
 The duty to avoid conflicts of interest
 The duty to retain discretions in the performance of their obligations to the company.

GOOD GOVERNANCE OF CHINA

The OECD defines corporate governance as a set of procedures and processes according to which an
organization is directed and controlled by the distribution of rights and responsibilities among
different participants in the organization and laying down the rules and procedures for decision
making. Participants include the board, managers, shareholders and other stakeholders.

In support of this concept, the OECD came up with six principles in 1999 (and revised them in 2004)
which stated the minimum goals of a corporate governance framework and represented a common
basis that OECD member countries consider essential for the development of good governance
practices. The OECD expressly invited both member and non‐member countries to utilize the
principles in the improvement of their legal, institutional and regulatory frameworks for corporate
governance. The six principles of a domestic corporate governance framework were to:

 Promote transparent and efficient markets, while being consistent with the rule of law and a

clear articulation of the responsibilities of all participants

 Protect and facilitate the exercise of shareholder rights

 Ensure equitable treatment of all shareholders, including minority and foreign parties and their

rights and methods of redress for any violations

 Recognize the rights of stakeholders and encourage co‐operation between the company and the

stakeholders
  Ensure that accurate and timely disclosure is made in a transparent way – all material matters,

including the financial situation, performance, ownership and governance of the company must

be disclosed

 Ensure strategic guidance and effective monitoring of management by the board and the

board’s accountability to the company and its shareholders.

GOOD GOVERNANCE OF SPAIN

The Unified Code of Good Governance of Listed Companies (herein after the Unified Code) was
passed in Spain in May 2006, as a unified document. In June 2013, a partial revision of the Unified
Code was approved, with the purpose of adopting various legislative initiatives that have affected
several of its recommendations.

In recent years, initiatives related to good practices with regard to good governance have
proliferated. Spain is not foreign to this movement and has achieved significant progress in the field
of good governance. In particular, it has expanded the framework of good governance in Spain, with
the goal of improving efficiency and responsibility in the management of Spanish companies and, at
the same time, setting national standards at the highest level of compliance with respect to
international criteria and principles.

The new Code of Good Governance of Listed Companies (the Code of Good Governance), of the
CNMV of 18 February 2015, fully responds to the following objectives:

 To ensure the adequate functioning of the governing and managing organs of Spanish
companies to lead them to the highest level of competiveness;
 To generate trust and transparency for national and foreign shareholders and investors;
 To enhance the internal control and corporate responsibility of companies; and
 To assure the adequate distribution of functions, tasks and responsibility within companies,
from the perspective of maximum precision and professionalism.

In this respect, the Commission of experts began to differentiate those questions that were
proposed to improve the existing regulatory framework, which resulted in Law 31/2014, of 3
December 2015, modifying the Capital Companies Act to improve corporate governance, from those
that constituted recommendations for monitoring voluntary subjects at the beginning of the
“«complying or clarifying”» period, which are contained in this Code of Good Governance.