Good corporate governance undeniably brings resilience in companies, improves values, and attracts cheap capital. A recent study by the Philippine Institute of Corporate Directors (ICD) suggests that corporate governance practices in the country have improved over the last five years, and that new scores have led to significant change in the valuation of firms. The study determined the co-relationship between share prices and corporate governance in China, Hong Kong, Indonesia, the Philippines and Thailand. Jesus P. Estanislao, Chairman of the ICD, said that:
“The question as to whether in fact corporate governance makes a difference in the valuation of the firms in the stock exchanges, and in all five economies, the answer is very clearly so, and the result is that relationship is robust.”
They’re all making strides in corporate governance. In the recent issue of Corporate Governance Trends, a quarterly CIPE publication, you’ll read about new tools for family-owned businesses in Lebanon to implement corporate governance, a private sector-driven initiative to create the Corporate Governance Code in Algeria, and a successful program in the Philippines using scorecards to rank companies’ corporate governance performance. Even in these uncertain times, CIPE partners continue to move forward in their efforts to create better business environments and promote good governance. With the global downturn on everyone’s mind, we’ve also included an interview with CIPE Executive Director John D. Sullivan about the importance of good governance as a response to the economic crisis. The publication is available in Arabic, French, and English.