Our distinguished guests, Director General Lilia de Lima, Mr. Manny Pangilinan, H.E. Ambassador Asif Anwar Ahmad, our honored guests, ladies and gentlemen, we gladly welcome you to the 2014 Summit of the Shareholders’ Association of the Philippines (SharePHIL).
Let me retrace a bit of history about SharePHIL. SharePHIL had its beginnings in 2006 when the members of the Corporate Governance Committee of the Management Association of the Philippines (MAP) thought that we should correct the common perception that MAP limits its concerns to issues affecting big business when in fact, MAP covers a wider constituency and its total community includes all internal and external stakeholders of its member companies.
It was a few years later when good governance practices of corporations and institutions became an issue for international institutional investors. Organizations representing different investment funds and multinationals started rating countries on various measures which define good governance and used these measures in determining what countries they will direct their investments to. It was a big disappointment, or rather a serious embarrassment, that the Philippines rated one of the lowest among the Asian countries covered by their rating. Among the metrics where the Philippines was rated lowest was on the “protection of minority shareholders” and the perceived absence of this protection dragged down our country score to a shameful low.
It was in response to this poor showing that the Shareholders’ Association of the Philippines (or SharePHIL) was formally organized, in January 2010, by the members of MAP Corporate Governance Committee. MAP was big brother to SharePHIL’s difficult start-up days. Now that SharePHIL can walk on its own, MAP has remained supportive and thanks to MAP for lending us its secretariat for logistical support in mounting this Summit.
During our inaugural meeting in 2012, we were privileged to have as our special guest Mr. David Gerald, who is the Founder, President and CEO of the Securities and Investors Association, Singapore (SIAS). We were inspired by how SIAS has become a powerful voice for small investors and how it has opened Board Rooms and Regulatory Offices to diplomatically discuss important issues relating to company governance policies. SIAS has also successfully arbitrated intercompany cases and problems “in the board room, not in the court room.” SIAS continues to be a friend and inspiration for SharePHIL and today we are honored with the attendance of Mr. Christopher Cheong, a senior member of the Management Committee of SIAS. To affirm this alliance, we will seal the mutual cooperation agreement between SIAS and SharePHIL by the signing of a Memorandum of Agreement later in the program.
Today, SharePHIL celebrates its second year of existence. Our first year was difficult because we suffered from a perception problem. Our colleagues wrongly thought that because SIAS was born out of a controversy and had a tumultuous beginning, SharePHIL would follow its path and take an aggressive and adversarial stand for the minority versus the companies. Thus, when we tried to make friends with institutions and organizations who we could work and cooperate with, we got a somewhat cold reception from some.
After two years, it is now an established fact that SharePHIL is an association that has chosen to be positive, creative, supportive and cooperative and focused on empowering small shareholders principally through education. Empowerment could take the form of seminars that will help small investors understand the risk and rewards of investing; of initiating dialogues to voice out and resolve issues; of making investors aware of their rights and obligations and how to use these properly. It could also entail analyzing why problems arise and what causes them so that applicable solutions could be advocated. The aim of SharePHIL’s efforts is to serve a wider public rather than specific individuals or cases.
Thus, we have signed a cooperation agreement with the Fund Managers Association of the Philippines (FMAP) as they see a common objective with SharePHIL. FMAP handles big sums of money for investors, yet they are still minority shareholders for the most part.
The Securities and Exchange Commission, under the leadership of Chairman Tess Herbosa, saw the value of SharePHIL and our shared vision of giving minority shareholders a voice and promoting their interest as well. Our cooperation has yielded positive results as when the SEC redefined the constituency of corporations to include not only stockholders but also other stakeholders. The SEC has likewise amended the “Guidelines on the Conduct of Valuation and Fairness Opinion” defining the objectives clearly and adding clarificatory provisions to benefit and protect minority shareholders during tender offers as when shares are bought back prior to delisting.
SharePHIL has many more projects down the line. Our Shareholders’ Handbook, a primer to educate the small investors will be off the press in September. Another session on investment options for small investors is lined up in the last quarter. We feel SharePHIL, which is not a provider of products or services, can give small investors an impartial assessment of various investment options available in the market. SharePHIL plans to expand its ownership of listed stocks so that our active participation in shareholders’ meetings can motivate others to do the same. We will work with listed companies to hold forums that will help develop or improve investor relations with their small shareholders. All these activities are geared to enticing our compatriots to channel their savings into productive endeavors so they may help build up capital markets and enjoy the fruits of our economic growth.
Before I close, let me express our gratitude and thanks to all our generous sponsors, many of whom are publicly listed firms, who have made today’s SharePHIL Summit a reality. More than their generosity, their unbridled support indicates their oneness with us in our advocacy to raise our country’s competitiveness, in a global market which demands “fairness, accountability, independence, transparency and honor” (the acronym for that is FAITH and it is SharePHIL’s value proposition).
We thank our distinguished speakers and our high-powered panel who honor us with their presence. To our audience, we promise you an afternoon well spent.
And for everyone who believes in SharePHIL’s mission and advocacy, we invite you to join us.
