MANILA, Philippines – Companies that want to attract capital, enhance shareholder value and survive through decades must have good corporate governance, according to brothers Jaime Augusto and Fernando Zobel de Ayala, who are at the helm of Ayala Corp.
During a forum organized by the Shareholders Association of the Philippines, the Zobel brothers shared several strategies they have employed to further grow their businesses through the years.
For one, Jaime said it was important to strengthen family bonds and instill in the younger generation a strong sense of patriotism and nation building.
“We instill in the new generations the importance of safeguarding the family legacy,” Jaime said.
There must also be good governance in the family.
“Family governance guides the family’s actions as owners and stewards,” Jaime said.
At the same time, Jaime said the conglomerate recognizes the important role of professionals that are not necessarily members of the family.
“We hire the best possible professional talents to run our companies,” he said.
Fernando, for his part, noted that the conglomerate has a lot of female executives.
“We ensure sufficient diversity in thinking across our board of directors,” Fernando said.
“We’ve advanced the brand equity of our institution. High standards of governance have helped us attract the best and most respected partners,” Fernando added.
These include JP Morgan, DBS and Singtel.
Governance also includes ensuring that even family members are qualified to be part of the business.
“Among family members, it’s not just competence we look at but characteristic because they will represent the family, the business,” Fernando said.
Meanwhile, SharePhil president Francis Lim said good corporate governance would help sustain a company in the long term.
Ayala’s story started in 1834 in what was Las Islas Filipinas. At that time, Manila’s business houses were engaged mainly in executing customers’ orders for buying and selling of commodities for a fee.
Landowner and entrepreneur Domingo Roxas and his young industrial partner Antonio de Ayala created a company that would engage in agribusiness.
They built a distillery to derive greater value from cane sugar.
When it had grown and become well known, the distillery exported various products to Europe and garnered awards and recognition for their quality.
The company then expanded into various businesses, moving from a family business into the conglomerate that it is now.
