The formation of the Shareholders’ Association of the Philippines (SharePHIL), formally launched last June 27 in a joint roundtable of the Management Association of the Philippines (MAP), the Institute of Corporate Directors (ICD) and SharePHIL, seems quite timely, given the announcement a week before from the Philippine Stock Exchange (PSE) that “there are now 505,054 retail investor accounts in the country” and that “individuals earning less than P500,000 a year now make up the bulk of investors.”
Of course, we have a long way to go in truly broadening the investor base, and this is where SharePHIL comes in, as it aims to engage in investor education, in the process creating awareness of the rights and duties of investors and attracting more people to invest in the stock market.
Investor education was a key point driven home in his presentation by the guest of honor at the SharePHIL launch, David Gerald, the founder, President and CEO of Securities Investors Association (Singapore) or “SIAS” as it is popularly known in Singapore and in the region. Mr. Gerald founded SIAS in 1999 to contest, successfully, the freezing of shares owned by 172,000 Singapore investors, many of them small, in Malaysian companies by the Malaysian government.
In his self-deprecating style, Mr. Gerald told us that in the beginning the joke circulating in Singapore was that SIAS stood for “Silly Investors Always Suffer” as few believed he would get very far in overturning the decision of the Malaysian government which had put the blame for the collapse of the Malaysian stock market on the Singapore investors. But when SIAS ultimately succeeded in its efforts to unfreeze those shares, SIAS came to stand for “Smart Investors Always Succeed.”
Mr. Gerald, who gave up a successful legal career of 30 years to found SIAS, said that he then realized that most Singapore investors did not really know much about investing in the stock market. This became a key thrust of SIAS: to educate the ordinary investor in the workings of the stock market. Over the last 13 years, SIAS, a non-profit organization, has conducted hundreds of investor education programs benefiting thousands of retail investors. And because of the support of government and the corporate, SIAS is able to offer most of the education programs for free.
Mr. Gerald said that SIAS has over time gained the respect and trust of government and the corporate as it has proven true to its philosophy that an Asian-style way of negotiating, non-confrontational, is the best approach to resolving issues. “We prefer to discuss and settle issues in the board room, not the court room,” he emphasized.
Thus, the programs of SIAS receive strong support from both the government of Singapore and the corporates in the form of funding and by providing experts to give the lectures.
And throughout, SIAS maintains its independence. The support cannot have “strings attached.”
Mr. Gerald recalled one large corporate who wanted certain conditionalities at the time and how SIAS cut the relationship right then and there. He added that the same company came back a few years later, this time with no conditionalities, and has become another strong supporter of SIAS.
SharePHIL would like to model itself after SIAS. Hence, it was fitting that Mr. Gerald was the honored guest at SharePHIL’s launch. His presentation on “Shareholder Activism: The Singapore Experience” was followed attentively and thoughtfully throughout, leading a member at our table to remark how unusual it was for a lunchtime speaker to hold the attention of the audience. Credit for suggesting that we invite Mr. Gerald for the occasion should go to SharePHIL Trustee Francis Lim, former president of the PSE, who had known Mr. Gerald for many years in his work with the stock exchange.
In conclusion, Mr. Gerald expressed confidence that SharePHIL would achieve success as did SIAS as long as SharePHIL is seen as a responsible partner by the regulators, the corporates and the investors. “SharePHIL should be seen not as an activist but as a partner,” he said.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is a member of the MAP and a member of the Board of Trustees of SharePHIL. He is the Relationship Partner for the Philippines of Li & Fung (1937) Management Ltd. Feedback at [email protected] For previous articles, please visit map.org.ph.