Maharlika Board up in September -- PSE

Posted at 03/23/11 4:07 AM

MANILA, Philippines - The Philippine Stock Exchange (PSE) plans to soon start showcasing firms that comply with high governance standards, yesterday announcing a September launch of its proposed Maharlika Board.

Companies wanting to be included need to comply with a more stringent 30% minimum public float and have at least three independent directors nominated by minority shareholders, among other requirements. Higher valuations are expected to come with inclusion.

"We are looking at a public launch of the Maharlika Board in September this year," said Argel G. Astudillo, vice-president of the PSE’s Corporate Governance Office.

"By the time we launch it, we may or may not have companies listed ... but we hope to have received indications," he said in a briefing.

Existing rules require listed firms to have at least two independent directors. The current minimum public float, meanwhile, is 10%.

To encourage companies to join the Maharlika Board, the PSE will waive the annual listing maintenance fees for the first year and provide discounts on the second and third year, Mr. Astudillo said.

"Companies have a 20-25% premium for those practicing high corporate governance based on econometric models in Brazil," said Rex C. Drilon II, president of the Institute of Corporate Directors, during the briefing.

Philip Armstrong, head of the Washington-based Global Corporate Governance Forum, said the premium also comes with "resilience in [a] market downturn."

The Maharlika Board will reportedly be the first in Asia and will be the first step in changing the country’s image, officials said.

The Corporate Governance Watch 2010 report of the Asian Corporate Governance Association and CLSA Asia-Pacific Markets placed the Philippines last among 11 Asian countries in terms of adherence to corporate governance standards.