The Philippines Securities and Exchange Commission has adopted a revised corporate governance code. The first page of the revised code indicates the companies to which it applies. Unlike the UK's Combined Code, the revised code stipulates board size: at least five and no more than fifteen members. The revised code also requires companies to appoint a compliance officer, reporting directly to the chairman of the board, with responsibility for monitoring the company's compliance with the code and the rules of other regulatory agencies. It is the compliance officer's responsibility to issue a certificate each year explaining the extent of the company's compliance with the code and the reasons for any deviations. The compliance officer can be summoned before the SEC to answer questions about the company's compliance with the code.
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It is not uncommon for corporations in the Philippines to appoint directors on the basis of connections or affiliations. However, the Code of Corporate Governance, especially the revised Code is very specific on the qualifications and experience of those who are supposed to discharge the responsibilities under the Code. One such example is the Audit Committee. If none of the appointed directors who will form the audit committee have the necessary experience as an audutor, for example - I believe that this could be corrected by outsourcing the performance of the required and defined responsi- bilities. The person to whom such responsibility was outsourced will report to the director appointed as audit committee member but lacking in audit qualification. Pls cpomment on this position.
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