Just this week the Philippine Stock Exchange announced new corporate governance rules. The Philippines were ranked 11th of 11 Asian countries in a review last fall of corporate governance standards by the Asian Corporate Governance Association.
The Philippines has struggled for credibility with investors due to lax governance and disclosure standards, enforcement issues and turnover at the PSE. The new approach calls for the establishment of the Maharlika Board, a special listing segment at the PSE comprised of a group of Philippine companies that adhere to strong corporate governance practices. "Maharlika" comes from a Sanskrit word (maharddhika) which means "a man of wealth, knowledge or ability."
While admittance into the Maharlika board is voluntary, the hope is that by providing this special distinction to Philippine companies with practices in line with international corporate governance standards, other companies will follow suit. This should ehhance investors' currently lacking confidence in the PSE.
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