In this second installment on assessing insurance companies in a VUCA world, meaning a volatile, uncertain, complex, and ambiguous environment that we now find ourselves in, during today's Sunday mass that happens to fall on the Feast of the Guardian Angels and the Foundation of Opus Dei, the Gospel reading is about needing only to have faith the size of a mustard seed to uproot a mulberry tree.

It may sound absurd to non-believers but I couldn't help but relate the reading and the feast days to the power of faith and prayers as we face the challenges of life. But of course, we most definitely also have to do our part and give our best in a VUCA situation. For corporate boards and management obliged to do their best for all stakeholders, practicing good corporate governance is definitely a must.

For our insurance companies in particular, unfortunately, the Philippines lags behind our ASEAN neighbors as manifested in the low penetration rate of the industry suggesting a relatively low acceptance rating by the public. Furthermore, in comparison to the domestic banks, another industry that is also heavily regulated because it similarly bears a heavy fiduciary responsibility to the public, the insurance industry's average corporate governance performance scorecard for the 2021 assessment was only 51.56 compared to the banking sector's average of 83.9.

Cognizant of this wide disparity in corporate governance practices, the Insurance Commission has been tightening the screws on the industry by mandating all types of insurance companies under the IC's supervision to file annually since 2015 their corporate governance scorecards and to make public what their metrics are which presumably because of the bright lights that will be cast should prompt the industry to step up. This approach has apparently produced results as the industry has been gradually improving its corporate governance scorecard performance from 2015's lowly average of 32.2, which rose to 38.58 in 2016, then slowly inched up to 39.73 (2017), 41.34 (2018), 42.54 (2019), and 45.9 (2020), until finally a breakthrough to 51.56 in 2021.

As management experts are fully aware, recognition for a job well done is an invaluable tool to spur even greater performance. In this regard, the Institute of Corporate Directors instituted an annual recognition of the top corporate governance performing domestic corporations covered by the country's Code of Corporate Governance by bestowing upward pointing Golden Arrows signifying the improving compliance with the desired governance to the companies which have stood out. There are 5 categories based on the points scored using the ASEAN Corporate Governance Scorecard. For those that score 80 – 89 points, 1 Golden Arrow; 2 Golden Arrows for those registering 90 – 99 points; 3 Golden Arrows for 100 -109 points; 4 Golden Arrows for 110 – 119 points; and 5 Golden Arrows for 120 -130 points which represent perfect adherence to the 5 OECD Principles of Corporate Governance.