Last week, I shared the results of a survey conducted among 335 corporate participants, composed of the Board of Directors and C-Suite levels of management in the ASEAN region, on the practice of corporate governance in their respective countries.

Certain trends were identified that could serve as a basis for moving forward in 2024 and beyond. For the folks who may wish to see how their company, whether big or small, stacks up against the rest of the region, allow me to share my thoughts in broad strokes on some possible guide questions you can use to evaluate yourselves.

Let’s start with the basics. How has your company performed so far relative to your competition?

Obviously, if you are up there in the industry and your bottom line reflects this, I guess this means you are okay and need not worry about governance, right? Oops, sorry, folks. That’s wrong in my view.

Although yesterday is presumably the natural forerunner of tomorrow, a Black Swan could quickly derail that lofty position in our VUCA (volatility, uncertainty, complexity, ambiguity) world. We need not look too far behind us to see the carcasses of businesses laid to waste by Covid-19.

It is imperative for the board of any organization to take the lead in assessing the prospects over the short and medium term — say three to five years — of the business based on its reading of the industry and economic macro-outlooks. This also necessitates understanding what regional or global developments might occur that could impact the country.

Currently, today’s headlines on the worsening armed conflict between Israel and the rest of the Hamas supporters surely continue to be a major, potentially explosive event not only for us but the world.

Closer to home, a much scarier scenario for us because we are in the middle of the fray, which so far continues to be just an expression of escalating irate indignance for both sides and relatively harmless water sprays, is the decades-old drama in the West Philippine Sea that now seems to be edging closer to the boiling point, spilling over to, God forbid, an armed confrontation.

Coupled with the political drama of the now open conflict between the BBM and RRD camps, all these add up to an unstable environment that can deter any business from executing any expansion plans in our country. Adding to these imponderable scenarios is the continuing macroeconomic instability in the Fed-centered western financial markets which heretofore was in unanimity in the prediction of lower interest rates.

Today’s headlines on the worsening armed conflict between Israel and the rest of the Hamas supporters surely continue to be a major, potentially explosive event not only for us but the world.

Today, the winds have changed and are pointing to a possible inflationary future, ironically brought about by the robustness of the US economy, derailing any hopes of a lower interest rate environment. The impact on the Philippines has been a local stock market that has been meandering aimlessly, driving investors to look at alternative options such as fixed-income instruments (mainly Government Securities), the US stock market, the US dollar, minerals, and real estate sans leverage for the liquid folks.

And lest you forget, particularly for businesses aspiring to go public, ESG (environmental, social, governance) concerns are here to stay and will influence the ability of a business to attract institutional investors and comply with ESG regulations and international norms.

The questions then for your board to ponder are: Has the board deliberated, openly discussed, and collectively arrived at a coherent view of the immediate future, taking into consideration these issues together with management?

Has your board mapped out a game plan to mitigate the downside risks without prejudicing possible growth prospects? Has your board discussed how to improve internal operations to be better prepared to face these risks?

More specifically, has your board seriously invested the time, resources, and effort to take advantage of technological advances, particularly the rapid advancement of generative artificial intelligence, which should enhance operations but could impact people?

In this regard, has your board developed a talent strategy game plan involving a reward system, training, redevelopment and retention of people, employee health and safety? Is your board fully on board with the need to be aware, informed, and responsive to the world’s call for ESG corporate responsibility? Finally, has the board self-reflected on their skills and identified the key competencies that may be lacking among themselves to meet future challenges?

If your board has checked and marked all these questions, you are in good standing. If not, it would be wise to consider how to address the gaps. After all, good governance is universal.

Until next week… OBF!

For comments, email bing_matoto@yahoo.com.