“For publicly listed corporations, it is a must to embed a good corporate governance culture in your 2026 strategic plans — just make sure it’s done right…”

As Philippine publicly listed corporations (PLCs) prepare their strategic plans for 2026, good corporate governance should no longer be treated as a compliance mechanism or a post-audit exercise. It must be embedded at the core of strategy formulation, execution, and performance management. In an environment marked by market volatility, regulatory scrutiny, technological disruption, ESG pressures, and heightened stakeholder expectations, governance is not a constraint on growth — it is a strategic enabler of sustainable success.

Globally, leading companies recognize that strong governance frameworks are integral to value creation and risk resilience. Best practices espoused by the OECD (Organization for Economic Cooperation and Development), World Economic Forum, and the world’s leading exchanges emphasize board independence, robust risk oversight, transparent disclosures, effective internal controls, and accountability across the organization. To answer to this call, PLCs that have integrated these principles into their 2026 strategic plans have positioned themselves to compete credibly in both domestic and global capital markets.

From a regulatory standpoint, the Philippine Securities and Exchange Commission (SEC) has made governance expectations increasingly explicit. The Sustainability Reporting (SuRe) Form, now a core disclosure requirement, compels companies to articulate how governance structures oversee sustainability risks, opportunities, and performance. 

The SEC Corporate Governance and Finance Department, headed by Commissioner Atty. Rogelio Quevedo, has successfully conducted two sessions of SuRe Form beta testing last March, participated by a few sample PLCs. At this point, it is a matter of time for all to engage in this journey.

This shifts governance from form to substance: Companies that embed governance into strategy will find SuRe reporting less burdensome and more meaningful, as disclosures naturally flow from well-designed board processes, risk frameworks, and performance metrics.

From the Enterprise Risk Management (ERM) perspective, good corporate governance also serves as a primary response to risks that become most acute when governance structures are weak or absent. Consider risks arising from poor capital allocation, operational risks due to inadequate controls, compliance risks linked to regulatory breaches, reputational risks from opaque and “greenwashing” disclosures, cyber and technology risks without board oversight, and even succession risks when leadership development is neglected. 

Without clear governance structures, these risks compound silently until they materialize as crises. Conversely, a governance-anchored strategy ensures that risks are identified early, owned by accountable executives, monitored by the board, and integrated into strategic decision-making.

Further, recognition programs such as the Institute of Corporate Directors’ (ICD) ASEAN Corporate Governance Scorecard Golden Arrow Awards reinforce the strategic value of good governance. These awards are just not cosmetic honors (nothing wrong with looking good for the right reasons) but more importantly — they signal to investors, regulators, and stakeholders a high set of standards for transparency, board effectiveness and disclosure quality.

Companies that consistently earn Golden Arrow recognition tend to exhibit disciplined boards, credible management teams, and lower governance risk premiums. As the latest ICD Corporate Members, SMIC and SM Prime led the way this year as recipients of 5 Golden Arrows, having incorporated good governance practices consistently over the years. Talk about correlations…

Finally, it is important to note the pivotal role of governance in board and C-suite performance assessments. A mature governance framework requires regular, structured evaluations of the board, committees, individual directors, and senior executives. These assessments — aligned with strategy, risk appetite, and ESG priorities — help identify capability gaps and priorities. After all, a most critical driver for CEO success is the overall performance of a capable senior management team.

When governance expectations are clear, consistent, and embedded in strategy, executives operate within a culture that values good governance as a necessary support to performance. This culture encourages better judgment, more rigorous debate, and higher-quality decisions — hallmarks of effective leadership. 

Over time, governance becomes self-reinforcing: strong boards attract strong executives; strong executives strengthen governance; and together they build resilient, sustainable enterprises. As Philippine listed companies look toward 2026, the message is clear. Governance should not be treated as a regulatory afterthought, but as a strategic pillar — integrated with ERM, performance management, sustainability and leadership development.