Despite all the local distractions and global tensions in the last few years, the Philippine corporate landscape has witnessed a clear and decisive shift toward stronger governance standards. At the center of this transformation is the Securities and Exchange Commission (SEC) Corporate Governance Code, which has steadily evolved from a regulatory framework into a strategic pillar supporting the credibility of the Philippine capital markets. The Code itself is largely anchored on the OECD Principles of Corporate Governance, the globally recognized benchmark for sound governance practices adopted by leading capital markets around the world. By aligning Philippine standards with these principles, the SEC Code strengthens the institutional foundations of the Philippine Stock Exchange (PSE) and the broader capital market ecosystem.

For listed companies, governance is no longer simply about regulatory compliance — it is about sustaining investor trust, strengthening institutional credibility, and ensuring long-term corporate resilience.

Capital markets operate fundamentally on confidence. Investors commit capital only when they believe that companies operate with transparency, accountability, and responsible leadership. The SEC Corporate Governance Code addresses precisely these concerns by placing the board of directors at the center of corporate stewardship.

The Code emphasizes ethical leadership, full and fair disclosure, strong internal controls, and the equitable treatment of stakeholders — principles that are essential for sustaining investor confidence

Recent reforms introduced by the SEC further reinforce this governance direction. One significant development is the strict nine-year cumulative term limit for independent directors, implemented through SEC Memorandum Circular No. 7, Series of 2026.

By enforcing a clear term limit, the SEC aims to refresh board perspectives, enhance objectivity in oversight, and ensure that independent directors continue to exercise impartial judgment in safeguarding shareholder interests. The reform also aligns Philippine governance practices more closely with global standards.

In addition to board reforms, the SEC has also strengthened beneficial ownership disclosure requirements, requiring corporations to provide clearer identification of individuals who ultimately control or benefit from corporate entities. This initiative seeks to improve transparency in corporate structures and prevent the misuse of companies for illicit or misleading purposes.

These reforms reflect a broader recognition that governance is not merely a regulatory obligation — it is a competitive advantage for capital markets. Investors today routinely compare governance standards across jurisdictions such as the ASEAN Corporate Governance Scorecard, currently handled by the Institute of Corporate Directors. Within ASEAN, markets such as Indonesia, Malaysia, Singapore, Thailand and Vietnam have prioritized — and made significant progress — in strengthening board independence, disclosure practices, and regulatory enforcement.

The board of directors therefore carries a crucial responsibility in this evolving landscape, with the SEC Code encouraging boards to establish strong governance structures, including independent directors and specialized committees such as the Audit Committee, Risk Committee, and Corporate Governance Committee. These structures allow the board to monitor management performance while maintaining accountability to shareholders and stakeholders.

Yet governance ultimately goes beyond structures and policies. It is fundamentally about decision-making. Boards must ensure that decisions are made through informed deliberation, supported by accurate information, robust risk assessment, and a commitment to ethical leadership, all towards long-term value creation.