A century of building institutions (1)

A century of building institutions (1) | Daily Tribune

I am Ginggay Hontiveros Malvar, chief reputation and sustainability officer at Aboitiz Equity Ventures and also concurrently, president of Aboitiz Foundation.

The Aboitiz Group is one of the Philippines’ leading business groups, with interests in power, banking and financial services, food and beverages, infrastructure, and real estate. Guided by over a century of business excellence, Aboitiz is transforming into the Philippine’s first techglomerate, leveraging innovation, sustainability and good governance to create long-term value and drive positive change.

When I was asked to speak about governance, I have to admit that I hesitated a little. Not because governance is unimportant — quite the opposite. But because governance is one of those topics that people usually talk about only after something has gone wrong. We talk about governance after a corruption scandal, after a failed project, after an audit finding, or after public trust has been damaged. Very few people wake up in the morning excited to discuss governance.

And yet, after spending much of my career working with communities, local governments, regulators, investors, development partners and businesses across the country, I have come to believe that governance is often the difference between institutions that endure and institutions that struggle.

I also want to be upfront about something. I am not here to tell you how to run your municipalities. You know your realities far better than I do. You understand the political pressures, the resource constraints, the competing interests, and the everyday challenges that come with local leadership. What I can offer instead is a perspective from the private sector. I can share what we have learned at Aboitiz over more than a century of building businesses, navigating crises, transforming ourselves, partnering with governments and communities, and trying to remain relevant across generations.

Some of those lessons came from successes. Many came from mistakes and our own failures. And perhaps the most important lesson is this: governance matters most when there is pressure to ignore it.

Before I go further, let me start with the textbook definition. Governance is the system of rules, practices, and processes by which an organization or society is directed, controlled and held accountable. It defines who makes decisions, who holds authority, and how risks and performance are monitored.

Government is the institution. Governance is how the institution works.

In our case, Aboitiz is the institution. Governance is how decisions are made within that institution.

But over the years, I have come to think about governance much more simply. Governance is really about how institutions make decisions when things become difficult. Because when everything is going well, governance is easy. Governance is tested when there is pressure — pressure to move faster, pressure to make exceptions, pressure to avoid difficult conversations, pressure to prioritize immediate results over long-term outcomes. That is when governance stops being a policy and becomes a leadership discipline.

One of the reasons I care deeply about governance comes from the history of our own organization.

The Aboitiz Group is now more than one hundred years old. When people hear that, they often assume that longevity is simply the result of making good business decisions. Certainly that is part of the story. But as I reflect on our history, I have come to believe that what allowed the organization to survive wars, economic crises, political transitions, industry disruptions, technological change, and multiple generations of leadership was not simply strategy. It was the willingness to evolve the way decisions were made.

Like many family-owned businesses, there was a time when leadership and authority were concentrated among family members. That model worked when the organization was smaller and less complex. But as the business expanded into multiple industries and engaged with a growing number of stakeholders, the family had to confront a difficult reality. The future of the organization could not depend on the judgment of a few individuals alone.

At some point, the family had to ask itself a difficult question: Are we building a family business, or are we building an institution?

That sounds like an obvious question today, but it was not an easy one at the time. Because governance required giving up some control. It required accepting greater scrutiny. It required bringing in professional managers and empowering them to lead. It required giving independent directors meaningful oversight roles. It required creating stronger systems for risk management, succession planning, disclosure, accountability, cybersecurity, sustainability and reputation management.

Most importantly, it required accepting that the best ideas might come from people outside the family.

Looking back, many of those decisions were uncomfortable. Governance often is. It requires leaders to hear views they may not agree with. It requires decisions to be challenged. It requires accepting that no single person has all the answers. But those decisions strengthened the institution. They allowed the organization to become bigger than any one individual, any one family member, or any one generation.

And I think there is a lesson there for all leaders, whether in business or government. Every mayor eventually faces a version of the same question. Not about family, but about leadership. Are you building a municipality that depends on you, or are you building a municipality that can continue to succeed long after you have left office? Because leadership is temporary. Terms end. Administrations change. People move on. But institutions remain.

One of the biggest challenges we face in the Philippines is that we often build around personalities instead of institutions. Every election risks a reset. Every leadership transition risks losing momentum. Every change in administration risks starting over.

Good governance helps to protect continuity. It protects institutional memory. It protects progress. And one of the hardest lessons in leadership is this: Immature leaders want institutions to depend on them. Mature leaders build institutions that can thrive without them.

(To be continued)