Becoming more effective strategic corporate governance — A Philippine perspective

How does a Board know it is actually becoming more effective?

During the 2008-2009 Global Financial Crisis, the Philippines avoided recession while many economies contracted. The Bangko Sentral ng Pilipinas and its Monetary Board responded through monetary easing, lower reserve requirements, liquidity support and prudential measures while preserving financial stability. During Amando M. Tetangco Jr.’s tenure, the country ended four decades of IMF indebtedness through early loan repayment, strengthened reserves and advanced financial inclusion. Global Finance named Tetangco among the world’s best central bank governors seven times by 2015. The stronger story, however, was “Team BSP”: collective judgment that helped the institution respond and become stronger.

Strategic corporate governance begins there. Becoming more effective is not about assembling impressive names around a table. It is about whether the Board’s composition, conduct, capability and courage improve institutional judgment.

Board effectiveness becomes strategic only when composition, conduct, capability and courage are translated into clear mandates, disciplined work, evidence and better decisions.

The Four Cs provide that test. Composition asks whether the right perspectives are present. Conduct asks whether directors can question and disagree productively. Capability asks whether the Board understands strategy, finance, technology, risk and stakeholders well enough to govern consequences. Courage determines whether directors will act when the sound decision is uncomfortable.

Committee charters make those qualities operational. Audit, risk, corporate governance, related party transactions and nomination or remuneration committees need clear mandates and escalation paths. Their effectiveness is not proven by having charters, but through Mandate → Work → Evidence → Board Judgment: what was examined, what work was done, what evidence reached the Board, and what decision followed?

Conglomerates demand a higher level of effectiveness because diverse businesses, subsidiaries and risks multiply the consequences of weak oversight. The parent Board must see across the enterprise without trying to operate every company itself — “nose in, hands out.” San Miguel Corporation illustrates this through specialized committees that let the parent Board test group-wide risks and consolidated performance while operating companies retain management responsibility.

A Board becomes more effective when evaluation identifies what must improve. In 2026, SM Prime’s Corporate Governance Committee assessed the Board, its committees, individual directors, the chairman, president and key management officers, including information quality and development needs.

Estela M. Perlas-Bernabe chairs the Corporate Governance and Sustainability Committee. The mechanism matters more than the personalities: effectiveness is subjected to evidence, diagnosis and improvement rather than assumed from appointment.

The same discipline applies to composition. SM Prime uses a Board Matrix to test whether skills, experience and perspectives remain aligned with evolving strategic needs. Tetangco now chairs SM Investments Corporation and serves as vice chairman and lead independent director of SM Prime, bridging central-bank governance and conglomerate oversight.

In an earlier Corporate Governance Matters article on “Aligned Corporate Governance,” it was argued that Board, management, strategy and institutional purpose become more powerful when they move coherently rather than as separate governance compartments. Board effectiveness is where that alignment should become visible — in better questions, clearer evidence and stronger judgment.

The real test is whether the institution makes better decisions because the Board exists — decisions that strengthen the trust on which governance ultimately depends.

Effective Boards are ultimately distinguished by a Strategic Corporate Governance culture — one that infuses strategic choices with sound governance practices, disciplines execution with accountability, and keeps institutional ambition anchored in judgment, trust and long-term stewardship.