Corporate governance in a family-owned corporation

At the BAIPHIL 3rd General Membership Meeting, corporate governance “guru” and guest speaker Dr. Jesus Estanislao emphasized that governance demands a focus on the longterm, realizing a great “vision” in five to ten years. Governance demands a focus on the institution and what the institution should become. Yes, people are very important, but cautioned against personalities.

He said governance asks for a strategy, a set of priorities pursued across all the different facets of any business. The key focus is on priorities which must be inter-connected and mutually supportive.

How then does one apply and observe them to a family-owned or controlled corporation? Tough question, he said, especially if the founding patriarch is still around. Governance goes way beyond mere practices and rules. It is made alive and comes into genuine force only if individuals decide to take on and personify the basic governance personal values such as integrity, fairness to all, personal discipline and courage. These are the personal values that make governance really count. These are the governance values that should be adopted by all corporations. Dr. Estanislao said this is required of everyone and more so of family members, given their significant position within a family-owned corporation, they are specially called upon to observe these personal governance values.

Is governance all about compliance? Is it simply ticking off some 100 scorecard questions such as:

- Do we have diversity e.g. enough women directors in our board?

- Do we have enough independent directors?

FLOR G. TARRIELA is the Chairman of Philippine National Bank. She is former Undersecretary of Finance and the First Filipina Vice President of Citibank N.A. She is Go Negosyo 2018 Woman Intrapreneur Awardee. She is a FINEX Foundation Trustee and an Institute of Corporate Directors(ICD) Fellow.