The institute, which conducts the annual corporate governance survey among listed firms, will adopt a new scorecard prepared by experts from the members of the Association of Southeast Asian Nations (ASEAN), ICD Chairman Jesus P. Estanislao said.

“The principles will still be the same, but there are four new items added,” Mr. Estanislao said, noting that the number of questions in the new scorecard have been expanded to 195 from 119.

He said the four new items that will be included in the scorecard will cover matters delving on the separation of the chairman and chief executive officer (CEO), the number of board of directors, the term limits for independent directors, and the 5% minimum allotment of traded shares to institutional investors.

“The Philippine law allows up to 15 independent directors, but in the ASEAN [standard], they want to put it at 12,” Mr. Estanislao said.

“The Philippine law allows the chairman and CEO to be the same person, but it is discouraged. In the ASEAN scorecard, it is not allowed,” he added.

Mr. Estanislao said the Philippines requires a 10% minimum public float, while the ASEAN mandates firms to allot 5% of their traded shares for institutional investors.

For the term limits of independent directors, Mr. Estanislao said the Philippines allows up to 10 years, with a two-year “cooling period” after the first five years. “In the ASEAN it is only nine years,” he said.

ICD President Rex C. Drilon, said the job of the chairman and CEO “are theoretically separate full-time jobs,” with the former assigned to lead “policy making,” while the latter is tasked to “execute board approvals.”

Mr. Estanislao said the new scorecard will also have bonus point for those firms that would not merit penalties from the Securities and Exchange Commission, as well as for firms which have gender diversity in their boards.

The previous scorecard only graded the companies in the following criteria: rights of the shareholders, equitable treatment of shareholders, roles of stakeholders, disclosure and transparency, and responsibilities of the board.

Mr. Drilon said the new scorecard comes ahead of the planned regional market integration by 2015.

“One way to be active in that integration is to think the same way [like our ASEAN peers] as far as corporate governance is concerned, that is why we are adopting the same metrics and the same questions, Mr. Drilon said.

Good corporate governance, Mr. Estanislao said, will also boost investments. “Whether we like it or not, most of the investment flows are global so they (investors) look for the economies that they can trust,” Mr. Estanislao said.

Commenting on the scorecard, Solomon M. Hermosura, compliance head of Ayala Corp., welcomed the new system. “If we are going to prepare for the market integration [in the region], I think there should be a common corporate governance standard,” Mr. Hermosura said — CHCV