Corporate Governance linked to firm value

by ABS-CBN News, December 27, 2009.

MANILA, Philippines – Listed firms that exhibit good corporate governance are valued more by investors, a recent study by the Philippine Stock Exchange (PSE) showed.

The study examined corporate governance and firm value in the Philippines, and found “positive correlation” between the two.

According to the study, which was conducted by corporate governance expert Dr. Stephen Cheung of the Hong Kong Baptist University, investors are most concerned about the equitable treatment of shareholders, disclosure and transparency, as well as board responsibilities.

The study also revealed that investors reward Philippine firms for disclosing more than what is required of them. Listed firms are compelled to inform the exchange details that range from as simple as the names of key officials hired to more complicated ones like plans and execution of mergers and acquisitions. These information are vital in decisions to buy, sell or hold firms’ stocks.

“These findings prove that investors value corporate governance practices as well as affirm the PSE’s direction of promoting good corporate governance practices in listed companies,” noted PSE president and chief executive Francis Lim…(continue reading)

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