If you knew that a company does business in an ethical way, would you buy more of its shares? Would you do more business with that company? Does good corporate governance translate into shareholder or customer loyalty?

Jesus P. Estanislao, chairman of the Institute for Corporate Directors, thinks so. He says corporate governance is closely linked with performance. He doesn’t have the figures yet. He is still in talks with the University of Asia and the Pacific to do a thorough study on the topic.

During the ICD roundtable last Wednesday, Jess revealed the top 20 listed companies in the 2007 Corporate Governance Scorecard. Here is the list:

Alaska Milk Corp.
Alsons Consolidated Res., Inc.
Asian Terminals, Inc.
Ayala Corp.
Ayala Land Inc.
Bank of the Philippine Island,
First Gen. Corp.
First Philippine Holdings Corp.
Globe Telecom Inc.
Manila Electric Co.
Manila Water Co.
MIC Holdings Corp.,
Panasonic Manufacturing Phils. Corp.
Petron Corp.
Philex Mining Corp.
Philippine Long Distance Telephone Co.
San Miguel Corp.
Semirara Mining Corp.
Sun Life Financial Inc.

Read my article here.

It’s going to be a tough thing to prove. But in the post-Enron world, and most recently the Societe Generale, wanting more good governance should be a no-brainer. The problem is, investing and chasing after returns can get the most of the market and put ethics in the backburner – until the next scandal comes along.

Meanwhile, here’s a video of Jess saying that Philippine listed companies’ governance practices are now at par with Asian countries, with the top five already at par with the US. Enjoy.

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