Increase in minimum float for better corporate governance

Corporate governance is a system of rules and policies by which a company is directed and controlled. It influences the behaviour of the company including how risks are managed and how objectives are set.

In the past decade, the interest in corporate governance, particularly in relation to accountability of the board of directors, has exponentially increased. With the collapse of high-profile corporations such as Enron, WorldCom, and MCI, the US introduced the Sarbanes-Oxley Act, which aimed to weed out corporations with bad governance and restore public confidence.

In Asia, the 1997 Asian financial crisis exposed the weak governance of many corporations, which led the business community to re-examine the effectiveness of their own corporate governance. The government, on the other hand, is stricter than ever in imposing rules and regulations to restore public confidence.

Ann Catherine Co is an associate at the Cebu branch of ACCRA Law Offices