The country’s top corporations have shown that they have been walking the talk even before signing the Covenant for Shared Prosperity wherein they have sacrificed profitability in order to take care of their stakeholders and ensure sustainability.
SM Prime Holdings Inc. Chairman Hans T. Sy said that, during this pandemic, “We were the first to announce to continue all the salaries even when we were all down. So these are all sacrificing profits. Why do we do that? …We are all looking into long term. Investment is not only just for the short term basis, it is really for the long term we're in here.”
Ayala Corporation Chairman Jaime Augusto Zobel de Ayala agreed with Sy, noting that most businesses, “in one way or another has suffered a great deal of pain and, in many ways, to preserve the ecosystem, to retain their employees, the people that support them.”
“I have 1001 examples that I've seen during this crisis of everybody sacrificing a great deal,” he noted.
Sy and Zobel were keynote speakers during the launching of the Philippine Business Community’s Covenant for Shared Prosperity organized by the Management Association of the Philippines.
“As we struggle with the COVID pandemic, we also need to address the critical longer-term global issue of inequality which has worsened because of the current health crisis. Many businesses have closed, millions have lost jobs and many are going hungry,” said MAP President Francis Lim.
He noted that, “When the crisis is over, we at MAP would like to see a new ‘normal’ in the way we deal with our stakeholders -- our employees, customers, product/service/fund providers, the communities we serve (especially the bottom of the pyramid), the environment and our shareholders (both majority and non-controlling shareholders).”
Lim explained that, “The Covenant… is envisioned to be the private sector’s response to the stakeholder theory now enshrined under the Revised Corporation Code.”
Securities and Exchange Commission Chairman Emilio Aquino explained that the stakeholder theory is a major shift in focus of businesses which used to be focused only in the interests of its stockholders.
Aquino said that, now, publicly-listed companies “are mandated to report on their economic, environmental and social impacts which further strengthened the Stakeholder Theory. At this point, we have seen a drastic paradigm shift in the way corporations do business and create shareholder value. Profit, while essential in the survival of the corporation, is not anymore the sole focus of corporate ventures.”
“Maybe it had to take a beast like COVID-19 for all of us to understand that we all have to support each other as communities and institutions if we are to rebuild successfully,” said Zobel.
He added that, “Now, more than ever, we have to find ways to expand our traditional definition of who we are responsible for and accountable to – well beyond our shareholders and other providers of capital; well beyond the sole pursuit of profit.”