Independent judgment and meritocracy: Driving growth from the boardroom

PASAY CITY,Philippines,Jan. 24,2025 --Meritocracy is advancing as an indicator of effective governance,with a focus on qualifications,expertise,and independent judgment to propel organizations forward and drive growth from the boardroom.

Frameworks focused on merit and excellence exemplify the growing emphasis on ensuring that board members bring meaningful contributions to their roles.

SM Investments Corporation recently highlighted this principle from the lens of its independent directors. Tomasa "Tammy" Lipana,Independent Director and Chairperson of SM Investments' Audit Committee,emphasized the importance of qualifications: "You need to look at qualifications. A board member should add to the company's reputation which is crucial for investors and other stakeholders."

This sentiment is echoed by Atty. Lily Gruba,Independent Director of SM Investments,who pointed to the natural diversity within the board as a product and clear indication of a healthy meritocracy. "Ideally,the perfect meritocracy is blind to and independent of issues of gender,background,and race,at least where it is not relevant. This is the next level to aspire for in any organization—that it is composed of persons of merit,not just a collection of diverse personalities," she said.

SM's governance framework exemplifies its commitment to professionalization,accountability,integrity,fairness,sustainability,and transparency. The company has been raising the bar on corporate governance by promoting independent judgment and fostering leadership that aligns with the highest standards.

A landmark decision in 2023 saw the appointment of Amando M. Tetangco,Jr.,former Governor of the Bangko Sentral ng Pilipinas,as Chairman of the Board—the first independent director to hold this position in SM's history. This underscores the company's prioritization of expertise,professionalism and the value of independent leadership in shaping its future.

Over 50% of SM's board seats are held by independent directors,exceeding regulatory standards and setting an industry benchmark. Two of these directors are women known for their expertise in taxation and corporate law,mergers and acquisitions,audit and accounting,to name a few,highlighting a balance between diversity and merit. Independent directors also lead key committees,including Audit,Corporate Governance and Sustainability,Related Party Transactions,and Risk Management,further ensuring objective independent judgment on corporate affairs.

Completing SM's distinguished roster of independent board directors are Ramon M. Lopez,former Secretary of the Philippine Department of Trade and Industry (DTI) and Robert G. Vergara who previously served as the President and General Manager and Vice-Chairman of the Board of Trustees of the Government Service Insurance System (GSIS).

These initiatives reflect a commitment to fostering performance and competence,while upholding high governance standards,meeting investor expectations and societal demands and helping drive inclusive growth.