With the creation of the Governance Commission for Government-owned or -Controlled Corporations (GCG), there is now an agency that centrally and directly monitors GOCCs, ensuring their viability and operational efficiency.
The GCG is mandated to rationalize the operations of these GOCCs to promote efficient use of government resources and curb corrupt activities. The GCG helps ensure that public funds do not go to waste and instead are used to deliver much-needed services to Filipinos.
The GCG has three appointive members of the Commission and two Ex-Officio members, the Finance Secretary and the Budget and Management Secretary.
The GCG has so far introduced a number of major policy reforms—the Fit-and-Proper Rule for Appointive Directors and CEOs of GOCCs, the Ownership and Operations Manual Governing the GOCC Sector, and the Code of Corporate Governance for GOCCs.
SELECTION, NOMINATION OF DIRECTORS
The GCG oversees the selection and nomination of directors/trustees and maintains the quality of Board Governance.
GCG implements the Fit-and-Proper Rule which refers to the standard for determining whether a CEO or a member of the Board of Directors or Trustees is fit and proper to hold a position in a GOCC.
The Fit-and-Proper Rule includes standards on integrity, experience, education, training, and competence. All members of the Board, the CEO and other officers of the GOCCs including affiliate corporations and appointive directors in subsidiaries are assessed using the Fit and Proper Rule.
Additionally, appointive directors, including CEOs, are only allowed a term of one year. The GCG may nominate appointive directors for reappointment but only if they obtain a required minimum performance score for their immediately preceding tenure.
A set of performance criteria is used to assess the performance of appointive directors. This entire system helps keep appointive directors on their toes and compels them to deliver the duties and functions with utmost integrity and excellence.
INSTITUTIONALIZING GOOD GOVERNANCE
The GCG institutionalizes transparency, accountability, financial viability and responsiveness in corporate performance by monitoring and enforcing GOCCs performance.
This is done through the Performance Target Conferences or PTCs. These are annual high-level meetings between the GCG and the CEO of a GOCC for the setting of the final performance targetting of the GOCC for a specific year.
PTCs help GOCCs improve performance by assessing whether they achieved the targets set for the previous year, providing an opportunity to establish new baselines and targets.
The GCG and GOCCs use an established performance evaluation system and performance scorecards to monitor the yearly results of GOCCs. The Performance Evaluation System (PES) enables GOCCs to identify their strategies for development and achieve breakthrough results.
The GCG also instituted the adoption of the Quality Management System in GOCCs to link regular strategy and operations review to process re-engineering.
The GCG also implemented the Performance Evaluation for Directors (PED) in order to monitor and assess the performance of appointive directors in GOCCs through peer review organizational performance and Board attendance.
The GCG promotes Government Corporate Standards, which is a set of rules and practices that are geared towards generating long-term and desirable economic value for the State. It also refers to a system where shareholders, creditors, and other stakeholders of a GOCC ensure that management enhances the value of the corporation as it competes in an increasingly global marketplace.
These Standards also promote transparency and accountability among GOCCs by requiring a statement of the social responsibilities of GOCCs and establishing disclosure requirements and a publicly accessible portal for Integrated Corporate Reporting System or ICRS, among other mechanisms.
STREAMLINING GOCCS
The agency rationalizes the Sector through streamlining reorganization, merger as well as recommending to the President of the Philippines the privatization or abolition of a GOCC.
Rationalization is the process of determining the relevance of a GOCC, ascertaining whether such GOCC should be reorganized, merged, streamlined, abolished, or privatized, with the view of ensuring that government assets and resources are used efficiently and government’s exposure to all forms of liabilities including subsidies is warranted and incurred through prudent means.
ESTABLISHING COMPENSATION STANDARDS
The GCG establishes compensation standards to ensure reasonable and competitive remuneration schemes that attract and retain the right talent. The GCG created the Compensation and Position Classification System or CPCS which is a mechanism mandated by RA 10149 to promote a standardized compensation package and index of occupational services for GOCC officers and employees.
The goal is to develop a competitive compensation and remuneration system that will attract and retain talent while allowing GOCCs to remain financially sound and sustainable. All GOCCS including
their subsidiaries are covered by the CPCS.
CUSTOMER FEEDBACK
Last April 12, the GCG and the Anti-Red Tape Authority (ARTA) signed Joint Memorandum Circular (JMC) No. 1, s. 2023, that provides supplemental guidelines on the implementation of a harmonized framework for client satisfaction measurement among GOCCs.
GOCCs are mandated to maintain a Customer Satisfaction Survey mechanism to enable direct citizen participation in the performance evaluation of GOCCs by giving weight to their experience as customers. This aims to ensure continuous improvement and enhancement of service to Filipinos.
Under the JMC, at least 80% of the customers of a GOCC must be satisfied with its services, otherwise it automatically receives a zero score for this performance indicator.
The JMC also aims to reduce the cost and burden of compliance of GOCCs with the Client Satisfaction Measurement (CSM) and Client Satisfaction Survey (CSS) requirements.
With the harmonization of the system, the GCG and G OCCs will be able to better analyze government performance and thereby improve public service delivery.
