Instead, capital is increasingly flowing toward companies that can demonstrate consistency, transparency and disciplined decision-making.
For SM Investments Corp., that shift plays directly to what it sees as one of the group's enduring competitive advantages: corporate governance.
The listed holding company — whose businesses span retail, banking, property, geothermal energy and logistics — argues that governance is more than a compliance exercise. It is a management system that shapes how capital is allocated, risks are managed and long-term value is created.
Governance as corporate philosophy
That philosophy has become increasingly important as the SM group has grown into one of the country's largest and most diversified conglomerates. Managing businesses operating in different industries requires more than scale. It requires a framework that ensures investment decisions remain disciplined regardless of changing market conditions.
“At the end of the day, governance is about making better decisions. It brings discipline to how we allocate capital, manage risk and invest for the long term,” SM Investments president and CEO Frederic DyBuncio told InsiderPH recently.
“Those decisions help us build businesses that earn trust and continue creating value through different economic cycles.”
The company's approach extends beyond meeting regulatory requirements.
Board directors' independence
SM Investments maintains a board where independent directors comprise the majority, reflecting its view that independent oversight strengthens accountability, introduces broader perspectives and ultimately leads to better business decisions.
Its governance practices have also been recognized through the Institute of Corporate Directors' Golden Arrow Awards, which are based on the ASEAN Corporate Governance Scorecard. For the company, the recognition serves as an external benchmark against regional governance standards rather than simply another corporate accolade.
The emphasis on governance also reflects the changing expectations of investors.
As Philippine companies increasingly compete for both domestic and international capital, investors are placing greater weight on how businesses are run, particularly their ability to manage risk, allocate resources efficiently and sustain performance across economic cycles.
For SM, governance has become part of its competitive positioning rather than merely an internal control mechanism. The discipline embedded in its decision-making process is intended to help preserve resilience during periods of uncertainty while supporting growth when opportunities emerge.
Consistency is key
DyBuncio said consistency ultimately determines whether governance creates lasting value.
“Trust is built over time,” he said. “Good governance gives us the discipline to make better decisions, especially when markets become more uncertain. That consistency is what helps organizations remain resilient and continue creating value over the long term.”
As the Philippine economy enters a new phase of development, investors are likely to scrutinize not only how fast companies expand but also how effectively they deploy capital and manage increasingly complex businesses.
For SM Investments, governance is not simply about satisfying regulators or ticking compliance boxes. It is a corporate capability—one that the group believes gives it a durable advantage as competition for investor confidence becomes increasingly intense.
Senior Reporter
