Changes in the boardroom

Would you change your board of directors (BOD) in the middle of a COVID-19 global health pandemic?

This crisis has certainly underscored the important role of the powerful BOD in corporations. It’s an extraordinary time and management needs the extraordinary stewardship and guidance of the board. Some companies have elected new members, putting in place additional independent directors for increased corporate governance.

No change for Lucio Co

Tycoon Lucio Co, on the other hand, does not think changes are needed at this time. While he considers COVID-19 as the worst crisis he has ever faced as a businessman, even far worse than the 1997 Asian Financial Crisis, the retail tycoon believes his group cannot afford changes in the board at this time.

Any change now, he said, would only burden the company instead of helping it overcome the global pandemic.

“We need a board of directors to confidently respond to these challenges, such response will only come from a BOD that  is knowledgeable and competent to navigate this extraordinary time,” Co told shareholders of listed Puregold Price Club recently.

Thus, Puregold reelected the same board of directors with Co as chair; Susan Co, Ferdinand Vincent Co, Leonardo Dayao, Pamela Justine Co, Jack Huang as directors; and Edgardo Lacson, Marilyn Pardo and Jaime dela Rosa as independent directors.

House of Tans

It’s a different case for the other Lucio, taipan Lucio Tan, whose sprawling multi-billion dollar business empire is seeing a lot of changes now, perhaps as part of efforts to navigate this extraordinary global health pandemic.

His sons, daughters, and his grandchildren are playing more active roles in the different companies of the taipan.

Listed Philippine National Bank, for instance, welcomed Lucio “Han” Tan III to its board of directors during its recent annual stockholders’ meeting. Han is the son of the late Lucio “Bong” Tan Jr., the son and namesake of the taipan.  He debuted in the PNB board together with Wilfrido Sanchez and Angelito Villanueva.

Outside of family members, the taipan appointed veteran banker Federico Pascual as chairman of the bank. Pascual’s past experiences include a 20-year stint in PNB, as well as leadership roles in organizations such as the Allied Bank, Government Service Insurance System, Department of Trade and Industry, Bankers Association of the Philippines and San Miguel Corp., among others.

Leonilo Coronel, another veteran banker, was appointed vice chairman.

Back to Han, his PNB board seat adds to his growing list of directorships in his grandfather’s empire: LT Group Inc., Philippine Airlines, PAL Holdings, Inc., Philippine Airlines, Lufthansa Technik Philippines, Inc., MacroAsia, Eton City and many more.

He is currently the president and COO of Tanduay Distillers Inc., which he is now steering toward further growth and global expansion, together with his brother, executive vice president Kyle Tan.

Lucio Tan’s daughter Karlu Tan-Say has, likewise, taken an active role in her father’s business. She was recently elected into the board of directors of the LT Group as the taipan’s brother Harry stepped down. Karlu is also COO of Eton, while Tan’s son-in-law Ramon Pascual, husband of another daughter Sheila Tan, is the president and CEO.

Completing the LT Group’s board of directors for 2021 to 2022 are chairman Lucio Tan, vice chairman Carmen Tan, and directors Karlu Tan-Say, Michael Tan, Lucio Tan III, Vivienne Tan, Juanita Tan Lee, Johnip Cua, Mary Ng, Wilfrido Sanchez and Florencia Tarriela.

In the organization meeting after the ASM, the board of directors reappointed the company’s management team led by Tan’s son Michael as president and COO.

Partnership with Philip Morris

Speaking of the Tan empire, its cigarette partner in PMFTC, Philip Morris International Inc. said it is happy with its partnership with the Tan group.

“Our business combination with the Tan family has proven to be very successful and we are absolutely happy with this partnership. We’re focused on bringing ICOS to the Philippines....This is an example of a great partnership. One plus one is equal to more than two,” says PMI’s newly appointed CEO Jacek Olczak.

Olczak, most recently the company’s COO, was appointed CEO following the company’s 2021 annual shareholders meeting last May 5.

Good Governance Governor

Going back to the issue on whether or not to change the composition of board of directors at this time, listed Pilipinas Shell opted to make changes to its board and welcomed another member -- Amando Tetangco Jr., the esteemed multi-awarded two-termer former Bangko Sentral ng Pilipinas (BSP) governor.

His board election increased the number of Shell’s independent directors to four, joining the distinguished roster of Fernando Zobel de Ayala, Cesar Buenaventura and Lydia Echauz.

Gov. Tetangco is known as a good governance guy. He may as well be called the Good Governance Governor. It’s no surprise companies want him in their boards, especially in this difficult time.

Changes

Perhaps changes in any board during this critical time could bode well for corporations, as long as the changes add value to the company and its shareholders.

One thing is certain. Any new member of a board is in for a challenging time. The pandemic will dominate the boardroom agenda and if the company emerges stronger on the other side or fades into oblivion, its board certainly played a huge role in it.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com