In January 2018, IFAC released a new publication, Focusing on Performance, which is designed to raise awareness of the importance among PAOs of good corporate governance practices and principles. This new blog series features stories from professional accountancy organizations (PAOs) across the globe as they reflect upon and highlight the importance of adapting governance arrangements to drive performance while considering their current and past governance arrangements.

In 2001, reform-minded influencers gathered from different disciplines to form the Institute for Solidarity in Asia (the Institute). Together, its founding members sought a return to values and meaningful civic participation, and envisioned a Philippine nation led by strong and upstanding democratic institutions. At the same time, the leadership of the Philippines Professional Regulation Commission (PRC) also saw the need for good governance for all professional sectors.

This vision quickly met with presidential approval, demonstrated by the issuance of the “Code of Good Governance for the Professions” in the Philippines in 2003. The Code stated that good governance will promote and establish ethical awareness and competency among Filipino professionals to make them accountable and fulfill their professional obligation to clients. It also empowers professionals not only to upgrade or improve their technical and ethical proficiency but also keep pace with modern trends and technology in their respective professions. This assures high-quality, value-adding, and globally-competitive professional services, and secures the public’s safety and protection.

Now in its 15th year of service, the Institute is the country’s foremost authority on transforming the public sector for good. It approaches governance reforms through its Performance Governance System (PGS), a balanced and collaborative platform for executing transformation plans.

In 2006, the Institute collaborated with the PRC through the Board of Accountancy (BOA) together with the Philippine Institute of Certified Public Accountants (PICPA)—the Accredited Professional Organization (APO) for CPAs—and began its journey to improved organizational governance by institutionalizing the Institute’s Performance Governance System (PGS) for the accountancy profession with the ultimate objective of contributing to national economic and social development. The success of this journey is a direct result of many volunteers coming together to achieve milestones and breakthroughs, giving back collectively, and supporting the progressive development of our profession and country. Since implementation of the PGS, PICPA has become instrumental in strengthening and enhancing unity and coordination amongst the Philippines’ professional accountancy organizations, regulatory bodies, and stakeholders.

Good Governance is our DNA

PICPA’s PGS implementation journey followed nine key principles, which align with many of the principles outlined in IFAC’s latest resource on good governance practices.

The first step for any organization seeking to enhance its governance is to define a set of fundamental values that serve the public interest and common good by which the organization operates. All individuals involved in the governance structure should embrace these fundamental values so that good governance is fully integrated into the PAO. At PICPA, a PGS Committee was established to outline our values and incorporate them into the accountancy profession’s Governance Charter, in cooperation and collaboration with leaders, officers, and members of the profession.

Following the creation of the accountancy profession’s PGS Governance Charter, PICPA led the establishment of a PGS Governance Roadmap—strategically outlining the priority areas and activities that will achieve the stated vision. PGS Committee volunteers regularly met—oftentimes on weekends and long evening meetings—to draft the Charter and Roadmap. Investing in and utilizing our human capital resources—our volunteers’ commitment, dedication, diversity, and talents—was key to developing the Roadmap.

What Gets Measured, Gets Done

Once the PGS Roadmap for the accountancy profession and accompanying initiatives were outlined, the PGS Committee realized it needed to define specific targets and metrics to monitor and evaluate the organization’s strategic direction and business operations, and follow up with actions to ensure progress and continued alignment with objectives.

The defined targets and metrics were aggregated as part of a PGS Governance Scorecard. The PGS has four stages: Initiation (Design), Compliance (Execute), Proficiency (Monitor) and Institutionalization (Sustain). These stages illustrate that good governance is a never-ending process and is always subject to review and improvement to ensure that the best aspects are institutionalized to drive the organization forward.

The targets were cascaded down so that PICPA National Office and PICPA Chapters, as well as the sectoral organizations, include the targets within their annual planning. Monitoring achievements are regularly undertaken by PICPA under the Office for Strategy Management (OSM), including chapters and sectoral organizations.

Power of Communication and Collaboration

At PICPA, we understood that the successful institutionalization of the PGS, good governance arrangements, and stakeholder value optimization in our operational context requires a shared responsibility and necessitates key stakeholder involvement. For example, the PGS Committee has evolved so its members are key sectoral organization leaders as well as government regulatory agency leaders. This includes the Professional Regulations Commission - Board of Accountancy, Securities and Exchange Commission, Bureau of Internal Revenue, Cooperative Development Authority, and the Energy Regulatory Commission as well as business organizations, among others.

We also actively reach out to schools and universities, standard-setting bodies, the Junior Institute of Accountants and others to maintain a high level of support and ensure a variety of viewpoints and inputs to achieve the set targets. Our outreach allows us to turn what may appear to be a purely technical, top-down exercise (cascading down goals) into collective excitement and empowerment among CPAs and Officers, all levels of PICPA staff, and beyond. Moreover, this approach corrects any impression that governance is a slow-moving process, implemented by a select group of executives, yielding results only after many years, which helped secure buy-in for the initiative.

Building on Success

In 2016, the Institute reviewed the Philippine’s accountancy professions’ PGS Governance Roadmap and system compliance. At its conclusion, the Institute granted three distinguished awards to PICPA and the accountancy profession—the PGS Institutionalized Award, the Gold Performance Trailblazer Award, and the Islands of Good Governance Award. In addition to these honors, PGS implementation within the accountancy profession has led to significant achievements in four other key areas: nation-building and service to others; raising the bar of professional excellence; international image and reputation; and leadership, organization and stakeholder engagement.

Furthermore, due to this recognition and its significance to the Philippine economy, the accountancy profession was one of the professions that was involved in the development of the national 2030 Roadmap for the Professions. Other sectors represented in this initiative included local governments, business, media, youth, academe, religious institutions and the professions.

The 2030 Roadmap specifies the broad strategy for professional sectors within the Philippines to develop the country into a national community of responsible citizens in a generation's time. The 2030 Roadmap included two objectives of great relevance to professions and the accountancy profession in particular: aligning professional and ethical standards with global standards and spreading social responsibility programs to all sectors of society.

PICPA is committed to sustaining and building upon the cultural transformation in our accountancy profession and sustaining good governance for CPAs as a dynamic force in nation-building. We welcome and embrace the challenges and opportunities of globalization and regional integration to become relevant and sustainable. The emergence of the services sector as a major force and player in the global value chain finds the professional accountant at a great vantage point to capitalize on the benefits. Through the PGS, PICPA and its governance arrangements are prepared to remain dynamic and agile to serve national, regional, and global needs.