By Jomarc Angelo M. Corpuz
Business decisions today are being made against a myriad of challenges headlined by rapid technological change, new regulations, climate risks, cybersecurity threats, and erratic customer expectations. For companies managing multiple businesses and investments, the additional challenge increasingly stems from determining which opportunities to pursue, which risks to accept, and where resources can create the greatest long-term value.
In an exclusive interview, Frederic C. DyBuncio, president and chief executive officer of SM Investments Corporation (SM Investments), explained how corporate governance provides a structured approach to navigating these decisions.
“Corporate governance helps ensure that significant investments, emerging risks, and strategic initiatives are discussed by the right people, supported by the right information, and assessed from multiple perspectives before commitments are made,” Mr. DyBuncio told BusinessWorld.
Evaluating opportunities and risks
This approach centers on decision quality. Good governance, Mr. DyBuncio explained, means major decisions are supported by facts, risks are understood before resources are committed, and different viewpoints are considered before conclusions are reached.
“Whether the decision involves entering a new market, investing in technology, responding to a cybersecurity threat, or pursuing a sustainability initiative, governance helps management make informed choices while maintaining clear accountability for outcomes,” he said.
SM Investments’ experience with sustainability and technology provides examples of how these processes can work in practice.
On sustainability, governance structures have supported investments in renewable energy through the Philippine Geothermal Production Company (PGPC) and the widespread use of solar power across mall operations. Such initiatives involve several considerations that stem from true environmental stewardship and long-term business goals.
“These initiatives required balancing investment considerations, energy requirements, operational resilience, environmental impact, and long-term business objectives. Through structured oversight and review, these factors could be evaluated collectively rather than in isolation,” Mr. DyBuncio said.
The same approach applies to emerging technologies at the corporation. SM Investments has established an AI Council to help guide the responsible adoption of artificial intelligence across its businesses, as well as an IT Council that promotes strong cybersecurity and technology risk management practices across the group.
“These forums bring together business, risk, and technology leaders to evaluate opportunities and risks before significant technology decisions are made,” Mr. DyBuncio shared.
“Together, these initiatives demonstrate how governance helps transform emerging issues into informed business decisions,” he added.
Creating an environment where people can question assumptions is another part of the process where constructive challenge is an important part of decision-making.
“SM Investments maintains formal escalation mechanisms that allow concerns, risks, and differing views to be raised and discussed at the appropriate level,” Mr. DyBuncio said.
This also supports the group’s focus on long-term decision-making. Major investments and initiatives are assessed for their immediate business impact as well as their implications for sustainability, competitiveness, future growth, and the organization’s ability to manage changing conditions.
Investments in renewable energy, solar-powered operations, climate initiatives, and responsible technology adoption are some of the examples he mentioned of decisions intended to support long-term value creation.
Maintaining this perspective requires governance practices that can adapt as business models, technologies, and stakeholder expectations change.
Leaders influence how risks are discussed, whether assumptions are challenged, and how decisions are evaluated. Governance, therefore, becomes part of an organization’s culture when leaders encourage thoughtful debate, welcome different perspectives, and demonstrate sound judgment in the decisions they make.
“The key lesson is that governance is most valuable when it improves decision-making rather than simply supporting compliance,” Mr. DyBuncio said.