In 2002,the Company adopted a Manual on Corporate Governance in order to institutionalize the rules and principles of good corporate governance in the entire organization in accordance with the Code of Corporate Governance. The Manual on Corporate Governance is revised pursuant to SEC Memorandum Circular No. 6, Series of 2009 and as amended by SEC Memorandum Circular No. 9, Series of 2014.
The Company has a compliance officer who monitors compliance of ethics or conduct.
Directors submit annually a list of business and professional affiliating through which provide conflicts-of-interest may be determined. Relative to senior management and employees, the Human Resources Department of each subsidiary and affiliate implements and monitors compliance with the code of ethics or conduct.
The Company has designated a Compliance Officer who is tasked with monitoring compliance with the provisions of its Manual of Corporate Governance. The Compliance Officer, who is directly reporting to the Chairman of the Board, has established an evaluation system to measure or determine the level of compliance by the Company with its Manual. A Self-Rating System on Corporate Governance was implemented and submitted to SEC and PSE in July 2003.
In 2009, the Company substantially complied with its Manual of Corporate Governance and did not materially deviate from its provisions.
No sanctions have been imposed on any director, officer or employee on account of non-compliance.
Pursuant to SEC Memorandum Circular No. 6, Series of 2009, the Company has revised its Manual of Corporate Governance to make its provision complaint with the Revised Code of Corporate Governance.
Among the measures undertaken by the Company in order to fully comply with the provisions of the leading practices on good corporate governance adopted in its Manual on Corporate Governance are monitoring and evaluation of the internal control system for corporate governance. The Company likewise maintains an active website where its Annual Reports, Quarterly Reports, Financial Statements and other disclosures are uploaded for easy access and reference by the investing public. The Company is committed to good corporate governance and continues to improve and enhance the evaluation system for purposes of determining the level of compliance by the Company with its Manual on Corporate Governance.
The Company’s Corporate Governance Committee is tasked to assist the Board in the performance of its corporate governance responsibilities. It shall oversee the implementation and periodic review of the corporate governance framework, oversee periodic performance evaluation of the Board, recommend continuing relevant education/training programs for directors, assignment of tasks/projects to board committees, succession plan for the board members and senior officers, and remuneration packages for corporate and individual performance, determine the nomination and election process for the Corporation’s directors and the general profile of board members, and ensure that the nomination and election policy and procedures are conducted properly.
It is composed of at least three (3) members, two of whom are independent directors, including the Chairman.
The Company’s Board Risk Oversight Committee is responsible for the oversight of the Corporation’s Enterprise Risk Management system to ensure its functionality and effectiveness. It shall develop, oversee the implementation, and evaluate a formal enterprise risk management plan, advise the Board on its risk appetite levels and risk tolerance limits, and provide oversight over Management’s activities in managing credit, market, liquidity, operational, legal and other risk exposures of the corporation.
It is composed of at least three (3) members of the Board, the majority of whom should be independent directors, including the Chairman. The Chairman should not be the Chairman of the Board or of any other committee.
The Company’s Audit Committee has oversight capability over the Corporation’s financial reporting, internal control system, internal and external audit processes, and compliance with applicable laws and regulations. It is responsible for assessing the integrity and independence of external auditors. It monitors and evaluates the adequacy and effectiveness of the Corporation's internal control system including financial reporting control and information technology security, and review the reports submitted by the internal and external auditors.
It is composed of at least three (3) members of the Board who shall preferably have accounting, auditing, and finance backgrounds, majority of whom shall be independent directors and another with audit experience. The chair of the Audit Committee shall be an Independent Director.
The Company’s Related Party Transaction Committee is tasked with reviewing all material related party transactions of the Corporation. It evaluates on an ongoing basis existing relations between and among business and counterparties, ensures that appropriate disclosure is made, and/or information is provided to regulating and supervising authorities relating to the Corporation’s RPT exposures, and policies on conflicts of interest or potential conflicts of interest, ensures that transactions with related parties, including write-off of exposures are subject to a periodic independent review or audit process and oversees the implementation of the system for identifying, monitoring, measuring, controlling, and reporting RPTs, including a periodic review of RPT policies and procedures.
The Committee is composed of at least three directors, two of whom should be independent, including the Chairman.
These activities are undertaken directly at the subsidiary and associate level. Some of the Company’s directors and officers may render some form of community service or social responsibility activity in connection with the activities of the respective subsidiaries and affiliates that they handle.
The Board, thru the Audit Committee, reviews the effectiveness of the Company’s, including its subsidiaries and affiliates, risk management system with emphasis on monitoring of existing and emerging risks as well as risk mitigation measures and on identifying risks before these cause significant trouble for the business. Based on the set guidelines, directors are assigned specific subsidiaries, affiliates or business where they monitor compliance of the risk management system. A review of the risk management system is ongoing as the Company awaits reports from each subsidiary, affiliate and business segment. Criteria used for review are compliance with established guidelines and controls and the appropriateness of risk management and risk mitigation measures taken.
The Board, thru the Audit Committee, reviews the effectiveness of the Company’s, including its subsidiaries and affiliates, risk management system with emphasis on monitoring of existing and emerging risks as well as risk mitigation measures and on identifying risks before these cause significant trouble for the business. Based on the set guidelines, directors are assigned specific subsidiaries, affiliates or business where they monitor compliance of the risk management system. Criteria used for review are compliance with established guidelines and controls and the appropriateness of risk management and risk mitigation measures taken.
MINORITY SHARE HOLDERS
CONTROL SYSTEM SET UP
(a) Policies and Procedures