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Manual on Corporate Governance
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2020 Annual Stockholders’ Meeting
Our company has adopted a Manual on Corporate Governance, as mandated by the Philippine SEC. This manual specifies the roles, duties and responsibilities of our board of directors, in line with relevant Philippine laws, rules and regulations.
Our board shall have the principal responsibility of ensuring the corporation’s compliance with the principles of good corporate governance. Corollary to setting the policies for the accomplishment of corporate objectives, the board shall provide an independent check on management. It shall be the board’s duty and responsibility to foster the long-term success of the corporation and secure its sustained competitiveness in a manner consistent with its fiduciary responsibility, which it shall exercise in the best interest of the corporation, and in proper cases, its shareholders and other stakeholders. The board shall conduct itself with utmost honesty and integrity in the discharge of its duties, functions and responsibilities.
The board has the following duties and functions to implement corporate governance principles: establish a process for the selection of qualified and competent directors and officers and adopt an effective succession planning program for management; determine the corporation’s purpose, vision and mission, and strategies to carry out its objectives; provide sound strategic policies and guidelines to the corporation on major capital expenditures; ensure that the corporation complies with all relevant laws, regulations and best business practices; identify the corporation’s major and other stakeholders and formulate a clear policy of accurate, timely and effective communication with them; establish and maintain an investor relations program that will keep the corporation’s stockholders informed on important developments in the corporation; adopt a system of internal checks and balances and conduct a regular review of the effectiveness of such a system to ensure the integrity of the decision-making and reporting processes; identify key risk areas and key performance indicators and monitor these factors with due diligence to enable the corporation to anticipate and prepare for possible threats to its operational and financial viability; properly discharge board functions by meeting regularly, giving due consideration to independent views during meetings; keep board authority within the powers of the corporation as prescribed in its articles of incorporation and by-laws, and in existing laws, rules and regulations; and as may be deemed proper by the board, establish and maintain an alternative dispute resolution system in the corporation to allow for the amicable settlement of conflicts or differences between the corporation and its stockholders, and the corporation and third parties.
The board of directors shall set up an Audit Committee which shall assist the board in the performance of its oversight responsibility for the financial reporting process, system of internal control, audit process, and monitoring of compliance with applicable laws, rules and regulations; provide oversight over management’s activities in managing credit, market, liquidity, operational, legal and other risks of the corporation; review the annual internal audit plan to ensure its conformity with the objectives of the corporation; prior to the commencement of the audit, discuss with the external auditor the nature, scope and expenses of the audit, and ensure proper coordination if more than one audit firm is involved in the activity to secure proper coverage and minimize duplication of efforts; organize an internal audit department and consider the appointment of an independent internal auditor and the terms and conditions of its engagement and removal; monitor and evaluate the adequacy and effectiveness of the corporation’s internal control system, including financial reporting control and information technology security; review the reports submitted by the internal and external auditors; review the quarterly, half-year and annual financial statements before their submission to the board, with particular focus on any change/s in accounting policies and practices, major judgmental areas, significant adjustments resulting from the audit, going concern assumptions, compliance with accounting standards, and compliance with tax, legal and regulatory requirements; coordinate, monitor, and facilitate compliance with laws, rules and regulations; evaluate and determine the non-audit work, if any, of the external auditor, and review periodically the non-audit fees paid to the external auditor; establish and identify the reporting line of the internal auditor to enable him to properly fulfill his duties and responsibilities; check all financial reports of the corporation against its compliance with both the internal financial management handbook and pertinent accounting standards, including regulatory requirements; perform interface functions with the internal and external auditors; and ensure the establishment of a transparent financial management controls system that aims to ensure the integrity of the system.
The board of directors shall organize a Risk Management Committee which shall oversee the formulation, establishment and implementation of an enterprise risk management (ERM) system; review and assess the corporation’s ERM policy, processes, strategies, methods and activities and recommend revisions thereto for approval by the board; understand and set clear directions for the management of the corporation’s strategic and critical risks; and provide management the support and resources necessary to manage the risks to the corporation.
The board of directors shall set up a Nomination and Governance Committee which shall review and evaluate the qualifications of all persons nominated to the board and other appointments that require board approval; ensure, through a managed and effective system consistent with the corporation’s by-laws, that each board election shall result in a mix of proficient directors, each of whom shall be able to add value and bring prudent judgment to the board; assess the effectiveness of the board’s processes and procedures in the election or replacement of directors; review the recommendations of the Compliance Officer in relation to the Manual on Corporate Governance as well as other corporate governance rules and regulations and endorse the same to the board for its approval; and review, as may be necessary, the charters of all board committees and recommend any changes to the board for its approval.
The board of directors shall set up a Compensation and Remuneration Committee which shall designate the amount of remuneration which shall be in a level sufficient to attract and retain directors and officers who are needed to run the corporation successfully; and review the corporation’s human resources development or personnel handbook to strengthen provisions on conflict of interest, policies on salaries and benefits, and directives on promotion and career advancement.
The Corporate Secretary of the corporation shall be responsible for the safekeeping and preservation of the integrity of the minutes of the meetings of the board; be loyal to the mission, vision and objectives of the corporation; work fairly and objectively with the board, management and stockholders; have appropriate administrative and interpersonal skills; if not the corporation’s legal counsel, be aware of the laws, rules and regulations necessary in the performance of his duties and responsibilities; have a working knowledge of the operations of the corporation; inform the members of the board, in accordance with the by-laws, of the agenda of their meetings and ensure that the directors have before them accurate information that will enable them to arrive at intelligent decisions on matters that require their approval; and ensure that all board procedures, rules and regulations are strictly followed by the directors.
September 11, 2020
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