Ansong, Regine A.

BSA 1 February 18, 2019

SEC Code of Corporate Governance

Series of 2016

I. INTRODUCTION
A. Code of Corporate Governance
 intended to raise the corporate governance standards of the Philippine corporations to a level at par with its
regional and global counterparts.
 latest G20/OECD1 Principles of Corporate Governance and Association of Southeast Asian Nations Corporate
Governance Scorecard (basis for drafting this Code)
 adopt with the “comply or explain” approach
- Combines voluntary compliance with mandatory disclosure
- Companies voluntarily comply with this code but an explanation for non-compliance is required, if they
opt not to conform with the provisions of this Code.
 the first of a series of Code that is intended to cover all types of corporations in the Philippines under the
provision of the Securities and Exchange Commission
 does not prescribe “one size fit all” framework
 Principle of Proportionality is used in applying its provisions
B. Arrangement of the Code
 Principles – high-level statements of corporate governance good practice and are applicable to all companies
 Recommendations - objective criteria that are intended to identify the specific features of corporate governance
good practice that are recommended for companies operating according to this Code.
Note: Alternatives to a Recommendations may be justified if good governance may be achieved by other means
- Must be describe and disclose the non-compliance and explain how overall Principle was achieved.
- Descriptions and explanations must be written in plain language
- Should be consistent with the overall Principle
 Explanations – strive to provide companies with additional information on the recommended best practice
C. Definition of Terms
 Corporate Governance
- the system of stewardship and control to guide organizations in fulfilling their long-term economic, moral,
legal and social obligations towards their stakeholders.
- System of directions, feedback and control using regulations, performance standards and ethical guidelines
to hold the Board and senior management accountable for ensuring ethical behavior – reconciling long-
term customer satisfaction with shareholder value – to the benefit of all stakeholders and society
- Purposes: (a) Maximize the organization’s long-term success; (b) Creating sustainable value for its
shareholders, stakeholders and the nation
 Board of Directors - the governing body elected by the stockholders that exercises the corporate powers of a
corporation, conducts all its business and controls its properties (at least 5-15)
 Management - a group of executives given the authority by the Board of Directors to implement the policies
 Independent director - is independent of management and the controlling shareholder and is free from any
business or other relationship which could, or could reasonably be perceived to, materially interfere with his
exercise of independent judgment in carrying out his responsibilities as a director.
 Executive director - a director who has executive responsibility of day-to-day operations of a part or the whole
of the organization.
  Non-executive director - a director who has no executive responsibility and does not perform any work related
to the operations of the corporation.
 Conglomerate - a group of corporations that has diversified business activities in varied industries, whereby the
operations of such businesses are controlled by a parent corporate entity
 Internal Control - a process designed and effected by the board of directors, senior management, and all levels
of personnel to provide reasonable assurance on the achievement of objectives through efficient and effective
operations; reliable, complete and timely financial and management information; and compliance with
applicable laws, regulations, and the organization’s policies and procedures.
 Enterprise Risk Management - a process, effected by an entity’s BODs, management and other personnel,
applied in strategy setting and across the enterprise that is designed to identify potential events that may affect
the entity, manage risks to be within its risk appetite, and provide reasonable assurance regarding the
achievement of entity objectives.2
 Related Party - shall cover the company’s subsidiaries, affiliates and any party (including their subsidiaries,
affiliates and special purpose entities), that the company exerts direct or indirect control over or that exerts direct
or indirect control over the company; the company’s directors; officers; shareholders and related interests
(DOSRI), and their close family members, as well as corresponding persons in affiliated companies. This shall
also include such other person or juridical entity whose interest may pose a potential conflict with the interest
of the company.
 Related Party Transactions - a transfer of resources, services or obligations between a reporting entity and a
related party, regardless of whether a price is charged. It should be interpreted broadly to include not only
transactions that are entered into with related parties, but also outstanding transactions that are entered with an
unrelated party that subsequently becomes a related party.
 Stakeholders – any individual, organization or society at large who can either affect and/or be affected by the
company’s strategies, policies, business decisions and operations, in general. This includes, among others,
customers, creditors, employees, suppliers, investors, as well as the government and community in which it
operates.

II. THE BOARD’S GOVERNANCE RESPONSIBILITIES

A. PRINCIPLE 1: ESTABLISHING A COMPETENT BOARD

The company should be headed by a competent, working board to foster the long-term success of the corporation,
and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the long-
term best interests of its shareholders and other stakeholders.

 Recommendations:

i. Should be composed of directors with collective working knowledge, experience or expertise relevant to
company’s sector/ industry; ensure that it has an appropriate mix of competence and expertise and members
remained qualified for their positions individually and collectively
- It is needed to perform each of their tasks properly.
ii. It shall be composed of a majority of non-executive directors (who can effectively participate and help
secure objective, independent judgement on corporate affairs and to substantiate proper checks and balances)
- It is for the protection of the company’s interest over the interest of the individual interest of
shareholders.
iii. Provide in its Board Charter and Manual on Corporate Governance, a policy on training of directors
- It aims to promote effective board performance and continuing qualifications in carrying out duties and
responsibilities.
 It includes the following:
 Orientation Program for first-time directors (at least 8 hours)
- Ensure new members are appropriately apprised of their duties and responsibilities
- Covers SEC-mandated topics on corporate governance, introduction of company’s business,
Articles of Incorporation and Code of Conduct
- Should be able to meet specific needs of company and individual directors
 Annual Continuing Training Program (at least 4 hours)
- Makes certain that directors are continuously informed of the developments in the business and
regulatory
iv. Should have a policy on board diversity
- To avoid groupthink and ensure that optimal decision-making is achieved

It includes the following:

 Age  Culture  Competence
 Ethnicity  Skills  Knowledge

v. Ensure that it is assisted by a Corporate Secretary

 Corporate Secretary
- Separate from Compliance officer
- Not a member of Board of Directors
- Annually attend corporate governance training
- Primarily responsible to corporation and stakeholders, not to Chairman or President
 Duties and Responsibilities
- Assists Board and its committees in the conduct of their meetings (prepare annual schedule and
calendar and assisting to set agendas for those meetings)
- Safe keeps and preserves integrity of the minutes of the meetings as well as other official records of
the corporation
- Keeps abreast on relevant laws, regulations, all governance issuances, relevant industry
developments and operations and advises the Board and its committees all relevant issues
- Works fairly and objectively with the Board, Management and stockholders and contributes to the
flow of information
- Advises on the establishment of board committees and their terms of reference
- Informs members of the Board of the agenda of their meetings at least five working days in advance,
and ensures that the members have accurate information that will enable them to arrive at intelligent
decisions on matters that require their approval
- Attends all Board meetings, except when justifiable causes, such as illness, death in the immediate
family and serious accidents, prevent him/her from doing so;
- Performs required administrative functions;
- Oversees the drafting of the by-laws and ensures that they conform with regulatory requirements

vi. Ensure that it is assisted by a Compliance Officer

 Compliance Officer
- have a rank of Senior Vice President or an equivalent position with adequate authority and stature
- not a member of Board of Directors
- annually attend corporate governance training
- member of management team in charge of compliance function
- primarily liable to the corporation and shareholders, not to Chairman or President
 Duties and Responsibilities
- Ensures proper onboarding of new directors
 - Monitors, reviews, evaluates and ensures the compliance by the corporation, its officers and
directors with the relevant laws, this Code, rules and regulations and all governance issuances of
regulatory agencies;
- Reports the matter to the Board if violations are found and recommends the imposition of
appropriate disciplinary action;
- Ensures the integrity and accuracy of all documentary submissions to regulators;
- Appears before the SEC when summoned in relation to compliance with this Code;
- Collaborates with other departments to properly address compliance issues, which may be subject
to investigation;
- Identifies possible areas of compliance issues and works towards the resolution of the same;
- Ensures the attendance of board members and key officers to relevant trainings

B. PRINCIPLE 2: ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES

The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the company’s
articles and by-laws, and other legal pronouncements and guidelines should be clearly made known to all directors as
well as to shareholders and other stakeholders.

 Recommendations:

i. The board members should act on a fully informed basis, in good faith, with due diligence and care (duty of
care) and in the best interest of the company and all shareholders (duty of loyalty).
- Key Elements of Fiduciary Duty of Board Members: Duty of Care and Duty of Loyalty

ii. The board should oversee the development of and approve the company’s business objectives and strategy
and monitor implementation.
- To sustain company’s long-term viability and strength
- Sound policies and objectives translate to the company’s proper identification and prioritization of its
goals and guidance on how best to achieve them which will create optimal value to the corporation.
iii. Board should be headed by a competent and qualified Chairperson.
 Roles and Responsibilities
- Makes certain that the meeting agenda focuses on strategic matters
- Guarantees that the Board receives accurate, timely, relevant, insightful, concise, and clear information
to enable it to make sound decisions;
- Facilitates discussions on key issues by fostering an environment conducive for constructive debate
and leveraging on the skills and expertise of individual directors;
- Ensures that the Board sufficiently challenges and inquires on reports submitted and representations
made by Management;
- Assures the availability of proper orientation for first-time directors and continuing training
opportunities for all directors
- Makes sure that performance of the Board is evaluated at least once a year and discussed/followed up
on.

iv. Should be responsible for ensuring and adopting effective succession planning program
- Goal of succession planning: transfer of company leadership to highly competent and qualified
individuals
- It includes retirement age policy, performance evaluation and professional development plan.

v. Should align the renumeration of key officers and board members with the long-term interests of the
company
- Adopt a policy specifying a relationship between renumeration and performance
 Key Considerations for Proper Compensation
 - Level of renumeration is commensurate to the responsibilities
- No director should participate in deciding his renumeration
- Renumeration pay-out schedules should be sensitive to risk outcomes over a multi-year horizon

vi. Should have and disclose in its Manual on Corporate Governance a formal and transparent board nomination
and election policy
- The policy should promote transparency and encourage shareholders’ participation
 Grounds for Permanent Disqualifications (Not limited below)
- Convicted by final judgement or order by a competent judicial or administrative body of any crime
- Person judicially declared insolvent
 Grounds for Temporary Disqualifications (Not limited below)
- Absence of more than 50% of all regular and special meetings of the Board
- Beneficial equity of an independent director in a corporation/ subsidiaries and affiliates exceeds 2%
of its subscribed capital stock
vii. Should have overall responsibility in ensuring that there is a group-wide policy and system governing related
party transactions and other unusual occurring transactions
- Prevention of abuse and promotion of transparency
viii. Should be primarily responsible for approving the selection and assessing the Management performance led
by the Chief Executive Officer (CEO) and control functions led by their respective heads (Chief Risk
Officer, Chief Compliance Officer, Chief Audit Executive)
- Fit and proper standards are to be applied on key personnel and due consideration to integrity,
technical expertise and experience
ix. Should establish an effective performance management framework
x. Should oversee that an appropriate internal control system is in place
xi. Should oversee that a sound enterprise risk management framework is in place
- Responsible for defining the company’s level of risk tolerance and providing oversight over its risk
management policies and procedures
xii. Should have a Board Charter that formalizes and clearly states its roles, responsibilities and accountabilities
- Guides the directors on how to discharge their functions

C. PRINCIPLE 3: ESTABLISHING BOARD COMMITTEES

Board committees should be set up to the extent possible to support the effective performance of the Board’s
functions, particularly with respect to audit, risk management, related party transactions, and other key corporate
governance concerns, such as nomination and remuneration. The composition, functions and responsibilities of all
committees established should be contained in a publicly available Committee Charter.

 Recommendations:
i. The Board should establish board committees that focus on specific board functions to aid in the optimal
performance of its roles and responsibilities.
- Allows for specialization in issues and leads to a better management of the Board’s workload

 Audit Committee - enhance its oversight capability over the company’s financial reporting, internal
control system, internal and external audit processes, and compliance with applicable laws and
regulations. (at least three appropriately qualified non-executive directors, the majority of whom,
including the Chairman, should be independent)

NOTE: The Audit Committee meets with the Board at least every quarter without the presence of the
CEO or other management team members, and periodically meets with the head of the internal audit.
  Corporate Governance Committee - assist the Board in the performance of its corporate governance
responsibilities, including the functions that were formerly assigned to a Nomination and Remuneration
Committee. (at least three members, all of whom should be independent directors, including the
Chairman)

NOTE: The establishment of a Corporate Governance Committee does not preclude companies from
establishing separate Remuneration or Nomination Committees, if they deem necessary.

 Board Risk Oversight Committee - responsible for the oversight of a company’s Enterprise Risk
Management system to ensure its functionality and effectiveness. (at least three members, 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, at least one member of the committee must have
relevant thorough knowledge and experience on risk and risk management)

 Related Party Transaction Committee - tasked with reviewing all material related party transactions
of the company (at least three non-executive directors, two of whom should be independent, including
the Chairman)

ii. All established committees should be required to have Committee Charters stating in plain terms their
respective purposes, memberships, structures, operations, reporting processes, resources and other relevant
information. The Charters should provide the standards for evaluating the performance of the Committees.
It should also be fully disclosed on the company’s website.

D. PRINCIPLE 4: FOSTERING COMMITMENT

To show full commitment to the company, the directors should devote the time and attention necessary to properly
and effectively perform their duties and responsibilities, including sufficient time to be familiar with the corporation’s
business.

 Recommendations:
i. The directors should attend and actively participate in all meetings of the Board, Committees, and
Shareholders in person or through tele-/videoconferencing
ii. The non-executive directors of the Board should concurrently serve as directors to a maximum of five
publicly listed companies
- to ensure that they have sufficient time to fully prepare for meetings, challenge Management’s
proposals/views, and oversee the long-term strategy of the company
iii. A director should notify the Board where he/she is an incumbent director before accepting a directorship in
another company.

E. PRINCIPLE 5: REINFORCING BOARD INDEPENDENCE

The board should endeavor to exercise an objective and independent judgment on all corporate affairs.

 Recommendations:
i. The Board should have at least three independent directors, or such number as to constitute at least one-third
of the members of the Board, whichever is higher.
- to ensure the exercise of independent judgment on corporate affairs and proper oversight of
managerial performance, including prevention of conflict of interests and balancing of competing
demands of the corporation.
ii. The Board’s independent directors should serve for a maximum cumulative term of nine years. After which,
the independent director should be perpetually barred from re- election as such in the same company but
may continue to qualify for nomination and election as a non-independent director.
 - To avoid conflict or a split board and to foster an appropriate balance of power, increased
accountability and better capacity for independent decision-making
iii. The positions of Chairman of the Board and Chief Executive Officer should be held by separate individuals
and each should have clearly defined responsibilities.
- avoids the abuse of power and authority, and potential conflict of interest
 Lead director - has sufficient authority to lead the Board in cases where management has clear conflicts
of interest.
Functions:
- Serves as an intermediary between the Chairman and the other directors when necessary;
- Convenes and chairs meetings of the non-executive directors; and
- Contributes to the performance evaluation of the Chairman, as required
iv. A director with a material interest in any transaction affecting the corporation should abstain from taking
part in the deliberations for the same.
- ensures that he has no influence over the outcome of the deliberations. The fundamental principle to be
observed is that a director does not use his position to profit or gain some benefit or advantage for his
himself and/or his/her related interests.
v. The non-executive directors (NEDs) should have separate periodic meetings with the external auditor and
heads of the internal audit, compliance and risk functions, without any executive directors present to ensure
that proper checks and balances are in place within the corporation. The meetings should be chaired by the
lead independent director.

F. PRINCIPLE 6: ASSESSING BOARD PERFORMANCE

The best measure of the Board’s effectiveness is through an assessment process. The Board should regularly carry
out evaluations to appraise its performance as a body and assess whether it possesses the right mix of backgrounds
and competencies.
 Recommendations
i. The Board should conduct an annual self-assessment of its performance, including the performance of the
Chairman, individual members and committees. (Every 3 years, the assessment should be supported by an
external facilitator)
- provides a means to assess a director’s attendance at board and committee meetings, participation in
boardroom discussions and manner of voting on material issues.
ii. The Board should have in place a system that provides a criteria and process to determine the performance
of the Board, the individual directors, committees and such system should allow for a feedback mechanism
from the shareholders.
- ensures transparency and allows shareholders and stakeholders to determine if the directors are
performing their responsibilities to the company
G. PRINCIPLE 7: STRENGTHENING BOARD ETHICS
Members of the Board are duty-bound to apply high ethical standards, considering the interests of all stakeholders.

 Recommendations
i. The Board should adopt a Code of Business Conduct and Ethics
ii. The Board should ensure the proper and efficient implementation and monitoring of compliance with the
Code of Business Conduct and Ethics and internal policies.

III. DISCLOSURE AND TRANSPARENCY

H. PRINCIPLE 8: ENHANCING COMPANY POLICIES AND PROCEDURES
The company should establish corporate disclosure policies and procedures that are practical and in accordance
with best practices and regulatory expectations.
 Recommendations
i. The Board should establish corporate disclosure policies and procedures.
- to ensure a comprehensive, accurate, reliable and timely report to shareholders and other stakeholders
that gives a fair and complete picture of a company’s financial condition, results and business
operations
ii. The Company should have a policy requiring all directors and officers to disclose/report to the company any
dealings in the company’s shares within three business days.
iii. The Board should fully disclose all relevant and material information on individual board members and key
executives
- to evaluate their experience and qualifications and assess any potential conflicts of interest that might
affect their judgment.
iv. The company should provide a clear disclosure of its policies and procedure for setting Board and executive
remuneration, level and mix of the same in the Annual Corporate Governance Report. (should disclose the
remuneration on an individual basis, including termination and retirement provisions)
- enables investors to understand the link between the remuneration paid to directors and key
management personnel and the company’s performance.
v. The company should disclose its policies governing Related Party Transactions (RPTs) and other unusual or
infrequently occurring transactions in their Manual on Corporate Governance (disclosed in its Annual
Corporate Governance Report)
vi. The company should make a full, fair, accurate and timely disclosure to the public of every material fact or
event that occurs, particularly on the acquisition or disposal of significant assets. Moreover, the Board of
the offeree company should appoint an independent party to evaluate the fairness of the transaction price on
the acquisition or disposal of assets.
- to establish transparency and independence on the transaction. The independent evaluation of the
fairness of the transparent price ensures the protection of the rights of shareholders.
vii. The company’s corporate governance policies, programs and procedures should be contained in its Manual
on Corporate Governance.
- To ensure the better protection of shareholders and other stakeholders’ rights

I. PRINCIPLE 9: STRENGTHENING THE EXTERNAL AUDITOR’S INDEPENDENCE AND

IMPROVING AUDIT QUALITY
The company should establish standards for the appropriate selection of an external auditor, and exercise effective
oversight of the same to strengthen the external auditor’s independence and enhance audit quality.
 Recommendations
i. The Audit Committee should have a robust process for approving and recommending the appointment,
reappointment, removal, and fees of the external auditor.
ii. The Audit Committee Charter should include the Audit Committee’s responsibility on assessing the
integrity and independence of external auditors and exercising effective oversight to review and monitor
the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into
consideration relevant Philippine professional and regulatory requirements.
iii. The company should disclose the nature of non-audit services performed by its external auditor in the
Annual Report to deal with the potential conflict of interest
J. PRINCIPLE 10: INCREASING FOCUS ON NON-FINANCIAL AND SUSTAINABILITY REPORTING
The company should ensure that the material and reportable non-financial and sustainability issues are disclosed.
 Recommendations:
 i. The Board should have a clear and focused policy on the disclosure of non-financial information. (emphasis
on the management of economic, environmental, social and governance (EESG) issues of its business,
which underpin sustainability)
K. PRINCIPLE 11: PROMOTING A COMPREHENSIVE AND COST-EFFICIENT ACCESS TO
RELEVANT INFORMATION

The company should maintain a comprehensive and cost-efficient communication channel for disseminating
relevant information. This channel is crucial for informed decision-making by investors, stakeholders and other
interested users.
 Recommendations:
i. The company should include media and analysts’ briefings as channels of communication to ensure the
timely and accurate dissemination of public, material and relevant information to its shareholders and other
investors.
- essential for the company to have a strategic and well-organized channel for reporting

IV. INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT FRAMEWORK

L. PRINCIPLE 12: STRENGTHENING THE INTERNAL CONTROL SYSTEM AND ENTERPRISE RISK
MANAGEMENT FRAMEWORK
To ensure the integrity, transparency and proper governance in the conduct of its affairs, the company should have
a strong and effective internal control system and enterprise risk management framework.
 Recommendations
i. The Company should have an adequate and effective internal control system and an enterprise risk
management framework in the conduct of its business, taking into account its size, risk profile and
complexity of operations.
- help sustain safe and sound operations as well as implement management policies to attain corporate
goals.
ii. The Company should have in place an independent internal audit function that provides an independent and
objective assurance, and consulting services designed to add value and improve the company's operations.
- essential to monitor and guide the implementation of company policies. It helps the company
accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving
the effectiveness of the company’s governance, risk management and control functions.
 Functions of Internal Audit
- Provides an independent risk-based assurance service to the Board, Audit Committee and
Management
- Performs regular and special audit as contained in the annual audit plan and/or based on the
company’s risk assessment;
- Performs consulting and advisory services related to governance and control as appropriate for the
organization;
- Performs compliance audit of relevant laws, rules and regulations, contractual obligations and other
commitments, which could have a significant impact on the organization;
- Reviews, audits and assesses the efficiency and effectiveness of the internal control system of all
areas of the company;
- Evaluates operations or programs to ascertain whether results are consistent with established
objectives and goals, and whether the operations or programs are being carried out as planned
- Evaluates specific operations at the request of the Board or Management, as appropriate
- Monitors and evaluates governance processes
 iii. Subject to a company’s size, risk profile and complexity of operations, it should have a qualified Chief Audit
Executive (CAE) appointed by the Board.
 Chief Audit Executive
- shall oversee and be responsible for the internal audit activity of the organization
 Duties and Responsibilities (Not limited below)
- Periodically reviews the internal audit charter and presents it to senior management and the Board
Audit Committee for approval;
- Establishes a risk-based internal audit plan, including policies and procedures, to determine the
priorities of the internal audit activity, consistent with the organization’s goals;
- Communicates the internal audit activity’s plans, resource requirements and impact of resource
limitations, significant interim changes, to senior management and the Audit Committee for review
and approval
iv. Subject to its size, risk profile and complexity of operations, the company should have a separate risk
management function to identify, assess and monitor key risk exposures.
 Risk Management Activities
- Defining a risk management strategy;
- Identifying and analyzing key risks exposure relating to economic, environmental, social and
governance (EESG) factors and the achievement of the organization’s strategic objectives;
- Evaluating and categorizing each identified risk
- Establishing a risk register with clearly defined, prioritized and residual risks;
- Developing a risk mitigation plan for the most important risks to the company, as defined by the risk
management strategy;
- Communicating and reporting significant risk exposures including business risks (i.e., strategic,
compliance, operational, financial and reputational risks), control issues and risk mitigation plan to
the Board Risk Oversight Committee; and
- Monitoring and evaluating the effectiveness of the organization's risk management processes.
v. In managing the company’s Risk Management System, the company should have a Chief Risk Officer
(CRO).
 Chief Risk Officer
- who is the ultimate champion of Enterprise Risk Management (ERM)
- has adequate authority, stature, resources and support to fulfill his/her responsibilities
 Duties and Responsibilities (Not limited below)
- Supervises the entire ERM process and spearheads the development, implementation, maintenance
and continuous improvement of ERM processes and documentation;
- Communicates the top risks and the status of implementation of risk management strategies and
action plans to the Board Risk Oversight Committee;
- Collaborates with the CEO in updating and making recommendations to the Board Risk Oversight
Committee

V. CULTIVATING A SYNERGIC RELATIONSHIP WITH SHAREHOLDERS

M. PRINCIPLE 13: PROMOTING SHAREHOLDER RIGHTS

The company should treat all shareholders fairly and equitably, and also recognize, protect and facilitate the
exercise of their rights.
 Recommendations
i. The Board should ensure that basic shareholder rights are disclosed in the Manual on Corporate Governance
and on the company’s website.
  Shareholder’s Rights:
- Pre-emptive rights;
- Dividend policies;
- Right to propose the holding of meetings and to include agenda items ahead of the scheduled Annual
and Special Shareholders’ Meeting;
- Right to nominate candidates to the Board of Directors;
- Nomination process
- Voting procedures that would govern the Annual and Special Shareholders’ Meeting.
NOTE: The related shareholders’ rights and relevant company policies should be contained in the Manual on
Corporate Governance.
ii. The Board should encourage active shareholder participation by sending the Notice of Annual and Special
Shareholders’ Meeting with sufficient and relevant information at least 28 days before the meeting.
iii. The Board should encourage active shareholder participation by making the result of the votes taken during
the most recent Annual or Special Shareholders’ Meeting publicly available the next working day. In
addition, the Minutes of the Annual and Special Shareholders’ Meeting should be available on the company
website within five business days from the end of the meeting.
 Minutes of Meeting
- A description of the voting and the vote tabulation procedures used
- the opportunity given to shareholders to ask questions, as well as a record of the questions and the
answers received
- the matters discussed, and the resolutions reached
- a record of the voting results for each agenda item
- a list of the directors, officers and shareholders who attended the meeting;
- dissenting opinion on any agenda item that is considered significant in the discussion process
iv. The Board should make available, at the option of a shareholder, an alternative dispute mechanism to resolve
intra-corporate disputes in an amicable and effective manner. This should be included in the company’s
Manual on Corporate Governance.
v. The Board should establish an Investor Relations Office (IRO) to ensure constant engagement with its
shareholders. The IRO should be present at every shareholders’ meeting

VI. DUTIES TO STAKEHOLDERS

N. PRINCIPLE 14: RESPECTING RIGHTS OF STAKEHOLDERS AND EFFECTIVE REDRESS FOR
VIOLATION OF STAKEHOLDER’S RIGHTS
The rights of stakeholders established by law, by contractual relations and through voluntary commitments must
be respected. Where stakeholders’ rights and/or interests are at stake, stakeholders should have the opportunity to
obtain prompt effective redress for the violation of their rights.
 Recommendations
i. The Board should identify the company’s various stakeholders and promote cooperation between them and
the company in creating wealth, growth and sustainability.
ii. The Board should establish clear policies and programs to provide a mechanism on the fair treatment and
protection of stakeholders.
iii. The Board should adopt a transparent framework and process that allow stakeholders to communicate with
the company and to obtain redress for the violation of their rights.
O. ENCOURAGING EMPLOYEES’ PARTICIPATION
A mechanism for employee participation should be developed to create a symbiotic environment, realize the
company’s goals and participate in its corporate governance processes.
 Recommendations
i. The Board should establish policies, programs and procedures that encourage employees to actively
participate in the realization of the company’s goals and in its governance.
 Establishment of Policies and Programs
- health, safety and welfare
- training and development
- reward/compensation for employees
ii. The Board should set the tone and make a stand against corrupt practices by adopting an anti-corruption
policy and program in its Code of Conduct. Further, the Board should disseminate the policy and program
to employees across the organization through trainings to embed them in the company’s culture.
- endeavors to mitigate corrupt practices such as, but not limited to, bribery, fraud, extortion, collusion,
conflict of interest and money laundering. This encourages employees to report corrupt practices and
outlines procedures on how to combat, resist and stop these corrupt practices
iii. The Board should establish a suitable framework for whistleblowing that allows employees to freely
communicate their concerns about illegal or unethical practices, without fear of retaliation and to have direct
access to an independent member of the Board or a unit created to handle whistleblowing concerns. The
Board should be conscientious in establishing the framework, as well as in supervising and ensuring its
enforcement.
- inclusion of safeguards to secure the confidentiality of the informer and to ensure protection from
retaliation.

P. PRINCIPLE 16: ENCOURAGING SUSTAINABILITY AND SOCIAL RESPONSIBILITY

The company should be socially responsible in all its dealings with the communities where it operates. It should
ensure that its interactions serve its environment and stakeholders in a positive and progressive manner that is fully
supportive of its comprehensive and balanced development.
 Recommendations
i. The company should recognize and place an importance on the interdependence between business and
society promote a mutually beneficial relationship that allows the company to grow its business, while
contributing to the advancement of the society where it operates.