Board Committees and Charters

Audit Committee

Chairman: Jose G. Araullo
Members: Jose D. Leviste III | Shennan A. Sy

The members of the audit committee or audit group or auditor shall have adequate understanding at least or competence at most, of the company’s financial management systems and environment.

The audit committee shall also perform independent internal audit function through which its Board, senior management, and stockholders shall be provided with reasonable assurance that its key organizational and procedural controls are effective, appropriate, and complied with.

Duties and Responsibilities:

  1. Recommends the approval of the Internal Audit Charter (IA Charter), which formally defines the role of Internal Audit and the audit plan as well as oversees the implementation of the IA Charter;
  2. Through the Internal Audit (IA) Department, monitors and evaluates the adequacy and effectiveness of the Companys internal control system, integrity of financial reporting, and security of physical and information assets. Well-designed internal control procedures and processes that will provide a system of checks and balances shall be in place in order to (a) safeguard the companys resources and ensure their effective utilization, (b) prevent occurrence of fraud and other irregularities, (c) protect the accuracy and reliability of the companys financial data, and (d) ensure compliance with applicable laws and regulations;
  3. Oversees the Internal Audit Department, and recommends the appointment and/or grounds for approval of an internal audit head. The Audit Committee shall also approve the terms and conditions for outsourcing internal audit services;
  4. Establishes and identifies the reporting line of the Internal Auditor to enable him to properly fulfill his duties and responsibilities. For this purpose, he shall directly report to the Audit Committee;
  5. Reviews and monitors Managements responsiveness to the Internal Auditors findings and recommendations;
  6. Prior to the commencement of the audit, discusses with the External Auditor the nature, scope and expenses of the audit, and ensures the proper coordination if more than one audit firm is involved in the activity to secure proper coverage and minimize duplication of efforts;
  7. 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;
  8. Provide oversight over Managements activities in managing credit, market, liquidity, operational, legal and other risks of the Company. This function shall include regular receipt from Management of information on risk exposures and risk management activities;
  9. Perform oversight functions over the Companys internal and external auditors. It shall ensure that the internal and external auditors act independently from each other, and that both auditors are given unrestricted access to all records, properties and personnel to enable them to perform their respective audit functions;
  10. Review the annual internal audit plan to ensure its conformity with the objectives of the Company. The plan shall include the audit scope, resources and budget necessary to implement it;
  11. 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;
  12. Organize an internal audit department, and consider the appointment of an independent internal auditor and the terms and conditions of its engagement and removal;
  13. Monitor and evaluate the adequacy and effectiveness of the Companys internal control system, including financial reporting control and information technology security
  14. Review the reports submitted by the internal and external auditors;
  15. Review the quarterly and annual financial statements before their submission to the Board, with particular focus on the following matters:
    • Any change/s in accounting policies and practices
    • Major judgmental areas
    • Significant adjustments resulting from the audit
    • Going concern assumptions
    • Compliance with accounting standards
    • Compliance with tax, legal and regulatory requirements
  16. Coordinate, monitor and facilitate compliance with laws, rules and regulations;
  17. 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 in relation to their significance to the total annual income of the external auditor and to the Companys overall consultancy expenses. The committee shall disallow any non-audit work that will conflict with his duties as an external auditor or may pose a threat to his independence. The non-audit work, if allowed, shall be disclosed in the Company’s annual report;
  18. Recommends to the Board the appointment, reappointment, removal and fees of the External Auditor, duly accredited by the Commission, who undertakes an independent audit of the corporation, and provides an objective assurance on the manner by which the financial statements shall be prepared and presented to the stockholders; and
  19. Establish and identify the reporting line of the Internal Auditor to enable him to properly fulfill his duties and responsibilities. He shall functionally report directly to the Audit Committee.
  20. Evaluations on an ongoing basis of all related party transactions and that such transactions are not to the detriment of the Companys business and to determine any potential reputational risk issues that may arise as a result or in connection with the transactions. In evaluation these transactions, the audit committee shall take into account, among others, the following:
    1. The related partys relationship to the company and interest in the transaction;
    2. The material facts of the proposed RPT, including the proposed aggregate value of such transaction;
    3. The benefits to the corporation of the proposed RPT;
    4. The availability of other sources of comparable products or services; and
    5. An assessment of whether the proposed RPT is on terms and conditions that are comparable to the terms generally available to an unrelated party under similar circumstances. The company shall have an effective price discovery system in place and exercise due diligence in determining a fair price for RPTs.

Corporate Governance Committee

Compliance Officer: Christine P. Base
Members: Jose G. Araullo | Jose D. Leviste III | Shennan A. Sy

The Corporate Governance Committee (“CG Committee”) shall be tasked to assist the Board in the performance of its corporate governance responsibilities, including the functions that were formerly assigned to a Nomination and Remuneration Committee. It shall be composed of at least three members, all of whom shall be independent directors, including the Chairman.

Duties and Responsibilities:

  1. Oversees the implementation of the corporate governance framework and periodically reviews the said framework to ensure that it remains appropriate in light of material changes to the corporation’s size, complexity and business strategy, as well as its business and regulatory environments;
  2. Oversees the periodic performance evaluation of the Board and its committees as well as executive management, and conducts an annual self-evaluation of its performance;
  3. Ensures that the results of the Board evaluation are shared, discussed, and that concrete action plans are developed and implemented to address the identified areas for improvement;
  4. Recommends continuing 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;
  5. Adopts corporate governance policies and ensures that these are reviewed and updated regularly, and consistently implemented in form and substance;
  6. Proposes and plans relevant trainings for the members of the Board;
  7. Determines the nomination and election process for the company’s directors and has the special duty of defining the general profile of board members that the company may need and ensuring appropriate knowledge, competencies and expertise that complement the existing skills of the Board; and
  8. Establishes a formal and transparent procedure to develop a policy for determining the remuneration of directors and officers that is consistent with the corporation’s culture and strategy as well as the business environment in which it operates.

Nomination Committee

Chairman: Rafael A. Dominguez
Members: Jose D. Leviste III |Romolo V. Nati

The Nomination Committee shall be composed of at least three (3) members and one of whom should be an independent director, to review and evaluate the qualifications of all persons nominated to the Board and other appointments that require Board approval, and to assess the effectiveness of the Board’s processes and procedures in the election or replacement of directors.

The Committee shall, among other functions, pre-screen and shortlist all candidates nominated to become a member of the board of directors in accordance with the qualifications and disqualifications prescribed under the Manual.

Compensation and Remuneration Committee

Chairman: Rafael A. Dominguez
Members: Jose D. Leviste III | Romolo V. Nati

The Compensation and Remuneration Committee shall be composed of at least three (3) members and one of whom should be an independent director.

Duties and Responsibilities:

  1. Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of corporate officers and directors, and provide oversight over remuneration of senior management and other key personnel ensuring that compensation is consistent with the Company’s culture, strategy and control environment.
  2. Designate amount of remuneration, which shall be in a sufficient level to attract and retain directors and officers who are needed to run the company successfully.
  3. Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of individual directors, if any, and officers.
  1. Develop a form on Full Business Interest Disclosure as part of the pre-employment requirements for all Incoming officers, which among others compel all officers to declare under the penalty of perjury all their existing business interests or shareholdings that may directly or indirectly conflict in their performance of duties once hired.
  2. Disallow any director to decide his or her own remuneration.
  3. Provide in the Company’s annual reports, information and proxy statements a clear, concise and understandable disclosure of compensation of its executive officers for the previous fiscal year and the ensuing year.
  4. Review (if any) of the existing Human Resources Development or Personnel Handbook, to strengthen provisions on conflict of interest, salaries and benefits policies, promotion and career advancement directives and compliance of personnel concerned with all statutory requirements that must be periodically met in their respective posts.

DOWNLOAD:

Draft Compensation Committee and Charter

Draft Nomination Committee Charter

Draft Charter of the Board of Directors

Draft Executive committee and charter