Good Governance & Social Responsibility:

1. What is Good Corporate Governance?

 Corporate Governance is the art of directing and controlling the organization by
balancing the needs of the various stakeholders.
 Corporate governance is the structure of rules, practices, and processes used to
direct and manage a company.
 A company's board of directors is the primary force influencing corporate
governance.
 Bad corporate governance can cast doubt on a company's reliability, integrity, and
transparency.
 Organizations have duties and responsibilities towards their shareholders and
stakeholders and hence they need to be governed in accordance with the law and
keeping in mind the interests of the stakeholders and shareholders.
 The purpose of corporate governance is to facilitate effective, entrepreneurial and
prudent management that can deliver the long-term success of the company.
 Good corporate governance means that the processes of disclosure and
transparency are followed so as to provide regulators and shareholders as well as
the general public with precise and accurate information about the financial,
operational and other aspects of the company.

Why is it important?
 A lack of corporate governance can lead to profit loss, corruption and a tarnished
image, not only to the corporation, but to the society, or even worse will influence
global as a whole.
 Poor corporate governance can create potential conflicts of interests, expropriation
and unfair of minority shareholders.
 Corporate governance is intended to increase the accountability of your company
and to avoid massive disasters before they occur.
 It also enhances a company's image in the public eye as a self-policing company
that is responsible and worthy of shareholder and debtholder capital.

Examples:
 Transparency: Being able to open up when questioned

 Accountability: Stepping up to the plate either to fix a problem or acknowledging

wrong

 Tolerance: Allowing different views, only makes it better to have solutions

 Inclusivity: Acceptance of diverse backgrounds cultures, looking at merits and

capabilities of people other than focusing on their backgrounds etc.

 Honesty: Ability to admit failure, ability to keep communication channels open and
easier for people
Seven Characteristics of Corporate Governance

Discipline
Corporate discipline is a commitment by a company’s senior management to adhere to behavior that is
universally recognized and accepted to be correct and proper. This encompasses a company’s awareness
of, and commitment to, the underlying principles of good governance, particularly at senior management
level.

Transparency
Transparency is the ease with which an outsider is able to make meaningful analysis of a company’s actions,
its economic fundamentals and the non-financial aspects pertinent to that business. This is a measure of
how good management is at making necessary information available in a candid, accurate and timely
manner – not only the audit data but also general reports and press releases. It reflects whether or not
investors obtain a true picture of what is happening inside the company.

Independence
Independence is the extent to which mechanisms have been put in place to minimize or avoid potential
conflicts of interest that may exist, such as dominance by a strong chief executive or large share owner.
These mechanisms range from the composition of the board, to appointments to committees of the board,
and external parties such as the auditors. The decisions made, and internal processes established, should be
objective and not allow for undue influences.

Accountability
Individuals or groups in a company, who make decisions and take actions on specific issues, need to be
accountable for their decisions and actions. Mechanisms must exist and be effective to allow for
accountability. These provide investors with the means to query and assess the actions of the board and its
committees.

Responsibility
With regard to management, responsibility pertains to behavior that allows for corrective action and for
penalizing mismanagement. Responsible management would, when necessary, put in place what it would
take to set the company on the right path. While the board is accountable to the company, it must act
responsively to and with responsibility towards all stakeholders of the company.

Fairness
The systems that exist within the company must be balanced in taking into account all those that have an
interest in the company and its future. The rights of various groups have to be acknowledged and respected.
For example, minority share owner interests must receive equal consideration to those of the dominant
share owner(s).

Social responsibility
A well-managed company will be aware of, and respond to, social issues, placing a high priority on
ethical standards. A good corporate citizen is increasingly seen as one that is non-discriminatory, non-
exploitative, and responsible with regard to environmental and human rights issues. A company is likely
to experience indirect economic benefits such as improved productivity and corporate reputation by
taking those factors into consideration.
2. What is Social Responsibility?
 The concept of social responsibility holds that businesses should be good
citizens, balancing their money-making operations with activities that benefit
society, be it on a local, national or global scale.
 Social responsibility is a means of achieving sustainability.
 According to Peter F Druker, “Social responsibility requires managers to consider
whether their actions are likely to promote the public good, to advance the basic
belief of society, to contribute to its stability strength and harmony.”
 Social responsibility refers to the voluntary efforts on the part of the business to
contribute to the social well-being.
 Social responsibility is an ethical theory, in which individuals are accountable
for fulfilling their civic duty.
 Social responsibility means that businesses, in addition to maximizing
shareholder value, must act in a manner that benefits society.

Why is it Important?

 Corporate social responsibility (CSR) is vital not just for the environment,
society, and the world at large, but for your company’s reputation.
 A healthy CSR program also doubles as reputation protection.
 Social responsibility has become increasingly important to investors and
consumers who seek investments that are not just profitable but also
contribute to the welfare of society and the environment.
 Social responsibility in marketing promotes a positive company image,
which can significantly impact profitability and even productivity
favorably.

Examples:

 Companies can act responsibly in many ways, such as promoting

volunteering, making changes that benefit the environment, and engaging
in charitable giving.
 Advocating for child labor laws, purchasing fair trade products, recycling.
 Donating to charities;
 Making a special effort to employ veterans;
 Directing research money at projects that will promote public health;
 Recycling (especially where that’s not financially advantageous);
 Reducing use of non-renewable fuels (especially where that’s not
financially advantageous).
Effective ways to promote your CSR efforts

Align your efforts with your brand

Choose CSR initiatives that work authentically with your established brand. Not only is it a more
natural fit, but your activities will directly impact your customer base.

Don’t overlook local initiatives

Global causes are undoubtedly critical, but don’t neglect what’s happening right in your
backyard. Build strategies around soup kitchens, food banks, homeless shelters, schools and
senior citizens. You’ll make a difference and increase brand visibility among your customer
base.

Advertise charitable efforts

Post flyers in your windows or near your cash registers. You could also write a blog post or
create a section on your website calling out your charitable giving. Some brands also leverage
social media to amplify giving and positive mentions.

Involve your customers

Encourage consumers to donate to the good causes you champion. Ask them to give at the point
of sale or donate a certain percentage of your proceeds to charity.

Focus your attention

Concentrate on just a few charities. This will make you appear more authentic and less like your
business is trying fake goodwill for profit.

Be more interactive
Encourage word-of-mouth communication by participating in activities that are easily shareable
on social media. Use relatable images and videos to bring awareness to your good deeds.

Encourage further giving

Ask consumers and other stakeholders to join you in your mission for giving. Gently prompt
them to contribute their time, money, and other resources to the causes and initiatives that you
highlight.
Corporate Social Responsibility

Sharing our plate with others

As a corporate citizen, the San Miguel Food Group recognizes its responsibility in helping create a
better world, starting with the areas where the business operates. Being one of the country’s largest
food companies with products that span various categories, the Company commits to do its part in
providing solutions not only for nutrition and health, but for other pillars of social development as
well.
From what started out as a supplemental nutrition program for children affected by
malnutrition, Handog Lusog Nutrisyon Para Sa Nasyon, which was launched in 2010, has now
evolved into Handog—a simpler name for the San Miguel Food Group’s flagship Corporate Social
Responsibility program, but definitely more holistic in coverage with its five (5) subcategories:
Karunungan, Kalusugan, Komunidad, Kalikhasan, and Kabuhayan.
In 2017, two (2) students from the Future Leaders Scholarship Program graduated from their
respective courses, with one (1) passing the board exams for Accountancy. While in college, San
Miguel granted them annual financial assistance, full tuition, monthly stipend, book allowance, and
free trainings. Meanwhile, the Company donated educational supplies and rehabilitated 12 schools
around the metro. Two (2) classrooms and a municipal playground were also built for pupils in
Sumilao, Bukidnon.
Enriching the overall health and well-being of communities continued to be a priority. This was done
in the form of community clinics, medical missions, and nutrition feeding programs. To enhance the
feeding, the following activities were done: nutritional talks for teachers and parents, food safety talk
and meal preparation, cooking demonstrations, and starter kits distribution. A total of 1,000 children
from 22 schools and barangays nationwide benefited from the program, and achieved a 100%
overall nutrition improvement.
Cooking demonstrations led by the Culinary Center were also conducted for two (2) barangays in
Tagoloan, Misamis Oriental. This aimed not only to show the 105 participants how to prepare
delicious meals for their families but to also introduce livelihood opportunities. The San Miguel Food
Group also continued to lead tree planting and coastal resource management activities to champion
its duty in protecting the environment.
As it kicked off its pioneering Handog program, the Company, through its employees and business
partners, further actualized the vision of “nourishing and nurturing families worldwide”. To promote
employee awareness and participation, Handog Roadshows were conducted in the Food Group’s
offices and plants in Luzon, Visayas, and Mindanao. In the spirit of giving back, employees were
able to generate more than P1.2 million from their very own pockets to be used for
future Handog initiatives. This reflected a strong sense of malasakit embedded in the Company’s
culture, driving the Company to focus its efforts in establishing Handog as a flagship CSR program.