GOVERCO  P3: Establishing board committees (R3.1-R3.
6)
CHAPTER 3 & 4 CODE OF CORPORATE GOVERNANCE
FOR PUBLICLY LISTED COMPANIES
NEED FOR CODE OF GOVERNANCE FOR PUBLICLY
LISTED COMPANIES
 To raise corporate governance standards of
Philippine corporations to a level at par with its
regional and global counterparts
G20/OECD PRINCIPLES OF CORPORATE GOVERNANCE
 Widely used as benchmark
 Presented in six chapters
i. Ensuring the basis for an effective corporate
governance framework
ii. The rights of shareholders and key ownership
functions
iii. The equitable treatment of shareholders
iv. Role of stakeholders in corporate governance
v. Disclosure and transparency
vi. Responsibilities of the BOD
ASEAN CORPORATE GOVERNANCE SCORECARD
Objectives
 To raise the corporate governance standards and
practices of ASEAN publicly listed companies
 To give greater international visibility to well-
governed ASEAN publicly listed companies, and
showcase them as investable companies
Joint initiative of the ASEAN capital markets forum and
the Asian development bank
The scorecard judges 5 key principles of corporate
governance in each nation:
1. Rights of shareholders (10%)
2. Role of stakeholder (10%)
3. Equitable treatment of shareholders (15%)
4. Disclosure and transparency (25%)
5. Responsibilities of the board (40%)
NEED FOR CODE OF GOVERNANCE FOR PUBLICLY
LISTED COMPANIES
“Strong corporate governance is founded on the
principles of fairness, accountability, and transparency.
It is key to increasing the global competitiveness of
Philippine corporations in a manner that optimizes long-
term value to the company and its shareholders.” –
Teresita J. Herbasa (Former Chairperson)
AREAS OF CORPORATE GOVERNANCE
Board’s Governance Responisibilities
 P1: Establishing a competent board (R1.1-R1.6)
 P2: Establishing clear roles and responsibilities of the
board (R2.1-R2.12)
 P4: Fostering commitment (R4.1-R4.3)
 P5: Reinforcing board independence (R5.1-R5.7)
 P6: Assessing board performance (R6.1)
 P7: Strengthening board ethics (R7.1-R7.2)
Areas of Corporate Governance
 P8: Enhancing company disclosure policies and
procedures (R8.1-R8.7)
 P9: Strengthening external auditor’s independence
and improving audit quality (R9.1-R9.3)
 P10: Increasing non-financial and sustainability
issues (R10.1)
 P11: Promoting comprehensive and cost-efficient
access to relevant information (R11.1)
Internal Control and Risk Management Framework
 P12: Strengthening internal control and risk
management (R12.1-R12.5)
 Why: To ensure integrity, transparency and
proper governance in PLCs conduct of its affairs
 How:
o Internal control and risk management
activities
o Internal audit function
o Risk management function
o Qualified Chief Audit Executive
o Chief Risk Officer
Cultivating a Synergic Relation with
shareholders/members
 P13: Promoting shareholder/member rights (R13.1-
R13.5)
 Pre-emptive right
 Right to dividends
 Right to vote
 Right to nominate candidates to BOD
Duties to Stakeholders
 P14: Respecting rights of stakeholders and effective
redress for violation of stakeholders’ rights (R14.1-R14.2)
 P15: Encouraging employees’ participation (R15.1-R15.3)
 P16: Encouraging sustainability and social responsibility
(R16.1)
CORPORATE GOVERNANCE IN THE PHILIPPINES
SEC MC No. 2 S2002, Code of Corporate Governance
 Issued on April 5, 2002, an alternative of the east
Asian financial crisis, collapse of NASDAQ index and
abusive practices of some corporate giants in the US
that underscored need for proper disclosure and
greater transparency.
 Applicable to corporations whose securities are
registered or listed, corporations who are grantees
of permits/licenses and secondary franchises from
SEC, public companies, branches or subsidiaries of
foreign corporation

SEC MC No. 6, S2009, Revised Code of Corporate
Governance
 Issued on June 18, 2009
 Applicable to registered corporations and branches
or subsidiaries of foreign corporations operating in
the Philippines
 That sell equity and/or debt securities to the
public that are required to be registered with
SEC
 That have assets >50M and at least 200
stockholders who own at least 100 shares each
of equity securities
 Whose equity securities are listed on an
Exchange
 That are grantees of secondary license from SEC
SEC MC No. 9, S2014, Amendment to the revised code of
Corporate Governance
 Issued on May 6, 2014
 Amended provisions of SEC MC No. 6, S2009
 Art 1: Definition of Corporate Governance
 Art 3: Responsibilities, duties and functions of
the board
 Art 5: Accountability and Audit
 Art 8: Disclosure and transparency
SEC MC No. 19, S2016, Code of Corporate Governance
for Publicly-Listed Companies
 Issued on Nov. 22, 2016
 To promote the development of a strong corporate
governance culture and keep abreast with recent
developments in corporate governance
 1st of series of codes intended to cover all types of
corporations in the Philippines under supervision of
SEC
 Adopts “comply or explain” approach, principle
of proportionality
 Increased focus on areas of Disclosure and
Transparency, internal control and risk
management, role of stakeholders
 Introduces sustainability development, taking
into consideration economic, environmental,
social and governance (EESG) concerns
SEC MC No. 24, S2019, Code of Corporate Governance
for Publicly Listed Companies and Registered Issuers
 Issued of Dec. 19, 2019
 Next in series of Codes for different types of
corporations in the Philippines under supervision of
SEC
 Rooted in same CG principles provided in CG for PLCs
with same intention of raising CG standards of
Philippine corporations consistent with G20/OECD
Principles of CG and other internationally recognized
corporate governance principles
 Public Company – company with assets of at least
50M and having 200 or more shareholders holding at
least 100 shares each of equity securities
 Registered Issuer – company that (1) issues
proprietary and/or non-proprietary
shares/certificates; (2) issues equity securities to the
public that are not listed in an exchange; or (3) issues
debt securities to the public that are required to be
registered to the SEC, whether or not listed in an
exchange
PHILIPPINE CORPORATE GOVERNANCE BLUEPRINT
 SEC’s Corporate Governance (CG) roadmap, a
program of improvement and transportation
between 2016 and 2020
 Articulation of global corporate governance
principles as the framework for further
strengthening the CG regime in the Philippines
 Provides best CG practices and policies that may be
adopted by all Philippine Corporations registered
with the SEC
 Best practices are primarily prescribed for
publicly-listed companies, public companies and
secondary licenses.
 All other companies are encouraged to consider
adapting said practices
“Our CG framework is open and dynamic. While it
specifies broad guidelines, it expects these guidelines to
be observed under the “comply or explain” approach
and subject to the principle of proportionality.”
“The corporate board is mandated to take full
responsibility for exercising oversite function over
management, while taking a long-term view in securing
the company’s sustainability through due observance of
fairness, transparency and accountability under a
corporate regime underpinned by ethics and social
responsibility.”