CHAPTER 3

“SEC CODE OF CORPORATE

GOVERNANCE FOR PUBLICLY-
LISTED COMPANIES”       
( CG CODE OF PLC’s )
 PREVIEW…

Approved 
November 10, 2016

November 22, 2016 Released

January 1, 2017 Date of Effectivity

•Why there is a code of corporate governance for public listed companies?

ARNALIZ O1
PREVIEW… 16 principles that are distributed among
five sections.

Principles 1-7 - boards governance responsibilities

One of its silent
provision is for
publicly listed Principles 8-11 - disclosure and transparency
companies to
establish a code of Principle 12 - internal control and risk
business conduct management framework
and submit a new Principle 13 - cultivating a synergic relationship
manual on Corporate with shareholders
Governance
Principles 14-16 - duties and stakeholders

The 16 principles arranged as principle, recommendations and the explanation

ARNALIZ 02
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES
TheBo ard’sGovern anceR espo nsibilties
PRINCIPLE
01
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.
PRINCIPLE
02
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
ARNALIZ 03
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES
TheBo ard’sGovern anceR espo nsibilties
PRINCIPLE
03
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.
PRINCIPLE
04
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.
ARNALIZ 05
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES
TheBo ard’sGovern anceR espo nsibilties
PRINCIPLE
05
The board should endeavor to exercise
an objective and independent
judgment on all corporate affairs.
PRINCIPLE
06
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.
ARNALIZ 06
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES

TheBo ard’sGovern anceR espo nsibilties

PRINCIPLE PRINCIPLE
07 08
Members of the Board are duty- The company should establish
Disclosure
bound to apply high ethical corporate disclosure policies and
standards, taking into account the procedures that are practical and
interests ofand
all stakeholders. in accordance with best practices
Transparency and regulatory expectations.

ARNALIZ 07
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES

TheBo ard’sGovern anceR espo nsibilties

PRINCIPLE
09
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.
PRINCIPLE
10
The company should ensure that
the material and reportable non-
financial and sustainability issues
are disclosed.

ARNALIZ 08
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES

TheBo ard’sGovern anceR espo nsibilties

PRINCIPLE PRINCIPLE
11 12
The company should maintain a
comprehensive and Cost-efficient To ensure the integrity, transparency
Internalchannel
communication Controlfor and proper Governance in the
System Relevant
disseminating and Risk conduct of its affairs, the company
information. This channel is
Management Should have a strong and effective
crucial for informed Decision- internal control System and enterprise
making by Framework
investors, stakeholders risk management framework.
and other Interested users.

ARNALIZ 09
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES

TheBo ard’sGovern anceR espo nsibilties

PRINCIPLE
13
The company should treat all
shareholders fairly and
Equitably, and also recognize,
protect and facilitate the
Exercise of their rights.
PRINCIPLE
14
The rights of stakeholders established by
law,Cultivating
by Contractual a relations and through
Synergic
voluntary Commitments must be
respected. Where stakeholders’ Rights
Relationship
and/or interests are at stake, stakeholders
withhave the opportunity to obtain
should
prompt effective redress for the violation
Shareholders 
of their rights.

ARNALIZ 10
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES
TheBo ard’sGovern anceR espo nsibilties
PRINCIPLE
13
The company should treat all
shareholders fairly and
Equitably, and also recognize,
Duties to
protect andStakeholders
facilitate the
Exercise of their rights.
PRINCIPLE
14
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.
ARNALIZ 11
COD EOF C ORPORA TEGOV ERNAN CEFOR PUBLI CLY- LI STED COM P ANI ES
TheBo ard’sGovern anceR espo nsibilties
PRINCIPLE
15
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.
PRINCIPLE
16
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.
ARNALIZ 12
INTRODUCTI
ON

DEFINITION OF TERMS

JANE O1
 What isthe
To promote the
development of a strong
purpose of
corporate governance
CODE?
culture and keep abreast
with recent developments
in corporate governance

JANE O2
 “COMPLY OR EXPLAIN” APPROACH

state in their annual corporate

governance reports whether they
Voluntary comply with the Code provisions, 
compliance

Companies do not have to

comply with the Code, but
they must  identify any areas of
non-compliance,
mandatory
disclosure
explain the reasons for
non-compliance.
JANE O3
 ASPECTS OF THE CODE

PRINCIPLES Recommendations  Explanations

objective criteria that are   strive to provide

intended to identify the companies with
 high-level statements of specific features of additional information on
corporate governance corporate governance the recommended best
good practice good practice that are practice
recommended for
companies operating
according to the Code

1 2 3
JANE O4
DEFINITION OF TERMS

CORPORATE GOVERNANCE

 system of direction, feedback and control

What is the
using regulations, performance standards
purpose?
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
JANE 05
DEFINITION OF TERMS

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.

JANE 06
DEFINITION OF TERMS

MANAGEMENT

 a group of executives given the

authority by the Board of Directors to
implement the policies it has laid down
in the conduct of the business of the
corporation.

JANE 07
DEFINITION OF TERMS

INDEPENDENT DIRECTOR

 a person who 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.

JANE 08
DEFINITION OF TERMS

EXECUTIVE DIRECTOR

  a director who has executive

responsibility of day-to-day operations
of a part or the whole of the
organization.

JANE 09
DEFINITION OF TERMS

NON-EXECUTIVE DIRECTOR

  a director who has no executive

responsibility and does not perform any
work related to the operations of the
corporation.

JANE 10
DEFINITION OF TERMS

CONGLOMERATE

   a group of corporations that has

diversified business activities in varied
industries, whereby the operations of
such businesses are controlled and
managed by a parent corporate entity.

JANE 11
DEFINITION OF TERMS

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.
JANE 12
DEFINITION OF TERMS

ENTERPRISE RISK
MANAGEMENT
     a process, effected by an entity’s Board of
Directors, 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.
JANE 13
DEFINITION OF TERMS

RELATED PARTY
     shall cover the company’s subsidiaries, as well as 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

JANE 14
DEFINITION OF TERMS

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 into with an unrelated party that
subsequently becomes a related party.

JANE 15
DEFINITION OF TERMS

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.
JANE 16
 PRINCIPLE
• The board should be headed
by a competent, working
board to foster the long-
term success of the
corporation and to sustain its
ESTABLISHING

01
competitiveness and
profitability in a manner
consistent with its corporate A COMPETENT
objectives and the long-term
best interests of its BOARD
shareholders and other
stakeholders.

KARLA 01
 ESTABLISHING A COMPETENT BOARD
The Board should be
composed of directors with a
collective working
knowledge, experience or
expertise that is important to
the company’s industry and
should always ensure that it
has an appropriate mix of
competence and expertise.
RECOMMENDATION
The Board should be
composed of a majority of
non-executive directors that
help secure objective,
independent judgement on
corporate affairs and to
substantiate proper checks
and balances.
The Company should
provide a policy on the
training of directors
including an orientation
program for first-time
directors and relevant
annual continuing training
for all directors.
KARLA 02
 ESTABLISHING A COMPETENT BOARD

The Board should ensure

that it is assisted in its
duties by a Compliance
The Board should have a Officer, who should have a
policy on board diversity. rank of Senior Vice
The Board should ensure
President or an equivalent
that it is assisted in its
position with adequate
duties by a Corporate
stature and authority in the
Secretary, who should be a
corporation.
separate individual from
the Compliance Officer.

RECOMMENDATION KARLA 03
 PRINCIPLE
ESTABLISHING
1.Under the Law
CLEAR ROLES
AND
2.The company article and by-
laws

02
3.Other legal pronouncement
and guidelines should be
RESPONSIBILIT
clearly made known to all
directors as well to
IES OF THE
shareholders and other
stockholders. BOARD
DAQUIAOG 01
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

The Board members should

act on a fully informed basis,
in good faith, with due The Board should oversee The Board should be
diligence and care, and in the the development of and headed by a competent and
best interest of the company approve the company’s qualified Chairperson.
and all shareholders, business objectives and
strategy, and monitor their
implementation, in order to
sustain the company’s long-
term viability and strength.
.

RECOMMENDATION DAQUIAOG 02
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD
The Board should align the
remuneration of the key officers and
board members with the long-term
interest of the company. In doing so, it
should formulate and adopt a policy
specifying the relationship between
remuneration and performance. Further,
no director should participate in
discussions or deliberations involving
his own remuneration.
RECOMMENDATION
The board should have and disclose in its Manual on
Corporate Governance a formal and transparent board
nomination and election policy that should include
how it accept nominations from minority
shareholders and reviews nominated candidates. The
policy should also include an assessment of the
effectiveness of the Board’s processes and procedures
in the nomination, election, or replacement of a
director. In addition, its process of identifying the
quality of directors should be aligned with the
strategic direction of the company. 
.
DAQUIAOG 03
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD
The Board should align the
remuneration of the key officers and
board members with the long-term
interest of the company. In doing so, it
should formulate and adopt a policy
specifying the relationship between
remuneration and performance. Further,
no director should participate in
discussions or deliberations involving
his own remuneration.
The board should have and disclose in its Manual on
Corporate Governance a formal and transparent board
nomination and election policy that should include
how it accept nominations from minority
shareholders and reviews nominated candidates. The
policy should also include an assessment of the
effectiveness of the Board’s processes and procedures
in the nomination, election, or replacement of a
director. In addition, its process of identifying the
quality of directors should be aligned with the
strategic direction of the company. 
.
MONICA 01
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

RELATED PARTY TRANSACTIONS

The Board should have the overall responsibility in

ensuring that there is a group-wide policy and system
governing related party transactions (RPTs) and other
unusual or infrequently occurring transactions,
particularly those which pass certain thresholds of
materiality.

RECOMMENDATION MONICA 02
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

The following are suggestions for the content of the RPT Policy:

 Definition of related parties

 Coverage of RPT policy
 Guidelines in ensuring arm’s-length terms
 Identification and prevention or management of potential or actual
conflicts of interest which arise
 Adoption of materiality thresholds
 Internal limits for individual and aggregate exposures
 Whistle-blowing mechanisms, and
 Restitution of losses and other remedies for abusive RPTs

RECOMMENDATION MONICA 03
 Example of RPTs
Policy
From: Asia United Bank

CLICK ME!!!

New folder\Related-Party-Transactions-Policy-and-Procedures-Sept2
019.pdf

MONICA 04
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

Selection of Executive Management Team and Annual Performance

Evaluation

 The Management is primarily accountable to the Board for the operations

of the Company.
 It is the responsibility of the Board to appoint a competent management
team and to exercise management oversight.

RECOMMENDATION MONICA 05
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD
Management Oversight

This includes the power to:

 Select and appoint the CEO and other Officers
 Monitor and assess the performance of Management led by the CEO based on
performance standards set by the Board and Management that are consistent with the
Company's strategic objectives
 Oversee Management's implementation of business strategies, plans, policies and budgets
 Oversee Management's adoption of human resources policies, including compensation
plans and professional development programs for Officers and succession plan for
Management
 Conduct a regular review of the Company's policies with the Management Team

RECOMMENDATION MONICA 06
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD
Fit-and-Proper Standard

In this regard, the following shall be considered:

 Integrity
 Probity
 Physical and mental fitness
 Competence
 Relevant education or training
 Possession of competencies relevant to the job.

RECOMMENDATION MONICA 07
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD
Executive Management Team

The Board shall appoint the executive officers who are the
 President or the Chief Executive Officer
 The Vice-Presidents (or their equivalent roles in the Company structure)
 The Treasurer and/or the Chief Finance Officer (CFO)
 Chief Risk Officer
 Chief Compliance Officer
 The Corporate Secretary, and 
 Chief Audit Executive

RECOMMENDATION MONICA 08
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

Effective Performance Management Framework

The Board should establish an effective performance management

framework that will ensure that the Management, including the Chief
Executive Officer, and personnel's performance is at par with the
standards set by the Board and Senior Management.
Results of performance evaluation should be linked to other human
resource activities such as training and development, remuneration,
and succession planning.

RECOMMENDATION MONICA 09
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

Internal Control

 The Board should oversee that an appropriate internal control

system is in place, including setting up a mechanism for monitoring
and managing potential conflicts of interest of Management, board
members, and shareholders.

The Board should also approve the Internal Audit Charter.

RECOMMENDATION MONICA 10
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

Enterprise Risk Management

The Board should oversee that a sound enterprise risk

management (ERM) framework is in place to effectively
identify, monitor, assess and manage key business risks. The
risk management framework should guide the Board in
identifying units/business lines and enterprise-level risk
exposures, as well as the effectiveness of risk management
strategies.

RECOMMENDATION MONICA 11
ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES
OF THE BOARD

Board Charter

The Board should have a Board Charter that formalizes and

clearly states its roles, responsibilities and accountabilities in
carrying out its fiduciary duties.

RECOMMENDATION MONICA 12
 PRINCIPLE

Board Committees should set up to the

extent possible to support the effective
performance of the board’s function,
particularly with respect to audit, risk
ESTABLISHING
BOARD
03
management, related party transactions
and other key corporate governance
concerns, such as nomination and
renumeration.
The composition, functions be
COMMITTEES
contained in a publicly available
Committee charter.

CARINO 01
 ESTABLISHING BOARD COMMITTEES

The board should establish an Audit Committee to

enhance its over the company’s financial reporting ,
The board should be establish internal control system, internal and external audit
board committees that focus process, and compliance with applicable laws and
on specific board function on regulations. (Audit Committee Duties and
to aid in the optimal
performance of its roles and Responsibilities pages 50-52.)
responsibilities.

Composed at least (3)three appropriately qualified

non-executive directors, the majority whom
including chairman, should be independent.
.

RECOMMENDATION CARINO 02
 ESTABLISHING BOARD COMMITTEES

The board should establish a corporate Governance

Committee that be tasked to assist the board in the
performance of its corporate governance responsibilities,
including that were formerly assigned to a Nomination and
Renumeration Committee.

Composed at least (3) three members including chairman.

(Corporate Governance Committee Duties and Function
page 52-53).

RECOMMENDATION CARINO 03
 ESTABLISHING BOARD COMMITTEES

The board should establish a separate Board Risk Oversight

Committee (BROC) that should be responsible for the oversight
of a company’s Enterprise Risk Management system to ensure
its functionality and effectiveness.

BROC should composed at least (3) three members including

chairman. The chairman should not be the Chairman of the
board or of any other committee.
(BROC responsibilities and duties on pages 54-55).

RECOMMENDATION CARINO 04
 ESTABLISHING BOARD COMMITTEES

The board should be establish a Related Party

Transaction (RPT) Committee, which should be tasked
with reviewing all material related party transactions of
the company.

Composed at least (3)three appropriately qualified non-

executive directors,(2) two of whom should be
independent, Including Chairman.
(functions of RPT committee on pages 56-57).

RECOMMENDATION CARINO 05
 ESTABLISHING BOARD COMMITTEES

All Established Committee should be required to have

Committee Charters stating terms their respective purposes,
membership, 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 websites.

RECOMMENDATION CARINO 06
 PRINCIPLE

To show full commitment to the

company, the directors should

FOSTERING
devote the time and attention

04
necessary to properly and
effectively perform their duties
and responsibilities, including COMMITMENT
sufficient time to be familiar with
the corporation’s business,

GABION 01
 FOSTERING COMMITMENT

The directors should attend and actively participate in all

meetings of the Board, Committees, and Shareholders in
person or through videoconferencing conducted in
accordance with the rules and regulations of the
Commission, except when justifiable cause that prevents
them from doing so. In meetings, the director should
review meeting materials and if called for, ask the
necessary questions or seek clarifications and
explanations. 

RECOMMENDATION GABION 02
FOSTERING COMMITMENT
The non-executive directors of
the Board serve as directors to
a maximum of five publicly
listed companies to ensure that
in a sufficient time, they have
fully prepared the meetings.
RECOMMENDATION
A director should notify the
Board where he/she is an
incumbent director before
accepting a directorship in
another company.
.
GABION 03
 PRINCIPLE

The board should

endeavor to exercise an
REINFORCING
BOARD
05
objective and independent
judgement on all corporate
affairs. INDEPENDENCE

CHARISE 01
REINFORCING BOARD INDEPENDENCE

 The Board should have at  The Board should ensure that

least three independent its independent directors
directors, or such number as possess the necessary
to constitute at least one- qualifications and none of
third of the members of the the disqualifications for an
Board, whichever is higher.  independent director to hold
the position.

RECOMMENDATION CHARISE 02
 REINFORCING BOARD INDEPENDENCE

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.  In the instance that a company wants to retain an
independent director who has served for nine years, the
Board should provide meritorious justification/s and seek
shareholders’ approval during the annual shareholders’
meeting. 

RECOMMENDATION CHARISE 03
REINFORCING BOARD INDEPENDENCE
 The positions of Chairman
of the Board and Chief
Executive Officer should be
held by separate individuals
and each should have
clearly defined
responsibilities. 
RECOMMENDATION
 The Board should designate
a lead director among the
independent directors if the
Chairman of the Board is not
independent. 
CHARISE 04
REINFORCING BOARD INDEPENDENCE

 A director with a material The non-executive directors (NEDs)

interest in any transaction should have separate periodic
affecting the corporation meetings with the external auditor
should abstain from taking and heads of the internal audit,
part in the deliberations for compliance and risk functions,
the same.  without any executive directors
present to ensure that proper checks
and balances are in place within the
corporation

RECOMMENDATION CHARISE 05
 PRINCIPLE

The best measure of the Board’s

effectiveness is through an
assessment process. The Board
should regularly carry out
ASSESSING
BOARD
06
evaluations to appraise its
performance as a body, and
assess whether it possesses the
right mix of backgrounds and
PERFORMANCE
competencies. 

ARIES 01
ASSESSING BOARD PERFORMANCE

The Board should conduct The Board should have in place a

an annual self-assessment system that provides, at the
of it’s performance and minimum, criteria and process to
determine the performance of the
every 3 years, the Board, the individual directors,
assessment should be committees and such system should
supported by an external allow for a feedback mechanism
facilitator. from the shareholders.

RECOMMENDATION ARIES 02
 PRINCIPLE

Members of the Board are

duty-bound to apply high STRENGTHENIN
ethical standards, taking
G BOARD
07
into account the interests of
all stakeholders.  ETHICS

ARIES 03
STRENGTHENING BOARD ETHICS
The Board should adopt a Code of
Business Conduct and Ethics. The
code should be properly
disseminated to the Board, senior
management and employees. It
should be disclosed and made
available to the public through the
company website.
RECOMMENDATION
The board should ensure the
proper and efficient
implementation and monitoring
of compliance with the Code of
Business Conduct and Ethics
and internal policies.
ARIES 04
 PRINCIPLE

ENHANCING
 The company should establish
corporate disclosure policies and COMPANY

08
procedures that are practical and in
accordance with best practices and DISCLOSURE
regulatory expectations.
POLICIES AND
PROCEDURES
ANGEL @ GAB 01
ENHANCING COMPANY DISCLOSURE POLICIES AND
PROCEDURES
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.
RECOMMENDATION
The Board should fully
disclose all relevant and
material information on
individual board members
The Company should have and key executives to
a policy requiring all evaluate their experience
directors and officers to and qualifications, and
disclose/report to the assess any potential
company any dealings in conflicts of interest that
the company's shares might affect their judgment.
within three business days.
ANGEL @ GAB 02
ENHANCING COMPANY DISCLOSURE POLICIES AND
PROCEDURES
The company should provide a clear
disclosure of its policies and
procedure for setting Board and
executive remuneration, as well as
the level and mix of the same in the
Annual Corporate Governance
Report. Also, companies should
disclose the remuneration on an
individual basis, including
termination and retirement
provisions.
RECOMMENDATION
 The company should disclose its
policies governing Related Party
Transactions (RPTs) and other unusual or
infrequently occurring transactions in
their Manual on Corporate Governance,
the material or significant RPTs reviewed
and approved during the year should be
disclosed in its Annual Corporate
Governance Report.
ANGEL @ GAB 03
ENHANCING COMPANY DISCLOSURE POLICIES AND
PROCEDURES

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, which could adversely
affect the viability or the interest of its
shareholders and other stakeholders.
Moreover, the Board of the offered company
should appoint an independent party to
evaluate the fairness of the transaction price
on the acquisition or disposal of assets.
  The company's corporate
governance policies, programs and
procedures should be contained in
its Manual on Corporate
Governance, which should be
submitted to the regulators and
posted on the company's website.

RECOMMENDATION ANGEL @ GAB 04

 PRINCIPLE
 
STRENGTHENING
The company should establish
standards for the appropriate
THE EXTERNAL
AUDITOR’S

09
selection of an external auditor, and
exercise effective oversight of the
same to strengthen the external INDEPENDENCE
auditor's independence and enhance
audit quality.  AND IMPROVING
AUDIT QUALITY
ANGEL @ GAB 05
 STRENGTHENING THE EXTERNAL AUDITOR’S
INDEPENDENCE AND IMPROVING AUDIT QUALITY

The Audit Committee should have a robust process for

approving and recommending the appointment,
reappointment, removal, and fees of the external auditor.
The appointment, reappointment, removal, and fees of the
external auditor should be recommended by the Audit
Committee, approved by the Board and ratified by the
shareholders. For removal of the external auditor, the
reasons for removal or change should be disclosed to the
regulators and the public through the company website
and required disclosures.

RECOMMENDATION ANGEL @ GAB 6

 STRENGTHENING THE EXTERNAL AUDITOR’S
INDEPENDENCE AND IMPROVING AUDIT QUALITY

 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 The Charter should also contain the
Audit Committee's responsibility on reviewing  and monitoring
the external auditor's suitability and effectiveness on an annual
basis.

RECOMMENDATION ANGEL @ GAB 07

 STRENGTHENING THE EXTERNAL AUDITOR’S
INDEPENDENCE AND IMPROVING AUDIT QUALITY

 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. The
Audit Committee should be alert for any potential conflict
of interest situations. given the guidelines or policies on
non-audit services, which could be viewed as impairing
the external auditor's objectivity.

RECOMMENDATION ANGEL @ GAB 08

 THANKS!
Do you have any questions?
Freely to ask!!!
BSA2B-NCBA@GMAIL.COM

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PRESENTED BY: GROUP 3