SHLPH 2019 Integrated Annual Corporate Governance Report (I-ACGR) - Redacted

SEC FORM – I-ACGR
INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT
1. For the fiscal year ended 2019
2. SEC Identification Number 14829 3. BIR Tax Identification No. 000-164-757
4. Exact name of issuer as specified in its charter PILIPINAS SHELL PETROLEUM CORPORATION
5. Metro Manila, Philippines 6. (SEC Use Only)

Province, Country or other jurisdiction of Industry Classification Code:
incorporation or organization
7. 41st Floor, The Finance Center, 26th Street corner 9th Avenue 1635
Bonifacio Global City, Brgy. Fort Bonifacio, Taguig City, Metro Manila
Address of principal office Postal Code
8. (632) 3 499 4001

Issuer's telephone number, including area code
9. Not Applicable
Former name, former address, and former fiscal year, if changed since last report .
INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT
COMPLIANT/ ADDITIONAL INFORMATION EXPLANATION
NON-
COMPLIANT
The Board’s Governance Responsibilities
Principle 1: 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.
Recommendation 1.1
1. Board is composed of directors with collective COMPLIANT The Board has implemented a process for the selection of
working knowledge, experience or expertise that directors who can add value and contribute independent
is relevant to the company’s industry/sector. judgment to the formulation of sound corporate strategies
and policies.
2. Board has an appropriate mix of competence COMPLIANT
and expertise. The members of the Board are composed of businessmen,
professionals, educators, insurance experts, engineers and
3. Directors remain qualified for their positions COMPLIANT personalities with extensive knowledge, experience and
individually and collectively to enable them to expertise in the petroleum industry and the Philippine
fulfill their roles and responsibilities and respond to economy in general. For more information on the
the needs of the organization. qualifications of the Board members, please refer to
http://pilipinas.shell.com.ph/about-us/leadership/board-
of-directors.html.
The qualification standards for directors of the Corporation

are found in Sections 2.2.2 and 2.2.3.1 of the Revised
Manual on Corporation Governance (“CG Manual”). The
nomination process conducted by the Nomination
Committee is outlined in Section 9.1.6 of the CG Manual.
Please refer to https://pilipinas.shell.com.ph/corporate-
governance/corporate-governance-
policies/_jcr_content/par/textimage.stream/154209108363
3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
corporate-governance-manual-nov-13.pdf.
Recommendation 1.2
1. Board is composed of a majority of non- COMPLIANT As of filing, the Board is composed of eleven (11) directors,
executive directors. eight (8) of whom, including three (3) independent
directors, are non-executive directors. The remaining three
(3) are executive directors.
For more information on the directors and the type of their

directorships, please refer to
http://pilipinas.shell.com.ph/about-us/leadership.html.
Recommendation 1.3
SEC Form – I-ACGR * Updated 21Dec2017

Page 2 of 67
1. Company provides in its Board Charter and COMPLIANT Sections 2.2.3.1.6 and 4 of the CG Manual provide for the
Manual on Corporate Governance a policy on orientation and training of directors. Pursuant to Section
training of directors. 2.2.3.3.2 of the CG Manual, the Corporate Governance
Committee recommends continuing education/training
programs for directors and proposes and plans relevant
trainings for the members of the Board. Please refer to
https://pilipinas.shell.com.ph/corporate-
2. Company has an orientation program for first COMPLIANT Sections 2.2.3.1.6 and 4 of the CG Manual provide for the
time directors. orientation and training of first-time directors. Please refer
to https://pilipinas.shell.com.ph/corporate-
3. Company has relevant annual continuing training COMPLIANT 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
for all directors. corporate-governance-manual-nov-13.pdf.
Information on the trainings attended by the Corporation’s

directors can be viewed at
http://edge.pse.com.ph/openDiscViewer.do?edge_no=40
c3fb4d0dc060d03318251c9257320d#sthash.SiFZMM0l.dpbs
and
http://edge.pse.com.ph/openDiscViewer.do?edge_no=f4
d3bc78b20684273318251c9257320d#sthash.jRdPgtoS.dpbs
Recommendation 1.4
1. Board has a policy on board diversity. COMPLIANT In 2017, the Board is composed of eight (8) male and three
(3) female directors. In 2018, one of the female non-
executive directors stepped down and a male director was
elected. The Corporation currently has nine (9) male and
two (2) female directors.
The Board has adopted a policy on Board diversity, which

may include diversity in gender, age, ethnicity, culture, skills,
competence and knowledge. Please refer to Section

Page 3 of 67
2.2.1.2 of the CG Manual
Optional: Recommendation 1.4
1. Company has a policy on and discloses COMPLIANT The Board has adopted a policy on Board diversity, which
measurable objectives for implementing its board may include diversity in gender, age, ethnicity, culture, skills,
diversity and reports on progress in achieving its competence and knowledge. With this, the stockholders
objectives. elected a female independent director from the academe.
Further, the Nomination Committee included amongst the
nominees for election during the annual stockholders’
meeting with experience in Upstream, real estate and
government, as well as individuals with valuable industry
experience from other jurisdictions. Please refer to Section
2.2.1.2 of the CG Manual
Recommendation 1.5
1. Board is assisted by a Corporate Secretary. COMPLIANT Information on the Corporation’s Corporate Secretary, Atty.
Erwin R. Orocio, is available in the Definitive Information
2. Corporate Secretary is a separate individual from COMPLIANT
Sheet for the 2020 Annual Stockholders’ Meeting
the Compliance Officer.
https://pilipinas.shell.com.ph/investors/2020-annual-
3. Corporate Secretary is not a member of the COMPLIANT
stockholders-meeting.html. The Chief Compliance Officer is
Board of Directors.
a separate individual from the Corporate Secretary. Please
refer to Section 2.1.1 of the CG Manual
corporate-governance-manual-nov-13.pdf. Atty. Orocio is
likewise not a member of the Board.

Page 4 of 67
The duties and functions of the Corporate Secretary are
enumerated in Section 2.2.5.3 of the CG Manual.
4. Corporate Secretary attends training/s on COMPLIANT Please refer to
corporate governance. https://edge.pse.com.ph/openDiscViewer.do?edge_no=d
92c467eb2f6045cefdfc15ec263a54d.
1. Corporate Secretary distributes materials for COMPLIANT Please refer to Section 2.2.4.2 of the CG Manual
board meetings at least five business days before (https://pilipinas.shell.com.ph/corporate-
scheduled meeting. governance/corporate-governance-
corporate-governance-manual-nov-13.pdf).
Recommendation 1.6
1. Board is assisted by a Compliance Officer. COMPLIANT Atty. Jannet C. Regalado is the Corporation’s Vice-
2. Compliance Officer has a rank of Senior Vice COMPLIANT President - Legal and Chief Compliance Officer. Atty.
President or an equivalent position with Regalado is not a member of the Board of Directors. For
adequate stature and authority in the more information on her qualifications, please refer to
corporation. http://pilipinas.shell.com.ph/about-
3. Compliance Officer is not a member of the COMPLIANT us/leadership/management-team.html.
board.
The qualifications, duties and functions of the Chief
Compliance Officer are specified in Section 2.1 of the CG
Manual (https://pilipinas.shell.com.ph/corporate-
4. Compliance Officer attends training/s on COMPLIANT Please refer to
corporate governance. https://edge.pse.com.ph/openDiscViewer.do?edge_no=d
92c467eb2f6045cefdfc15ec263a54d.
Principle 2: 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 stockholders and other stakeholders.
Recommendation 2.1
1. Directors act on a fully informed basis, in good COMPLIANT Information on how the directors performed their duties is
faith, with due diligence and care, and in the available in the Definitive Information Statement which was
best interest of the company. filed with the Securities and Exchange Commission on 21
Page 5 of 67
May 2020 (https://pilipinas.shell.com.ph/investors/2020-
annual-stockholders-
meeting/_jcr_content/par/textimage.stream/15901396431
64/311ceb2dbb5a740c71da8ff1071cd0abdedbc9ae/2-
2020-definitive-information-statement-20-is-including-the-
agenda-of-the-meeting.pdf).
Recommendation 2.2
1. Board oversees the development, review and COMPLIANT The directors performed this function pursuant to Section
approval of the company’s business objectives 2.2.1 of the Corporation’s CG Manual
and strategy. (https://pilipinas.shell.com.ph/corporate-
2. Board oversees and monitors the implementation COMPLIANT governance/corporate-governance-
of the company’s business objectives and policies/_jcr_content/par/textimage.stream/154209108363
strategy. 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
The business objectives and strategy of the Corporation are

reviewed by the Board every year.
Supplement to Recommendation 2.2
1. Board has a clearly defined and updated vision, COMPLIANT The Corporation’s vision, mission and core values are
mission and core values. available at http://pilipinas.shell.com.ph/about-us/who-
we-are.html.
The Board oversees the development of, formulate, and

approve the Corporation’s vision, mission, strategic
objectives, business objectives and strategy, policies, and
procedures that guide its activities, including the means to
effectively monitor Management’s performance. It shall
also monitor their implementation, in order to sustain the
Corporation’s long-term viability and strength. The
Corporation’s vision, mission and core values are reviewed
every year.
2. Board has a strategy execution process that COMPLIANT Management develops and formulates the Corporation’s
facilitates effective management performance strategic and business objectives and plans, which are
and is attuned to the company’s business presented to the Board. The President and Chief Executive
environment, and culture. Officer oversees the operations and manages human and
financial resources; and directs, evaluates and guides the
work of key officers, among others.
Page 6 of 67
Please refer to Section 2.2.1 of the CG Manual
(https://pilipinas.shell.com.ph/corporate-
Recommendation 2.3
1. Board is headed by a competent and qualified COMPLIANT Information on the Corporation’s new Chairman of the
Chairperson. Board, Mr. Min Yih Tan, is available at
of-directors.html. The duties and responsibilities of the
Chairman of the Board are provided in Section 2.2.1.4 of the
CG Manual (https://pilipinas.shell.com.ph/corporate-
Recommendation 2.4
1. Board ensures and adopts an effective COMPLIANT The Board has a competent, professional, honest and
succession planning program for directors, key effective succession planning program for directors, key
officers and management. officers and Management to ensure growth and a
continued increase in the shareholders’ value. This includes
adopting a policy on the retirement age for directors and
2. Board adopts a policy on the retirement for COMPLIANT key officers as part of management succession and to
directors and key officers. promote dynamism in the Corporation. The Corporate
Governance Committee recommends to the Board the
succession plan for the Board members and senior officers,
including retirement. Please refer to Sections 2.2.1.2 and
2.2.3.3.2 of the CG Manual

Page 7 of 67
Succession planning forms a core part of the Senior
Succession Review, Business and Country Talent Review
processes. It is carried out on a regular basis to accurately
assess the health of the pipeline for key leadership roles; to
assist with identifying development needs of potential
successors; and to gauge whether external recruitment
may be required to strengthen the pipeline.
As of 2019, about 90% of senior management are local hires.

These managers lead large-scale business units or support
functions.
Recommendation 2.5
1. Board aligns the remuneration of key officers and COMPLIANT Information on the Corporation’s remuneration policy is
board members with long-term interests of the available in the following:
company. 1. CG Manual
2. Board adopts a policy specifying the relationship COMPLIANT governance/corporate-governance-
between remuneration and performance. policies/_jcr_content/par/textimage.stream/154209
1083633/3db39a3713abfca6bf9db826ac2544d1df5
3. Directors do not participate in discussions or COMPLIANT cf1d0/pspc-corporate-governance-manual-nov-
deliberations involving his/her own remuneration. 13.pdf).
2. Corporate Governance Committee Charter
governance/board-
committees/_jcr_content/par/expandablelist/expa
ndablesection_137368764.stream/1495703726932/7
53d422d2e590902331b0eb323db4c9730d44723/ps
pc-corporate-governance-committee-
charter.pdf).
The Corporate Governance (CG) Committee is tasked with

the implementation and review of the corporate
governance framework, and adopts the functions formerly
assigned to the Compensation and Remuneration
Committee. It is composed of four members, at least three
of whom are independent directors, including the

Page 8 of 67
committee chairman. The fourth member is the Chief
Compliance Officer.
The policy on executive remuneration and for fixing the

remuneration packages of corporate officers and directors,
including the CEO is within the oversight function of the CG
Committee.
The functions of the CG Committee, including its

responsibility to establish 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, are detailed in
the CG Committee Charter.
1. Board approves the remuneration of senior COMPLIANT The annual pay review is presented to the Corporate
executives. Governance Committee and Board pursuant to the CG
Manual. Please refer to the CG Manual
2. Company has measurable standards to align the COMPLIANT The remuneration of key officers and directors are aligned
performance-based remuneration of the with the long-term interests of the Corporation. In doing so,
executive directors and senior executives with it adopts a policy specifying the relationship between
long-term interest, such as claw back provision remuneration and performance and ensures that no
and deferred bonuses. director participates in discussions or deliberations involving
his/her own remuneration. The Corporate Governance
Committee has duly reviewed and considered
remuneration packages based on corporate and individual
performance through a formal and transparent procedure
and has provided oversight over the remuneration of senior
management and other key personnel to ensure that
compensation is consistent with the Corporation’s culture,
strategy, and control environment. The amount of

Page 9 of 67
remuneration is in a sufficient level to attract and retain
qualified and competent directors and officers who are
needed to manage the Corporation sustainably. Thus, in
the Corporation’s Annual Report and Information
Statement, a clear, concise and understandable disclosure
of all fixed and variable compensation of its directors and
top management officers are provided. Please refer to
Sections 2.2.1.2 and 2.2.3.3.2 of the CG Manual
The remuneration of key officers and Board members are

aligned with the long-term interests of the Corporation.
There is currently no policy on the relationship between
remuneration and performance. There is no claw back
provision and deferred bonuses in case of a serious
misconduct or a material misrepresentation.
Recommendation 2.6
1. Board has a formal and transparent board COMPLIANT The Board has implemented a process for the selection of
nomination and election policy. directors who can add value and contribute independent
judgment to the formulation of sound corporate strategies
2. Board nomination and election policy is disclosed COMPLIANT and policies. Thus, members of the Board are composed of
in the company’s Manual on Corporate businessmen, professionals and personalities with extensive
Governance. knowledge, experience and expertise in the petroleum
industry and the economy.
3. Board nomination and election policy includes COMPLIANT The qualification standards for directors of the Corporation
how the company accepted nominations from are found in Sections 2.2.2 and 2.2.3.1 of the CG Manual.
minority shareholders. The nomination process conducted by the Nomination
4. Board nomination and election policy includes COMPLIANT Committee is outlined in Section 9.1.6 of the CG Manual.
how the board shortlists candidates. Please refer to https://pilipinas.shell.com.ph/corporate-
5. Board nomination and election policy includes COMPLIANT
an assessment of the effectiveness of the Board’s
Page 10 of 67
processes in the nomination, election or 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
replacement of a director. corporate-governance-manual-nov-13.pdf.
6. Board has a process for identifying the quality of COMPLIANT For more information on the qualifications of the Board
directors that is aligned with the strategic members, please refer to:
direction of the company. a. Nomination Committee Charter
governance/board-
09b19d74078c6e39e4811a2a50da5a35ede4397/ps
pc-nomination-committee-charter.pdf)
b. Nominations Guidelines
governance/board-
ndablesection_397569864.stream/1519807441474/d
6dd2e2e012425d7bcc4e9981784913a0057e7f6/no
mcom-director-nominations-guidelines.pdf)
c. List of Qualifications and Disqualifications
governance/board-
207b8102ce56b75e9fc69660541301e38f24313/pspc
-list-of-qualifications-and-disqualifications-of-
directors.pdf)
Optional: Recommendation to 2.6
1. Company uses professional search firms or other COMPLIANT On 06 January 2020, the Nomination Committee issued
external sources of candidates (such as director letters to all stockholders of record informing them of their
databases set up by director or shareholder right to nominate and elect members of the Board of
bodies) when searching for candidates to the Directors and to submit by 04 February 2020 their
board of directors. nominations. When applicable, the Corporation uses
external sources (i.e., Institute of Corporate Directors) and
leverages on its broad network to search for potential
candidates to the Board.
Recommendation 2.7

Page 11 of 67
1. Board has overall responsibility in ensuring that COMPLIANT Information on the Corporation’s related party policy is
there is a group-wide policy and system available at https://pilipinas.shell.com.ph/corporate-
governing related party transactions (RPTs) and governance/board-
other unusual or infrequently occurring committees/_jcr_content/par/expandablelist/expandable
transactions. section_2070877671.stream/1565865518514/e797463e090bf
2. RPT policy includes appropriate review and COMPLIANT 964d6811fc9edbf134b9c4e2193/sec-related-party-
approval of material RPTs, which guarantee transaction-policy.pdf.
fairness and transparency of the transactions.
3. RPT policy encompasses all entities within the COMPLIANT Related party transactions were disclosed in the Notes to
group, taking into account their size, structure, risk the Audited Financial Statements
profile and complexity of operations. (http://pilipinas.shell.com.ph/investors/financial-
reports.html).
Supplement to Recommendations 2.7
1. Board clearly defines the threshold for disclosure COMPLIANT Please refer to the Corporation’s Related Party Transaction
and approval of RPTs and categorizes such Policy (https://pilipinas.shell.com.ph/corporate-
transactions according to those that are governance/board-
considered de minimis or transactions that need committees/_jcr_content/par/expandablelist/expandable
not be reported or announced, those that need section_2070877671.stream/1565865518514/e797463e090bf
to be disclosed, and those that need prior 964d6811fc9edbf134b9c4e2193/sec-related-party-
shareholder approval. The aggregate amount of transaction-policy.pdf).
RPTs within any twelve (12) month period should
be considered for purposes of applying the
thresholds for disclosure and approval.
2. Board establishes a voting system whereby a NOT The Corporation presently does not have a voting system Related party transactions
majority of non-related party shareholders APPLICABLE specific to non-related party shareholders. Based on entered, or to be entered
approve specific types of related party Section 4, Article II of the Corporation’s Amended By-Laws, into by the Corporation are
transactions during shareholders’ meetings. a majority of a quorum consisting of the majority of the made in the ordinary
subscribed capital stock of the Corporation shall decide course of business. These
any question at a meeting of the stockholders, except in are recurring transactions
matters in which the Corporation Code requires the which are entered into to
affirmative vote of a greater proportion. take advantage of quality
assured products and
services, lower operating
cost and improved
efficiency. While, the said
related party transactions
are not submitted to non-
Page 12 of 67
related party shareholders
for their approval, the
approval and review
process laid down in the
Corporation’s Related
Party Transaction Policy
sufficiency protects the
interests of non-related
party shareholders.
Recommendation 2.8
1. Board is primarily responsible for approving the COMPLIANT Please refer to the CG Manual and Amended By-Laws
selection of Management led by the Chief dated 25 January 2019
Executive Officer (CEO) and the heads of the (https://pilipinas.shell.com.ph/corporate-
other control functions (Chief Risk Officer, Chief governance/corporate-charter-documents.html).
Compliance Officer and Chief Audit Executive).
Information on the Management Team is available at
http://pilipinas.shell.com.ph/about-
us/leadership/management-team.html.
2. Board is primarily responsible for assessing the COMPLIANT Please refer to the CG Manual
performance of Management led by the Chief (https://pilipinas.shell.com.ph/corporate-
Executive Officer (CEO) and the heads of the governance/corporate-governance-
other control functions (Chief Risk Officer, Chief policies/_jcr_content/par/textimage.stream/154209108363
Compliance Officer and Chief Audit Executive). 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
Recommendation 2.9
1. Board establishes an effective performance COMPLIANT Please refer to the CG Manual, Shell General Business
management framework that ensures that Principles) and Code of Conduct
Management’s performance is at par with the (https://pilipinas.shell.com.ph/about-us/our-values.html)
standards set by the Board and Senior
Management.
2. Board establishes an effective performance COMPLIANT

management framework that ensures that
personnel’s performance is at par with the
standards set by the Board and Senior
Management.
Page 13 of 67
Recommendation 2.10
1. Board oversees that an appropriate internal COMPLIANT Information on the Corporation’s internal control system
control system is in place. and the Board responsibility for overseeing said system and
potential conflict of interest mechanism is available in the
CG Manual (https://pilipinas.shell.com.ph/corporate-
2. The internal control system includes a mechanism COMPLIANT governance/corporate-governance-
for monitoring and managing potential conflict of policies/_jcr_content/par/textimage.stream/154209108363
interest of the Management, members and 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
shareholders. corporate-governance-manual-nov-13.pdf).
Please also refer to Shell General Business Principles) and

Code of Conduct (https://pilipinas.shell.com.ph/about-
us/our-values.html)
An effective system of internal control ensures the integrity

of the financial reports and protection of the assets of the
Corporation for the benefit of all the stockholders and other
stockholders. The Board ensures 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 Audit and Risk Oversight Committee (“BARC”)

has enhanced oversight capability over the Corporation’s
financial reporting, internal control system, internal and
external audit processes, and compliance with applicable
laws and regulations. BARC also monitors and evaluates the
adequacy and effectiveness of the Corporation’s internal
control system, including financial reporting control and
information technology security. The Board also approved
the Internal Audit Charter of the Corporate Audit and
Assurance Department (“CAAD”). Through CAAD, BARC
monitors and evaluates the adequacy and effectiveness of
the Corporation’s internal control system, integrity of

Page 14 of 67
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 are in
place in order to (a) safeguard the Corporation’s resources
and ensure their effective utilization, (b) prevent
occurrence of fraud and other irregularities, (c) protect the
accuracy and reliability of the Corporation’s financial data,
and (d) ensure compliance with applicable laws and
regulations. The minimum internal control mechanisms for
Management’s operational responsibility is centered on the
CEO, being ultimately accountable for the Corporation’s
organizational and procedural controls.
The CEO and the CAAD Manager issue an annual joint

attestation that a review of the adequacy and
effectiveness of the overall internal control system of the
Corporation is conducted. The review covered all material
controls, including financial, operational, and compliance
controls. The review approach consisted of the business
assurance process and risk-based assurance plan
approved by the BARC. The results of the review are
reported to BARC. The external auditors use the review in
their audit.
3. Board approves the Internal Audit Charter. COMPLIANT Please refer to Section 2.2.7 of the CG Manual
Recommendation 2.11
1. Board oversees that the company has in place a COMPLIANT Please refer to Sections 2.2.3.2 and 8 of the CG Manual
sound enterprise risk management (ERM) (https://pilipinas.shell.com.ph/corporate-
framework to effectively identify, monitor, assess governance/corporate-governance-
and manage key business risks. policies/_jcr_content/par/textimage.stream/154209108363

Page 15 of 67
2. The risk management framework guides the COMPLIANT 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
board in identifying units/business lines and corporate-governance-manual-nov-13.pdf).
enterprise-level risk exposures, as well as the
effectiveness of risk management strategies.
Recommendation 2.12
1. Board has a Board Charter that formalizes and COMPLIANT The composition, and duties and functions of, and other
clearly states its roles, responsibilities and matters relating to the Board were already incorporated in
accountabilities in carrying out its fiduciary role. the CG Manual which also serves as the Board Charter.
2. Board Charter serves as a guide to the directors in COMPLIANT Please refer to Section 2.2.1 of the CG Manual
the performance of their functions. (https://pilipinas.shell.com.ph/corporate-
3. Board Charter is publicly available and posted on COMPLIANT policies/_jcr_content/par/textimage.stream/154209108363
the company’s website. 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
Additional Recommendation to Principle 2

1. Board has a clear insider trading policy. COMPLIANT The Corporation has adopted its own Securities Dealing
Code which provides clear prohibition against insider
dealing, short term/swing transactions, unauthorized
disclosure of inside information (tipping), trading in
commodities/derivatives or shares of other publicly-listed
companies in the Philippines using inside information gained
from relationship with and employment in the Corporation.
Please refer to its Securities Dealing Code
0/3c0ec9e0818bdc93a7bccc1bdbd381f4a252127c/shlph-
securities-dealing-code-2017-02-17.pdf).
Optional: Principle 2
1. Company has a policy on granting loans to COMPLIANT The Corporation created a Related Party Transactions
directors, either forbidding the practice or Committee and has adopted a Related Party Transactions
ensuring that the transaction is conducted at Policy. Please refer to its Related Party Transaction Policy
arm’s length basis and at market rates. (https://pilipinas.shell.com.ph/corporate-
governance/board-
committees/_jcr_content/par/expandablelist/expandable
Page 16 of 67
section_2070877671.stream/1565865518514/e797463e090bf
964d6811fc9edbf134b9c4e2193/sec-related-party-
transaction-policy.pdf).
Executive directors may avail of loans granted pursuant to

published employee loan policies (e.g. housing, car,
emergency) that are also available to other employees
who meet the criteria. Further, these loans are extended by
third party providers (e.g. banks).
2. Company discloses the types of decision COMPLIANT Please refer to the Corporation’s Amended By-Laws and
requiring board of directors’ approval. CG Manual which are made available in the Corporation’s
website at (https://pilipinas.shell.com.ph/corporate-
governance/corporate-charter-documents.html).
Principle 3: 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.
Recommendation 3.1
1. Board establishes board committees that focus COMPLIANT Information about the Corporation’s Board Committees is
on specific board functions to aid in the optimal available in its website,
performance of its roles and responsibilities. https://pilipinas.shell.com.ph/corporate-
governance/board-committees.html:
1. Board Audit and Risk Oversight Committee

2. Related Party Transaction Committee
3. Corporate Governance Committee
4. Nomination Committee
5. Corporate Social Responsibility Committee
Information on all the board committees established by the

Corporation is provided in the CG Manual
Recommendation 3.2
Page 17 of 67
1. Board establishes an Audit Committee to COMPLIANT Please refer to the CG Manual and Board Audit and Risk
enhance its oversight capability over the Oversight Committee Charter
company’s financial reporting, internal control (https://pilipinas.shell.com.ph/corporate-
system, internal and external audit processes, governance/board-
and compliance with applicable laws and committees/_jcr_content/par/expandablelist/expandable
regulations. section.stream/1489634545629/bcf7fb04c1b894e12b85d0f
a947afd889e73463962a5d3275d10f64c0715678b/audit-
committee-charter-2016.pdf).
2. Audit Committee is composed of at least three COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-
appropriately qualified non-executive directors, governance/board-committees.html and
the majority of whom, including the Chairman is http://pilipinas.shell.com.ph/about-us/leadership/board-
independent. of-directors.html.
3. All the members of the committee have relevant COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-
background, knowledge, skills, and/or governance/board-committees.html and
experience in the areas of accounting, auditing http://pilipinas.shell.com.ph/about-us/leadership/board-
and finance. of-directors.html.
4. The Chairman of the Audit Committee is not the COMPLIANT Information on the Committee’s Chairman, Mr. Cesar A.
Chairman of the Board or of any other Buenaventura, is available at
committee. http://pilipinas.shell.com.ph/about-us/leadership/board-
of-directors.html.
1. Audit Committee approves all non-audit services COMPLIANT Please refer to the CG Manual and Board Audit and Risk
conducted by the external auditor. Oversight Committee Charter
governance/board-
section.stream/1591005190974/e2bbef8f78613bc0155c442f
e7d1812b2c060a7a/board-audit-and-risk-oversight-
committee-charter20.pdf).
2. Audit Committee conducts regular meetings and COMPLIANT Board Audit and Risk Oversight Committee has separate
dialogues with the external audit team without periodic meetings with the external auditor, without any
anyone from management present. executive directors (except the Vice President-Finance and
Treasurer who attends in the executive capacity), present
to ensure that proper checks and balances are in place
Page 18 of 67
with the Corporation. The Vice President-Finance and
Treasurer does not participate as a director nor is a member
of the Board Audit and Risk Oversight Committee. Please
refer to the CG Manual and Board Audit and Risk Oversight
Committee Charter
governance/board-

1. Audit Committee meet at least four times during COMPLIANT Based on its Minutes, the Board Audit and Risk Oversight
the year. Committee held four (4) meetings in 2019. Based on the CG
Manual, it shall meet with the Board at least every quarter.
2. Audit Committee approves the appointment and COMPLIANT Please refer to the following:
removal of the internal auditor. 1. CG Manual
cf1d0/pspc-corporate-governance-manual-nov-
13.pdf); and
2. Board Audit and Risk Oversight Committee Charter
governance/board-
ndablesection.stream/1591005190974/e2bbef8f786
13bc0155c442fe7d1812b2c060a7a/board-audit-
and-risk-oversight-committee-charter20.pdff).
Recommendation 3.3
1. Board establishes a Corporate Governance COMPLIANT Please refer to the CG Manual and Corporate Governance
Committee tasked to assist the Board in the Committee Charter
performance of its corporate governance (https://pilipinas.shell.com.ph/corporate-
responsibilities, including the functions that were governance/board-
Page 19 of 67
formerly assigned to a Nomination and committees/_jcr_content/par/expandablelist/expandable
Remuneration Committee. section_137368764.stream/1495703726932/753d422d2e590
902331b0eb323db4c9730d44723/pspc-corporate-
governance-committee-charter.pdf).
2. Corporate Governance Committee is composed COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-

of at least three members, all of whom should be governance/board-committees.html and
independent directors. http://pilipinas.shell.com.ph/about-us/leadership/board-
of-directors.html.
3. Chairman of the Corporate Governance COMPLIANT Information on the Committee’s Chairman, Mr. Fernando
Committee is an independent director. Zobel de Ayala, is available at
of-directors.html.
Optional: Recommendation 3.3.

1. Corporate Governance Committee meets at COMPLIANT Based on its Minutes, the Corporate Governance
least twice during the year. Committee held three (3) meetings in 2019. Please refer to
its Committee Charter
governance/board-
section_137368764.stream/1495703726932/753d422d2e590
902331b0eb323db4c9730d44723/pspc-corporate-
governance-committee-charter.pdf)
Recommendation 3.4
1. Board establishes a separate Board Risk Oversight COMPLIANT Please refer to the following:
Committee (BROC) that should be responsible for 1. CG Manual
the oversight of a company’s Enterprise Risk (https://pilipinas.shell.com.ph/corporate-
Management system to ensure its functionality governance/corporate-governance-
and effectiveness. policies/_jcr_content/par/textimage.stream/154209
13.pdf); and
2. Board Audit and Risk Oversight Committee
governance/board-
Page 20 of 67
and-risk-oversight-committee-charter20.pdf).
2. BROC is composed of at least three members, COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-
the majority of whom should be independent governance/board-committees.html and
directors, including the Chairman. http://pilipinas.shell.com.ph/about-us/leadership/board-
of-directors.html.
3. The Chairman of the BROC is not the Chairman of COMPLIANT Information on the Committee’s Chairman, Mr. Cesar A.
the Board or of any other committee. Buenaventura, is available at
of-directors.html.
4. At least one member of the BROC has relevant COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-
thorough knowledge and experience on risk and governance/board-committees.html and
risk management. http://pilipinas.shell.com.ph/about-us/leadership/board-
of-directors.html.
Recommendation 3.5
1. Board establishes a Related Party Transactions COMPLIANT Please refer to the following:
(RPT) Committee, which is tasked with reviewing 1. CG Manual
all material related party transactions of the (https://pilipinas.shell.com.ph/corporate-
company. governance/corporate-governance-
13.pdf);
2. Related Party Transaction Board Committee Charter
governance/board-
ndablesection_2070877671.stream/1543201576341/
45b71e0dd84b82bbccdee905360ff5ddcb8bbaf3/r
elated-party-transaction-board-committee-
charter.pdf); and
3. Related Party Transaction Policy
governance/board-
Page 21 of 67
e797463e090bf964d6811fc9edbf134b9c4e2193/sec
-related-party-transaction-policy.pdf).
2. RPT Committee is composed of at least three COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-
non-executive directors, two of whom should be governance/board-committees.html and
independent, including the Chairman. http://pilipinas.shell.com.ph/about-us/leadership.html.
Recommendation 3.6
1. All established committees have a Committee COMPLIANT Please refer to the CG Manual and the Committee Charters
Charter stating in plain terms their respective which are available at
purposes, memberships, structures, operations, https://pilipinas.shell.com.ph/corporate-
reporting process, resources and other relevant governance/board-committees.html.
information.
2. Committee Charters provide standards for COMPLIANT

evaluating the performance of the Committees.
3. Committee Charters were fully disclosed on the COMPLIANT

company’s website.
Principle 4: 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.
Recommendation 4.1
1. The Directors attend and actively participate in COMPLIANT Information on the process and procedure for
all meetings of the Board, Committees and tele/videoconferencing board and/or committee
shareholders in person or through tele- meetings is available in the Corporation’s Amended By-
/videoconferencing conducted in accordance Laws (https://pilipinas.shell.com.ph/corporate-
with the rules and regulations of the Commission. governance/corporate-charter-documents.html) and CG
Information on the attendance and participation of

directors to Board, Committee and shareholders’ meetings
is available at http://pilipinas.shell.com.ph/investors/other-
corporate-disclosures.html and
Page 22 of 67
http://pilipinas.shell.com.ph/investors/stockholders-
meeting-information.html.
2. The directors review meeting materials for all COMPLIANT Directors are mandated to review meeting materials and, if
Board and Committee meetings. called for, ask necessary questions or seek clarifications and
explanations when they attend and actively participate in
all Board, Committee, and shareholders’ meetings in person
or through tele-/videoconferencing conducted in
accordance with the rules and regulations of the
Commission, except when justifiable causes, such as, illness,
death in the immediate family, and serious accidents,
prevent him from doing so. Please refer to Section 2.2.1.3 (b)
of the CG Manual
3. The directors ask the necessary questions or seek COMPLIANT Based on the Minutes of Board Meetings, directors asked
clarifications and explanations during the Board necessary questions and sought clarifications and
and Committee meetings. explanations during the Board and Committee meetings.
Recommendation 4.2
1. Non-executive directors concurrently serve in a FOR Section 2.2.3.1.5 of the CG Manual provides that the
maximum of five publicly-listed companies to COMPLIANCE Corporation’s non-executive directors shall concurrently
ensure that they have sufficient time to fully serve as directors in a maximum of five (5) publicly listed
prepare for minutes, challenge Management’s companies (https://pilipinas.shell.com.ph/corporate-
proposals/views, and oversee the long-term governance/corporate-governance-
strategy of the company. policies/_jcr_content/par/textimage.stream/154209108363
corporate-governance-manual-nov-13.pdf). As borne out
by their attendance at most (if not all) board and
committee meetings, all directors were able to effectively
commit themselves to perform their roles and responsibilities
in the Corporation. They contributed enough time to keep
abreast of the Corporation’s operations and to attend and
actively participate during meetings.

Page 23 of 67
Information on the directorships of the Corporation’s
directors in other companies is available in its 2019 Annual
Report (https://pilipinas.shell.com.ph/investors/financial-
reports.html) and Amended Definitive Information
Statement which was filed with the SEC on 21 May 2020
(https://pilipinas.shell.com.ph/investors/2020-annual-
stockholders-
Recommendation 4.3
1. The directors notify the company’s board before COMPLIANT Please refer to Section 2.2.3.1.4 of the CG Manual
accepting a directorship in another company. (https://pilipinas.shell.com.ph/corporate-
1. Company does not have any executive directors COMPLIANT Please refer to the profiles of the Board found in the 2019
who serve in more than two boards of listed Annual Report of the Corporation
companies outside of the group. (https://pilipinas.shell.com.ph/investors/financial-
reports.html).
2. Company schedules board of directors’ meetings COMPLIANT Based on the Corporate Calendar of the Corporation,
before the start of the financial year. Board meetings are scheduled before the start of the year.
The Corporate Secretary assists the Board and its
Committees in the conduct of their meetings, including
preparing an annual schedule of Board and committee
meetings and the annual board calendar, and assisting the
chairs of the Board and its committees to set agenda for
those meetings.
3. Board of directors meet at least six times during NOT Unless there is a need for
the year. APPLICABLE special meeting, the Board
holds at least four regular
meetings each year.
Further, Board Committees
conduct their meetings
Page 24 of 67
prior to each Board
meeting.
4. Company requires as minimum quorum of at NOT A quorum at any meeting of the Board of Directors shall The minimum quorum
least 2/3 for board decisions. APPLICABLE consist of a majority of the entire membership of the Board. provided under the
A majority of the Directors forming such quorum shall Corporation’s Amended
decide any question that may come before the meeting, By-Laws is compliant with
save and except such matters in which the Corporation the provisions of the
Code may require the affirmative vote of a greater Corporation Code.
proportion of the Board members (cf. Section4, Article III,
Amended By-Laws).
Principle 5: The board should endeavor to exercise an objective and independent judgment on all corporate affairs
Recommendation 5.1
1. The Board has at least 3 independent directors or COMPLIANT Information on the number of independent directors of the
such number as to constitute one-third of the Corporation is available in its CG Manual and General
board, whichever is higher. Information Sheet
(http://pilipinas.shell.com.ph/investors/other-corporate-
disclosures.html).
Recommendation 5.2
1. The independent directors possess all the COMPLIANT Information on the qualifications of the independent
qualifications and none of the disqualifications to directors is available at
hold the positions. https://pilipinas.shell.com.ph/corporate-
governance/board-
section_397569864.stream/1532936769570/8207b8102ce56
b75e9fc69660541301e38f24313/pspc-list-of-qualifications-
and-disqualifications-of-directors.pdf.
1. Company has no shareholder agreements, by- COMPLIANT Please refer to the Corporation’s Amended By-Laws
laws provisions, or other arrangements that (https://pilipinas.shell.com.ph/corporate-
constrain the directors’ ability to vote governance/corporate-charter-documents.html).
independently.
Recommendation 5.3
1. The independent directors serve for a cumulative COMPLIANT Information on the number of years that the independent
term of nine years (reckoned from 2012). directors have served as such is available at

Page 25 of 67
of-directors.html.
2. The company bars an independent director from COMPLIANT Information on the Corporation’s policy on term limits for its
serving in such capacity after the term limit of independent directors is available in its CG Manual
nine years. (https://pilipinas.shell.com.ph/corporate-
3. In the instance that the company retains an COMPLIANT Please refer to the Corporation’s CG Manual
independent director in the same capacity after (https://pilipinas.shell.com.ph/corporate-
nine years, the board provides meritorious governance/corporate-governance-
justification and seeks shareholders’ approval policies/_jcr_content/par/textimage.stream/154209108363
during the annual shareholders’ meeting. 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
Recommendation 5.4
1. The positions of Chairman of the Board and Chief COMPLIANT The Corporation’s Chairman of the Board is Mr. Asada
Executive Officer are held by separate Harinsuit and its Chief Executive Officer and President is Mr.
individuals. Cesar G. Romero. Please refer to Section 2.2.1.4 of the CG
2. The Chairman of the Board and Chief Executive COMPLIANT Information on the roles and responsibilities of the Chairman
Officer have clearly defined responsibilities. of the Board and the President and Chief Executive Officer
is available in the CG Manual

Page 26 of 67
The Chairman of the Board and the President and Chief
Executive Officer of the Corporation are not related to
each other.
Recommendation 5.5
1. If the Chairman of the Board is not an COMPLIANT Information on the Corporation’s directors is available at
independent director, the board designates a http://pilipinas.shell.com.ph/about-us/leadership/board-
lead director among the independent directors. of-directors.html.
The Chairman of the Board, Mr. Asada Harinsuit, is not an

independent director. The appointed lead director is Mr.
Cesar A. Buenaventura, an independent director.
Recommendation 5.6
1. Directors with material interest in a transaction COMPLIANT Directors have, when the occasion arises, recused
affecting the corporation abstain from taking themselves from discussions where they may have material
part in the deliberations on the transaction. interest in the subject matter. Please also refer to the
Corporation’s Related Party Transaction Policy which is
available at https://pilipinas.shell.com.ph/corporate-
governance/board-
transaction-policy.pdf.
Recommendation 5.7
1. The non-executive directors (NEDs) have COMPLIANT The Non-Executive Directors have separate periodic
separate periodic meetings with the external meetings on the same day as the Annual Stockholders’
auditor and heads of the internal audit, Meeting and the Organizational Board Meeting. The
compliance and risk functions, without any executive directors are not present to ensure that proper
executive present. checks and balances are in place with the Corporation.
The meetings are chaired by the lead independent
2. The meetings are chaired by the lead COMPLIANT director. The topics discussed included the Board’s
independent director. dynamics, mechanics, ways of working (e.g. results of
performance self-evaluation) and relevant issues faced by
the Corporation. The next meeting will be held on the same
day as the 2020 Annual Stockholders’ Meeting. On 07 May
2019, the non-executive directors held their separate
meeting without the presence of the executive directors.

Page 27 of 67
Lead independent director, Mr. Buenaventura, chaired the
said meeting.
1. None of the directors is a former CEO of the COMPLIANT The Corporation’s Chief Executive Officer and President for
company in the past 2 years. the past two (2) years is Mr. Cesar G. Romero.
Principle 6: 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.
Recommendation 6.1
1. Board conducts an annual self-assessment of its COMPLIANT Please refer to the CG Manual
performance as a whole. (https://pilipinas.shell.com.ph/corporate-
2. The Chairman conducts a self-assessment of his COMPLIANT governance/corporate-governance-
performance. policies/_jcr_content/par/textimage.stream/154209108363
3. The individual members conduct a self- COMPLIANT corporate-governance-manual-nov-13.pdf).
assessment of their performance.
Performance self-assessments have been conducted for
4. Each committee conducts a self-assessment of its COMPLIANT the Board, individual members, Committees and the
performance. Management. Results were tabulated and presented by
the Corporation Governance Committee to the Board.
5. Every three years, the assessments are supported FOR The third year of
by an external facilitator. COMPLIANCE assessment will cover 2019
to be conducted in 2020,
subject to health and
safety restrictions brought
about by COVID-19 and
other similar conditions.
Recommendation 6.2
1. Board has in place a system that provides, at the COMPLIANT Please refer to the CG Manual and Committee Charters
minimum, criteria and process to determine the which are available at
performance of the Board, individual directors https://pilipinas.shell.com.ph/corporate-
and committees. governance/board-committees.html.
2. The system allows for a feedback mechanism COMPLIANT

from the shareholders.
Page 28 of 67
Principle 7: Members of the Board are duty-bound to apply high ethical standards, taking into account the interests of all stakeholders.
Recommendation 7.1
1. Board adopts a Code of Business Conduct and COMPLIANT The Corporation’s Code of Business Conduct and Ethics
Ethics, which provide standards for professional and General Business Principle are made available in its
and ethical behavior, as well as articulate website at http://pilipinas.shell.com.ph/about-us/our-
acceptable and unacceptable conduct and values.html.
practices in internal and external dealings of the
company.
2. The Code is properly disseminated to the Board, COMPLIANT The Corporation’s Code of Business Conduct and Ethics
senior management and employees. and General Business Principle were disseminated to its
Board, senior management and employees mainly through
its website. Printed copies of the said documents were also
provided to the Board, senior management and
employees.
3. The Code is disclosed and made available to the COMPLIANT Please refer to http://pilipinas.shell.com.ph/about-us/our-
public through the company website. values.html.
1. Company has clear and stringent policies and COMPLIANT Information on the company’s policy and procedure on
procedures on curbing and penalizing company curbing and penalizing bribery is available in the following:
involvement in offering, paying and receiving 1. Code of Business Conduct
bribes. (https://pilipinas.shell.com.ph/about-us/our-
values/_jcr_content/par/textimage.stream/1519787
681925/5003138fa511f112398bd8832f85523d89dd20
6c/codeofconduct-english-2015.pdf); and
2. Ethics and Compliance Manual
4445481/6b6e83f036651d0a2fd7277224b573e0bf01
231b/shell-ethics-and-compliance-manual-
2018.pdf).
Recommendation 7.2
1. Board ensures the proper and efficient COMPLIANT Please refer to the CG Manual
implementation and monitoring of compliance (https://pilipinas.shell.com.ph/corporate-
with the Code of Business Conduct and Ethics. governance/corporate-governance-

Page 29 of 67
2. Board ensures the proper and efficient COMPLIANT policies/_jcr_content/par/textimage.stream/154209108363
implementation and monitoring of compliance 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
with company internal policies. corporate-governance-manual-nov-13.pdf).
The Corporation’s directors, officers and employees are

required to comply with its Code of Business Conduct and
Ethics.
Disclosure and Transparency
Principle 8: The company should establish corporate disclosure policies and procedures that are practical and in accordance with best practices and regulatory
expectations.
Recommendation 8.1
1. Board establishes corporate disclosure policies COMPLIANT Please refer to the following:
and procedures to ensure a comprehensive, 1. CG Manual
accurate, reliable and timely report to (https://pilipinas.shell.com.ph/corporate-
shareholders and other stakeholders that gives a governance/corporate-governance-
fair and complete picture of a company’s policies/_jcr_content/par/textimage.stream/154209
financial condition, results and business 1083633/3db39a3713abfca6bf9db826ac2544d1df5
operations. cf1d0/pspc-corporate-governance-manual-nov-
13.pdf); and
2. Revised Corporate Disclosure Guide
governance/corporate-disclosure-policy.html).
The Corporation distributes the Definitive Information

Statement to its stockholders. Printed copies of the Annual
Report and Audited Financial Statements are also available
upon the stockholder’s request. The financial reports and
other material disclosures of the Corporation are available
in its website at
http://pilipinas.shell.com.ph/investors/financial-reports.html
and http://pilipinas.shell.com.ph/investors/other-
corporate-disclosures.html, respectively.
1. Company distributes or makes available annual COMPLIANT We aim to make the consolidated financial statements
and quarterly consolidated reports, cash flow available within ninety (90) days from the end of the
statements, and special audit revisions. Corporation’s fiscal year, while its interim reports are made
Consolidated financial statements are published available within forty-five (45) days from the end of the
Page 30 of 67
within ninety (90) days from the end of the fiscal reporting period. However, pursuant to SEC Memorandum
year, while interim reports are published within Circular No. 5, Series of 2020, the Corporation availed of the
forty-five (45) days from the end of the reporting right to extend and electronically filed and submitted its
period. 2019 Audited Financial Statements (“AFS”) on 16 April 2020.
The extension was due to logistics and administrative
constraints brought about by the Enhanced Community
Quarantine.
2. Company discloses in its annual report the COMPLIANT There are no principal risks associated with the identity of
principal risks associated with the identity of the the Corporation’s controlling shareholders, the degree of
company’s controlling shareholders; the degree ownership concentration, cross-holdings among company
of ownership concentration; cross-holdings affiliates, and any imbalances between the controlling
among company affiliates; and any imbalances shareholders’ voting power and overall equity position in
between the controlling shareholders’ voting the company. Information on principal risks is available in
power and overall equity position in the its 2019 Annual Report
company. (https://pilipinas.shell.com.ph/investors/financial-
reports.html).
Recommendation 8.2
1. Company has a policy requiring all directors to COMPLIANT Please refer to the Corporation’s Securities Dealing Code (
disclose/report to the company any dealings in https://pilipinas.shell.com.ph/corporate-
the company’s shares within three business days. governance/corporate-governance-
2. Company has a policy requiring all officers to COMPLIANT policies/_jcr_content/par/textimage.stream/149663804387
disclose/report to the company any dealings in 0/3c0ec9e0818bdc93a7bccc1bdbd381f4a252127c/shlph-
the company’s shares within three business days. securities-dealing-code-2017-02-17.pdf).
The actual dealings of directors involving shares of stock in

the Corporation were disclosed under SEC Forms 23-A and
23-B (http://pilipinas.shell.com.ph/investors/other-
corporate-disclosures.html).
1. Company discloses the trading of the COMPLIANT Information on the shareholdings of directors and
corporation’s shares by directors, officers (or management is available in the Public Ownership Reports
persons performing similar functions) and and Statements of Changes in Beneficial Ownership of the
controlling shareholders. This includes the shares of the Corporation in its PSE Disclosures available at
disclosure of the company's purchase of its shares https://edge.pse.com.ph/companyDisclosures/form.do?cmpy_id
from the market (e.g. share buy-back program). =663.

Page 31 of 67
The List of Top 100 Stockholders of the Corporation as of 31
March 2020 is available at
https://edge.pse.com.ph/openDiscViewer.do?edge_no=1
183f8a405f014370de8473cebbd6407.
Information on the Corporation’s associates and joint

venture is available at http://pilipinas.shell.com.ph/about-
us/who-we-are.html. The Conglomerate/Relationship Map
is available in the Corporation’s Audited Financial
Statements
(http://pilipinas.shell.com.ph/investors/financial-
reports.html).
Recommendation 8.3
1. Board fully discloses all relevant and material COMPLIANT Please refer to the Corporation’s General Information
information on individual board members to Sheets (https://pilipinas.shell.com.ph/investors/other-
evaluate their experience and qualifications, and corporate-disclosures.html) and
assess any potential conflicts of interest that http://pilipinas.shell.com.ph/about-us/leadership/board-
might affect their judgment. of-directors.html.
2. Board fully discloses all relevant and material COMPLIANT Please refer to the following:
information on key executives to evaluate their 1. General Information Sheets
experience and qualifications, and assess any (https://pilipinas.shell.com.ph/investors/other-
potential conflicts of interest that might affect corporate-disclosures.html) and
their judgment. http://pilipinas.shell.com.ph/about-
us/leadership/board-of-directors.html); and
2. http://pilipinas.shell.com.ph/about-
Recommendation 8.4
1. Company provides a clear disclosure of its COMPLIANT Please refer to the following:
policies and procedure for setting Board 1. CG Manual
remuneration, including the level and mix of the (https://pilipinas.shell.com.ph/corporate-
same. governance/corporate-governance-
13.pdf); and

Page 32 of 67
governance/board-
53d422d2e590902331b0eb323db4c9730d44723/ps
charter.pdf).
2. Company provides a clear disclosure of its COMPLIANT Please refer to the following:
policies and procedure for setting executive 1. CG Manual
remuneration, including the level and mix of the (https://pilipinas.shell.com.ph/corporate-
same. governance/corporate-governance-
13.pdf); and
governance/board-
53d422d2e590902331b0eb323db4c9730d44723/ps
charter.pdf).
The Corporate Governance (CG) Committee is tasked with

the implementation and review of the corporate
governance framework, and adopts the functions formerly
assigned to the Compensation and Remuneration
Committee. It is composed of four members, at least three
of whom are independent directors, including the
committee chairman. The fourth member is the Chief
Compliance Officer.
The policy on executive remuneration and for fixing the

remuneration packages of corporate officers and directors,

Page 33 of 67
including the CEO is within the oversight function of the CG
Committee.
The functions of the CG Committee, including its

responsibility to establish a formal and transparent
procedure to develop a policy for determining the
remuneration of directors and officers that is consistent with
PSPC’s culture and strategy as well as the business
environment in which it operates, are detailed in the CG
Committee Charter.
3. Company discloses the remuneration on an COMPLIANT Please refer to the following:
individual basis, including termination and 1. Annual Report
retirement provisions. (https://pilipinas.shell.com.ph/investors/financial-
reports.html); and; and
2. Information Statement
(https://pilipinas.shell.com.ph/investors/2020-
39643164/311ceb2dbb5a740c71da8ff1071cd0abd
edbc9ae/2-2020-definitive-information-statement-
20-is-including-the-agenda-of-the-meeting.pdf)
Recommendation 8.5
1. Company discloses its policies governing Related COMPLIANT Please refer to the following:
Party Transactions (RPTs) and other unusual or 1. CG Manual
infrequently occurring transactions in their Manual (https://pilipinas.shell.com.ph/corporate-
on Corporate Governance. governance/corporate-governance-
13.pdf);
2. Related Party Transaction Board Committee Charter
governance/board-
45b71e0dd84b82bbccdee905360ff5ddcb8bbaf3/r

Page 34 of 67
elated-party-transaction-board-committee-
charter.pdf); and
3. Related Party Transaction Policy
governance/board-
e797463e090bf964d6811fc9edbf134b9c4e2193/sec
-related-party-transaction-policy.pdf).
2. Company discloses material or significant RPTs COMPLIANT Please refer to the following:
reviewed and approved during the year. 1. Definitive Information Statement
20-is-including-the-agenda-of-the-meeting.pdf);
and
2. 2019 Annual Report and Audited Financial
Statements
(https://pilipinas.shell.com.ph/investors/financial-
reports.html).
1. Company requires directors to disclose their COMPLIANT Please refer to the Corporation’s Related Party Transaction
interests in transactions or any other conflict of Policy (https://pilipinas.shell.com.ph/corporate-
interests. governance/board-
Optional : Recommendation 8.5
1. Company discloses that RPTs are conducted in COMPLIANT Please refer to the Corporation’s Related Party Transaction
such a way to ensure that they are fair and at Policy (https://pilipinas.shell.com.ph/corporate-
arms’ length. governance/board-

Page 35 of 67
Recommendation 8.6
1. Company makes a full, fair, accurate and timely COMPLIANT The Corporation’s disclosures of material transactions may
disclosure to the public of every material fact or be viewed at http://pilipinas.shell.com.ph/investors/other-
event that occur, particularly on the acquisition corporate-disclosures.html.
or disposal of significant assets, which could
adversely affect the viability or the interest of its
shareholders and other stakeholders.
2. Board appoints an independent party to COMPLIANT Please refer to the Corporation’s Related Party Transaction
evaluate the fairness of the transaction price on Policy for the procedure on benchmarking and assurance
the acquisition or disposal of assets. process (https://pilipinas.shell.com.ph/corporate-
governance/board-
1. Company discloses the existence, justification COMPLIANT Please refer to the Corporation’s Revised Disclosure Guide
and details on shareholder agreements, voting (https://pilipinas.shell.com.ph/corporate-
trust agreements, confidentiality agreements, governance/corporate-disclosure-policy.html) .
and such other agreements that may impact on
the control, ownership, and strategic direction of
the company.
Recommendation 8.7
1. Company’s corporate governance policies, COMPLIANT The Corporation’s CG Manual may be viewed at
programs and procedures are contained in its https://pilipinas.shell.com.ph/corporate-
Manual on Corporate Governance (MCG). governance/corporate-governance-
2. Company’s MCG is submitted to the SEC and COMPLIANT policies/_jcr_content/par/textimage.stream/154209108363
PSE. 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
3. Company’s MCG is posted on its company COMPLIANT corporate-governance-manual-nov-13.pdf.
website.
1. Company submits to the SEC and PSE an COMPLIANT Please refer to the CG Manual
updated MCG to disclose any changes in its https://pilipinas.shell.com.ph/corporate-
corporate governance practices. governance/corporate-governance-
Page 36 of 67
corporate-governance-manual-nov-13.pdf and
https://edge.pse.com.ph/companyDisclosures/form.do?c
mpy_id=663.
1. Does the company’s Annual Report disclose the Please refer to the Annual Report at
following information: (https://pilipinas.shell.com.ph/investors/financial-
reports.html).
a. Corporate Objectives COMPLIANT
b. Financial performance indicators COMPLIANT
c. Non-financial performance indicators COMPLIANT
d. Dividend Policy COMPLIANT
e. Biographical details (at least age, academic COMPLIANT

qualifications, date of first appointment,
relevant experience, and other directorships
in listed companies) of all directors
f. Attendance details of each director in all COMPLIANT While attendance of each

directors meetings held during the year director is not included in
the Corporation’s Annual
Report, records of
attendance level of
directors in board meetings
are prepared on a yearly
basis and made available
to stockholders.
Please refer to the

Attendance of Board in
Meetings
(https://pilipinas.shell.co
m.ph/corporate-

Page 37 of 67
governance/board-
committees.html).
g. Total remuneration of each member of the COMPLIANT Please refer to the
board of directors Definitive Information
Statement
(https://pilipinas.shell.com.
ph/investors/2020-annual-
stockholders-
meeting/_jcr_content/par/
textimage.stream/1590139
643164/311ceb2dbb5a740
c71da8ff1071cd0abdedbc
9ae/2-2020-definitive-
information-statement-20-
is-including-the-agenda-of-
the-meeting.pdf).
2. The Annual Report contains a statement COMPLIANT Please refer to the 2019 Annual Report
confirming the company’s full compliance with (https://pilipinas.shell.com.ph/investors/financial-
the Code of Corporate Governance and where reports.html).
there is non-compliance, identifies and explains
reason for each such issue. The Corporation complies with its Revised Manual on
3. The Annual Report/Annual CG Report discloses COMPLIANT Corporation Governance. compliance with the principles
that the board of directors conducted a review of good corporate governance shall start with the Board of
of the company's material controls (including Directors. The Chief Compliance Officer has an evaluation
operational, financial and compliance controls) system to determine and measure compliance with the
and risk management systems. Manual.
4. The Annual Report/Annual CG Report contains a COMPLIANT
statement from the board of directors or Audit
Committee commenting on the adequacy of the
company's internal controls/risk management
systems.
5. The company discloses in the Annual Report the COMPLIANT
key risks to which the company is materially
exposed to (i.e. financial, operational including IT,
environmental, social, economic).

Page 38 of 67
Principle 9: 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.
Recommendation 9.1
1. Audit Committee has a robust process for COMPLIANT Please refer to the following:
approving and recommending the appointment, 1. CG Manual
reappointment, removal, and fees of the external (https://pilipinas.shell.com.ph/corporate-
auditors. governance/corporate-governance-
13.pdf); and
2. Board Audit and Risk Oversight Committee Charter
governance/board-
and-risk-oversight-committee-charter20.pdf.
2. The appointment, reappointment, removal, and COMPLIANT At the Annual Stockholder’s Meeting held on 07 May 2019,
fees of the external auditor is recommended by stockholders owning 84.69% of the Corporation’s
the Audit Committee, approved by the Board outstanding shares ratified the re-appointment of Sycip
and ratified by the shareholders. Gorres Velayo and Co. (SGV) as the Corporation’s external
auditor for the year ending 31 December 2019.
Please refer to the Minutes of said meeting

(https://pilipinas.shell.com.ph/investors/stockholders-
meeting-information.html).
3. For removal of the external auditor, the reasons COMPLIANT Please refer to the Definitive Information Sheet for the
for removal or change are disclosed to the Annual Stockholders’ Meeting
regulators and the public through the company (https://pilipinas.shell.com.ph/investors/2020-annual-
website and required disclosures. stockholders-meeting.html).
1. Company has a policy of rotating the lead audit COMPLIANT Please refer to the CG Manual
partner every five years. (https://pilipinas.shell.com.ph/corporate-

Page 39 of 67
Recommendation 9.2
1. Audit Committee Charter includes the Audit COMPLIANT Please refer to the CG Manual
Committee’s responsibility on: (https://pilipinas.shell.com.ph/corporate-
i. assessing the integrity and independence policies/_jcr_content/par/textimage.stream/154209108363
of external auditors; 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
ii. exercising effective oversight to review corporate-governance-manual-nov-13.pdf) and Board
and monitor the external auditor’s Audit and Risk Committee Charter
independence and objectivity; and (https://pilipinas.shell.com.ph/corporate-
iii. exercising effective oversight to review governance/board-
and monitor the effectiveness of the audit committees/_jcr_content/par/expandablelist/expandable
process, taking into consideration relevant section.stream/1591005190974/e2bbef8f78613bc0155c442f
Philippine professional and regulatory e7d1812b2c060a7a/board-audit-and-risk-oversight-
requirements. committee-charter20.pdf).
2. Audit Committee Charter contains the COMPLIANT

Committee’s responsibility on reviewing and
monitoring the external auditor’s suitability and
effectiveness on an annual basis.

1. Audit Committee ensures that the external COMPLIANT Please refer to the CG Manual
auditor is credible, competent and has the ability (https://pilipinas.shell.com.ph/corporate-
to understand complex related party governance/corporate-governance-
transactions, its counterparties, and valuations of policies/_jcr_content/par/textimage.stream/154209108363
such transactions. 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
corporate-governance-manual-nov-13.pdf) and Board
Audit and Risk Committee Charter
2. Audit Committee ensures that the external COMPLIANT (https://pilipinas.shell.com.ph/corporate-
auditor has adequate quality control procedures. governance/board-

Page 40 of 67
Recommendation 9.3
1. Company discloses the nature of non-audit COMPLIANT Please refer to the 2019 Annual Report
services performed by its external auditor in the (https://pilipinas.shell.com.ph/investors/financial-
Annual Report to deal with the potential conflict reports.html).
of interest.
2. Audit Committee stays alert for any potential COMPLIANT Please refer to the CG Manual
conflict of interest situations, given the guidelines (https://pilipinas.shell.com.ph/corporate-
or policies on non-audit services, which could be governance/corporate-governance-
viewed as impairing the external auditor’s policies/_jcr_content/par/textimage.stream/154209108363
objectivity. 3/3db39a3713abfca6bf9db826ac2544d1df5cf1d0/pspc-
corporate-governance-manual-nov-13.pdf) and Board
Audit and Risk Oversight Committee Charter
governance/board-
1. Fees paid for non-audit services do not outweigh COMPLIANT Please refer to the Definitive Information Statement for the
the fees paid for audit services. AINT Annual Stockholders’ Meeting
stockholders-meeting.html) and the 2019 Annual Report
reports.html).
1. Company’s external auditor is duly accredited by COMPLIANT The relevant details on the Corporation’s external auditor
the SEC under Group A category. are as follows:
1. Name of the audit engagement partner: Jose

Pepito E. Zabat, III
2. Accreditation number: 0328-AR-4 (Group A)
3. Date Accredited: 26 April 2018
4. Expiry date of accreditation: 25 April 2021
5. Name, address, contact number of the audit firm:
Sycip Gorres Velayo & Co., 6760 Ayala Avenue,
Makati City, Metro Manila 1226, (632) 891-0307
Page 41 of 67
2. Company’s external auditor agreed to be COMPLIANT The audit engagement partner of SGV, Mr. Jose Pepito E.
subjected to the SEC Oversight Assurance Review Zabat, III, has agreed to be subjected to the SEC SOAR
(SOAR) Inspection Program conducted by the Inspection Program conducted by its OGA.
SEC’s Office of the General Accountant (OGA).
Principle 10: The company should ensure that the material and reportable non-financial and sustainability issues are disclosed.
Recommendation 10.1
1. Board has a clear and focused policy on the COMPLIANT Please refer to the following:
disclosure of non-financial information, with 1. CG Manual
emphasis on the management of economic, (https://pilipinas.shell.com.ph/corporate-
environmental, social and governance (EESG) governance/corporate-governance-
issues of its business, which underpin sustainability. policies/_jcr_content/par/textimage.stream/154209
13.pdf);
2. Corporate Social Responsibility Committee Charter
governance/board-
341602211d783c7014b220d9db50e9b44489fa2d/co
rporate-social-responsibility-committee-charter.pdf)
3. Revised Corporate Disclosure Guide
governance/corporate-disclosure-policy.html); and
4. Sustainability section of the Corporation’s website
(http://pilipinas.shell.com.ph/sustainability.html).
2. Company adopts a globally recognized COMPLIANT Please refer to the Corporation’s Annual and Sustainability
standard/framework in reporting sustainability Report for 2019 which is available at
and non-financial issues. (https://pilipinas.shell.com.ph/investors/financial-
reports/_jcr_content/par/textimage.stream/1588942664554
/99372f894b50410c6b85c54f33d4e418352b0755/pspc-
annual-and-sustainability-report-2019.pdf).
Principle 11: 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.
Page 42 of 67
Recommendation 11.1
1. Company has media and analysts’ briefings as COMPLIANT Please refer to http://pilipinas.shell.com.ph/media.html.
channels of communication to ensure the timely Disclosures are also available at
and accurate dissemination of public, material http://edge.pse.com.ph/companyDisclosures/form.do?c
and relevant information to its shareholders and mpy_id=663.
other investors.
Supplemental to Principle 11
1. Company has a website disclosing up-to-date Please refer to the following links:
information on the following: 1. Financial statements and Annual Reports (
http://pilipinas.shell.com.ph/investors/financial-
a. Financial statements/reports (latest quarterly) COMPLIANT reports.html);
2. Materials provided to analysts and media
b. Materials provided in briefings to analysts and COMPLIANT (http://pilipinas.shell.com.ph/media.html);
media 3. Notices and Minutes of Stockholders’ Meetings
(http://pilipinas.shell.com.ph/investors/stockholders
c. Downloadable annual report COMPLIANT -meeting-information.html); and
4. Articles of Incorporation and By-Laws
d. Notice of ASM and/or SSM COMPLIANT (https://pilipinas.shell.com.ph/corporate-
e. Minutes of ASM and/or SSM COMPLIANT
f. Company’s Articles of Incorporation and By- COMPLIANT

Laws

1. Company complies with SEC-prescribed website COMPLIANT Please refer to http://pilipinas.shell.com.ph/.
template.
Internal Control System and Risk Management Framework

Principle 12: 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.
Recommendation 12.1
1. Company has an adequate and effective COMPLIANT The Board conducts a regular review of the Corporation’s
internal control system in the conduct of its internal control system in order to maintain its adequacy
business. and effectiveness. The minimum internal control
Page 43 of 67
mechanisms include overseeing the implementation of the
key control functions, such as risk management,
compliance and internal audit, and reviewing the
Corporation’s human resource policies, conflict of interest
situations, compensation program for employees and
management succession plan.
At the forefront is the Board Audit and Risk Oversight

Committee which is responsible for overseeing senior
management in establishing and maintaining an
adequate, effective, and efficient internal control
framework. Moreover, through the Corporate Audit and
Assurance Department (CAAD), it monitors and evaluates
the adequacy and effectiveness of the Corporation’s
internal control system, integrity of financial reporting, and
security of physical and information assets.
Please see the CG Manual

2. Company has an adequate and effective COMPLIANT The Corporation’s Risk Management Policy states that
enterprise risk management framework in the management is responsible for implementing, operating
conduct of its business. and monitoring the system of internal control, which is
designed to provide reasonable assurance of achieving
business objectives. The approach to internal control
includes a number of general and specific risks
management processes and policies. The primary control
mechanisms are self-appraisal processes in combination
with strict accountability for results.
Information on the Corporation’s risk management

procedures and processes, key risks which the Corporation
is facing, and how the Corporation manages the key risks is
available in the following:

Page 44 of 67
1. CG Manual
13.pdf);
2. Board Audit and Risk Committee Charter
governance/board-
and-risk-oversight-committee-charter20.pdf); and
3. Annual Report, Annual and Sustainability Report
(https://pilipinas.shell.com.ph/sustainability.html)
and Audited Financial Statements
reports.html).
The ERM is reviewed at least quarterly.

1. Company has a formal comprehensive COMPLIANT The Corporation’s Board Audit and Risk Committee
enterprise-wide compliance program covering performs risk oversight management and compliance
compliance with laws and relevant regulations monitoring pursuant to the:
that is annually reviewed. The program includes 1. CG Manual
appropriate training and awareness initiatives (https://pilipinas.shell.com.ph/corporate-
to facilitate understanding, acceptance and governance/corporate-governance-
compliance with the said issuances. policies/_jcr_content/par/textimage.stream/154209
13.pdf); and
governance/board-

Page 45 of 67
The ERM is reviewed at least quarterly.

1. Company has a governance process on IT issues COMPLIANT Please refer to the Corporation’s Code of Conduct
including disruption, cyber security, and disaster (https://pilipinas.shell.com.ph/about-us/our-
recovery, to ensure that all key risks are identified, values/_jcr_content/par/textimage.stream/1519787681925
managed and reported to the board. /5003138fa511f112398bd8832f85523d89dd206c/codeofco
nduct-english-2015.pdf).
Recommendation 12.2
1. Company has in place an independent internal COMPLIANT The Corporation’s internal audit is in-house. It has a
audit function that provides an independent and Corporate Audit and Assurance Department which is
objective assurance, and consulting services headed by Mr. Reynaldo Abilo and functionally reports to
designed to add value and improve the the Board Audit and Risk Oversight Committee. For more
company’s operations. information, please see
http://pilipinas.shell.com.ph/investors/governance.html.
Recommendation 12.3
1. Company has a qualified Chief Audit Executive COMPLIANT The Chief Audit Executive (CAE) of the Corporation is Mr.
(CAE) appointed by the Board. Rey P. Abilo. Information ion his functions is available at
2. CAE oversees and is responsible for the internal COMPLIANT Section 8.3 of the CG Manual
audit activity of the organization, including that (https://pilipinas.shell.com.ph/corporate-
portion that is outsourced to a third party service governance/corporate-governance-
provider. policies/_jcr_content/par/textimage.stream/154209108363
3. In case of a fully outsourced internal audit COMPLIANT The CAE oversees the internal audit activity of the
activity, a qualified independent executive or organization, including that portion that is outsourced to a
senior management personnel is assigned the third-party service provider. Information on the CAE’s
responsibility for managing the fully outsourced functions is available at Section 8.3 of the CG Manual
internal audit activity. (https://pilipinas.shell.com.ph/corporate-
Recommendation 12.4
Page 46 of 67
1. Company has a separate risk management COMPLIANT Information on the Corporation’s risk management function
function to identify, assess and monitor key risk is available in the following:
exposures. 1. CG Manual
13.pdf); and
governance/board-
1. Company seeks external technical support in risk COMPLIANT The Company engages the services of technical experts
management when such competence is not whenever necessary to manage identified risks. Examples
available internally. are occupational health nurses and advisers,
environmental consultancy firms, and insurance advisers.
Furthermore, the Corporation’s Chief Risk Officer is Mr. Jose
Jerome R. Pascual, III. He has adequate authority, stature,
resources and support to fulfill his responsibilities regarding
the ERM.
Recommendation 12.5
1. In managing the company’s Risk Management COMPLIANT The Corporation’s Chief Risk Officer is Mr. Jose Jerome R.
System, the company has a Chief Risk Officer Pascual, III.
(CRO), who is the ultimate champion of
Enterprise Risk Management (ERM). Information on the responsibilities of the Chief Risk Officer is
2. CRO has adequate authority, stature, resources COMPLIANT available in Section 8.7 of the CG Manual
and support to fulfill his/her responsibilities. (https://pilipinas.shell.com.ph/corporate-

Page 47 of 67
The profile of Mr. Pascual is available at
http://pilipinas.shell.com.ph/about-
1. Company’s Chief Executive Officer and Chief COMPLIANT The Corporation’s Chief Executive Officer and Chief Audit
Audit Executive attest in writing, at least annually, Executive executed a separate written document attesting
that a sound internal audit, control and to the fact that a sound internal audit, control and
compliance system is in place and working compliance system is in place and working effectively.
effectively.
The Corporate Assurance Manager is tasked to submit to
the Board Audit and Risk Oversight Committee and
Management an annual report on the internal audit
department’s activities, responsibilities and performance
relative to the audit plans and strategies as approved by
the Board Audit and Risk Oversight Committee. The annual
report includes significant risk exposures, control issues and
such other matters as may be needed or requested by the
Board and Management. He will also certify that he
conducts his activities in accordance with the International
Standards on the Professional Practice of Internal Auditing
and if not, why he has not fully complied with the said
standards.
As part of the Corporation’s system of risk management and

internal control, the executive management provides an
annual self-assurance on the extent of its compliance with
the control framework.
Cultivating a Synergic Relationship with Shareholders
Principle 13: The company should treat all shareholders fairly and equitably, and also recognize, protect and facilitate the exercise of their rights.
Recommendation 13.1
1. Board ensures that basic shareholder rights are COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-
disclosed in the Manual on Corporate governance/corporate-governance-
Governance. policies/_jcr_content/par/textimage.stream/154209108363
2. Board ensures that basic shareholder rights are COMPLIANT Please refer to CG Manual which is made available in the
disclosed on the company’s website. Corporation’s website at
Page 48 of 67
1. Company’s common share has one vote for one COMPLIANT Based on Section 6, Article II of the By-Laws of the
share. Corporation, every stockholder entitled to vote shall be
entitled to one vote for each share of stock standing in its
name on the books of the Corporation and may vote either
in person or by proxy.
2. Board ensures that all shareholders of the same COMPLIANT Shareholders are treated equally pursuant to the
class are treated equally with respect to voting Corporation Code, Amended Articles of Incorporation and
rights, subscription rights and transfer rights. By-Laws of the Corporation and its CG Manual.
3. Board has an effective, secure, and efficient COMPLIANT Please refer to the following:
voting system. 1. Amended By-Laws
governance/corporate-charter-documents.html);
and
2. CG Manual
13.pdf).
3. Items 19 and 20 of the Definitive Statement for the
Annual Stockholders’ Meeting
20-is-including-the-agenda-of-the-meeting.pdf).
4. Board has an effective shareholder voting COMPLIANT The Corporation Code of the Philippines requires at least 2/3
mechanisms such as supermajority or “majority of of the outstanding capital stock for approval of certain acts
minority” requirements to protect minority
Page 49 of 67
shareholders against actions of controlling of the Board that significantly affect the rights of all
shareholders. shareholders.
Please refer to Section 9.1 of the CG Manual

5. Board allows shareholders to call a special COMPLIANT Under Section 2, Article II of the Corporation’s Amended
shareholders’ meeting and submit a proposal for Articles of Incorporation, Special Meetings of the
consideration or agenda item at the AGM or stockholders may be called by the President or by order of
special meeting. the Board of Directors, whenever he or they shall deem it
necessary. It shall be the duty of the President to order and
call such Special Meetings whenever the holders of record
of not less than one-fifth (1/5) of the outstanding capital
stock of the Corporation with voting privilege shall in writing
so request. Please see
governance/corporate-charter-documents.html.
Under Section 9.2.4 of the CG Manual, minority stockholders

were accorded the right to propose the holding of
meetings and the items for discussion in the agenda that
relate directly to the business of the Corporation.
6. Board clearly articulates and enforces policies COMPLIANT Please refer to Section 9 of the CG Manual
with respect to treatment of minority (https://pilipinas.shell.com.ph/corporate-
shareholders. governance/corporate-governance-
7. Company has a transparent and specific COMPLIANT The Corporation, pursuant to a board approval on 18 July
dividend policy. 2016, intends to pay annual dividends in the amount of not
less than seventy-five percent (75%) of its audited net
income after tax of the previous year subject to compliance
with the requirements of applicable laws and regulations,
and subject to investment plans and financial conditions.

Page 50 of 67
For more information on the Corporation’s Dividend Policy,
please refer to its 2019 Annual and Sustainability Report
which is available in its website at
(https://pilipinas.shell.com.ph/sustainability.html).
1. Company appoints an independent party to COMPLIANT The counting of votes at Annual Stockholders’ Meeting is
count and/or validate the votes at the Annual undertaken by RCBC Stock and Transfer Agent and
Shareholders’ Meeting. witnessed by SGV.
Recommendation 13.2
1. Board encourages active shareholder COMPLIANT The Corporation’s Annual Stockholders’ Meeting (“ASM”)
participation by sending the Notice of Annual based on its By-Laws is set to be held on the second Tuesday
and Special Shareholders’ Meeting with in May. However, for the 2020 ASM, the decided to hold it
sufficient and relevant information at least 28 at a later date during its Board meeting held on 26 March
days before the meeting. 2020. The Board likewise delegated the authority to
determine the ASM date and closing of the Stock and
Transfer Book to the President and Chief Executive Officer
and the Treasurer. The Corporation has complied with the
notice and legal requirements provided under the
applicable issuances of the Securities and Exchange
Commission.
The notice and details of the 2020 Annual Stockholders’

Meeting was disclosed on 06 May 2020 (
https://edge.pse.com.ph/openDiscViewer.do?edge_no=2
ddb4439622503ee0de8473cebbd6407). Shareholders were
invited to nominate directors as early as January 2020.
Preliminary and Definitive Information Statements were
disclosed on 11 May 2020 and 22 May 2020, respectively
(https://edge.pse.com.ph/openDiscViewer.do?edge_no=
23c58192a0b137690de8473cebbd6407) and
(https://edge.pse.com.ph/openDiscViewer.do?edge_no=
39e5545a6af26a020de8473cebbd6407).
Pursuant to SEC Notice on Alternative Mode of Distribution

of Notice of Meeting, Information Statement, and Other
Documents Related to the Holding of Annual Stockholders’

Page 51 of 67
Meeting for 2020, in lieu of physical distribution of 2020 ASM
materials to shareholders, the Corporation made use of the
alternative mode. Electronic copy of the Information
Statement and Management Report and Annual Report
and other pertinent documents are available in its website
and PSE Edge. It likewise published Notice of the ASM in the
business section of two (2) newspaper of general
circulation, in print and online format, for two (2)
consecutive days.
Supplemental to Recommendation 13.2
1. Company’s Notice of Annual Stockholders’ COMPLIANT Please refer to
Meeting contains the following information: http://pilipinas.shell.com.ph/investors/stockholders-
meeting-information.html.
a. The profiles of directors (i.e., age, academic COMPLIANT
qualifications, date of first appointment,
experience, and directorships in other listed
companies)
b. Auditors seeking appointment/re-appointment COMPLIANT
c. Proxy documents COMPLIANT

1. Company provides rationale for the agenda COMPLIANT The rationales for the agenda items are included in the
items for the annual stockholders meeting Definitive Information Statement. Please refer to
stockholders-
Recommendation 13.3
1. Board encourages active shareholder COMPLIANT Please refer to the Minutes of Stockholders’ Meetings which
participation by making the result of the votes are made available in the Corporation’s website at
taken during the most recent Annual or Special http://pilipinas.shell.com.ph/investors/stockholders-
Shareholders’ Meeting publicly available the meeting-information.html.
next working day.
Page 52 of 67
2. Minutes of the Annual and Special Shareholders’ COMPLIANT Please refer to the Minutes of Stockholders’ Meetings which
Meetings were available on the company are made available in the Corporation’s website at
website within five business days from the end of http://pilipinas.shell.com.ph/investors/stockholders-
the meeting. meeting-information.html.
1. Board ensures the attendance of the external COMPLIANT The external auditor and other relevant individuals (such as
auditor and other relevant individuals to answer representatives of the stock transfer agent) were present
shareholders questions during the ASM and SSM. during Stockholders’ Meetings.
Recommendation 13.4
1. Board makes available, at the option of a COMPLIANT When applicable, an alternative dispute resolution system
shareholder, an alternative dispute mechanism to in the Corporation is available to amicably settle conflicts or
resolve intra-corporate disputes in an amicable differences between the Corporation and its stockholders,
and effective manner. and the Corporation and third parties, including regulatory
authorities. Please refer to the CG Manual
2. The alternative dispute mechanism is included in COMPLIANT (https://pilipinas.shell.com.ph/corporate-
the company’s Manual on Corporate governance/corporate-governance-
Governance. policies/_jcr_content/par/textimage.stream/154209108363
Further, Shell Global helpline is available for stakeholders to

report a concern or seek advice. The helpline is
administered by an outside organization and is available in
several languages and is open to not only the Corporation’s
employees but also to the general public.
Recommendation 13.5
1. Board establishes an Investor Relations Office COMPLIANT The contact details of the officer/office responsible for
(IRO) to ensure constant engagement with its investor relations are as follows:
shareholders. 1. Name of the person: Angelica M. Castillo
2. Telephone number: (632) 3 499-4001
4. Fax number: not applicable
5. E-mail address: PSPC-Investor-
[email protected]
2. IRO is present at every shareholder’s meeting. COMPLIANT Investor Relations Officer was present during the 2019
Annual Stockholders’ Meeting (“ASM”). She confirmed her
attendance for the 2020 ASM.
Page 53 of 67
Supplemental Recommendations to Principle 13
1. Board avoids anti-takeover measures or similar COMPLIANT The Board avoids anti-takeover measures and similar
devices that may entrench ineffective devices by respecting the voting right of each stockholder
management or the existing controlling and providing a nomination process for Directors. Please
shareholder group refer to the following:
1. CG Manual
13.pdf); and
2. Amended By-Laws
2. Company has at least thirty percent (30%) public NOT As of 31 March 2020, the Corporation’s public float is The Corporation’s public
float to increase liquidity in the market. APPLICABLE 24.325%. float as of 31 March 2020
complies with the minimum
public ownership level of
ten percent (10%) as
required in the
amendments to the Rule on
Minimum Public Ownership
under Section 3, Article XVIII
of the Listing and Disclosure
Rules.
1. Company has policies and practices to COMPLIANT Please refer to the CG Manual
encourage shareholders to engage with the (https://pilipinas.shell.com.ph/corporate-
company beyond the Annual Stockholders’ governance/corporate-governance-
Meeting policies/_jcr_content/par/textimage.stream/154209108363
2. Company practices secure electronic voting in COMPLIANT Under Section 6, Article II of the By-Laws of the Corporation,
absentia at the Annual Shareholders’ Meeting. every stockholder entitled to vote shall be entitled to one
vote for each share of stock standing in its name on the
books of the Corporation and may vote either in person or
Page 54 of 67
by proxy. Proxy voting is allowed (which effectively allows
shareholders to vote in absentia).
With the Revised Corporation Code, the Board and

shareholders of the Corporation approved allowing voting
via remote communication and in absentia. This is for
submission to the Securities and Exchange Commission. For
its 2020 Annual Stockholders’ Meeting, the Corporation will
allow its stockholders to attend and vote via remote
communication and in absentia. This in order to protect
and safeguard the wellbeing of all concerned, and to help
avert the spread of COVID-19, This is also in compliance with
existing government regulations prohibiting mass gatherings
and mandating strict social distancing measures and in line
with the priority that the Corporation gives to health and
safety.
Duties to Stakeholders
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.
Recommendation 14.1
1. Board identifies the company’s various COMPLIANT The Corporation’s key stakeholders are its employees,
stakeholders and promotes cooperation suppliers, customers and creditors, as well as the community
between them and the company in creating and environment.
wealth, growth and sustainability.
Please refer to the following:
1. CG Manual
13.pdf);
governance/board-

Page 55 of 67
341602211d783c7014b220d9db50e9b44489fa2d/co
rporate-social-responsibility-committee-
charter.pdf);
3. Annual and Sustainability Report and Annual
Reports
reports.html); and
4. Sustainable development of the Corporation
Recommendation 14.2
1. Board establishes clear policies and programs to COMPLIANT Through Shell Global Business Principle 7 - Communication
provide a mechanism on the fair treatment and and Engagement, the Corporation provides full relevant
protection of stakeholders. information to legitimately interested parties, subject to any
overriding considerations of business confidentiality.

1. CG Manual
13.pdf);
governance/board-
341602211d783c7014b220d9db50e9b44489fa2d/co
charter.pdf);
Reports
reports.html); and

Page 56 of 67
Recommendation 14.3
1. Board adopts a transparent framework and COMPLIANT Stakeholders can use to voice their concerns and/or
process that allow stakeholders to communicate complaints for possible violation of their rights through the
with the company and to obtain redress for the channels provided in the Corporation’s website at
violation of their rights. http://pilipinas.shell.com.ph/about-us/contact-us.html.
As part of its good governance efforts, the Corporation

encourages its employees and contractors to share any
concerns they may have if they suspect that the
Corporation’s Code of Conduct is being breached
through the Shell Global Helpline. For more information,
please refer to pages 71 to 72 of the 2019 Annual and
Sustainability Report
/99372f894b50410c6b85c54f33d4e418352b0755/pspc-
1. Company establishes an alternative dispute COMPLIANT When applicable, an alternative dispute resolution system
resolution system so that conflicts and differences in the Corporation is available to amicably settle conflicts or
with key stakeholders is settled in a fair and differences between the Corporation and its stockholders,
expeditious manner. and the Corporation and third parties, including regulatory
authorities. Please refer to the CG Manual
Through Shell Global Business Principle 7 - Communication

and Engagement, we recognize that regular dialogue and
engagement with our stakeholders is essential. We seek to
listen and respond honestly and responsibly in our
interactions with employees, business partners and local
communities.

Page 57 of 67
Further, Shell Global helpline is available for stakeholders to
report a concern or seek advice. The helpline is
administered by an outside organization and is available in
several languages and is open to not only the Corporation’s
employees but also to the general public.
Additional Recommendations to Principle 14
1. Company does not seek any exemption from the COMPLIANT The Corporation has not sought any exemption from the
application of a law, rule or regulation especially application of a law, rule or regulation.
when it refers to a corporate governance issue. If
an exemption was sought, the company discloses
the reason for such action, as well as presents the
specific steps being taken to finally comply with
the applicable law, rule or regulation.
2. Company respects intellectual property rights. COMPLIANT Please refer to the Corporation’s 2019 Annual Report
reports.html) and Code of Conduct
(http://pilipinas.shell.com.ph/about-us/our-
/d63089ffcbc22d0aeb173dd3417997f9df9411004148469ab
a013d05926c8446/codeofconduct-english-2015.pdf).
1. Company discloses its policies and practices that COMPLIANT Please refer to the following:
address customers’ welfare 1. CG Manual
13.pdf);
governance/board-
341602211d783c7014b220d9db50e9b44489fa2d/co

Page 58 of 67
charter.pdf);
Reports
reports.html); and
2. Company discloses its policies and practices that COMPLIANT The Corporation’s Supplier Accreditation Process is
address supplier/contractor selection procedures available in its 2019 Annual and Sustainability Report
/99372f894b50410c6b85c54f33d4e418352b0755/pspc-
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.
Recommendation 15.1
1. Board establishes policies, programs and COMPLIANT Please refer to the 2019 Annual and Sustainability Report
procedures that encourage employees to (https://pilipinas.shell.com.ph/investors/financial-
actively participate in the realization of the reports/_jcr_content/par/textimage.stream/1588942664554
company’s goals and in its governance. /99372f894b50410c6b85c54f33d4e418352b0755/pspc-

1. Company has a reward/compensation policy COMPLIANT The Corporation attracts and retains the
that accounts for the performance of the best employees through very competitive remuneration
company beyond short-term financial measures. and growth opportunities.

1. 2019 Annual Report
reports.html); and
2. Definitive Information Statement for the 2020 Annual
Stockholders’ Meeting
Page 59 of 67
20-is-including-the-agenda-of-the-meeting.pdf).
The Corporate Governance (“CG”) Committee assumed

the functions formerly assigned to the Compensation and
Remuneration Committee. The CG Committee established
a formal and transparent procedure for developing a
policy on executive remuneration and for fixing the
remuneration packages of corporate officers and directors.
It also provides oversight over the remuneration of senior
management and other key personnel ensuring that
compensation is consistent with the Corporation’s culture,
strategy, and control environment. The designated amount
of remuneration is in a sufficient level to attract and retain
qualified and competent directors and officers who are
needed to manage the Corporation sustainably. The CG
Committee also recommends remuneration packages for
corporate and individual performance.
We compete strongly for talent in the markets where we

employ people. Our employer brand and competitive
employee value proposition attract the best talent. Our
approach to performance and reward is a key part of our
employee value proposition, together with other elements
such as providing challenging work and development
opportunities. All parts of the value proposition combine to
attract, engage and retain the diverse people needed.
The HR and Rewards team, with the support of the President

and Chief Executive Officer, conducts regular salary and
benefits external benchmarking to ensure that our
employee value proposition remains strong. They also
ensure that we capture relevant internal insights through
focused group discussions (FGDs) with employees. The FGDs

Page 60 of 67
cover a wide array of topics, where in most cases
compensation and benefits are included in the agenda.
Pilipinas Shell recognizes the value of showing care to our

employees through the delivery of a competitive
compensation and benefits package and consistent
adherence to the Labor code standards. In most cases, our
Company provides more than the statutory requirement.
An example would be the minimum standard for maternity
leave: whereas Philippine law mandates paid leave of up
to 105 days only, Shell provides up to 120 days of paid
maternity leave regardless of the type of delivery.
2. Company has policies and practices on health, COMPLIANT Please refer to the 2019 Annual and Sustainability Report
safety and welfare of its employees. (https://pilipinas.shell.com.ph/investors/financial-
/99372f894b50410c6b85c54f33d4e418352b0755/pspc-
3. Company has policies and practices on training COMPLIANT Please refer to the Corporation’s General Business Principles
and development of its employees. (https://pilipinas.shell.com.ph/about-us/our-
/1424c1f1d37903394b9db3be58487bb295663246/shell-
general-business-principles-2014.pdf) and Code of
Conduct (https://pilipinas.shell.com.ph/about-us/our-
/5003138fa511f112398bd8832f85523d89dd206c/codeofco
nduct-english-2015.pdf).
Policies are in place to encourage employees to actively

participate in the realization of the Corporation’s goals and
in its governance, including training and development. Staff
must complete appropriate Shell Ethics and Compliance
Training. The Ethics and Compliance training programme
uses a risk-based approach. The type of Ethics and
Compliance training that staff must take will depend on the
level of risk associated with their role: “at risk” or “at higher
risk”. The businesses and functions are accountable for staff
training nominations. Appropriate actions are taken with

Page 61 of 67
staff who have not completed the required Ethics and
Compliance training, including consequence
management.
Moreover, “Learning and Development” is built on a

foundation of defined competences as captured in
Discipline/Function frameworks. They describe the skills,
knowledge and behaviors required for each job.
Competences form the essential link between describing a
role and assessing development needs. Some technical
competences are also used for assurance purposes. In
taking development action, the Company recognizes that
70% of learning and development is “on the job” (which is
linked to staff’s annual goals and performance assessment)
20% from coaching and mentoring (which is highly
encouraged) and 10% from formal training.
Recommendation 15.2
1. Board sets the tone and makes a stand against COMPLIANT Please refer to the Corporation’s Code of Conduct
corrupt practices by adopting an anti-corruption (https://pilipinas.shell.com.ph/about-us/our-
policy and program in its Code of Conduct. values/_jcr_content/par/textimage.stream/1519787681925
/5003138fa511f112398bd8832f85523d89dd206c/codeofco
nduct-english-2015.pdf) and Anti-Bribery Policy
9/1b3ecefa639ef9b89b1a0041c26f029640a2b5d9/anti-
bribery-corruption-programme-overview-shell.pdf).
2. Board disseminates the policy and program to COMPLIANT The Corporation disseminates the policy and program to its
employees across the organization through employees across the organization through orientations
trainings to embed them in the company’s and regular trainings.
culture.
1. Company has clear and stringent policies and COMPLIANT Please refer to the Corporation’s Ethics and Compliance
procedures on curbing and penalizing employee Manual (https://pilipinas.shell.com.ph/corporate-
involvement in offering, paying and receiving governance/corporate-governance-
bribes. policies/_jcr_content/par/textimage.stream/159100444548

Page 62 of 67
1/6b6e83f036651d0a2fd7277224b573e0bf01231b/shell-
ethics-and-compliance-manual-2018.pdf).
Recommendation 15.3
1. Board establishes a suitable framework for COMPLIANT The Corporation’s Whistle-Blowing Policy is described in its
whistleblowing that allows employees to freely 2019 Annual and Sustainability Report
communicate their concerns about illegal or (https://pilipinas.shell.com.ph/investors/financial-
unethical practices, without fear of retaliation reports/_jcr_content/par/textimage.stream/1588942664554
2. Board establishes a suitable framework for COMPLIANT /99372f894b50410c6b85c54f33d4e418352b0755/pspc-
whistleblowing that allows employees to have annual-and-sustainability-report-2019.pdf).
direct access to an independent member of the
Board or a unit created to handle whistleblowing Anyone may freely communicate concerns about illegal or
concerns. unethical practices without fear of retaliation through the
3. Board supervises and ensures the enforcement of COMPLIANT Global Helpline at https://shell.alertline.eu/gcs/welcome.
the whistleblowing framework. The Helpline is operated by an independent third-party
provider. Reports related to the Code of Conduct and the
Shell General Business Principles should be made to the
Global Helpline, or can be made to Human Resources (HR),
Shell Legal, an Ethics and Compliance Officer or directly to
the Business Integrity Department. Reports of antitrust
concerns should also be made orally to Antitrust Legal
Counsel.
The Corporation does not tolerate any form of retaliation

directed against anyone who raises a concern in good
faith. It is ensured that line managers maintain a culture in
which staff feel confident to speak up if they know or
suspect a violation.
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.
Recommendation 16.1
1. Company recognizes and places importance on COMPLIANT Please refer to Shell General Business Principles
the interdependence between business and (https://pilipinas.shell.com.ph/about-us/our-
society, and promotes a mutually beneficial values/_jcr_content/par/textimage.stream/1519770430488
relationship that allows the company to grow its /1424c1f1d37903394b9db3be58487bb295663246/shell-
general-business-principles-2014.pdf) and 2019 Annual and
Page 63 of 67
business, while contributing to the advancement Sustainability Report
of the society where it operates. (https://pilipinas.shell.com.ph/investors/financial-
/99372f894b50410c6b85c54f33d4e418352b0755/pspc-
1. Company ensures that its value chain is COMPLIANT Please refer to the Corporation’s 2019 Annual and
environmentally friendly or is consistent with Sustainability Report
promoting sustainable development (https://pilipinas.shell.com.ph/investors/financial-
/99372f894b50410c6b85c54f33d4e418352b0755/pspc-
2. Company exerts effort to interact positively with COMPLIANT Please refer to Shell General Business Principles
the communities in which it operates (https://pilipinas.shell.com.ph/about-us/our-
/1424c1f1d37903394b9db3be58487bb295663246/shell-
general-business-principles-2014.pdf) and 2019 Annual and
Sustainability Report
/99372f894b50410c6b85c54f33d4e418352b0755/pspc-

Page 64 of 67
23rd
SIGNATURES
Pursuant to the requirements of SEC Memorandum Circular No. 15, Series of 2017, this
report is signed on behalf of the issuer by the undersigned, thereunto duly authorized, in
London on the 19th day of June 2020.
Note: The Chairman of the Board is holding office at London, United Kingdom. To protect
his health and safety and due to the lockdown and mobility restrictions in place at his
location, apostillation of the document is not possible. The apostilled version will be
submitted to the SEC at the earliest opportunity.
For: PILIPINAS SHELL PETROLEUM CORPORATION
_______________________________
MIN YIH TAN
Chairman of the Board
SUBSCRIBED AND SWORN to before me this 19th day of June 2020 at 2pm, affiant
exhibiting to me the following competent evidence of his identification:
Name Competent Evidence of Identification
Passport Date of Issue Place of

Number Issue
MIN YIH TAN
IN WITNESS WHEREOF, I have hereunto affixed my signature and Notarial Seal.

NOTARY PUBLIC
Doc. No. ___;

Page No. ___;
Book No. ___;
Series of 2020.

Page 67 of 67

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SEC FORM – I-ACGR

INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT

1. For the fiscal year ended 2019

2. SEC Identification Number 14829 3. BIR Tax Identification No. 000-164-757

5. Metro Manila, Philippines 6. (SEC Use Only)

8. (632) 3 499 4001

The qualification standards for directors of the Corporation

For more information on the directors and the type of their

SEC Form – I-ACGR * Updated 21Dec2017

Information on the trainings attended by the Corporation’s

The Board has adopted a policy on Board diversity, which

SEC Form – I-ACGR * Updated 21Dec2017

SEC Form – I-ACGR * Updated 21Dec2017

The business objectives and strategy of the Corporation are

The Board oversees the development of, formulate, and

SEC Form – I-ACGR * Updated 21Dec2017

As of 2019, about 90% of senior management are local hires.

The Corporate Governance (CG) Committee is tasked with

SEC Form – I-ACGR * Updated 21Dec2017

The policy on executive remuneration and for fixing the

The functions of the CG Committee, including its

SEC Form – I-ACGR * Updated 21Dec2017

The remuneration of key officers and Board members are

SEC Form – I-ACGR * Updated 21Dec2017

2. Board establishes an effective performance COMPLIANT

Please also refer to Shell General Business Principles) and

An effective system of internal control ensures the integrity

The Board Audit and Risk Oversight Committee (“BARC”)

SEC Form – I-ACGR * Updated 21Dec2017

Well-designed internal control procedures and processes

The CEO and the CAAD Manager issue an annual joint

SEC Form – I-ACGR * Updated 21Dec2017

Additional Recommendation to Principle 2

Executive directors may avail of loans granted pursuant to

1. Board Audit and Risk Oversight Committee

Information on all the board committees established by the

Optional: Recommendation 3.2

2. Corporate Governance Committee is composed COMPLIANT Please refer to https://pilipinas.shell.com.ph/corporate-

Optional: Recommendation 3.3.

2. Committee Charters provide standards for COMPLIANT

3. Committee Charters were fully disclosed on the COMPLIANT

Information on the attendance and participation of

SEC Form – I-ACGR * Updated 21Dec2017

SEC Form – I-ACGR * Updated 21Dec2017

SEC Form – I-ACGR * Updated 21Dec2017

The Chairman of the Board, Mr. Asada Harinsuit, is not an

SEC Form – I-ACGR * Updated 21Dec2017

2. The system allows for a feedback mechanism COMPLIANT

SEC Form – I-ACGR * Updated 21Dec2017

The Corporation’s directors, officers and employees are

The Corporation distributes the Definitive Information

The actual dealings of directors involving shares of stock in

SEC Form – I-ACGR * Updated 21Dec2017

Information on the Corporation’s associates and joint

SEC Form – I-ACGR * Updated 21Dec2017

The Corporate Governance (CG) Committee is tasked with

The policy on executive remuneration and for fixing the

SEC Form – I-ACGR * Updated 21Dec2017

The functions of the CG Committee, including its