CHAPTER I: INTRODUCTION TO CORPORATE GOVERNANCE PURPOSE OF CORPORATE GOVERNANCE

The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver long-term
GOVERNANCE- derived from the Greek word ‘KUBERNAN’ which means to pilot or steer success of the company. In simple terms, the fundamental aim of corporate governance is to enhance shareholders’ value and
- A process whereby elements in a society wield power, authority and influence and enact policies and decisions protect the interests of other stakeholders by improving the corporate performance and accountability. It is also about what the board
concerning public life and social upliftment. of directors of a company does, how it sets the values of the business firm.
- It comprises all the process of governing- whether undertaken by the government of a country, by a market or by a
network- over a social system and whether through the laws, norm, power or language of an organized society. The following are the basic objectives of corporate governance:
1. Fair and Equitable Treatment of Shareholders. A corporate governance structure ensures equitable and fair treatment
Governance therefore means the process of decision-making and the process by which decisions are implemented (or not of all shareholders of the company. In some organizations, a group of high-net-worth individuals and institutions who have
implemented) through the exercise of power or authority by leaders of the country and/or organization. a substantial proportion of their portfolios invested in the company, remain active through occupation of top-level positions
that enable them to guard their interest. However, all shareholders deserve equitable treatment and this equity is
Governance can be used in several contexts such as corporate governance, international governance, national governance, and local safeguarded by a good governance structure in an organization.
governance. 2. Self-Assessment. Corporate governance enables firms to assess their behavior and actions before they are scrutinized
by regulatory agencies. Business establishments with a strong corporate governance system are better able to limit
exposure to regulatory risks and fines and an active an independent board can successfully point out deficiencies or
CHARACTERISTICS OF A GOOD GOVERNANCE
loopholes in the company operations and help solve issues internally on a timely basis.
 Participation. Participation by both men and women is a key cornerstone of good governance. Participation could be 3. Increase Shareholders’ Wealth. Corporate governance aims to protect the long-term interest of the shareholders. Firms
either direct or through legitimate intermediate institutions or representatives. It is important to point out that representative with strong corporate governance structure are seen to have higher valuation attached to their shares by businessmen.
democracy does not necessarily mean that the concerns of the most vulnerable in society would be taken into This only reflects the positive perception that good corporate governance induces potential investors to decide to invest in
consideration in decision making. Participation needs to be informed and organized. This means freedom of association a company.
and expression on the one hand and an organized civil society on the other hand. 4. Transparency and Full Disclosure. Good corporate governance aims at ensuring a higher degree of transparency in an
 Rule of Law. Good governance requires fair legal frameworks that are enforced impartially. It also requires full protection organization by encouraging full disclosure of transactions in the company accounts
of human rights, particularly those of minorities. Impartial enforcement of laws requires an independent judiciary and an
impartial and incorruptible police force.
BASIC PRINCIPLES OF EFFECTIVE CORPORATE GOVERNANCE
 Transparency. Transparency means that decisions taken and their enforcement are done in a manner that follows rules
Effective corporate governance is transparent, protects the rights of shareholders and includes both strategic and operational risk
and regulations. It also means that information is freely available and directly accessible to those who will be affected by
management. It is concerned in both the long-term earning potential as well as actual short-term earnings and holds directors
such decisions and their enforcement. It also means that enough information is provided and that it is provided in easily
accountable for their stewardship of the business.
understandable forms and media.
 Responsiveness. Good governance requires that institutions and processes try to serve all stakeholders within a
reasonable timeframe. A. Transparency and full disclosure
 Consensus Oriented. There are several actors and as many view points in a given society. Good governance requires  Does the board meet the information needs of investment communities?
mediation of the different interests in society to reach a broad consensus in society on what is in the best interest of the  Does it safeguard integrity in financial reporting?
whole community and how this can be achieved. It also requires a broad and long-term perspective on what is needed for  Does the board have sound disclosure policies and practices?
sustainable human development and how to achieve the goals of such development. This can only result from an  Does it make timely and balanced disclosure?
understanding of the historical, cultural and social contexts of a given society or community.  Can an outsider meaningfully analyze the organization’s actions and performance?
 Equity and Inclusiveness. A society’s well being depends on ensuring that all its members feel that they have a stake in B. Accountability
it and do not feel excluded from the mainstream of society. This requires all groups, but particularly the most vulnerable,  Does the board clarify its role and that of management?
have opportunities to improve or maintain their well being.  Does it promote objective, ethical and responsible decision making?
 Effectiveness and Efficiency. Good governance means that processes and institutions produce results that meet the  Does it lay solid foundations for management oversight?
needs of society while making the best use of resources at their disposal. The concept of efficiency in the context of good  Does the composition mix of board membership ensure an appropriate range and mix of expertise,
governance also covers the sustainable use of natural resources and the protection of the environment. diversity, knowledge and added value?
 Accountability. Accountability is a key requirement of good governance. Not only governmental institutions but also the  Is the organization’s senior official committed to widely accepted standards of correct and proper
private sector and civil society organizations must be accountable to the public and to their institutional stakeholders. Who behavior?
is accountable to whom varies depending on whether decisions or actions taken are internal or external to an organization C. Corporate Control
or institution. In general an organization or an institution is accountable to those who will be affected by its decisions or  Has the board built long-term sustainable growth in shareholders’ value for the corporation?
actions. Accountability cannot be enforced without transparency and the rule of law.  Does it create an environment to take risk?
 Does it encourage enhanced performance?
 Does it recognize and manage risk?
CORPORATE GOVERNANCE: AN OVERVIEW
 Does it remunerate fairly and responsibly?
Corporate Governance is defined as the system of rules, practices and processes by which business corporations are directed and
 Does it recognize the legitimate interests of stakeholders?
controlled. It basically involves balancing the interests of a company’s many stakeholders, such as shareholders, management,
 Are conflicts of interest avoided such that the organization’s best interests prevail at all times?
customers, suppliers, financiers, government and the community.\

ILLUSTRATIVE APPLICATION OF THE BASIC PRINCIPLES OF CORPORATE GOVERNANCE AND BEST PRACTICE
Corporate governance is a topic that has received growing attention in the public in recent years as policy makers and others become
RECOMMENDATIONS
more aware of the contribution good corporate governance makes to financial market stability and economic growth. Good corporate
governance is all about controlling one’s business and so is relevant, and indeed vital, for all organizations, whatever size or structure.
Principles of Good Corporate Governance Best Practice Recommendation
The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the 1. A company should lay solid foundation for management Formalize and disclose functions reserved to the board and
and oversight. It should recognize and publish the those delegated to management
corporation, such as the board, managers, shareholders, and other stakeholders, and spells out the rules and procedures for making
respective roles and responsibilities of board and
decisions on corporate affairs. By doing this, it also provides the structure through which the objectives are set and the means of management.
attaining those objectives and monitoring performance.
2. Structure the board to add value. Have a board of an A board should have independent directors.
 effective composition, size and commitment to The role of chairperson and CEO should not be exercised by the The board should establish a renumeration committee.
adequately discharge its responsibilities and duties same individual
The board should establish a nomination committee.
Clearly distinguish the structure of non-executive director’s
3. Promote ethical and responsible decision making. Establish a code of conduct to guide the directors, the CEO,
renumeration from that of executives.
Actively promote ethical and responsible decision- CFO and any other key executives as to:
making.  The practice necessary to maintain confidence in the
company’s integrity; and Ensure that payment of equity-based executive renumeration is
 The responsibility and accountability of individuals made in accordance with thresholds set in plans approved by
for reporting and investigating reports of unethical shareholders.
practices 10. Recognize the legitimate interests of stakeholders. Establish and disclose a code of conduct to guide compliance
Disclose the policy concerning trading in company securities by Recognize legal and other obligations to all legitimate with legal and other obligations to legitimate stakeholders.
directors, officers, and employees. stakeholders.
4. Safeguard integrity in financial reporting. Have a Require the CEO or the CFO to state in writing that the
structure to independently verify and safeguard the company’s financial reports present a true and fair view, in all
integrity of the company’s financial reporting material respects, of the company’s financial condition and
CHAPTER 2: CORPORATE GOVERNANCE RESPONSIBILITIES AND ACCOUNTABILITIES
operational results are in accordance with relevant accounting
standards.
Many of the characteristics of good governance described in Chapter 1 are relevant to both SME’s and large listed public companies.
As an organization grows in size and influence, these issues become increasingly important.
The Board should establish an audit committee.
However, it is also important to recognize that good corporate governance is based on principles underpinned by consensus and
Structure the audit committee so that it consists of: continually developing notions of good practice. There are no absolute rules which must be adopted by all organizations. There is no
 Only non-executive or independent directors simple universal formula for good governance. Instead emphasis is many localities, has been encourage organizations to give
 An independent chairperson, who is not chairperson appropriate attention to the principles and adopt approaches which are tailored to the specific needs of an organization at a given
of the board; and point in time.
 At least three (3) members
5. Make timely and balanced disclosure. Promote timely Establish written policies and procedures designed to ensure The essence of any system of good corporate governance is to allow the board and management the freedom to drive their
and balanced disclosure of all material matters compliance with IFRS organization forward and to exercise the freedom within a framework of effective accountability.
concerning the company.

Listing rule disclosure requirements and to ensure accountability RELATIONSHIP BETWEEN SHAREHOLDERS/OWNERS AND OTHER STAKEHOLDERS
at a senior management level of compliance Governance starts with the shareholders/owners delegating responsibilities through an elected board of directors to management
6. Respect the rights of shareholders and facilitate the Design and disclose a communications strategy to promote and, in turn, to operating units with oversight and assistance from internal auditors. The board of directors and its audit committee
effective exercise of those rights. effective communication with shareholders and encourage oversee management and, in that role, are expected to protect the shareholders’ rights. However, it is important to recognize that
effective participation at general meetings management is part of the governance framework; management can influence who sits on the board and the audit committee as well
as other governance controls that might be put into place.

Request the external auditor to attend the annual general

In return for the responsibilities (and power) given to management and the board, governance demands accountability back through
meeting and be available to answer shareholder questions
the system to the shareholders. Stakeholders can be anyone who is influenced, whether directly or indirectly, by the actions of the
about the audit.
company. Management and the board have responsibilities to act within the laws of society and to meet various requirements of
7. Recognize and manage risk. Establish a sound system The board or appropriate board committee should establish
creditors, employees, and the stakeholders.
of risk oversight and management and internal control. policies on risk oversight and management.

A broad group of stakeholders has an interest in the quality of corporate governance because it has a relationship to economic
The chief executive officer and the chief financial officer should performance and the quality of financial reporting. For example, it is likely that many employees have significant funds invested in
state to the board in writing that: pension plans. Those pension plans are designed to protect the financial interests of those employees in their retirement. In a similar
 The statement given in accordance with best fashion, employees and creditors have a vested interest in the organization and how it is governed. Regulators are a response to
practice recommendation is founded on a sound society’s wishes to ensure that organizations act responsibly and operate in compliance with relevant laws.
system of risk management and internal compliance
and control which implements the policies adopted
by the board While shareholders/owners delegate responsibilities to various parties within the corporation, they also require accountability as to
 The company’s risk management and internal how well the resources that have been entrusted to management and the board have been used:
compliance and control system is operating  Financial performance
efficiently in all material aspects.  Financial transparency- financial statements that are clear with full disclosure and that reflect the underlying economics of
8. Encourage enhanced performance. Fairly review and Disclose the process for performance evaluation of the board, its the company.
actively encourage enhanced board and management committees and individual directors, and key executives.  Stewardship, including how well the company protects and manages the resources entrusted to it.
effectiveness.
 Quality of internal control- it is about having rules and procedures to ensure that financial reports are reliable
9. Renumerate fairly and responsibly. Ensure that the level Provide disclosure in relation to the company’s renumeration
and composition of renumeration is sufficient and policies to enable investors to understand:  Composition of the board of directors and the nature of its activities, including information on how well management
reasonable and that its relationship to corporate and incentive systems are aligned with the shareholders’ best interests.
 The costs and benefits of those policies, and
individual performance is defined.  The link between renumeration paid to directors and
key executives and corporate performance The owners want disclosures from management that are accurate and objectively verifiable. For instance, management has a
responsibility to provide financial reports, and in some cases, reports on internal control effectiveness. Management has always had
the primary responsibility for the accuracy and completeness of an organization’s financial statements. From a financial reporting  To seek information on a timely basis.
perspective, it is management’s responsibility to:  To ensure that he/she is in a position to contribute to the discussion when a matter comes before the board, or
 Choose which accounting principles best portray the economic substance of company transactions. alert the chairman in advance to the need for further information.
 Implement a system of internal control that assures completeness and accuracy in financial reporting.  To ask appropriate questions relative to operations.
 Ensure that the financial statements contain accurate and complete disclosure.

RELATED PARTIES INVOLVED IN CORPORATE GOVERNANCE 4. Management

Corporate governance and financial reporting reliability are receiving considerable attention from a number of parties including  Operations and accountability. Manage the organization effectively provide accurate and timely reports to
regulators, standard setting bodies, the accounting profession, lawmakers and financial statement users. shareholders and other stakeholders

1. Shareholders Specific activities:

 Provide effective oversight through election of board members, approval of major initiatives.  Recommend the strategic direction and translate the strategic plan into the operations of the business.
2. Board of Directors  Manage the company's human, physical and financial resources to achieve the organization's objectives - run
 The major representative of stockholders to ensure that the organization is run according to the the business.
organization's charter and that there is proper accountability.  Assume day to day responsibility for the organization's conformance with relevant laws and regulations and its
Specific activities: compliance framework
 Overall operations  Develop, implement and manage the organization's risk management and internal control frameworks.
 Establishing the organization's vision, mission values and ethical standards.  Develop, implement and update policies and procedures
 Delegating an appropriate level of authority to management.  Be alert to relevant trends in the industry and the organization's operating environment.
 Demonstrating leadership.  Provide information to the board.
 Assuming responsibility for the business relationship with CEO including his or her appointment,  Act as conduit between the board and the organization.
succession, performance remuneration and dismissal.  Developing financial and other reports that meet public, stakeholder and regulatory requirements
 Overseeing aspects of the employment of the management team.
 Recommending auditors and new directors to shareholders. 5. Audit Committees Of The Board Of Directors
 Ensuring effective communication with shareholders other stakeholders.  Provide oversight of the internal and external audit function and the process of preparing the annual financial
 Crisis management statements as well as public reports on internal control.
 Appointment of the CFO and corporate secretary.
Specific activities:
 Performance  Selecting and / or approving the appointment of the Chief Audit Executive (Internal Auditor).
 Ensuring the organization's long term viability and enhancing the financial position.  Reviewing and approving the scope and budget of the internal audit function.
 Formulating and overseeing implementation of corporate strategy.  Discussing audit findings with internal auditor and external auditor and advising the board (and management)
 Approving the plan, budget and corporate policies. on specific actions that should be taken.
 Agreeing key performance indicators (KPIS).
 Monitoring / assessing assessment, performance of the organization, the board itself, management and 6. Regulators
major projects. A. Board of Accountancy
 Overseeing the risk management framework and monitoring business risks. f) Monitoring developments  Set accounting and auditing standards dictating underlying financial reporting and auditing concepts, set the
in the industry and the operating environment. expectations of audit quality and accounting quality
 Oversight of the and organization, including its control and accountability systems.
 Approving and monitoring the progress of major capital expenditure, capital management and Specific activities:
acquisitions and divestitures.  Conducting CPA Licensure Board Examinations.
 Approving accounting principles.
 Compliance/Legal Conformance  Approving auditing standards.
 Understanding and protecting the organization's financial position  Interpreting previously issued standards implementing quality control processes to ensure audit quality.
 Requiring and monitoring legal and regulatory compliance including compliance with accounting  Educating members on audit and accounting requirements.
standards, unfair trading legislations, occupational health and safety and environmental standards.
 Approving annual financial reports, annual reports and other public documents/sensitive report B. Securities and Exchange Commission
 Ensuring an effective system of internal controls exists and is operating as expected.  Ensure the accuracy, timeliness and fairness of public reporting of financial and other information for public
companies.
3. Non-Executive Or Independent Directors
 The same as the broad role of the entire board of directors Specific activities:
 Reviewing filings with the SEC.
Specific activities:  Interacting with the Financial Reporting Standards Council in setting accounting standards.
 To understand the organization, its business, its operating environment and its financial position  Specifying independence standards required of auditors that report on public financial statements.
 To apply expertise and skills in the organization's best interests  Identify corporate frauds, investigate causes, and suggest remedial actions
 To assist management to keep performance objectives at the top of its agenda
 To understand that his/her role is not to act as auditor, nor to act as a manager. 7. External Auditors
 To respect the collective, cabinet nature of the board's decisions.  Identify corporate frauds, investigate causes, and suggest remedial actions
 To prepare for and attend board meetings.
 Specific activities: - The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the company’s articles
 Audit of public company financial statements. and by-laws, and other legal pronouncements and guidelines should be clearly made known to all directors as well as to
 Audits of nonpublic company financial statements. stockholders and other stakeholders.
 Other services such as tax or consulting
Elements of fiduciary duty:
 Duty of care- requires board to act on a fully informed basis, in good faith, with diligence and care
8. Internal Auditors  Duty of loyalty- the board member should act in the interest of the company
 Perform audits of companies for compliance with company policies and laws, audits to evaluate the efficiency
of operations, and periodic evaluation and tests of controls The board should oversee the development of and approve the company’s business objectives and strategy
 The board should be headed by a competent and qualified Chairperson.
Specific Activities:
 Reporting results and analyses to management (including operational management) and audit committees. Recommendations:
 Evaluating internal controls 1. Succession planning and program for directors, key officers, and management.
2. Remuneration of key officers and board members
3. Formal and transparent board nomination and election policy
PURPOSE OF THE CODE 4. Grounds for permanent and for temporary disqualification of a director
5. Group-wide policy and system governing related party transactions
- To promote the development of strong corporate governance culture and keep abreast with recent developments in
6. Approving the selection and assessing the performance of the management
corporate governance best practices
7. Effective performance management framework
- To provide standards for professional and ethical behavior as well as articulate acceptable and unacceptable conduct and
8. Oversight an appropriate internal control system and a sound enterprise risk management (ERM) frameworks
practices
-
PRINCIPLE 3: ESTABLISHING BOARD COMMITTEES
ASPECTS OF THE CODE
- The code allows the Board to create special committee to whom it can delegate its functions but not responsibilities.
 Principles can be considered as high-level statements of corporate governance good practice, and are applicable to all
companies.
The board should establish board committees that focus on specific board functions to aid in the optimal performance of its roles and
 Recommendations are consistent with the principle of proportionality objective criteria that are intended to identify the
responsibilities.
specific features of corporate governance good practice that are recommended for companies operating according to the
Code.
 Explanations strive to provide companies with additional information on the recommended best practice Committees that may be established by the Board:
  Audit Committee- responsible for overseeing the senior management in establishing and maintaining an adequate,
Principle of Proportionality- it is where SEC addresses specific segments of the corporate sector which may be differentiated on the effective and efficient internal control framework
basis of company type, size, access to public funds and risk profile, among others.  Corporate Governance Committee- tasked to assist the board in the performance of its corporate governance
responsibilities
 Board Risk Oversight Committee- responsible for the oversight of a company’s Enterprise Risk Management system to
Comply and Explain- voluntary compliance with mandatory disclosure (explanation) Annual Corporate Governance reports and
ensure its functionality and effectiveness.
disclose any deviations from the recommendations of the SEC
 Related Party Transaction Committee- tasked with reviewing all material related party transactions of the company and
should be composed of at least three non-executive directors.
FIVE BROAD CATEGORIES
 Nomination Committee
 Board’s Governance Responsibilities (1-7)  Renumeration Committee
 Disclosure and Transparency (8-11)  Committee of Inspectors of Ballots and Proxies
 Internal Control System and ERM Framework (12)  Finance Committees
 Cultivating a synergic relationship with members or shareholders (13)  Technology Strategy Committee
 Duties to Stakeholders (14-16)  Technology Support to Committees
 Other committees that may deemed necessary for the efficient and effective performance of its functions
Approved on November 10, 2016
PRINCIPLE 4: FOSTERING COMMITMENT
PRINCIPLE 1: ESTABLISHING A COMPETENT BOARD - To show full commitment to the company, the directors should devote the time and attention necessary to properly and
- To foster the long-term success of the corporation effectively perform their duties and responsibilities, including sufficient time to be familiar with the corporation’s business
- 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. Recommendations:
Recommendations: 1. Presence and active participation in all meetings of the Board, Committees, and Shareholders
1. Collective working knowledge, experience, or expertise that is relevant to the company’s industry or sector. 2. Limit on board directorships
2. Appropriate mix of competence and expertise
3. Majority of non-executive directors to help secure objective and independent judgment on corporate affairs A director should notify the Board where he/she is an incumbent director before accepting a directorship in another company.
4. Relevant annual continuing training for all directors
5. Policy on board diversity.
PRINCIPLE 5: REINFORCING BOARD INDEPENDENCE
6. Assistance by a Corporate Secretary and Compliance Officer and its duties and responsibilities.
- The Board should endeavor to exercise objective and independent judgement on all corporate affairs.
PRINCIPLE 2: ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD
The Board’s independent directors should serve for a maximum cumulative term of nine years.
 3. Disclosure of the company’s strategic goals and the impact of sustainability issue
Recommendations:
1. Minimum number of independent directors (at least three independent auditors or such number as to constitute at least PRINCIPLE 11: PROMOTING A COMPREHENSIVE AND COST-EFFICIENT ACCESS TO RELEVANT INFORMATION
one-third of the members of the Board, whichever is higher.) - This channel is crucial for informed decision-making by investors, stakeholders and other interested users.
2. Qualifications, disqualifications, and maximum term of an independent director Recommendations:
3. Roles and responsibilities of the Chief Executive Officer 1. Inclusion of media and analysts’ briefings as channels of communication
4. Lead director and his/her functions
2. Reporting of timely and up-to-date information relevant to investors’ decision-making
5. Abstention of a director from participating in meetings on which he/she has a material interest
6. Non-executive directors separate periodic meetings
PRINCIPLE 12: STRENGTHENING THE INTERNAL CONTROL SYSTEM AND ENTERPRISE RISK MANAGEMENT
FRAMEWORK
PRINCIPLE 6: ASSESSING BOARD’S PERFORMANCE
1. Effective internal control system and ERMF
- The best measure of the Board’s effectiveness is through an assessment process. The Board should regularly carry out 2. Functions of an independent or a separate internal audit
evaluations 3. Chief Audit Executive, his/her responsibilities, and to whom he/she reports
a. To appraise its performance as a body, and 4. Risk Management Function
b. Assess whether it possesses the right mix of backgrounds and competencies 5. Chief Risk Officer and his/her function
6. Company’s size, risk profile, and complexity of operations
The Board should conduct an annual self-assessment of its performance, including the performance of the Chairman, individual
members and committees.
The Board should have in place a system that provides, at the minimum, criteria to process to determine the performance of the PRINCIPLE 13: PROMOTING SHAREHOLDERS RIGHTS
Board, committees and such system should allow for a feedback mechanism from the shareholders. - The company should treat all shareholders fairly and equitably, and also recognize, protect and facilitate the exercise of
their rights

PRINCIPLE 7: STRENGTHENING BOARD ETHICS 1. Disclosure of shareholders right

- Members of the Board are duty-bound to apply high ethical standards, taking into account the interests of all stakeholders. 2. Encourage active shareholder participation
a. Adoption of Code of Business Conduct and Ethics 3. Investor Relations Office (IRO)
b. Implementation and monitoring of compliance with the Code
PRINCIPLE 14: RESPECTING RIGHTS OF STAKEHOLDERS AND EFFECTIVE REDRESS FOR VIOLATION OF
STAKEHOLDER’S RIGHTS
PRINCIPLE 8: COMPANY DISCLOSURE POLICIES AND PROCEDURES 1. Identify stakeholders and promote cooperation
- The company should establish corporate disclosure policies and procedures that are practical and in accordance with best 2. Policies and programs that may provide a mechanism on fair treatment of stakeholders
practices and regulatory expectations 3. Adopt transparent framework that allow the stakeholders to communicate with the company and to obtain redress for the
violation of their rights
Recommendations:
1. Establishing disclosure policies and procedure PRINCIPLE 15: ENCOURAGING EMPLOYEES’ PARTICIPATION
2. Period to disclose any dealings in the company’s shares 1. Establishment of policies, programs, and procedures to encourage employees
3. Full disclosure of relevant and material information on individual board members and key executives. 2. Anti-corruption policy and program
4. Disclosure of renumeration policies and procedure 3. Free communication of concerns about illegal or unethical practices
5. Disclosure of policies governing Related Party Transactions (RPTs)
6. Disclosure of material facts and events PRINCIPLE 16: ENCOURAGING SUSTAINABILITY AND SOCIAL RESPONSIBILITY
7. Should be contained in Manual on Corporate Governance 1. Interdependence between business and society
2. Sustainable development and value chain
Reportorial Requirements
All corporations are required to submit to SEC the following as per SEC. MC. No. 2 series of 2020:
- General information sheet (within 30 calendar days from the date of actual annual stockholders’ meeting)
- Audited FS stamped received by BIR (120 calendar days after the end of fiscal year or on or before April20-May 22 based
on the last numerical digit of their SEC registration or license number in accordance with the schedule set by SEC)
- Annual Corporate Governance Report (beginning May 30 and every 5 years thereafter)

PRINCIPLE 9: STRENGTHENING THE EXTERNAL AUDITORS INDEPENDENCE AND IMPROVING AUDIT QUALITY
- The company should establish standards for the appropriate selection of an external auditor, and exercise effective
oversight of the same to strengthen the external auditor’s independence and enhance audit quality.

PRINCIPLE 10: INCREASING FOCUS ON NON-FINANCIAL AND SUSTAINABILITY REPORTING

- The company should ensure that material and reportable non-financial and sustainability issues are disclosed

Recommendations:
1. Disclosure of non-financial information
2. Management of the economic, environmental, social, governance (EESG) issues of the business