GLOBE TELECOM, INC. · GLOBE TELECOM, INC. Corporate Governance . C G F D 0 4 1 8 17-C: Manual of GLOBE TELECOM, INC. Corporate Governance . Title: Manual of Corporate Governance

M S R D

4 0 8 1 17-C: Manual of

Corporate Governance

GLOBE T

ELECOM

, INC.

C G F D

4 0 8 1 17-C: Manual of

Corporate Governance

GLOBE T

ELECOM

, INC.

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32nd Street corner 7th Avenue,Bonifacio GLobaL City,Taguig, Phitippines 1 634

,, +632.7972000

29 May 2017www.gtobe.com.ph

SECURITIES AND EXCHANGE COMMISSIONG/F Secretariat BuildingPICC Complex, Roxas Boulevard, Pasay City

Attention: Atty. Justina F. CallanDirector, Corporate Governance and Fina

Mr. Vicente Graciano P. Felizmenio, Jr.

Department

Director, Markets and Securities Regulation Department

Gentlemen:

ln compliance with the Securities and Exchange Commission's Memorandum Circular No. 19, Series of

2016 or the Code of Corporate Governance for Publicly-Listed Companies dated 22 November 2016, we

submit to you the Manual of Corporate Governance (MCG) of Globe Telecom, lnc. Our MCG is also

compliant with the Commission's Memorandum Circular No. B, Series of 2017 regarding the signatories to

the MCG who are the Chairman of the Board and Compliance Officer. Our MCG shall also be posted on

our company website.

Thank you very much.

Very truly yours,

VLVE CIOCSON.COA

Se Vice President for Law and Compliance,Compliance Officer and Assistant Corporate Secretary

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THE PHILIPPINE STOCK EXCHANGE, INC.3/F Tower One and Exchange Plaza,Ayala Triangle, Ayala Avenue, Makati City

Attention: Mr. Jose Valeriano B. Zuflo lllOfficerln-Charge, Head of Disclosure Department

PHILIPPINE OEALING AND EXCHANGE CORPORATION37lF Tower 1, The Enterprise Center,6766 Ayala Avenue corner Paseo de Roxas, Makati City

Attention. Ms. Vina Vanessa S. SalongaHead, lssuer Compliance and Disclosure Department

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MANUAL OF CORPORATE GOVERNANCE Globe Telecom, Inc.

GLOBE T

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MANUAL OF CORPORATE GOVMay A9, 2017

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ARTICLE I

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PREAMBLE

Corporate Governance refers to the framework of rules, systems hecorporation that governs and guides the performance of the Board of Di rs and Managementof their respective duties and responsibilities to shareholders and stakeholders which includeamong others, customers, employees, suppliers, financiers, government and community in whichit operates. lt's a system of direction, feedback and control using regulations, performancestandards and ethical guidelines to hold the Board and Management accountable for ensuringethical behavior - reconciling long{erm customer satisfaction with shareholder value - to thebenefit of all stakeholders and society. The primary goal of corporate governance is thus to createand sustain increased value in the corporation for all of its shareholders, stakeholders and thenation. To achieve this goal, it is necessary among other things - to clearly set forth the principlesof appropriate supervision, stewardship, control and good management, and thereby lay thegroundwork for development and implementation of value-creating activaties. Moreover, it is asimportant that these agreed principles of governance are made transparent to all shareholdersand stakeholders concerned, thereby safeguarding shareholders and stakeholders' rights as wellas promoting their participation in the corporate governance process.

The framework for Corporate Governance is not drawn from any single document. The PhilippineCorporation Code lays down the basic legal framework for corporate governance of everyPhilippine corporation. lt is supplemented by the Securities Regulation Code (Republic Act No.

8799), the Securities and Exchange Commission ("SEC" or "Commission") implementing rulesand regulations, the Code of Corporate Governance (SEC Memorandum Circular No. 6, Series of2009, The Revised Code of Corporate Governance) and the Code of Corporate Governance forPublicly Listed Companies ("PLC Code of CG") (SEC l\4emorandum Circular No. 19, Series of2016). All terms used herein are used with the meanings assigned to them by said laws and

implementing rules and regulations.

The machinery for corporate governance of Globe Telecom, lnc. ("Globe" or the "Corporation") isprincipally contained in the Corporation's Articles of lncorporation and By-Laws and theiramendments. These constitutive documents lay down, among others, the basic structure ofgovernance, minimum qualifications of directors, and the principal duties of the Board of Directorsand officers of the Corporation. The function of this Manual of Corporate Governance is to

supplement and complement the Corporation's Articles and By-Laws by setting forth principles ofgood and transparent governance.

The Board of Directors, Management and employees of the Corporation hereby commit

themselves to the principles and best practices of governance contained in this Manual as aguide in the attainment of its corporate goals. The Corporation shall undertake to make a

iontinuing effort to create awareness of good corporate governance within the organization to

fulfil its long-term economic, moral, legal, environmental, social and governance obligations

towards all shareholders, stakeholders and the nation.

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GLOBE T

ELECOM

, INC.

2

MISSION

We create wonderful experiences for people to have choices, overcome challenges, and discover new ways to enjoy life.

VISION

We see a Philippines where families’ dreams come true, businesses flourish, and the nation is admired.

OUR CORE VALUES

In everything we do, we treat people right to create a Globe of good.

We put customers first.

We value people and together, we make the difference.

We act with integrity.

We care like an owner.

We keep things simple.

We move fast, we are better every day.

This keeps our Circle of Happiness spinning…

Employees feel empowered and find meaning at work.

Customers feel special and valued.

Shareholders feel confident and rewarded.

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ARTICLE II

THE BOARD’S GOVERNANCE RESPONSIBILITIES

1. Establishing a Competent Board of Directors

Principle 1: Globe 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.

1.1 Composition

The Board of Directors is the supreme authority in matters of governance and managing the regular and ordinary business of the Corporation. Within their chartered authority, the directors acting as a Board have the fullest powers to regulate the concerns of the Corporation according to their best judgment.

The Board of Directors shall set qualification standards for its members to facilitate the selection of potential nominees for board seats, and to serve as a benchmark for the evaluation of its performance. Therefore, the Board of Directors shall be composed of directors with a collective working knowledge, experience or expertise that is relevant to the telecommunications industry. It shall always ensure that it has an appropriate mix of competence and expertise to enable it to fulfill its roles and responsibilities and respond to the needs of the organization based on evolving business environment and strategic direction. The Board shall likewise determine the qualifications of the independent directors to enable them to effectively participate in the deliberations of the Board and carry out their roles and responsibilities.

The Board shall be composed of such number of members as required by the Corporation’s By-Laws, the majority of which are non-executive directors who possess the necessary qualifications, and elected by the Corporation's shareholders entitled to vote at the annual meeting, and shall hold office for one year and until their successors are elected and qualified in accordance with the By-Laws of the Corporation.

Following the Corporation’s policy on board diversity and adhering to the PLC Code of CG, Globe shall have at least three (3) independent directors. The independent directors shall also be identified in the annual reports.

1.2 Policy on Training1

The Corporation shall have trainings for directors, including an orientation program for first-time directors and relevant annual continuing training for all directors.

All directors, including key officers, shall continuously be informed of the developments in the business and regulatory environments, including emerging risks relevant to the Corporation. Training and/or seminar program shall involve courses on corporate governance matters relevant to the Corporation, including audit, internal controls, risk management, sustainability and strategy. Directors, with assistance from the Corporate Secretary and Chief Compliance

1 Details and more information on the Corporation’s Policy on Training is posted on the Globe website under ‘Company

Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.

http://corporate-governance.globe.com.ph/company-policies.html

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Officer, shall assess their own training and development needs in determining the coverage of their continuing training and/or seminar program.

1.3. Policy on Board Diversity2

As a board diversity policy, no director or candidate for directorship shall be discriminated upon by reason of gender, age, disability, ethnicity, nationality, or political, religious or cultural backgrounds, skills, competence or knowledge.

1.4 The Corporate Secretary

The Corporate Secretary shall be a resident and citizen of the Philippines. The Corporate Secretary is an officer of the Corporation and his loyalty to the mission, vision and specific business objectives of the Corporation comes with his duties. Considering his varied functions and responsibilities, the Corporate Secretary must possess organizational and interpersonal skills, and the legal skills of a chief legal officer. The Corporate Secretary shall be separate from the Compliance Officer, not be a member of the Board and shall attend an annual training on corporate governance. The Board has access to the Corporate Secretary who acts as adviser to directors regarding their responsibilities and obligations, and oversees the flow of information prior to Board meetings.

The Corporate Secretary is primarily responsible to the Corporation and its shareholders, and not to the Chairman or President of the Corporation and has, among others, the following duties and responsibilities:

a) Assists the Board and the board 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 agendas for those meetings;

b) Safe keeps and preserves the integrity of the minutes of the meetings of the Board and its committees, as well as other official records of the corporation;

c) Keeps abreast on relevant laws, regulations, all governance issuances, relevant industry developments and operations of the corporation, and advises the Board and the Chairman on all relevant issues as they arise;

d) Works fairly and objectively with the Board, Management and shareholders and contributes to the flow of information between the Board and management, the Board and its committees, and the Board and its stakeholders, including shareholders;

e) Advises on the establishment of board committees and their terms of reference;

f) Informs members of the Board, in accordance with the by-laws, of the agenda of their meetings at least five working days in advance, and ensures that the members have before them accurate information that will enable them to arrive at intelligent decisions on matters that require their approval;

g) Attends all Board meetings, except when justifiable causes, such as illness, death in the immediate family and serious accidents, prevent him/her from doing so;

2 Details and more information on the Corporation’s Policy on Board Diversity is posted on the Globe website under

‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.


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h) Performs required administrative functions;

i) Oversees the drafting of the by-laws and ensures that they conform with regulatory

requirements; and

j) Performs such other duties and responsibilities as may be provided by the SEC.

1.5 The Compliance Officer

To ensure adherence to corporate principles and best practices, the Board shall be assisted by a Compliance Officer, who should have a rank of Senior Vice President or an equivalent position with adequate stature and authority in the Corporation. The Compliance Officer shall not be a member of the Board and shall annually attend a training on corporate governance.

The Compliance Officer is a member of the Corporation’s management team in charge of the compliance function. Similar to the Corporate Secretary, the Compliance Officer is primarily liable to the Corporation and its shareholders, and not to the Chairman or President of the Corporation. The Compliance Officer shall perform, among others, the following duties and responsibilities:

a) Ensures proper onboarding of new directors (i.e., orientation on the Corporation’s business, charter, articles of incorporation and by-laws, among others);

b) Monitors, reviews, evaluates and ensures the compliance by the Corporation, its officers and directors with the relevant laws, this Code, rules and regulations and all governance issuances of regulatory agencies;

c) Reports the matter to the Board if violations are found and recommends the imposition of appropriate disciplinary action;

d) Ensures the integrity and accuracy of all documentary submissions to regulators;

e) Appears before the SEC when summoned in relation to compliance with this Code;

f) Collaborates with other departments to properly address compliance issues, which may be subject to investigation;

g) Identifies possible areas of compliance issues and works towards the resolution of the same;

h) Ensures the attendance of board members and key officers to relevant trainings; and

i) Performs such other duties and responsibilities as may be provided by the SEC.

2. Establishing Clear Roles and Responsibilities of the Board

Principle 2: The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the Corporation’s Articles and By-laws, and other legal pronouncements and guidelines should be clearly made known to all directors as well as to shareholders and other stakeholders.

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2.1 General Responsibilities of the Board for Good Governance3

The Board shall:

a) Act on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the Corporation and all shareholders in a manner characterized by transparency, accountability and fairness. The Board shall exercise leadership, prudence and integrity in directing the Corporation towards sustained progress over the long term.

b) Oversee the development of, and approve, the Corporation’s vision, mission, values, corporate strategies and objectives and monitor implementation in order to sustain the Corporation’s long-term viability and strength. It is the Board's responsibility to foster the long-term success of the Corporation and the corporate objectives and to sustain its competitiveness and profitability in a manner consistent with the corporate objectives and the best interest of its shareholders and other stakeholders. It shall set forth policies that shall guide its activities, including the means to effectively monitor Management’s performance. The vision, mission, values and strategic objectives, are subject to review by the Board, at least once every five (5) years, if not sooner as deemed necessary.

c) Create and sustain a corporate culture where employees are actively involved in the realization of the Corporation’s vision, mission, goals and corporate governance such that employees experience a sense of accountability and inspiration in the workplace. This may translate to programs for employees’ training and development and health, safety and welfare.

d) Ensure that there is a group-wide policy and system governing related party transactions (RPTs) and other unusual or infrequently occurring transactions, particularly those which pass certain thresholds of materiality. The policy shall include, among others, the appropriate review and approval of material or significant RPTs, which guarantee fairness and transparency of the transactions and encompass all entities within the group, taking into account their size, structure, risk profile and complexity of operations.

e) Approve the selection of and assess the performance of the Management led by the President and Chief Executive Officer (CEO), and control functions led by their respective heads including the Chief Risk Officer (CRO), Chief Compliance Officer, and Chief Audit Executive (CAE).

f) Establish an effective performance management framework that will ensure that the Management, including the CEO, and personnel’s performance are at par with the standards set by the Board where due consideration on competency, integrity, technical expertise and experience in the Corporation’s business, either current or planned, is applied, among other considerations.

g) Ensure the presence and adequacy of internal control mechanisms and systems for good governance. The minimum internal control mechanisms for the Board's oversight responsibility include, but shall not be limited to:

3 Details and more information on the Corporation’s various CG policies are posted on the Globe website under ‘Company



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i. Ensuring the presence of organizational and procedural controls supported by an effective management information system and risk management reporting system;

ii. Reviewing conflict-of-interest situations and providing appropriate remedial measures for the same as applicable to Management, Board members, and shareholders;

iii. Appointing a CEO with the appropriate ability, integrity, and experience to fill the role; and defining the duties and responsibilities of the CEO;

iv. Ensuring the review of the Corporation's personnel and human resources policies, compensation plan and the management succession;

v. Institutionalizing the internal audit function; and

vi. Ensuring the presence of, and regularly reviewing, the performance and quality of independent audit.

h) Encourage environmental concern, sustainability and social responsibility among shareholders, stakeholders and employees. The corporate governance proactive culture begins at the Board level.

i) Motivate the Corporation to participate in domestic or regional corporate governance forums, conferences, fellowships, initiatives, such as, CG Scorecards, as an instrument to raise corporate governance policies and practices and ensure that these remain relevant and updated;

j) To the extent set forth above, orient all its activities towards three general guidelines:

i. All actions taken by the Board are subject to the principle of legal permissibility. They must therefore not infringe on the appropriate provisions of Philippine law and the Corporation's constitutive documents, including the Board charter.

ii. All actions taken by the Board are subject to the principle of economic usefulness. They should accordingly contribute to increasing the value of the Corporation in a sustainably progressive manner that benefits the Corporation, its stakeholders and the communities it operates in.

iii. The Board should, when carrying out its duties, be aware of its duty as the governing body of a public utility rendering public service.

2.2 Specific Duties of the Board of Directors

The Board shall exert its best effort to ensure a high standard of best practice for the Corporation, its shareholders and other stakeholders. The Board shall conduct itself with honesty and integrity in the performance of its duties in accordance with the Corporation’s By-Laws and the following duties and functions:

a) Implement a process for the selection of directors who can add value and contribute independent judgment to the formulation of sound corporate strategies and policies;

b) Adopt an effective succession planning program for directors, which includes a policy on the retirement age, to ensure growth and a continued increase in the shareholders’ value;

c) Align the remuneration of Board members with the long-term interests of the Corporation. As such, it shall formulate and adopt a policy specifying the relationship

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between remuneration and performance of directors. No director shall participate in discussions or deliberations involving his own remuneration;

d) Properly discharge Board functions by meeting at such times or frequency as may be needed. Independent views during Board meetings should be given due consideration and all such meetings should be minuted;

e) Oversee that an appropriate internal control system is in place, including setting up a mechanism for monitoring and managing potential conflicts of interest of Management, board members and shareholders. It shall approve the Internal Audit charter in concurrence with the Audit Committee;

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

g) Adopt a succession planning and professional development program for employees and Management; and formulate and adopt a remuneration policy specifying the relationship between remuneration and performance of employees and Management that consider, among others, the level of remuneration as commensurate to the responsibilities of the role;

h) Adopt a transparent framework and process that allow stakeholder engagement such that all stakeholders are able to communicate with the Corporation and obtain redress for violation of stakeholder/shareholder rights, which may include, among others, social media channels, the Investor Relations Office and Corporate Communications group;

i) Review and guide corporate strategy, major plans of action, risk management policies and procedures, annual budgets and business plans, set performance objectives, monitor implementation and corporate performance, and oversee major capital expenditures, acquisitions and divestitures;

j) Provide sound written policies and strategic guidelines on key capital expenditures, and periodically evaluate and monitor implementation of such strategies;

k) Ensure that the Corporation complies with all relevant laws, regulations and as far as possible best business and corporate governance practices;

l) Identify the Corporation's stakeholders in the community in which it operates or are directly affected by its operations, and formulate a clear policy of accurate, timely and effective communication with them;

m) Adopt a system of checks and balances, which may be applied in the first instance to the Board. Such systems shall be regularly reviewed and updated to ensure effectiveness and the integrity of the decision-making and reporting process at all times. There should be a continuing review of the Corporation’s internal control system in order to maintain its adequacy and effectiveness;

n) Identify and monitor, and endeavor to provide appropriate technology and systems for the identification and monitoring of key risks and key performance areas with due diligence to enable the Corporation to anticipate and prepare for possible threats to its operational and financial viability;

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o) Formulate and implement policies and procedures, including appropriate review and approval, that would ensure the fairness, integrity and transparency of material or significant RPTs between and among the Corporation and its parent company, joint ventures, subsidiaries, associates, affiliates, major shareholders, officers and directors, including their spouses, children and dependent siblings and parents, and that of interlocking director relationships by members of the Board. The policy may include, among others, materiality thresholds, whistle-blowing mechanism, remedies for abuse of such transactions and the creation of a committee dedicated to the review of all RPTs. Such policy shall also ensure that RPTs are at arm's length, the terms are fair, and they will inure to the best interest of the Corporation and its subsidiaries or affiliates and all shareholders;

p) Establish and maintain an alternative dispute resolution system in the Corporation that can amicably settle conflicts or differences between the Corporation and its shareholders, and the Corporation and third parties, which may involve the submission of such conflict to mediation pursuant to the Alternative Dispute Resolution Act of the Philippines and to arbitration in accordance with the Philippine Arbitration Law (Article VI, Section 13.3 below);

q) Be primarily responsible to the shareholders for financial reporting and control, and should:

i. Provide to all stakeholders relevant and timely information about the Corporation, including but not limited to a semestral report and an annual report of the Corporation's performance position and prospects through publicly available reports submitted to the Securities and Exchange Commission;

ii. Present a balance and understandable assessment of the Corporation's position and prospects. This extends to interim and other price-sensitive public reports and reports to regulators as well as to information required to be presented by statutory requirements;

iii. Explain their responsibility for preparing the accounts, for which there should be a statement by the auditors about their reporting responsibilities;

iv. Report that the business is going concern, with supporting assumptions or qualifications, if necessary;

v. Maintain a sound system of internal control to safeguard stakeholders' investment and the Corporation's assets;

vi. Based on the approved audit plans, scope and frequency of audits, ensure that internal audit examinations cover, at least the evaluation of adequacy and effectiveness of controls encompassing the organization's governance, operations, information systems, to include reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws, rules, regulations, and contracts; and

vii. Require the CAE to render to the Audit Committee an annual report on the internal audit department's activity, purpose, authority, responsibility and performance relative to the audit plans and strategies approved by the Audit Committee. Such annual report should include significant risk exposures and control issues, corporate governance issues, and other matters needed or requested by the Board;

r) Recommend to the shareholders the appointment of Independent Auditors, in accordance with the recommendation of the Audit Committee; and

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s) Create a procedure for directors, either individually or as a group, in the furtherance of their duties, to take independent professional advice, if necessary, at the Corporation's expense, which expense shall be reasonable;

t) Create a Board charter that formalizes and clearly states its roles, responsibilities and accountabilities in carrying out its fiduciary duties.

2.3 Specific Responsibilities of each Director

In addition to the duties and responsibilities of a director set forth in the Corporation’s By-Laws and existing relevant statutes, a director shall:

a) Conduct fair business transactions with the Corporation and ensure that personal interest does not bias Board decisions. A director shall not use his position to make profit or to acquire benefit or advantage for himself and/or his related interests. He should avoid situations that may compromise his impartiality. He should observe the conflict of interest policy stated in this Manual. He shall accomplish an annual conflict of interest disclosure and voluntarily disclose any conflict of interest that may arise within the year after the submission of the disclosure. If an actual or potential conflict of interest may arise on the part of a director, he should fully and immediately disclose it and should not participate in the decision-making process. A director who has a continuing material conflict of interest should seriously consider resigning from his position. A conflict of interest shall be considered material if the director’s personal or business interest is antagonistic to that of the Corporation, or he stands to acquire or gain financial advantage at the expense of the Corporation.

b) Devote time and attention necessary to properly discharge his duties and responsibilities. A director should attend and actively participate in Board meetings.

c) Act judiciously. Before deciding on any matter brought before the Board of Directors, every director should evaluate the issues, risks, ask questions and seek clarification as appropriate.

d) Exercise independent judgment. A director should view each problem/situation objectively and support plans and ideas which he believes are beneficial to the Corporation.

e) Have a working knowledge of the statutory and regulatory requirements affecting the Corporation. This would include a firm knowledge of the contents of the Articles of Incorporation and By-Laws of the Corporation and the amendments thereof, the requirements of the PSE and SEC for the conduct of the Corporation's business, and where applicable, the requirements of other regulatory agencies.

f) Observe confidentiality. A director shall observe the confidentiality of nonpublic information acquired by reason of his position as a director. He should not disclose any information to any other person without the authority of the Board.

g) Ensure the continuing soundness, effectiveness and adequacy of the Corporation's control environment. Each director is responsible for assuring that actions taken by the Board maintain the adequacy of the control environment within the Corporation.

h) Prior to assuming office, attend an orientation seminar or training program on corporate governance. Existing directors shall attend corporate governance training programs, seminars or sessions for continuing professional

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development. These seminars, sessions and/or training programs shall be conducted by a training provider accredited by the SEC.4 If necessary, funds shall be allocated by the Corporation for this purpose.

2.4 The Chairman of the Board

The Board shall be headed by a competent and qualified Chairman. The Chairman of the Board shall, when present, preside at all meetings of the Board and shall render advice and counsel to the President and CEO. He shall –

a) Make certain that the meeting agenda focuses on strategic matters, including the overall risk appetite of the corporation, considering the developments in the business and regulatory environments, key governance concerns, and contentious issues that will significantly affect operations;

b) Guarantee that the Board receives accurate, timely, relevant, insightful, concise, and clear information to enable it to make sound decisions;

c) Facilitate discussions on key issues by fostering an environment conducive for constructive debate and leveraging on the skills and expertise of individual directors;

d) Ensure that the Board sufficiently challenges and inquires on reports submitted and representations made by Management;

e) Assure the availability of proper orientation for first-time directors and continuing training opportunities for all directors; and

f) Make sure that performance of the Board is evaluated at least once a year and discussed and/or followed up on.

The Chairman shall have such other responsibilities as the Board of Directors may impose upon him.

2.5 Co-Vice-Chairmen

In the absence of the Chairman of the Board, one of the Co-Vice-Chairmen shall preside at meetings of the Board.

2.6 Board Nomination and Election Policy5

In accordance with the By-Laws of the Corporation, any shareholder, including minority shareholders, may submit to the Nomination and Governance Committee the names of the nominees to the Board of Directors including the independent directors. The Corporate Secretary presents all nominations to the Nomination and Governance Committee. Copies of the profiles of the nominees to the Board of Directors will be provided in the Corporation’s

4 In accordance with SEC Memorandum Circular No. 19, Series of 2016 or the 2016 Code of Corporate Governance (PLC

Code of CG), orientation programs and trainings for first-time directors shall be for at least eight (8) hours, while the annual corporate governance continuing training program/s shall be for at least four (4) hours. Such training programs shall be conducted by SEC-accredited training providers or such other training providers as approved by the SEC.

5 Details and more information on the Corporation’s Board Nomination and Election Policy is posted on the Globe website

under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.


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Information Statement and in the Globe website for examination by the shareholders as well as other reports required to be submitted to the Commission.

2.6.1 The Nominations shall be conducted as follows:

a) Nomination of director/s, including independent directors, shall be conducted by the Committee prior to a shareholders meeting. All recommendations shall be signed by the nominating shareholders together with the acceptance and conformity by the would-be nominees.

b) The Committee shall pre-screen the qualification and prepare a final list of all candidates and put in place screening policies and parameters to enable it to effectively review the qualifications of the nominees including independent director/s.

c) After the nomination, the Committee shall prepare a Final List of Candidates which shall contain all the information about all the nominees for directors including independent directors, as required under Part IV (A) of Annex “C” of SRC Rule 12, which list, shall be made available to the Commission and to all shareholders through the filing and distribution of the Information Statement, in accordance with SRC Rule 20, or in such other reports the Corporation is required to submit to the Commission. The name of the person or group of persons who recommended the nomination of the directors, including independent directors, shall be identified in such report including any relationship with the nominee.

d) Only nominees whose names appear on the Final List of Candidates shall be eligible for election as Director/s. No other nominations shall be entertained after the Final List of Candidates shall have been prepared. No further nominations shall be entertained or allowed on the floor during the actual annual stockholders’/memberships’ meeting.

e) The election of Independent Director/s shall be as follows:

i. The conduct of the election of independent director/s shall be made in accordance with the standard election procedures of the Corporation or its By-Laws.

ii. It shall be the responsibility of the Chairman of the Meeting to inform all shareholders in attendance of the mandatory requirement of electing independent director/s. He shall ensure that independent director/s are elected during the stockholders’ meeting.

iii. Specific slot/s for independent directors shall not be filled-up by unqualified nominees.

iv. In case of failure of election for independent director/s, the Chairman of the Meeting shall call a separate election during the same meeting to fill up the vacancy.

2.6.2 The Election and Voting Procedures shall be conducted as follows at the stockholders’ meeting where a shareholder may opt for manual voting or electronic voting:

a) For manual voting, each shareholder will be given a ballot upon registration to enable the shareholder to vote in writing per item in the agenda, which includes, among others, the election of directors including independent directors. The

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shareholder may drop his ballot in ballot boxes placed at the registration area and inside the Ballroom;

b) For electronic voting, there will be computer stations placed outside the Ballroom where shareholders may cast their votes;

c) Both ballot and website platform will state the proposed resolutions for consideration by the shareholders and each proposed resolution will be shown on the screen as the same will be take up at the meeting;

d) Election of directors will be by plurality of votes, and every shareholder will be entitled to cumulate his votes. Each outstanding share of stock entitles the registered shareholder to one vote;

e) As the shareholders take up an item in the agenda, including the election of all directors, the Corporate Secretary will report on the votes received and tabulated by his office at that point in time; and

f) An independent external auditor will validate the voting results and the final tally of the votes will be reflected in the minutes of the meeting. The minutes of the meeting will be made publicly available within five (5) business days from the date of the meeting through the Globe website.

2.7 Replacement of Directors in case of Vacancy

In case of resignation, disqualification or cessation of directorship and only after notice has been made with the SEC within five (5) days from such resignation, disqualification or cessation, the vacancy shall be filled by the vote of at least a majority of the remaining directors, if still constituting a quorum, upon the nomination and endorsement of the Governance and Nomination Committee. Otherwise, said vacancy shall be filled by the shareholders in a regular or special meeting called for that purpose. A director so elected to fill a vacancy shall serve only for the unexpired term of his predecessor in office.

2.8 Qualifications of a Director

A director of the Corporation shall have the following qualifications:

a) Ownership of at least one (1) share of the capital stock of the Corporation;

b) A college degree or its equivalent or adequate understanding of the telecommunication industry or sufficient experience and competence in managing a business to substitute for such formal education;

c) Relevant qualification, such as previous business experience, membership in good standing in the relevant industry, and membership in business and professional organizations;

d) Possess integrity, probity and shall be diligent and assiduous in the performance of his functions.

2.9 Disqualifications of a Director

The following persons are disqualified from being a director of the Corporation:

a) Any person who has been finally convicted by a competent judicial or administrative body of the following: (i) any crime involving the purchase or sale of securities as defined in the Securities and Regulation Code; (ii) any crime arising out of the person's conduct as an underwriter, broker, dealer, investment corporation,

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investment adviser, principal distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, floor broker; and (iii) any crime arising out of his relationship with a bank, quasi-bank, trust company, investment house or as an affiliated person of any of them;

b) Any person who, by reason of any misconduct, after hearing or trial, is permanently or temporarily enjoined by order, judgment or decree of the SEC, Bangko Sentral ng Pilipinas (BSP), or any court or other administrative body of competent jurisdiction from; (i) acting as an underwriter, broker, dealer, investment adviser, principal distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, or a floor broker; (ii) acting as a director or officer of a bank, quasi-bank, trust corporation, investment house, investment corporation or an affiliated person of any of them; (iii) engaging in or continuing any conduct or practice in connection with any such activity or willfully violating laws governing securities, and banking activities. Such disqualification shall also apply when such person is currently subject to an effective order of the SEC BSP or any court or other administrative body refusing, revoking or suspending any registration, license or permit issued under the Corporation Code, Securities Regulation Code, or any other law administered by the, or under any rule or regulation promulgated by the SEC or BSP, or otherwise restrained to engage in any activity involving securities and banking. Such person is also disqualified when he is currently subject to an effective order of a self-regulatory organization suspending or expelling him from membership or participation or from association with a member or participant of the organization;

c) Any person finally convicted judicially of an offense involving moral turpitude, fraud, embezzlement, theft, estafa, counterfeiting, misappropriation, forgery, bribery, false oath, perjury or other fraudulent acts or transgressions;

d) Any person finally found by the SEC, BSP or a court or other administrative body to have willfully violated, or willfully aided, abetted, counseled, induced or procured the violation of, any provision of the Securities Regulation Code, the Corporation Code of the Philippines, or any other law administered by the SEC, or any rule, regulation or order of the SEC or BSP or who has filed a materially false or misleading application, report or registration statement required by the SEC , or any rule, regulation or order of the SEC;

e) Any person judicially declared to be insolvent;

f) Any person finally found guilty by final judgment or order by a foreign court or equivalent financial regulatory authority of acts, violations or misconduct similar to any of the acts, violations or misconduct enumerated previously;

g) Any person convicted by final and executory judgment of an offense punishable by imprisonment for a period exceeding six (6) years, or a violation of the Corporation Code, committed within five (5) years prior to the date of his election or appointment;

h) Any person convicted by final and executory judgment by an appropriate court or body of a violation of the Public Service Act (CA 146) or under any law administered by the National Telecommunications Commission; and

i) No person shall qualify or be eligible for nomination or election to the Board of Directors if he is engaged in any business which competes with or is antagonistic to that of the Corporation. Without limiting the generality of the foregoing, a person shall be deemed to be so engaged:

i. If he is an officer, manager or controlling person of, or the owner (either of record or beneficially) of 10% or more of any outstanding class of shares of, any

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corporation (other than one in which the Corporation owns at least 30% of the capital stock) engaged in a business in the Philippines which the Board, by at least three-fourths (3/4) vote, determines to be competitive or antagonistic to that of the Corporation, or

ii. If he is an officer, manager or controlling person of, or the owner (either of record or beneficially of 10% or more of any outstanding class of shares of, any other corporation or entity in the Philippines engaged in any line of business of the Corporation, when in the judgment of the Board, by at least three-fourths (3/4) vote, the laws against combinations in restraint of trade shall be violated by such persons membership in the Board of Directors; or

iii. In determining whether or not a person is a controlling person, beneficial owner, or the nominee of another, the Board may take into account such factors as business and family relations.

2.10 Temporary Disqualifications of a Director

The following are grounds for temporary disqualification of incumbent directors:

a) Refusal to fully disclose the extent of his business interest as required under the Securities Regulation Code and its Implementing Rules and Regulations. This disqualification shall be in effect as long as his refusal persists.

b) Absence or non-participation for whatever reason(s) for more than Fifty Percent (50%) of all meetings, both regular and special, of the Board of Directors during his incumbency, or any twelve (12) month period during the said incumbency. This disqualification applies for purposes of the succeeding election.

c) Dismissal/termination for cause from directorship in another listed corporation, public company, registered issuer of securities and holder of a secondary license from the SEC. This disqualification shall be in effect until he has cleared himself of any involvement in the alleged irregularity.

d) Being under preventive suspension by the Corporation for any reason.

e) If the beneficial equity ownership of an independent director in the corporation or its subsidiaries and affiliates exceeds two percent (2%) of its subscribed capital stock. The disqualification from being elected as an independent director is lifted if the limit is later complied with.

f) If any of the judgments or orders cited in the grounds for permanent disqualification has not yet become final.

Temporary disqualification shall be at the discretion of the Board and shall require a resolution of a majority of the Board.

A temporarily disqualified director shall, within sixty (60) business days from such disqualification take the appropriate action to remedy or correct the disqualification. If he fails or refuses to do so for unjustified reasons, the disqualification shall become permanent. The Board shall consider a director’s illness, death in the immediate family, or serious accident in determining whether absence from meetings shall or shall not be a ground for temporary disqualification under this Section.

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2.11 Policy on Succession Planning6

The Board shall ensure an effective succession planning for its directors and Management to safeguard the transfer of Corporation leadership. Retirement age for directors shall be eighty (80) years old. The Board may, however, amend this policy, as it may deem appropriate, taking into consideration local and global trends and practices, stature and strong qualifications of a director.

The retirement age for Management shall follow the compulsory retirement age prescribed under the Labor Code of the Philippines.

2.12 Policy on RPTs7

Related Parties shall mean the Corporation and its controlling shareholders, joint ventures, subsidiaries, associates, affiliates, officers and directors, including their spouses, children and dependent siblings and parents, and that of interlocking director relationships by members of the Board.

Parties are considered to be related to the Corporation if it has the ability, directly or indirectly, to control the Corporation or exercise significant influence over the Corporation in making financial and operating decisions, or vice versa, or where the Corporation and the party are subject to common control or common significant influence.

The Globe policy on RPTs institutionalizes the Corporation’s assurance of protection for its shareholders, including minority shareholders, and all stakeholders from abusive RPTs as well as reinforces the CG principles of complete disclosure and transparency in relation to such transactions. Among other key provisions, the Globe policy on RPTs provides for:

the definition of RPTs,

the coverage and materiality threshold,

guidelines to ensure arm’s length terms,

identification and prevention or management of potential or actual conflicts of interest,

the role of and review by the Audit and RPT Committee in relation to RPTs,

whistle-blowing mechanisms,

restitution of losses and other remedies for abusive RPTs, and

proper disclosure of RPTs, in addition to the provisions under Article III, Section 8.5 of this Manual.

6 Details and more information on the Corporation’s Policy on Succession Planning is posted on the Globe website under


7 Details and more information on the Corporation’s Policy on RPTs is posted on the Globe website under ‘Company




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3. Establishing Board Committees

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.

3.1 Establishment of Board Committees The Board shall establish board committees that focus on specific board functions to aid in the optimal performance of its roles and responsibilities, in accordance with the By-Laws of the Corporation and to aid in good governance. 3.2 Audit and RPT Committee

The Audit and Related Party Transactions (RPT) Committee shall provide assistance to the Board in fulfilling its purpose to maximize the Corporation’s long-term success, creating sustainable value for its shareholders and stakeholders by carrying out the Committee’s oversight responsibilities over financial reporting and disclosures, internal controls, internal audit function, external/independent audit, operational risks specifically on financial statement and reporting, legal or regulatory compliance, corporate governance, risk management and fraud risks.

i) The Audit and RPT Committee shall be composed of such number of members as the Board may designate but in no case less than three (3) members, majority of whom shall be independent directors. An independent director shall chair the Audit and RPT Committee who shall not simultaneously chair the Board or any other committee. Members of the Audit and RPT Committee shall be independent of Management and the controlling shareholders, free from any business or other relationship, with no direct or indirect control over the Corporation, its directors, Management, shareholders and related interests, including such other person(s) or juridical entity that may pose a potential conflict of interest(s), of the Corporation, its subsidiaries, affiliates and special purpose entities, which, in the opinion of the Board of Directors, would interfere significantly with the exercise of objective and independent judgment in carrying out the functions of the Audit and RPT Committee.

Each member of the Audit and RPT Committee shall have an adequate working knowledge, experience and/or expertise that is relevant to the Corporation’s operations and financial management systems and controls; and in particular, an understanding of accounting and auditing principles, and of the Corporation's regulatory environment, to enable individually and collectively, effective discharge of its roles and responsibilities.

ii) To support the Board in the optimal performance of its roles and responsibilities, the Audit and RPT Committee is expected, through the provision of checks and balances, to oversee the Corporation’s financial reporting and disclosures, audit, risk management, material RPTs, and other key corporate governance matters, acting on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the Corporation and all shareholders. Specifically in its Audit function, the Committee shall be responsible for the following, among others:

a) Review the financial statements and all related disclosures and reports certified by the Chief Finance Officer and released to the public and/or submitted to the SEC for compliance with both the internal financial management handbook and pertinent accounting standards, including legal and regulatory requirements;

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b) Review the quarterly, half-year and annual financial statements before submission to the Board, focusing on changes in accounting policies and practices, major judgmental areas, significant adjustments resulting from the audit, going concern assumptions, compliance with accounting standards, tax, legal and regulatory requirements;

c) Ensure that Management formulates accounting/reporting processes and practices in accordance with the Philippine Financial Reporting Standards (PFRS), including rules and procedures in compliance with the financial reporting requirements of various regulatory agencies;

d) Ensure the existence of sound and comprehensive internal control procedures and processes encompassing governance of the Corporation’s operations, maintained/updated regularly, document and approved, in order to safeguard the Corporation’s resources and ensure full and optimum utilization, prevent occurrence of fraud and wrongdoing, protect the accuracy and reliability of Globe’s financial and management reports, protect the integrity of information systems and logical assets and ensure compliance with applicable laws and regulations. This function shall include receiving from Management periodic information on risk exposures and risk management activities;

Management, however, remains primarily responsible for the development and implementation of the risk management strategies, policies and systems intended to address the identified risks.

e) Oversee the implementation of an independent internal audit function as stated in the Internal Audit charter approved by the Board. Approve the terms and conditions for outsourcing internal audit services. Recommend the appointment of a qualified CAE who will set up and oversee the Internal Audit Department; and be responsible for the internal audit activities, including those outsourced to a third party service provider. Establish and identify the reporting line of the CAE, so that the reporting levels allow the internal audit activity to fulfil properly its duties and responsibilities;

f) Provide oversight of the Corporation's internal and independent auditors. Review and approve the Annual Internal Audit Work Plan (“Plan”), including scope and frequency before the conduct of independent audit, ensuring that audit resources are allocated reasonably to the areas of highest risk, encompassing the Corporation’s operations, information systems, financial reporting, management information, safeguarding of physical and logical assets and compliance with laws and regulations; and making certain that the Plan is aligned with Corporation’s objectives;

g) Review and monitor Management’s responsiveness to the Internal Auditor’s findings and recommendations. Conduct separate meetings with the CAE to discuss any matter arising from the internal auditors’ work that the Audit and RPT Committee or the auditors may deem necessary to be discussed privately;

h) Ensure there are appropriate policies and processes that strengthen the external/independent auditor’s independence. Recommend the appointment, retention or discharge of the external/independent auditors accredited by the SEC, and remuneration. The external/independent auditor appointment, re-appointment, removal and fees shall be approved by the Board and ratified by the shareholders;

i) Review and pre-approve the external/independent auditors’ plans to understand the basis for their risk assessment and financial statement materiality, including

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the scope and frequency of the audit. Discuss with the external/independent auditors, before the audit commences, the nature, scope and related fees of the audit, and ensure proper coordination when more than one professional service firm is needed;

j) Ensure that the external/independent auditor has unrestricted access to all records, properties and personnel to enable performance of the required audit;

k) Review and approve proportion of audit versus non-audit work both in relation to their significance to the external/independent auditors’ and in relation to the Corporation’s year-end financial statements, and total expenditure on consultancy, to ensure that non-audit work will not be in conflict with the audit functions of the external/independent auditor. The non-audit work of external/independent auditor allowed by the Audit and RPT Committee shall be disclosed in the Annual Report and Annual Corporate Governance Report (ACGR);

l) Review the disposition of the recommendations in the external/independent auditor’s management letter. Conduct a separate meeting in executive session, with the external/independent auditors to discuss any matters that the Audit and RPT Committee or external/independent auditors believe should be discussed privately, including the results of the audit, year-end financial statements, and the quality of the management, financial and accounting controls;

m) In order to coordinate, monitor and facilitate compliance with laws, rules and regulations:

m.1. Review the process for monitoring and reporting compliance with applicable laws and regulations pursuant to which Globe conducts its operations and business activities;

m.2. Review internal control framework implemented by Management for fraud prevention and detection, including review of significant RPTs;

m.3. Receive and review reports of internal auditor, external/independent auditors and regulatory agencies, where applicable, and ensure that Management is taking appropriate corrective actions in a timely manner in addressing control and compliance functions with regulatory agencies.

n) Have separate meetings with the CAE, Chief Compliance Officer, CRO and external/independent auditors in executive session (without any executive director of the Board and/or any member of Management present) at least twice a year;

The external/independent auditors and/or CAE may request a meeting with the Audit and RPT Committee whenever deemed necessary.

Meet with the Board at least every quarter without the presence of the President and CEO or other management team members, and periodically meets with the CAE.

o) Ensure the attendance of the external/independent auditors in the Annual General Stockholders’ Meeting to address queries within the audit scope;

p) Submit a report every quarter to the Chairman of the Board and present the report to the Board of Directors during its meeting for the quarter. Submit and

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present an Annual Audit Committee report to the Board of Directors during its first meeting following the immediate fiscal year; and,

q) Conduct an assessment of its performance at least annually, and undergo annual continuing training as well as oversee the implementation of the Internal Audit charter.

iii) In relation to the Corporation’s RPTs, the Committee shall, among others:

a) Evaluate, on an ongoing basis, existing relations between and among businesses and counterparties to ensure that all related parties are continuously identified, RPTs are monitored, and subsequent changes in relationships with counterparties (from non-related to related and vice versa) are captured. Related parties, RPTs and changes in relationships should be reflected in the relevant reports to the Board and if applicable, to regulators/supervisors;

b) Subject to an agreed materiality threshold, evaluate all material RPTs to ensure that these are not undertaken on more favorable economic terms (e.g., price, commissions, interest rates, fees, tenor, collateral requirement) to such related parties than similar transactions with non-related parties under similar circumstances and that no corporate or business resources of the Corporation are misappropriated or misapplied, and to determine any potential reputational risk issues that may arise as a result of or in connection with the transactions. In evaluating RPTs, the Committee takes into account, among others, the following:

b.1. The related party’s relationship to the Corporation and interest in the transaction;

b.2. The material facts of the proposed RPT, including the proposed aggregate value of such transaction;

b.3. The benefits to the Corporation of the proposed RPT;

b.4. The availability of other sources of comparable products or services; and

b.5. An assessment of whether the proposed RPT is on terms and conditions that are comparable to the terms generally available to an unrelated party under similar circumstances.

c) Ensure that appropriate disclosure is made, and/or information is provided to regulating and supervising authorities relating to the Corporation’s RPT exposures, and policies on conflicts of interest or potential conflicts of interest. The disclosure should include information on the approach to managing material conflicts of interest that are inconsistent with such policies, and conflicts that could arise as a result of the Corporation’s affiliation or transactions with other related parties;

d) Report to the Board of Directors on a regular basis, the status and aggregate exposures to each related party, as well as the total amount of exposures to all related parties, subject to an agreed materiality threshold;

e) Ensure that transactions with related parties that exceed the agreed materiality threshold, including write-off of exposures are subject to a periodic independent review or audit process; and,

f) Oversee the implementation of the system for identifying, monitoring, measuring, controlling, and reporting RPTs, including a periodic review of RPT policies and procedures.

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The Audit and RPT Committee shall have its own charter for implementation and regular review.

3.3 Nomination and Governance Committee

The Nomination and Governance Committee is tasked to assist the Board in the performance of its corporate governance and nomination responsibilities. It shall be composed of at least three (3) members, all of whom shall be independent directors including the Chairman.

In its corporate governance function, the Committee is tasked with ensuring compliance with and proper observance of corporate governance principles and practices. Through the committee charter, it shall also assess the effectiveness of the Board’s processes and procedures in the nomination, election, or replacement of a director and is in line with the nomination policy in this Manual. It has the following duties and functions, among others:

a) Oversees the implementation of the corporate governance framework and periodically reviews the said framework to ensure that it remains appropriate in light of material changes to the corporation’s size, complexity and business strategy, as well as its business and regulatory environments;

b) Oversees the periodic performance evaluation of the Board and its committees as well as executive management, and conducts an annual self-evaluation of its performance;

c) Ensures that the results of the Board evaluation are shared, discussed, and that concrete action plans are developed and implemented to address the identified areas for improvement;

d) Recommends continuing education/training programs for directors, assignment of tasks/projects to board committees, succession plan for the board members and senior officers, and remuneration packages for corporate and individual performance;

e) Adopts corporate governance policies and ensures that these are reviewed and updated regularly, and consistently implemented in form and substance;

f) Proposes and plans relevant trainings for the members of the Board;

g) Determines the nomination and election process for the Corporation’s directors and has the special duty of defining the general profile of board members that the Corporation may need and ensuring appropriate knowledge, competencies and expertise that complement the existing skills of the Board; and

h) In its Nomination function, the Committee shall:

i. install and maintain a process to ensure that all directors to be nominated for election at the next annual stockholders’ meeting (ASM) have the qualifications and none of the disqualifications stated above;

ii. undertake the process of identifying the quality of directors aligned with Globe’s vision, mission, core values and strategic directions;

iii. encourage the selection of a mix of competent directors nominated by shareholders, including minority shareholders, each of whom can add value and create independent judgment as to the formulation of sound corporate strategies and policies.

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i) Performs such other functions as may be delegated to it by the Board and in accordance with its committee charter.

3.4 Supporting Committees

The Board shall also have the following supporting committees:

3.4.1 Executive Committee

The Board may appoint an Executive Committee composed of such number of members as the Board may designate but in no case less than three (3) members, at least three (3) of whom shall be existing Board members and shall designate one of such members as Chairman of the Executive Committee.

The Executive Committee, in accordance with the authority granted by the Board, or during the absence of the Board, shall act by majority vote of all its members on such specific matters within the competence of the Board of Directors as may from time to time be delegated to the Executive Committee in accordance with the Corporation's By-Laws, except with respect to –

a) approval of any action for which shareholders' approval is also required;

b) the filling of vacancies on the Board or in the Executive Committee;

c) the amendment or repeal of By-Laws or the adoption of new By-Laws;

d) the amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable;

e) the distribution of cash dividends; and,

f) the exercise of powers delegated by the Board exclusively to other committees, if any.

A majority of all the members of the Executive Committee shall constitute a quorum. The Executive Committee shall fix its own rules of procedures. An act of the Executive Committee which is within the scope of its powers shall not require ratification or approval for its validity and effectivity, provided however that the Board of Directors may at any time enlarge or redefine the powers of the Executive Committee. All actions of the Executive Committee shall be reported to the Board of Directors at the meeting thereof following such action and shall be subject to revision or alteration by the Board of Directors, provided that no rights or acts of third parties shall be affected by any such revision or alteration.

3.4.2 Finance Committee

The Finance Committee shall have the principal oversight responsibility with respect to the Corporation's financial operation and its treasury-related activities. The Finance Committee shall define its own charter and fix its own rules of procedures. The Finance Committee shall be composed of such number of members as the Board may designate but in no case less than three (3) members, at least three (3) of whom shall be existing Board members.

The Finance Committee shall be responsible for reviewing and evaluating the financial affairs of the Corporation from time to time.

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The Finance Committee shall, prior to each ASM, conduct an annual financial review and operations review, which shall cover the financial activities of the Corporation during the immediately preceding year.

3.4.3 Compensation and Remuneration Committee

The Compensation and Remuneration Committee shall be composed of such number of members as the Board may designate but in no case less than three (3) members, majority of whom shall be independent directors including the Chairman. It shall have the following duties and responsibilities:

a) Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of officers and directors, and provide oversight over remuneration of Management and other key personnel ensuring that compensation is consistent with the Corporation's culture, strategy and control environment;

b) Designate the amount of remuneration, which shall be in a sufficient level to attract and retain directors and officers who are needed to run the Corporation successfully;

c) Establish a formal and transparent procedure for developing a policy on executive remuneration packages of individual directors, if any, and officers in line with the long-term interests of the Corporation;

d) Formulate and adopt a policy specifying the relationship between remuneration and performance including, but not limited to, specific financial and non-financial metrics to ensure performance and delivery of quality work among employees with significant influence on the overall risk profile of the Corporation;

e) Develop a form on Full Business Interest Disclosure as part of the pre-employment requirements for all incoming officers, which among others compel all officers to declare under the penalty of perjury all their existing business interests or shareholdings that may directly or indirectly conflict in their performance of duties once hired;

f) Disallow any director to decide his or her own remuneration;

g) Provide in the Corporation's annual reports, information and proxy statements a clear, concise and understandable disclosure of compensation of its executive officers for the previous fiscal year and the ensuing year;

h) Review the existing Human Resources Development or Personnel Handbook, to strengthen provisions on conflict of interest, salaries and benefits policies, promotion and career advancement directives and compliance of personnel concerned with all statutory requirements that must be periodically met in their respective posts; and

In the absence of such Personnel Handbook, cause the development of such, covering the same parameters of governance stated above

3.4.4 Proxy Validation

The Board of Directors shall appoint three (3) persons (who need not be shareholders) to act as Proxy Validation Committee which shall be empowered to pass on the validity of proxies. The Proxy Validation Committee shall be guided by existing laws, and rules and regulations of the Philippine Securities and Exchange Commission regarding proxies. The term of office of the Committee members shall be fixed by the Board of Directors. In the event of vacancy in the

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Committee membership, the Board of Directors may appoint another member to such vacancy.

3.4.5 Technical Support to Committees The Corporation shall, as appropriate, provide directors, including independent directors, with technical support staff to assist them in performing their duties for such committees. Directors may, when necessary, also request and receive support from executives, employees or outside professionals such as auditors, advisers and counsel to perform such duties. The Corporation shall cover the reasonable expenses of providing such support.

3.5 Governance Policy on Conflict of Interest8

The personal interest of directors and officers should never prevail over the interest of the Corporation. They are required to be loyal to the organization so much so that they may not directly or indirectly derive any personal profit or advantage by reason of their position in the Corporation. They must promote the common interest of all shareholders, including minority shareholders and other stakeholders, and the Corporation without regard to their own personal and selfish interests.

a) A conflict of interest exists when a director or an officer of the Corporation –

i. supplies or is attempting or applying to supply goods or services to the Corporation;

ii. supplies or is attempting to supply goods, services or information to an entity in competition with the Corporation;

iii. by virtue of his office, acquires or is attempting to acquire for himself a business opportunity which should belong to the Corporation;

iv. if offered or receives consideration for delivering the Corporation’s business to a third party;

v. is engaged or is attempting to engage in a business or activity which competes with or works contrary to the best interests of the Corporation; and

vi. is disqualified by virtue of Article II, Section 2.9 of this Manual.

b) If an actual or potential conflict of interest should arise on the part of directors, it should be fully disclosed and the concerned director should not participate in the decision making. A director who has a continuing conflict of interest of a material nature should either resign or, if the Board deems appropriate, be removed from the Board.

c) A contract of the Corporation with one or more of its directors or officers is voidable, at the option of the Corporation, unless all the following conditions are present:

i. The presence of such director in the Board meeting in which the contract was approved was not necessary to constitute a quorum for such meeting;

8 Details and more information on the Corporation’s Policy on Conflict of Interest is posted on the Globe website under



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ii. The vote of such director was not necessary for the approval of the contract;

iii. The contract is fair and reasonable under the circumstances; and

iv. In case of an officer, the contract has been previously approved by the Board of Directors.

In the case of a contract with a director, such contract may be ratified by the vote of shareholders representing two-thirds (2/3) of the outstanding capital stock in a meeting called for that purpose; provided that full disclosure of the adverse interest of the director involved is made at such meeting; and provided further that the contract is fair and reasonable under the circumstances.

d) Where a director, by virtue of his office, acquires for himself a business opportunity which should belong to the Corporation, thereby obtaining profits to the prejudice of the Corporation, the director must account to the latter for all such profits by refunding the same, unless his act has been ratified by a vote of the shareholders owning or representing at least two-thirds (2/3) of the outstanding capital stock. This provision shall be applicable notwithstanding the fact that the director risked his own funds in the venture.

The foregoing is without prejudice to the Corporation's existing Rules on Conflict of Interest for its directors, officers and employees.

3.6 Committee Charters

All established committees shall have committee charters stating in plain terms their respective purposes, memberships, structures, operations, reporting processes, resources and other relevant information. The charters shall provide the standards for evaluating the performance of the committees. It shall also be fully disclosed in the Corporation’s website.

4. Fostering Commitment

Principle 4: To show full commitment to the Corporation, 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.

4.1 Meetings and Attendance

Members of the Board should attend and actively participate in all regular and special meetings of the Board, Committees, and Shareholders in person or via teleconference or videoconference or by any other technological means allowed by the SEC. Such meetings shall be scheduled before the start of the financial year and the schedule shall be made available through the Globe website. Board materials/papers shall be provided to each director at least seven (7) days prior to the meetings set.

In Board and Committee meetings, the director shall review meeting materials and if called for, ask the necessary questions or seek clarifications and explanations. A director’s presence in meetings is still prioritized. The absence of a director in more than fifty percent (50%) of all regular and special meetings of the Board during his/her incumbency is a ground for disqualification in the succeeding election, unless the absence is due to illness, death in the immediate family, serious accident or other unforeseen or fortuitous events

The Board may, to promote transparency, require the presence of at least one (1) independent director in all of its meetings. However, the absence of an Independent director

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shall not affect the quorum requirements if he is duly notified of the meeting but notwithstanding such notice fails to attend.

4.2 Policy on Multiple Board Seats9

The Board may consider the adoption of guidelines on the number of directorships that its members can hold in publicly-listed companies. The optimum number should take into consideration the capacity of a director to diligently and efficiently perform his duties and responsibilities.

a) The non-executive directors of the Board may concurrently serve as directors to a maximum of five (5) publicly-listed companies to ensure that they have sufficient time to fully prepare for meetings, challenge Management’s proposals or views, and oversee the long-term strategy of the Corporation.

b) The President and CEO and other executive directors may be covered by a lower indicative limit for membership in other boards, but in no case shall any executive director serve as such on more than two (2) boards of publicly-listed companies outside the group. A similar limit may apply to independent or non-executive directors who, at the same time serve as full-time executives in other corporations. In any case the capacity of directors to diligently and efficiently perform their duties and responsibilities to the boards they serve should not be compromised.

c) Any limitation in the number of directorships outside of Globe shall not include directorships in the Corporation's subsidiaries, affiliates, parent corporation, and affiliates and subsidiaries of the parent corporation.

4.3 Proper Notification of Directorship

A director shall notify the Board where he/she is an incumbent director before accepting a directorship in another corporation. This is for the Corporation to be able to assess if his/her present responsibilities and commitment to the Corporation will be affected and if the director can still adequately provide what is expected of him/her in his/her function as director.

5. Reinforcing Board Independence

Principle 5: The board should endeavor to exercise an objective and independent judgment on

all corporate affairs.

5.1 Independent Directors

As stated in Article II, Section 1.1 of this Manual, the Board shall have at least three (3) independent directors. Independent directors shall be independent of the Corporation, its Management and major/substantial shareholders. They shall hold no interests or relationships with the Corporation that may hinder their independence from the Corporation or Management which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

9 Details and more information on the Corporation’s Policy on Multiple Board Seats is posted on the Globe website under



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5.2 Qualifications and Disqualifications of Independent Directors

The Board shall ensure that its independent directors possess the necessary qualifications and none of the disqualifications for an independent director to hold the position.

An Independent director shall, within ten (10) days from the time of his election or appointment and/or re-election/re-appointment as a director, submit to the Corporate Secretary a letter of confirmation stating that he holds no interests affiliated with the Corporation, Management or controlling shareholder. Moreover, an independent director refers to a person who, ideally:

a) Is not, or has not been a senior officer or employee of the covered Corporation unless there has been a change in the controlling ownership of the Corporation;

b) Is not, and has not been in the three years immediately preceding the election, a director of the covered Corporation; a director, officer, employee of the covered Corporation’s subsidiaries, associates, affiliates or related companies; or a director, officer, employee of the covered Corporation’s substantial shareholders and its related companies;

c) Has not been appointed in the covered Corporation, its subsidiaries, associates, affiliates or related companies as Chairman “Emeritus,” “Ex-Officio” Directors/Officers or Members of any Advisory Board, or otherwise appointed in a capacity to assist the Board in the performance of its duties and responsibilities within three years immediately preceding his election;

d) Is not an owner of more than two percent (2%) of the outstanding shares of the covered Corporation, its subsidiaries, associates, affiliates or related companies;

e) Is not a relative of a director, officer, or substantial shareholder of the covered Corporation or any of its related companies or of any of its substantial shareholders. For this purpose, relatives include spouse, parent, child, brother, sister and the spouse of such child, brother or sister;

f) Is not acting as a nominee or representative of any director of the covered Corporation or any of its related companies;

g) Is not a securities broker-dealer of listed companies and registered issuers of securities. “Securities broker-dealer” refers to any person holding any office of trust and responsibility in a broker-dealer firm, which includes, among others, a director, officer, principal shareholder, nominee of the firm to the Exchange, an associated person or salesman, and an authorized clerk of the broker or dealer;

h) Is not retained, either in his personal capacity or through a firm, as a professional adviser, auditor, consultant, agent or counsel of the covered Corporation, any of its related companies or substantial shareholder, or is otherwise independent of Management and free from any business or other relationship within the three years immediately preceding the date of his election;

i) Does not engage or has not engaged, whether by himself or with other persons or through a firm of which he is a partner, director or substantial shareholder, in any transaction with the covered Corporation or any of its related companies or substantial shareholders, other than such transactions that are conducted at arm’s length and could not materially interfere with or influence the exercise of his independent judgment;

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j) Is not affiliated with any non-profit organization that receives significant funding from the covered Corporation or any of its related companies or substantial shareholders; and

k) Is not employed as an executive officer of another Corporation where any of the covered Corporation’s executives serve as directors.

l) Related companies, as used in this Section, refer to (a) the covered entity’s holding/parent company; (b) its subsidiaries; and (c) subsidiaries of its holding/parent company.

5.3 Tenure of Independent Directors

The Board’s independent directors should serve for a maximum cumulative term of nine (9) years. After which, the independent director should be perpetually barred from re-election as such in the same Corporation, but may continue to qualify for nomination and election as a non-independent director or regular director.

In the instance that Globe wants to retain an independent director who has served for nine years, the Board should:

a) provide meritorious justification/s; and,

b) seek shareholders’ approval during the ASM.

5.4 The President and Chief Executive Officer (CEO)

The position of Chairman of the Board and President and CEO shall be held by separate individuals, who are not related to each other, and each shall have clearly defined responsibilities.

The separation and distinction between the roles of the Chairman and the President and CEO shall ensure an appropriate balance of power, increased accountability, and greater capacity of the Board for independent decision-making. The Corporation shall disclose the relationship between the Chairman and the President and CEO, if any, in its annual report to the SEC.

Minimum internal control mechanisms for Management’s operational responsibility shall center on the President and CEO, being ultimately accountable for the Corporation's organizational and procedural controls. In addition to the duties imposed on the President and CEO by the Board of Directors, the President and CEO shall:

a) determine the Corporation’s strategic direction and formulate and implement its strategic plan on the direction of the business;

b) communicate and implement the Corporation’s vision, mission, values and overall strategy and promotes any organization or stakeholder change in relation to the same;

c) oversee the operations of the Corporation and manage human and financial resources in accordance with the strategic plan;

d) has a good working knowledge of the corporation’s industry and market and keep up-to-date with its core business purpose;

e) direct, evaluate and guide the work of the key officers of the Corporation;

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f) manage the Corporation’s resources prudently and ensure a proper balance of the same;

g) provide the Board with timely information and interface between the Board and the employees;

h) build the corporate culture and motivates the employees of the corporation;

i) serve as the link between internal operations and external stakeholders;

j) have general supervision of the business, affairs, and property of the Corporation, and over its employees and officers;

k) see that all orders and resolutions of the Board of Directors are carried into effect;

l) submit to the Board as soon as possible after the close of each fiscal year, and to the shareholders at the annual meeting, a complete report of the operations of the Corporation for the preceding year, and the state of its affairs; and

m) report to the Board from time to time all matters within its knowledge which the interest of the Corporation may require to be brought to their notice.

The President and CEO shall have such other responsibilities as the Board of Directors may

impose upon him.

5.5 Lead Independent Director

The Board should designate a lead director among the independent directors if the Chairman of the Board is not independent, including if the positions of the Chairman of the Board and President and CEO are held by one person. The Board-designated lead independent director shall, among others, have the following functions:

a) Serve as intermediary between the Chairman of the Board and the other directors, as necessary;

b) Convene and chair periodic meetings held separately by the non-executive directors; and,

c) Contribute to the performance evaluation of the Chairman of the Board, as required.

5.6 Liability of Directors

A director with a material interest in any transaction affecting the Corporation should abstain from taking part in the deliberations for the same.

Directors who willfully and knowingly vote or consent to patently unlawful acts of the Corporation or who are guilty of gross negligence or bad faith in directing the affairs of the Corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors, shall be liable jointly and severally for all damages resulting therefrom suffered by the Corporation, its shareholders and other persons.

When a director attempts to acquire or acquires, in respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal In his own behalf, he shall be liable as a trustee for the Corporation and must account for the profits which otherwise would have accrued to the Corporation.

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5.7 Meetings of the Non-executive Directors

The non-executive directors (NEDs) shall have separate periodic meetings with the external auditor and heads of the internal audit, compliance and risk functions, without any executive directors present to ensure that proper checks and balances are in place within the corporation. The meetings should be chaired by the lead independent director.

6. Assessing Board Performance

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.

6.1 Board Annual Self-Assessment

The Board shall conduct an annual self-assessment exercise of its performance, including the performance of the Chairman, individual members and committees as well as Management that includes the President and CEO. Every three (3) years, the assessment shall be supported by an external facilitator.

A self-assessment questionnaire shall be given to each director to ensure the effectiveness of processes, performance and to identify areas of improvement with evaluation criteria focusing on structure, efficiency, and effectiveness of the Board, as well as participation and engagement of each member of the Board.

This exercise shall also provide a means to assess a director’s attendance at board and committee meetings, participation in boardroom discussions and manner of voting on material issues. The external facilitator can be any independent third party such as, but not limited to, a consulting firm, academic institution or professional organization.

6.2 Stakeholder Feedback

The Board shall have, at the minimum, criteria and process to determine the performance of the Board, the individual directors, committees and such system should allow for a feedback mechanism from the shareholders. Disclosure of the criteria, process and collective results of the assessment ensures transparency and allows shareholders and stakeholders to determine if the directors are performing their responsibilities to Globe. Corporations are given the discretion to determine the assessment criteria and process, which should be based on the mandates, functions, roles and responsibilities provided in the Board and committee charters. In establishing the criteria, attention is given to the values, principles and skills required for the Corporation. The Nomination and Governance Committee oversees the evaluation process.

7. Strengthening Board Ethics

Principle 7: Members of the Board are duty-bound to apply high ethical standards, taking into account the interests of all stakeholders.

7.1 Code of Business Conduct and Ethics

The Board shall develop, adopt and maintain a Code of Business Conduct and Ethics, to set the tone of good corporate governance, business ethics and social responsibility throughout the Corporation, which would provide standards for professional and ethical behavior, as well as articulate acceptable and unacceptable conduct and practices in internal and external

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dealings. The Code of Conduct shall contain policies and procedures on anti-corruption, whistleblowing, among others. The Code shall be properly disseminated to the Board, Management and employees. It shall also be disclosed and made available to the public through the Globe website. To ensure implementation and applicability of the same, the Board may designate the Nomination and Governance Committee and Human Resources Group to facilitate a continuing awareness campaign on the matter across the Corporation including direct stakeholders such as, but not limited to, vendors and suppliers.

7.2 Board-level Compliance

The Board shall ensure the proper and efficient implementation and monitoring of compliance with the Code of Business Conduct and Ethics and internal policies. The Chief Compliance Officer shall also support in ensuring the awareness and observance of all provisions in the Code among Board members.

The Board has the primary duty to make sure that the internal controls are in place to ensure the Corporation’s compliance with the Code of Business Conduct and Ethics and its internal policies and procedures. Hence, it needs to ensure the implementation of said internal controls to support, promote and guarantee compliance. This includes efficient communication channels, which aid and encourage employees, customers, suppliers and creditors to raise concerns on potential unethical/unlawful behavior without fear of retribution. A Corporation’s ethics policy can be made effective and inculcated in the corporate culture through a communication and awareness campaign, continuous training to reinforce the code, strict monitoring and implementation and setting in place proper avenues where issues may be raised and addressed without fear of retribution.

ARTICLE III

DISCLOSURE AND TRANSPARENCY

8. Enhancing Disclosure Policies and Procedures of the Corporation

Principle 8: Globe shall establish corporate disclosure policies and procedures that are practical and in accordance with best practices and regulatory expectations.

8.1 Policies and Procedures

The Board shall establish corporate disclosure policies and procedures to ensure a comprehensive, accurate, reliable and timely report to shareholders and other stakeholders that gives a fair and complete picture of a Corporation’s financial condition, results and business operations. As a listed Corporation in the PSE and Philippine Dealing and Exchange Corporation (PDEx), with reportorial requirements, rules and applicable laws as well as regulations of relevant regulatory agencies, Globe shall provide a fair, accurate, complete and meaningful assessment of the Corporation’s financial performance and prospects through the annual report, quarterly financial reports, and analyst presentations. The Corporation shall practice regular disclosure of its financial results, among others. Quarterly financial results are immediately disclosed to pertinent regulatory bodies after the approval by the Board. Quarterly and year-end financial statements and detailed management’s discussion and analysis are filed within forty-five (45) and one hundred five (105) calendar days, respectively, from the end of the financial period. The Corporation shall maintain that its financial reporting

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disclosures are in compliance with the PSE and SEC requisites. Audited financial statements shall be released within sixty (60) days from financial year-end, in compliance with international standards that is earlier than the local regulatory deadline. These reports shall be made available to the analysts after disclosure, as well as released through various media channels, and on the Globe website. In case of mergers, acquisitions and/or takeovers requiring shareholders’ approval, the Board of Directors of the offeree Corporation shall appoint an independent party to evaluate the fairness of the transaction price. Such shall be disclosed in the financial statement and relevant reports. The Corporation shall also ensure compliance with applicable laws, rules, and regulations prescribed by the SEC and the PSE. Any market-sensitive information such as dividend declaration shall also be disclosed to the SEC and PSE and then released through various modes of communication.

8.2 Dealings in Securities by Directors10

All directors and key officers are required, within three (3) trading days upon change in their ownership of securities, to submit the statement of changes of ownership in securities (SEC Form 23-B) in relation to their trades to the Compliance Officer for immediate submission and disclosure to the SEC and the PSE, among other regulatory bodies. Once submission and disclosure to pertinent regulatory agencies are completed, the information shall be reflected in the Corporation’s relevant reports and the Globe website.

8.3 Board-level Transparency

The Board shall fully disclose all relevant and material information on individual board members and key executives to evaluate their experience and qualifications, and assess any potential conflicts of interest that might affect their judgment.

The Corporation’s annual reports including, but not limited to, the Annual and Sustainability Report and the Annual Corporate Governance Report (ACGR), shall contain directors’ and key officers’ qualifications, share ownership in the Corporation, membership in other boards, other executive positions, continuous trainings attended and identification of independent directors.

8.4 Remuneration Matters11

The Corporation shall provide a clear disclosure of its policies and procedure for setting Board and executive remuneration, as well as the level and mix of the same in the ACGR. The Board’s remuneration is set at an optimum level to attract and retain high caliber directors who continuously and effectively deliver services. In accordance with the Globe’s By-Laws, the Board shall receive, pursuant to a resolution of the shareholders, fees and other

10 Details and more information on the Corporation’s Policy on Dealings in Securities by Directors and Key Officers is

posted on the Globe website under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.

11 Details and more information on the Corporation’s Policy on Remuneration of Board and officers is posted on the

Globe website under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.




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compensation for their services as directors and members of committees of the Board of Directors. The per diem remuneration received by each director shall be disclosed in the Globe’s annual reports and reflected in the Globe website. The executive director shall not receive per diem remuneration in addition to his remuneration as part of the Corporation’s Management in his role as the President and CEO. Meanwhile, the remuneration structure of Management shall also be disclosed in the Globe’s annual reports. The structure shall be kept such that the variable component increases as the executive moves up in the corporate ladder.

8.5 RPT Disclosure Policy12

The Corporation’s Related Party Transactions (RPTs) shall be disclosed, reviewed and approved in accordance with the principles of transparency, integrity and fairness, to ensure that they are at arm’s length, the terms are fair, and they will inure to the best interest of the Corporation, its subsidiaries or affiliates and all shareholders. Proper disclosure of the Corporation’s RPTs shall be in accordance with the disclosure rules and applicable filings of the SEC, the PSE and other pertinent regulatory agencies. The Audit and RPT Committee shall be instrumental in implementing the RPT policy. Shareholders, including minority shareholders, and other stakeholders shall be provided with proper guidelines and procedures for right of action and remedies that are readily accessible in order to redress corporate conduct in case of any abuse on such transactions (e.g. email account and hotline numbers) through a whistle-blowing mechanism. The Corporation’s RPTs shall also be disclosed in its financial statements and annual reports including, but not limited to, the ACGR. The disclosure includes, but is not limited to, the name of the related party, relationship with the corporation for each RPT, the nature and value for each RPT. Such disclosure shall also be made publicly available by the Corporation, for the benefit of all shareholders and other stakeholders, through the Globe website and such other media channels as applicable. 8.6 General Disclosure Policy13 Globe shall make a full, fair, accurate and timely disclosure to the public of every material fact or event that occurs, particularly on the acquisition or disposal of significant assets, which could adversely affect the viability or the interest of its shareholders and stakeholders. Moreover, the board of the offeree Corporation shall appoint an independent party to evaluate the fairness of the transaction price on the acquisition or disposal of assets.

8.7 Communication of this Manual

This Manual shall be submitted to the SEC and other relevant regulators, and be made available on the Globe website. It shall also be available for inspection by any shareholder of the Corporation at its principal office during reasonable hours on a business day.

12 Details and more information on the Corporation’s Policy on RPTs and RPT Disclosure are posted on the Globe

website under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.

13 Details and more information on the Corporation’s Policy on Disclosure and Transparency is posted on the Globe

website under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.



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9. Strengthening the External Auditor’s Independence and Improving Audit Quality

Principle 9: The Corporation shall establish standards for the appropriate selection of an external auditor, and exercise oversight of the same to strengthen the external auditor’s independence and enhance audit quality.

9.1 External/Independent Auditor

The Audit Committee shall have a robust process for approving and recommending the appointment, reappointment, removal, and fees of the external/independent auditor. The appointment, reappointment, removal, and fees of the external/independent auditor should be recommended by the Audit Committee, approved by the Board and ratified by the shareholders. For removal of the external/independent auditor, the reasons for removal or change should be disclosed to the regulators and the public through the Globe website and required disclosures. The Board, through the Audit Committee, shall recommend to the shareholders a duly accredited External/Independent Auditor who shall undertake an independent audit and shall provide an objective assurance on the way in which the financial statements shall have been prepared and presented.

a) The External/Independent Auditor shall –

i. perform fair audits independently from the Corporation, its Management and controlling shareholders, so that shareholders and other users may maintain confidence in the Corporation's accounting information;

ii. check whether any fact conflicts with the audit results in the information disclosed regularly with the audited financial statements, and demand correction, if necessary;

iii. attend the ASM and answer any questions on audit reports and on themselves, their work and their remuneration; and

iv. perform such other functions as may be approved by the Board in its engagement of the auditor provided, however, that non-audit work shall not be in conflict with the functions of the auditor as External/Independent Auditor.

b) The Audit Committee shall ensure the rotation of the lead engagement partner of the external/independent auditor at least once every five (5) years, or earlier and consider whether there should be regular rotation of the audit firm itself.

c) The reason/s for the resignation, dismissal or cessation from service and the date thereof of an External/Independent Auditor shall be reported in the Corporation's annual and current reports including the nature of non-audit services performed by its external/independent auditor, as applicable.

A preliminary copy of any report on disagreement between the accounting principles and practice shall be given by the Corporation to the independent auditor before its submission to the SEC and shareholders.

If an External/Independent Auditor believes that the statements made in an annual report, information or proxy statements filed during the auditor’s engagement are incorrect or incomplete, the external/independent auditor shall also present such views in said reports.

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10. Increasing Focus on Non-Financial and Sustainability Reporting

Principle 10: Globe shall ensure that the material and reportable non-financial and sustainability

issues are disclosed.

The Board shall adopt a clear and focused policy on the disclosure of non-financial information, with emphasis on the management of economic, environmental, social and governance issues of the Corporation’s business, which underpin sustainability. As such, the Board shall be instrumental in maintaining the standards espoused in the Corporation’s sustainability framework and the policies thereof. The Board shall also encourage the Corporation to continue adopting a globally recognized standard or framework in reporting sustainability and non-financial issues alongside its respective annual report.

To strengthen the Corporation’s sustainability campaign, a Chief Sustainability Officer may be appointed who will communicate sustainability concerns and initiatives from the management to the Board through the President and CEO. The Chief Sustainability Officer shall ensure that the Corporation’s annual reports are aligned with its environmental and sustainability policy and that the overall sustainability framework is observed and remains relevant.

ARTICLE IV

COMMUNICATION AND INFORMATION

11. Promoting A Comprehensive and Cost-Efficient Access to Relevant Information

Principle 11: Globe shall 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.

11.1 Channels of Communication

In addition to stockholders’ meetings, various venues shall be extended for shareholders and stakeholders to communicate effectively with the Corporation through the conduct of analysts’ briefings, ad-hoc briefings, investor conferences, media briefings, investor briefings, press conferences, media roundtables, one-on-one or small group meetings, and investor days that are organized by the Investor Relations Office and/or Corporate Communications Group or in partnership with the Corporation’s shareholders, broker or other partner institutions. Other than keeping the Corporation’s website up-to-date, these venues shall provide another means for the Corporation to send out notices or announcements and discuss relevant matters with its stakeholders. The Corporation may also use other available media channels to extend communication to stakeholders, as applicable.

11.2 Management's Responsibility for Information

a) Management is primarily responsible to the Board for financial reporting and control, and to this extent, shall:

i. Present a balanced and understandable assessment of the Corporation’s position and prospects. This extends to interim and other price-sensitive public reports and reports to regulators as well as to information required to be presented by statutory requirements;

ii. Explain their responsibility for preparing the accounts, for which there should be a statement by the auditors about their reporting responsibilities;

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iii. Report that the business is going concern, with supporting assumptions or qualifications, if necessary;

iv. Maintain a sound system of internal control to safeguard stakeholders’ investment and the Corporation’s assets;

v. Based on the approved audit plans, scope and frequency of audits, ensure that internal audit examinations cover, at least, the evaluation of adequacy and effectiveness of controls encompassing the organization's governance, operations information systems, to include reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws, rules, regulations, and contracts; and

vi. Require the CAE to render to the Audit Committee an annual report on the internal audit department's activity, purpose, authority, responsibility and performance relative to the audit plans and strategies approved by the Audit Committee of the Board. Such annual report should include significant risk exposures and control issues, corporate governance issues, and other matters needed or requested by the Board and Management.

b) Management shall be primarily responsible for the adequate flow of information to the Board. This information may include the background or explanatory information relating to matters to be brought before the Board, copies of disclosure statements and documents, budgets, forecasts and monthly internal financial statements. Any variance between projections and actual results should also be disclosed and explained by Management to the Board.

c) It is therefore essential that all materials about the Corporation which could adversely affect its viability or the interest of its shareholders and other stakeholders should be publicly and timely disclosed. Such information should include among others, earnings results, acquisition or disposition of assets, off balance sheet transactions, related party transactions, and direct and indirect remuneration of members of the Board and Management.

The Board shall therefore commit at all times to full disclosure of material information dealings, including material non-public information. It shall cause the filing of all required information through the appropriate Exchange mechanisms for listed companies and submissions to the Commission for the interest of its shareholders and other stakeholders.

ARTICLE V

INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT FRAMEWORK

12. Strengthening the Internal Control System and Enterprise Risk Management Framework

Principle 12: To ensure the integrity, transparency and proper governance in the conduct of its affairs, the Corporation shall have a strong and effective internal control system and enterprise risk management framework.

12.1 An effective internal control system and an enterprise risk management framework shall be developed and maintained to support the Corporation’s business, taking into account its size, risk profile and complexity of operations. Board Committees are dedicated for these functions at the Board level, which are supported by separate divisions in Management.

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12.2 Internal Audit

The Internal Audit Group shall provide for an effective system of internal control that will ensure the integrity of the financial reports and protection of the assets of the corporation for the benefit of all shareholders and other stakeholders. It shall also provide independent and objective assurance and consulting services to the Corporation designed to add value and improve on the organization's operations. It shall provide the Board, Management and the shareholders with reasonable assurance that the Corporation's key organizational and procedural controls are effective, appropriate, and complied with. It shall review, audit and report on, among others, the effectiveness of the system of organizational controls, taking into account the nature and complexity of the business and the business culture; the volume, size and complexity of transactions; the degree of risk; the degree of centralization and delegation of authority; the extent and effectiveness of information technology; and the extent of regulatory compliance.

It shall perform its auditing functions faithfully by maintaining independence from the Management and controlling shareholders.

The Internal Audit Group shall be headed by a CAE. The CAE shall preferably be a Certified Public Accountant and/or a Certified Internal Auditor and shall report to the Audit and RPT Committee of the Board of Directors.

The internal auditors shall report that their activities are conducted in accordance with the International Standards for the Professional Practice of Internal Auditing. Otherwise, the CAE shall disclose to the Board and Management that it has not yet achieved full compliance with the standards for the professional practice of internal auditing.

The Internal Audit Group shall have its own charter that contains its functions, which include,

among others:

a) Provides an independent risk-based assurance service to the Board, Audit Committee and Management, focusing on reviewing the effectiveness of the governance and control processes in (1) promoting the right values and ethics, (2) ensuring effective performance management and accounting in the organization, (3) communicating risk and control information, and (4) coordinating the activities and information among the Board, external and internal auditors, and Management;

b) Performs regular and special audit as contained in the annual audit plan and/or based on the Corporation’s risk assessment;

c) Performs consulting and advisory services related to governance and control as appropriate for the organization;

d) Performs compliance audit of relevant laws, rules and regulations, contractual obligations and other commitments, which could have a significant impact on the organization;

e) Reviews, audits and assesses the efficiency and effectiveness of the internal control system of all areas of the Corporation;

f) Evaluates operations or programs to ascertain whether results are consistent with established objectives and goals, and whether the operations or programs are being carried out as planned;

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g) Evaluates specific operations at the request of the Board or Management, as appropriate; and

h) Monitors and evaluates governance processes.

The CAE, in order to achieve the necessary independence to fulfill his/her responsibilities, directly reports functionally to the Audit and RPT Committee and administratively to the President and CEO. The functions and responsibilities of the CAE are also in the internal audit charter, which include, among others:

a) Periodically reviews the internal audit charter and presents it to Management and the Board Audit and RPT Committee for approval;

b) Establishes a risk-based internal audit plan, including policies and procedures, to determine the priorities of the internal audit activity, consistent with the organization’s goals;

c) Communicates the internal audit activity’s plans, resource requirements and impact of resource limitations, as well as significant interim changes, to Management and the Audit and RPT Committee for review and approval;

d) Spearheads the performance of the internal audit activity to ensure it adds value to the organization;

e) Reports periodically to the Audit and RPT Committee on the internal audit activity’s performance relative to its plan; and

f) Presents findings and recommendations to the Audit and RPT Committee and gives advice to Management and the Board on how to improve internal processes.

The responsibilities of the CAE in relation to the Audit and RPT Committee are also identified and discussed in Article II, Section 3.2 of this Manual.

12.3 Risk Management Function

The Corporation’s risk management function shall be guided by a risk management (RM) framework that is internationally-accepted and espouses sound global RM standards. The framework shall also ensure that compliance processes and procedures are effectively guided by the Corporation’s RM policy14. The Board shall have oversight over the Corporation’s RM function and activities. Under the Board’s leadership and as executed by its respective committees and the Management, RM activities shall include, among others:

a) Identification of top enterprise risks including, but not limited to, those that relate to economic, environmental, social and governance, that can impact the achievement of the Corporation’s key objectives;

b) Prioritization of risks based on the degree of impact to business objectives and the likelihood of occurrence based on pre-defined risk categories and parameters;

c) Scenario and mitigation planning;

14 Details and more information on the Corporation’s RM Policy is posted on the Globe website under ‘Company Policies’

(http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.


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d) Business continuity planning;

e) Crisis planning and management;

f) Program risk management;

g) Monitoring and reporting on the status of risks and corresponding RM plans;

h) Establishing a risk register with clearly defined, prioritized and residual risks;

i) Identification, assessment and management of operational risks by line

management;

j) Establishment of operational risk thresholds for monitoring; and,

k) As necessary, contract independent reviews by 3rd party consultants to assess/identify risk exposures and verify the soundness of controls.

The Corporation, through its Board and Management, shall institutionalize a process to closely monitor the RM plans and actions being taken to address critical risks, including, among others, the establishment of key risk indicators and key performance indicators to ensure that critical risks are appropriately managed. The process shall also involve and encourage participation from the Management Team, Business Team and Group Heads. The Management Team, among others, shall monitor enterprise level risks such as strategic risks, major program risks, and regulatory risks while the Business Team and Group Heads shall monitor the operational, legal, and project risks. On a regular basis, the Management Team shall discuss the current risk levels and status of implementation of mitigation plans.

The Management and Business Teams shall also perform an enterprise-wide assessment of risks as part of the annual planning and budgeting processes, results of which shall be reported to and reviewed by the Board. The assessment shall focus on, among others:

identifying the key risks that threaten the achievement of business objectives at corporate and business unit level; and

assignment of risk owner/s and development of plans in managing such risks.

The established strategies and plans to address the risks are continuously developed, updated, improved, and reviewed for effectiveness. There shall also be an established end-to-end operational risk assessment program to identify, assess, treat, monitor and report risks for effective and informed business decisions. The Management Team shall be apprised of the results of the assessments, particularly, the most significant risks for inputs on strategies and action plans and guidance on issues needing further review.

12.3.1 Risk Management Committee

A Risk Management Committee (RMC) shall be established to assist the Board in fulfilling its oversight responsibilities in relation to risk governance in the Corporation and to enable:

a) Cultivation of an organizational structure that supports strong corporate governance.

b) Clear definition of risk taking responsibility and authority.

c) Ownership and accountability of risk taking and ensure proper segregation of duties.

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The RMC shall be headed by the CRO and its members will include the following:

Chief Technology and Information Officer (CTIO), and Chief Strategy Officer (CSO) Chief Commercial Officer (CCO) Chief Customer Experience Officer (CCEO) Chief Human Resource Officer (CHRO) General Counsel Chief Compliance Officer

The RMC will be reporting to the Chief Risk Executive (CRE) who is the Corporation’s President and CEO, being a member of the Executive Committee and the Board. The RMC will be supported by the Enterprise Risk Management Services Division (ERMSD) who is led by the Risk Management Program Officer (RMPO). As the need may arise, the CRO may delegate the authority of chairmanship of the RMC to the RMPO. The RMC shall meet on a quarterly basis for updates on top enterprise risks discussions and on a monthly basis for updates on Operational Risk Sessions, or as necessary. The sessions will include, but not be limited to, a discussion on the impact of risks to Globe (i.e., operational, financial, reputational, etc.) and the likelihood of its occurrence as well as the status of the mitigation plans to address said risks. The RMC will report, through its chairman, to the Board at least annually or at such frequency as may be required by the Board. The report will provide updates on critical risks, control issues and key mitigation plans including insights on the following:

a) Risk management processes are working as intended,

b) Risk measures and mitigation plans are reported and continuously reviewed by risk owners for effectiveness; and

c) Established risk policies and procedures are being complied with.

12.3.2 Authority, Roles and Responsibilities

The CRE is ultimately responsible for RM priorities. The CRE shall, among others:

a) Act as the final enforcer of the RM process;

b) Establish organizational structure, assigns authority and designate management of key risks to risk owners to ensure that the RM activities are carried out effectively;

c) Review the continuing effectiveness and relevance of the RM framework, processes, organization and tolerances, as assisted by the CRO; and

d) Ensure that RM activities are linked to the risk owners’ Key Result Areas.

The CRO shall have a clear and open communication line with the CRE and the Board and will ensure that:

a) There is adequate supervision and guidance over the development, implementation, maintenance and continuous improvement of RM policies, processes and documentation.

b) Risk Management processes and activities are embedded within the Corporation’s policies, business cycles and operational decisions.

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c) Responsibilities for managing specific risks by Management are clear.

d) The level of risk accepted by the Corporation is appropriate.

e) An effective control environment exists for the Corporation as a whole.

f) In collaboration with the CEO, who is the CRE, and Management, the Audit and RPT Committee, the Board, and other stakeholders are provided periodic information on the results of the annual risk assessment exercise and updates on the status of top risks, key risk mitigation activities, key risk and performance indicators and emerging risks that could impact the attainment of our objectives.

The RMC shall:

a) Foster a risk-aware culture that is pervasive throughout the Corporation by promoting open discussions from all levels of the Corporation on the risks faced by Globe, integrate RM into the Corporation’s goals and strategies.

b) Provide supervision and guidance over Globe’s risk governance structure, as well as the adequacy, development, implementation, maintenance and continuous improvement of the RM function, its policies, frameworks, processes, and documentation.

c) Review and recommend to the Management Globe’s levels of risk appetite and risk tolerance, and risk exposure allocation for approval by the Board of Directors.

d) Review Globe’s risk profile (i.e., top enterprise risks) on an ongoing basis and re-evaluate the likelihood of occurrence, severity of impact of risk exposures, and any mitigating measures affecting those risks.

e) Review and approve the annual workplan (i.e., activities and initiatives such as risk assessments, risk embedding programs, etc.) of the ERM function, based on the priorities and direction of the RMC.

f) Perform risk oversight functions to ensure that:

i. RM processes and activities are embedded within the Corporation’s policies, business cycles and operational decisions.

ii. The level of risk appetite, risk tolerance, and risk accepted by Globe is appropriate.

iii. RM processes are working as intended, risk measures and mitigation plans are on track and are reported and continuously reviewed by risk owners for effectiveness, and established risk policies and procedures are being complied with.

g) Review disclosures regarding risk contained in Globe’s Annual Sustainability Report

and other publicly-issued statements.

h) Secure independent expert advice on RM matters where considered necessary or desirable.

i) Ensure that Globe’s RM activities are aligned with the internal audit work plan.

j) Perform other activities related to its charter as requested by the Board.

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With guidance provided by the Board, Management is fully responsible for decision-making over the day-to-day affairs of Globe including the design, development and implementation of the RM strategies, policies and systems intended to address the identified risks.

Key functions of the ERMSD include:

a) Facilitating Management Team’s annual risk assessment exercise and reporting the results thereof;

b) Coordinating with risk owners to gather updates on the status of risks and RM as well as risk mitigation activities;

c) Facilitating the execution of Management’s risk and controls assessment exercise; and,

d) Developing and implementing programs to embed RM discipline and drive sustained risk awareness across the Corporation.

The risk owner(s) shall have overall accountability for the assigned risk(s) and is granted authority to enable effective management of a particular risk. The risk owner’s function shall also include, but are not limited to, the following:

a) Understanding the risk/s and determining its drivers;

b) Planning for and executing appropriate RM strategies and mitigation plans for key risks identified;

c) Securing required resources needed to effectively manage the risks;

d) Monitoring and reviewing the level of risk exposures and continuing relevance of RM strategies and plans; and,

e) Providing timely updates on the status of RM activities to concerned stakeholders.

ARTICLE VI CULTIVATING A SYNERGIC RELATIONSHIP WITH SHAREHOLDERS 13. Promoting Shareholder Rights

Principle 13: The Corporation shall treat all shareholders fairly and equitably, and also

recognize, protect and facilitate the exercise of their rights.

13.1 Shareholder Rights

The Board shall ensure that shareholder rights are also disclosed through the Globe website in addition to this Manual. The Board shall be committed to respect the following rights of the shareholders:

a) Voting Right

Shareholders, including minority shareholders, have the right to elect, remove and replace directors and vote on certain corporate acts in accordance with the Corporation Code. The nomination procedures of the Corporation shall also be provided to all

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shareholders to promote awareness of their right to elect and vote at the ASMs through the notice and agenda of the meeting.

Cumulative voting shall be used in the election of directors. Directors may be removed with or without cause, but directors shall not be removed without cause if it will deny minority shareholders representation in the Board. Removal of directors requires an affirmative vote of two-thirds (2/3) of the outstanding capital of the Corporation.

b) Pre-emptive Right

All shareholders have pre-emptive rights as set out in the Corporation Code and the Articles of Incorporation, unless there is a specific denial of this right in the Articles of Incorporation or an amendment thereto. They shall have the right to subscribe to the capital stock of the Corporation. The Articles of Incorporation may lay down the specific rights and powers of shareholders with respect to the particular shares they hold, all of which are protected by law so long as they are not in conflict with the Corporation Code.

c) Right of Inspection

Shareholders shall be allowed to inspect corporate books and records including minutes of Board meeting and stock registries in accordance with the Corporation Code and shall be provided an annual report, including financial statements, without cost or restrictions.

d) Right to Information

Upon request and for a legitimate purpose, a shareholder shall be provided, upon request, with periodic reports which disclose personal and professional information about the directors and officers and certain other matters such as their holdings of the Corporation's shares, dealings with the Corporation, relationships among directors and key officers, and the aggregate compensation of directors and officers. The Information Statement/Proxy Statement where these are stated must be distributed to the shareholders before annual general meetings and in the Registration Statement and Prospectus in case of registration of shares for public offering with the Commission.

The shareholders, including minority shareholders, shall have the right to propose the holding of a meeting, and the right to propose items in the agenda of the meeting, provided the items are for legitimate business purposes.

In accordance with existing law and jurisprudence, minority shareholders shall have access to any and all information relating to matters for which the Management is accountable for and to those relating to matters for which the Management should include such information and, if not included, then the minority shareholders can propose to include such matters in the agenda of stockholders’ meeting provided always that this right of access is conditioned upon the requesting shareholder's having a legitimate purpose for such access.

e) Right to Dividends

Shareholders have the right to receive dividends subject to the discretion of the Board. However, the Commission may direct the Corporation to declare dividends when its retained earnings is in excess of 100% of Its paid-in capital stock, except: a) when justified by definite corporate expansion projects or programs approved by the Board or b) when the Corporation is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its consent, and such consent has not been secured; or c) when it can be clearly shown that such retention is necessary under special circumstances obtaining in the Corporation such as when there is a need for special reserve for probable contingencies.

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As a policy and as much as practicable, Globe shall observe a 30-day period for the payment of dividends to shareholders from the declaration date of such dividends.

The policy on dividends (dividend policy) is posted on the Globe website and reflected in the Annual and Sustainability Report and ACGR.

f) Appraisal Right

In accordance with the Corporation Code, shareholders may exercise appraisal rights under the following circumstances:

i. In case any amendment to the Articles of Incorporation has the effect of changing or restricting the rights of any shareholder or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence;

ii. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets as provided in the Corporation Code; and

iii. In case of merger or consolidation.

13.2 Annual Stockholders’ Meetings

The Board shall encourage active shareholder participation by sending the notice of annual and special stockholders’ meetings with sufficient and relevant information at least 28 days before the date of the meeting. Together with the notice, the Corporation shall also send the Agenda Items for shareholder approval, explanation of such items, and other relevant information.

The results of the annual and special stockholders’ meetings, including all the votes (approving and dissenting) during the meetings and the results of the organizational meeting, shall be publicly available through the Globe website within one (1) day from the dates of the meetings while the minutes of shareholders’ meetings shall be available within five (5) business days from the dates of the meetings. The minutes of the meeting shall include, but not be limited to, a description of the voting and the vote tabulation procedures used, the opportunity given to shareholders to ask questions, as well as a record of the questions and the answers received if any, the matters discussed and the resolutions reached and a list of directors and officers who attended the meeting.

13.3 Alternative Dispute Resolution

To resolve intra-corporate disputes, a shareholder, at his option, may file for mediation under the Alternative Dispute Resolution Act of 2004. If the intra-corporate dispute is not resolved by mediation, the parties may bring the matter to arbitration in accordance with the Philippine Arbitration Law, then in force. The seat of arbitration shall be the Philippines. The language of arbitration shall be English.

13.4 The Investor Relations Office

In accordance with the Corporation’s strong advocacy for corporate governance, the Corporation commits to high standards of disclosure, transparency, and accountability through the Investor Relations (IR) program. The IR Program is geared towards fulfilling the Corporation’s commitment to a transparent disclosure regime and accessibility for all stakeholders. The IR Division within the Corporation which shall be tasked with –

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a) Creation and implementation of an investor relations program that reaches out to all shareholders and fully informs them of corporate activities;

b) Formulation of a clear policy on communicating or relating relevant information to Corporation stakeholders and to the broader investor community accurately, effectively and sufficiently;

c) Setting up an avenue to receive feedback, complaints and queries from shareholders assure their active participation with regard to activities and policies of the Corporation. The IR Division shall have a designated IR Officer, email address and telephone number to ensure that all information regarding the activities of the Corporation are properly and timely communicated to shareholders and other relevant stakeholders;

d) Preparation of disclosure documents to the Philippine Securities and Exchange Commission and the Philippine Stock Exchange; and

e) Dissemination of this Manual, and the conduct of an orientation program for the Board and Management.

The IR Division shall report to the Chief Finance Officer.

ARTICLE VII

DUTIES TO STAKEHOLDERS 14. Respecting the Rights of Stakeholders and Effective Redress for Violation of Stakeholder’s Rights

Principle 14: The rights of stakeholders established by law, by contractual relations and through voluntary commitments must be respected. Where stakeholders’ rights and/or interests are at stake, stakeholders should have the opportunity to obtain prompt effective redress for the violation of their rights.

14.1 Identification of Stakeholders

The Board shall identify the Corporation’s various stakeholders and promote cooperation between them and the Corporation in creating wealth, growth and sustainability.

Globe’s stakeholders shall include, among others, subscribers, customers, employees, suppliers, shareholders, investors, the community the Corporation operates in and regulators. The Board shall consider the Corporation’s strategic and operational decisions affecting its wealth, growth and sustainability, in line with the interest of both the Corporation and its stakeholders.

14.2 Equitable Treatment of Stakeholders

The Board shall establish clear policies and programs to provide a mechanism on the fair treatment and protection of stakeholders. It is the duty of the directors to promote shareholders rights, remove impediments to the exercise of shareholders rights and allow possibilities to seek redress for violation of their rights. They shall encourage the exercise of shareholders' rights, voting rights and the solution of collective action problems through appropriate mechanisms as well as awareness of the same to all shareholders and stakeholders.

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The Board of Directors shall be instrumental in removing excessive costs and other administrative or practical impediments to shareholders participating in meetings and/or voting in person. The directors shall pave the way for the electronic filing and distribution of shareholder information necessary to make informed decisions subject to legal constraints. The Corporation shall provide an open line of communication with its stakeholders to communicate with the Corporation and obtain redress for the violation of their rights, as applicable. Whistle-blowing channels and other convenient social channels shall be provided to stakeholders.

14.3 Whistle-Blowing Policy15

The Corporation shall commit to compliance with laws and regulations to which it is subject to and conduct its business in accordance with ethical standards. All officers and employees of the Corporation, as well as all suppliers and business partners, shall be required to observe and practice high standards of business and personal ethics in the conduct of their duties and responsibilities. As such, all employees, including directors and officers, shall be subject to the whistle-blowing policy stated in this Manual and in the Code of Conduct.

The Corporation shall make available various channels to provide a mechanism that will allow employees and even third parties to report suspected violations of Globe policies by employees, officers, directors, and partners, on unethical and corrupt practices, misappropriation of Globe assets, fraudulent reporting practices, and other violations of the Globe Code of Conduct, stock transaction policy, Code of Corporate Governance, and Securities Regulation Code. These channels shall include, but not be limited to, a dedicated hotline, portal, an e-mail address as well as specific group under the HR Employee Relations department, Disclosures – in whatever form, including verbal – made in good faith will be investigated according to the protocols established in the Policy and protected by keeping the information confidential. The identity and source of the information shall likewise be protected to the extent required by law. Persons or units within the Corporation who receive disclosures shall forward or relay the disclosures through the Corporation’s different whistleblower channels as mentioned in this Manual and in the Code of Conduct. The Human Resource (HR) Employee Relations group shall support the procedures of this policy. HR Employee Relations shall also be in charge of administering the different whistleblower channels, and receiving, collating, and submitting all disclosures to the Disclosure Committee (DC), who is composed of the Corporation’s Corporate Secretary, HR, Internal Audit, ERM and Legal Services. Upon receipt of the complaints raised, the HR Employee Relations and Security shall review and evaluate the details of the report provided, as follows:

a) If a whistleblower involves a third party, the report is endorsed to Security for investigation.

i. If with financial and reputation risk, Security shall forward the report to DC for proper endorsement to the Office of the President, Audit and RPT Committee and Legal Services for possible criminal case or action.

15 Details and more information on the Corporation’s Whistle-Blowing Policy is posted on the Globe website under



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b) If the report involves employees, HR Employee Relations shall conduct the investigation.

c) If and when disclosure involves a member of the Board or ERM or the complaint administrator, the disclosure shall be transmitted directly to the Corporate Secretary for handling.

d) If disclosure involves the DC, the disclosure shall then be endorsed to the Board.

e) For employee related activities, HR Employee Relations shall implement appropriate disciplinary proceedings in accordance with due process. If with financial (Php1 Million and up) and reputational risk, HR Employee Relations shall do the same and forward to DC for proper endorsement to the Office of the President, Audit and RPT Committee, and Legal Services for possible criminal case or action.

Once disclosure is submitted, the whistleblower shall receive a notice that the complaint has been received and that it shall be processed in accordance with the policy. The whistleblower shall also receive an update if no merits were found on the complaint filed.

15. Encouraging Employees’ Participation

Principle 15: A mechanism for employee participation should be developed to create a symbiotic environment, realize Globe’s goals and participate in its corporate governance processes.

15.1 Employee Engagement

The Board shall be instrumental in establishing policies, programs and procedures that encourage the Corporation’s employees to actively participate in the realization of the Corporation’s goals and in its governance. At the minimum, the Corporation shall provide opportunities for training and development for employees and policies and activities relating to health, safety and welfare of all employees. Employees must also have access to a feedback mechanism in case of violation of their rights or such other unethical concerns they may want to report such as the whistleblowing policy.

The Board shall set the tone and make a stand against corrupt practices reflected through the anti-corruption policy and program in the Corporation’s Code of Conduct. The Board shall also enforce the dissemination of the policy and program to employees across the Corporation through trainings to embed them in the Corporation’s culture.

15.2 Conflict of Interest Policy16

In addition to Article II, Section 3.5 on directors and officers, Globe's conflict of interest policy is applied to all regular employees, officers and directors of Globe and subsidiaries, including consultants/project hires seconded to or engaged on a full-time basis by Globe. This policy is included in the Corporation's Code of Conduct. It is the obligation of every employee to declare and divulge in writing to the Corporation his own involvement in any conflict of interest with Globe. Failure on the part of an employee to divulge the same to the Corporation shall be penalized with dismissal.

16 Details and more information on the Corporation’s Conflict of Interest Policy is posted on the Globe website under



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In general, conflict of interest will be deemed to exist where an employee has or may possibly have a financial or personal interest divergent with or in conflict with his professional obligations, or where financial or other personal considerations may compromise, or have the appearance of compromising the employee's judgment in the administration, management, decision-making and discharge of his official functions. Personal interest is not confined to the personal involvement of the employee himself -- it may also arise from the employee's family or close personal relationship with a contractor, sub-contractor, customer, competitor, creditor or any other entity that does business with Globe. Conflict of interest situations may include, but not be limited to, the following:

a) Being in an official capacity to negotiate, procure, endorse or approve a transaction for and behalf of the Corporation, either by himself or through a middlemen or agent, with:

i. a person, or entity where the controlling interest is held by the spouse of the employee or his relative within the fourth degree of consanguinity or affinity; or

ii. the former employer of the employee within two (2) years prior to the date of the transaction in question.

b) Directly or indirectly having financial or pecuniary interest in any business, contract or

transaction over which the employee has the occasion to intervene or take part in his official capacity, or which will require his endorsement or approval;

c) Outside employment, directorship, officership, partnership, consultancy, distributorship, or agency in any company or enterprise which adversely affects the employee's working efficiency and productivity;

d) Access to sensitive information which may be of value to a person or entity where the controlling interest is held by:

i. the spouse of the employee or his relatives within the fourth degree of consanguinity or affinity; or

ii. the former employer of the employee within two (2) years prior to the date of the transaction in question.

e) Having a spouse or relative within the fourth degree of consanguinity or affinity with individuals in the employ of a competitor or business partner;

f) Investments or other pecuniary or material interest, directorship, officership, partnership, employment, consultancy, distributorship, or agency or sub-agency in a contractor; sub- contractor; customer; competitor; creditor; or any other entity that does business with Globe or which is in competition with the business of the Globe;

g) Borrowing money or property from, or otherwise incurring any debt to, any of the individuals, companies or enterprises mentioned above;

h) Solicitation or acceptance, whether directly or indirectly, of payments, commissions, rebates, services or gifts of more than nominal value, excessive entertainment, or improper or excessive favors from a contractor; sub-contractor; customer; competitor;

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creditor; or any other entity that does business with the Corporation or which is in competition with the business of the Corporation;

i) Pre-empting the Corporation in the purchase of any asset which the Corporation is interested in acquiring;

j) Taking for oneself, or passing on to a relative or associate a business opportunity which became known to the employee because of his position in the Corporation.

15.3 Insider Trading Policy17

It is the policy of Globe to restrict trading of securities (buy or sell) by Covered Persons considered to have knowledge of material information, during the Blackout Period, except in accordance with this policy. Covered Persons shall be defined as follows:

a) All members of the Board of Directors;

b) All key officers of the Corporation;

c) All members of senior management who are or may be in possession of material or non-public information about the Corporation because of their responsibilities, wherever they may be assigned or seconded to the subsidiaries.

d) Consultants and advisers of the Corporation;

e) All other employees who are made aware of undisclosed material information.

f) Members of the immediate families of persons under (a) to (d) who are living in the same household.

Under this policy, information shall be deemed material if: (i) it would likely affect the market price of the securities after being disseminated to the public and the lapse of three (3) days from dissemination; or (ii) it would be considered important by an investor in making a decision whether to buy, sell, or hold securities. While it is not possible to define all categories of material information, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material in nature. Such material information includes, but not limited to:

i. Financial results;

ii. Projections of future earnings or losses;

iii. News of a pending or proposed merger;

iv. Change in the corporate structure such as reorganization;

17 Details and more information on the Corporation’s Insider Trading Policy is posted on the Globe website under



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v. Acquisition/Divestitures/Joint venture;

vi. Dividend declaration and changes in dividend policy;

vii. Stock splits;

viii. New significant equity investments or debt offerings;

ix. Significant litigation exposure;

x. Major changes in key officers positions;

xi. Public or private sale of securities of the Corporation. Positive or negative information shall be considered material. In order to prevent insiders of the Corporation from taking unfair advantage over non-public information, Globe prohibits Covered Persons, from trading in Corporation’s shares ten (10) trading days before and three (3) trading days after any structured report and/or disclosure, such as, but not be limited to, quarterly financial results, and three (3) trading days before and three (3) trading days after any unstructured report and/or disclosure (“Blackout Period”). The exercise of vested stock options (i.e., acquiring shares) may be done at any time, even during Blackout periods. However, the liquidation, (i.e., the sale of shares acquired from options) is subject to Blackout periods. Members of the Board of Directors and key officers are required to immediately report their trades to the Office of the Chief Compliance Officer to ensure timely report and disclosure by such director and/or officer to the SEC, PSE and other pertinent regulatory agencies within three (3) trading days from the transaction.

When in doubt, all Covered Persons should consult the Office of the Chief Compliance Officer, prior to transacting shares of the Corporation, regardless of when they would like to perform such transactions, in order to determine if the trade will or will not violate this policy.

Certain staff personnel may at certain times or from time to time possess material non-public information about potentially market-affecting activities. The staff should consult the Chief Compliance Officer about any plan to trade on shares if they have knowledge or believe to have knowledge of such material non-public information, to ensure compliance with this policy.

Violation of this policy shall be subject to disciplinary action under the Corporation's Code of Conduct, without prejudice to any civil or criminal proceedings, which the Corporation or regulators may file for violation of existing laws. Insider trading under the law may be subject to penalty for damages or fine and/or imprisonment. 15.4 Policy in relation to Health, Safety and Welfare of Employees18

Globe shall continue to treat its employees as integral to its success. The Corporation shall put a premium on ensuring the health and safety of its employees in the place of work and

18 Details and more information on the Corporation’s Policy in relation to Health, Safety and Welfare of Employees is

posted on the Globe website under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.



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even outside of it. Globe shall ensure strict adherence with local and international standards on health and safety of its employees such as, but not limited to, the Occupational Safety and Health (OSH) standards and the OHSAS 18001 Occupational Health & Safety Management Systems Standards as well as a host of other related programs.

Globe shall continue to maintain and observe these safety standards to ensure that the Corporation minimizes the exposure to risk, fatality, disabling injuries and/or accidents of its stakeholders, including contractors, vendors, visitors to Globe sites, and all Globe employees. The Corporation shall disseminate and push for internal awareness a Safety, Health, and Environmental Management System (SHEMS) manual that shall cover mitigation of operational risks and a proactive approach to creating a safer workplace, such as correct ergonomics at work and avoiding serious illnesses. Regular training programs on health and safety for employees shall also be made available such as, but not limited to, training on how to assess all health and safety hazards in the workplace and communities, and address such hazardous incidents. The Corporation may also consider establishing a Health and Safety Committee at the management level to operationalize the abovementioned activities. Regular safety drills and trainings shall also be performed to ingrain in each employee the best practices and standards that must be followed in case of an emergency.

As part of implementing this policy, the Corporation shall also uphold the annual physical examination (APE) that all employees are required to have. Globe shall also maintain an in-house clinic and health adviser to provide personalized wellness programs in relation to the APE results of employees, and other health-related consultations. The Board shall also support campaigns that promote healthier lifestyle throughout the Corporation as well as sufficient healthcare coverage and well-being activities for all employees.

15.5 Rewards or Compensation Policy19

Globe shall attract, retain, and engage its talents to support its business strategies and enhance value of the Corporation through its remuneration philosophy and framework.

The Corporation’s remuneration philosophy and framework shall be designed to attract, retain, and engage talents as well as to support the business strategies and enhance the value of the Corporation. Globe, through its Board and Management, shall encourage and nurture a strong performance-oriented culture; recognize and reward talents who demonstrate and create value for the Corporation.

In order to support the rewards philosophy, the Corporation’s targeted reward strategies are as follows:

a) Adopt a total rewards approach, using both the tangible and intangible aspects of rewards to drive the Globe employment experience;

b) Market driven to attract and retain top talent in the business;

c) Operate on a single-platform-differentiated-application approach to accommodate different talent segments;

19 Details and more information on the Corporation’s Rewards or Compensation Policy is posted on the Globe website

under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.


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d) Promote relevant reward programs that will be sensitive to employee life cycles and

experiences; and

e) Practice transparency, clarity, and consistency in our reward delivery.

Annual remuneration reviews shall be conducted considering the Corporation, business unit, and individual performance. The same shall also be reviewed vis-à-vis market rates, and the Corporation’s financial capability shall be considered for any incentive payout.

Current remuneration initiatives that may allow for certain incentives to be withheld in any year, should an employee fail to meet performance requirements or be involved in any misconduct and given a disciplinary action resulting to suspension or demotion, shall also be considered.

15.6 Anti-Corruption Policy20

Globe employees shall maintain the highest standards of honesty and professional conduct. Seeking undue financial and material advantage from transactions with Globe is a breach of trust between the employee and the Corporation. The employee, by virtue of his employment, is bound not to betray Globe’s trust by seeking to gain any undue personal or pecuniary advantage (other than the rightful proceeds of employment) from his dealings with or for and in behalf of the Corporation.

As part of Globe’s campaign for anti-corruption, employees shall be reminded through internal communications channels to fill out gift disclosures especially during national festivities. The form shall be submitted to employees' respective group heads who will decide whether the gift shall be returned or kept by the employee or be surrendered to Human Resources Group for possible use during events of the Corporation.

Procedures and guidelines in relation to anti-corruption shall be subject to the Corporation’s anti-corruption policy in its Code of Conduct covering its employees and the members of the Board. Globe shall also conduct periodic lectures and seminars on anti-corruption initiatives to all employees.

15.7 Policy on Data Privacy and Intellectual Property Rights21

The Globe privacy policy outlines the Corporation’s standards and policy in relation to the collection, use, and protection of customer data to provide customers and other stakeholders with wonderful service and customer experience. The Corporation shall notify all customers and relevant stakeholders with any update on this privacy policy by posting the same on the Globe website for easy reference.

20 Details and more information on the Corporation’s Anti-Corruption Policy is posted on the Globe website under


21 Details and more information on the Corporation’s Policy on Data Privacy and Intellectual Property Rights is posted on

the Globe website under ‘Company Policies’ (http://corporate-governance.globe.com.ph/company-policies.html). The same shall be reflected in relevant reports.



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Globe shall continue to respect customer and stakeholder privacy and intellectual property. As such, the Corporation shall secure and protect customer data with proper safeguards to ensure confidentiality and privacy; prevent loss, theft, or use for unauthorized purposes; and comply with the requirements of the law. Permission is granted to electronically copy and print hard copy portions from the Corporation for the sole purpose of customers to view or pay their own Globe bills. Any other use of materials on the Globe website, including reproduction for purposes other than those noted above, modification, distribution, or republication, without the Corporation’s prior written permission is strictly prohibited.

As communications over the internet may not be secure, Globe shall make reasonable and appropriate security arrangements and measures that use a variety of physical, electronic, and procedural safeguards to protect customer data. The Corporation shall protect and keep information submitted through the Globe website safe using a secured server behind a firewall, encryption, and other appropriate security controls. Among others, the Corporation may use internationally recognized systems such as, but not limited to, the Secure Sockets Layer technology (SSL) to encrypt information entered through the Globe website in ensuring that all information shared by Globe users through the website are kept protected and secured. Information collection, storage, and processing practices, including physical security measures, shall be regularly reviewed to guard against unauthorized access to the Globe system and unauthorized alteration, disclosure, or destruction of information Globe holds. Among other safeguards, the Corporation shall also keep its records as accurate as possible. If customer personal information is wrong, Globe shall provide convenient ways to update it. Registered customers shall be given access to account details and correct personal information by contacting Globe Customer Care hotline or his/her designated relationship manager, as may be applicable; or by visiting any Globe Store or the Globe website, among other readily available channels.

To further manage daily security over digital information, the Corporation shall maintain an Information Security and Data Privacy Division (ISDP) whose focus is to handle and address cybersecurity matters and safeguard data privacy. The Corporation shall also, through its Management, appoint a Chief Information Security Officers (CISO) and Data Protection Officer (DPO)22. Contact details of the DPO shall be made publicly available through the Globe website and effective procedures shall be in place in case of a report or complaint on data privacy or intellectual property. Globe shall ensure compliance with relevant rules and laws on data privacy and intellectual property rights.

16. Encouraging Sustainability and Social Responsibility

Principle 16: Globe shall 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.

16.1 Sustaining Shareholder Value

The Corporation shall recognize and place an importance on the interdependence between business and society, and promote a mutually beneficial relationship that allows the

22 The appointment of Globe’s CISO and DPO are also in accordance with the Republic Act 10173 or the “Data Privacy

Act of 2012”.

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Corporation to grow its business, while contributing to the advancement of the society where it operates.

The Board shall be instrumental in encouraging sustainable development and empower the Corporation’s President and CEO and Chief Sustainability Officer in observance of responsible business operations and working alongside local government and other institutional partners to contribute to solving complex global challenges that may directly or indirectly affect the Corporation. The Corporation shall not only comply with existing regulations, but also voluntarily employ value chain processes that take into consideration economic, environmental, social and governance issues and concerns in accordance with its own sustainability framework and its adopted global reporting standard.

S croo"

AUGUSTO ZOBEL AYALAChairman of the

ctocsoN-coChief Compliance Officer

GLOBE T

ELECOM

, INC.

Documents

GLOBE TELECOM, INC. · GLOBE TELECOM, INC. Corporate Governance . C G F D 0 4 1 8 17-C: Manual of GLOBE TELECOM, INC. Corporate Governance . Title: Manual of Corporate Governance