Revised Code of Corporate Governance

7/17/2019 Revised Code of Corporate Governance

http://slidepdf.com/reader/full/revised-code-of-corporate-governance 1/10

Submitted By:

Zoren S. De Castro

M41 | MWF 3:00-5:00 pm

Accounting 12 - Auditing

Theoy

A!!ignment

Submitted To:

Mrs. Dolores D. Mallari

Augu!t 14" 2015

#epub$ic o% the &hi$ippine!SECURITIES AND EXCHANGE COMMISSION

S'( Bui$ding" ')SA" *eenhi$$!

M+nd+$uyong (ity

S'( Memo+ndum (icu$+ ,o .Seie! o% 200/

REVISED CODE OF CORPORATE GOVERNANCE&u!u+nt to it! m+nd+te unde the Secuitie!#egu$+tion (ode +nd the (opo+tion (ode" theSecuitie! +nd 'ch+nge (ommi!!ion the(ommi!!ion" in + meeting he$d on une 16" 200/"+ppo7ed the pomu$g+tion o% thi! #e7i!ed (ode o% (opo+te *o7en+nce the (ode 8hich !h+$$+pp$y to egi!teed copo+tion! +nd to b+nche! o

!ub!idi+ie! o% %oeign copo+tion! ope+ting in the&hi$ippine! th+t + !e$$ e9uity +ndo debt!ecuitie! to the pub$ic th+t +e e9uied to beegi!teed 8ith the (ommi!!ion" o b h+7e +!!et!in ece!! o% Fi%ty Mi$$ion &e!o! +nd +t $e+!t t8ohunded 200 !toc;ho$de! 8ho o8n +t $e+!t onehunded 100 !h+e! e+ch o% e9uity !ecuitie!" oc 8ho!e e9uity !ecuitie! +e $i!ted on +n'ch+nge< o d +e g+ntee! o% !econd+y $icen!e!%om the (ommi!!ion

Article ! De"nition o# Ter$s+ Cor%orate Go&ernance = the %+me8o; o%

u$e!" !y!tem! +nd poce!!e! in the copo+tionth+t go7en! the pe%om+nce by the Bo+d o% )iecto! +nd M+n+gement o% thei e!pecti7edutie! +nd e!pon!ibi$itie! to the !toc;ho$de!<

b 'oar( o# Directors = the go7ening bodye$ected by the !toc;ho$de! th+t eeci!e! thecopo+te po8e! o% + copo+tion" conduct! +$$it! bu!ine!! +nd conto$! it! popetie!<

c E)c*an+e = +n og+ni>ed m+;et p$+ce o%+ci$ity th+t bing! togethe buye! +nd !e$$e!"+nd eecute! t+de! o% !ecuitie! +ndocommoditie!<

d Mana+e$ent = the body gi7en the +uthoity

by the Bo+d o% )iecto! to imp$ement thepo$icie! it h+! $+id do8n in the conduct o% thebu!ine!! o% the copo+tion<

e In(e%en(ent (irector = + pe!on 8ho" +p+t%om hi! %ee! +nd !h+eho$ding!" i! independento% m+n+gement +nd %ee %om +ny bu!ine!! oothe e$+tion!hip 8hich cou$d" o cou$de+!on+b$y be pecei7ed to" m+tei+$$y inte%ee8ith hi! eeci!e o% independent ?udgment inc+ying out hi! e!pon!ibi$itie! +! + diecto<

% E)ec,ti&e (irector = + diecto 8ho i! +$!o thehe+d o% + dep+tment o unit o% the copo+tiono pe%om! +ny 8o; e$+ted to it! ope+tion<

g Non-e)ec,ti&e (irector = + diecto 8ho i!not the he+d o% + dep+tment o unit o% thecopo+tion no pe%om! +ny 8o; e$+ted to it!

ope+tion<h Non-a,(it or/ = the othe !e7ice! o@eed by

+n eten+$ +udito to + copo+tion th+t +e notdiect$y e$+ted +nd e$e7+nt to it! !t+tutoy+udit %unction!" !uch +!" +ccounting" p+yo$$boo;;eeping" econci$i+tion" compute po?ectm+n+gement" d+t+ poce!!ing" o in%om+tiontechno$ogy out!oucing !e7ice!" inten+$ +udit+nd othe !e7ice! th+t m+y compomi!e theindependence +nd ob?ecti7ity o% +n eten++udito<

i Internal control = the !y!tem e!t+b$i!hed bythe Bo+d o% )iecto! +nd M+n+gement %o the

+ccomp$i!hment o% the copo+tion! ob?ecti7e!the ecient ope+tion o% it! bu!ine!!" thee$i+bi$ity o% it! Cn+nci+$ epoting" +nd %+ith%ucomp$i+nce 8ith +pp$ic+b$e $+8!" egu$+tion!+nd inten+$ u$e!<

? Internal control s0ste$ = the %+me8o;unde 8hich inten+$ conto$! +e de7e$oped +ndimp$emented +$one o in concet 8ith othepo$icie! o pocedue! to m+n+ge +nd conto$ +p+ticu$+ i!; o bu!ine!! +cti7ity" ocombin+tion o% i!;! o bu!ine!! +cti7itie!" to8hich the copo+tion i! epo!ed<

; Internal a,(it = +n independent +nd ob?ecti7e

+!!u+nce +cti7ity de!igned to +dd 7+$ue to +ndimpo7e the copo+tion! ope+tion!" +nd he$pit +ccomp$i!h it! ob?ecti7e! by po7iding +!y!tem+tic +nd di!cip$ined +ppo+ch in thee7+$u+tion +nd impo7ement o% thee@ecti7ene!! o% i!; m+n+gement" conto$ +ndgo7en+nce poce!!e!<

$ Internal a,(it (e%art$ent = + dep+tment ounit o% the copo+tion +nd it! con!u$t+nt!" i%+ny" th+t po7ide independent +nd ob?ecti7e+!!u+nce !e7ice! in ode to +dd 7+$ue to +ndimpo7e the copo+tion! ope+tion!<

m Internal A,(itor = the highe!t po!ition in the

copo+tion e!pon!ib$e %o inten+$ +udit+cti7itie! D% inten+$ +udit +cti7itie! +epe%omed by out!ide !e7ice po7ide!" he i!the pe!on e!pon!ib$e %o o7e!eeing the!e7ice cont+ct" the o7e+$$ 9u+$ity o% the!e+cti7itie!" +nd %o$$o8-up o% eng+gement e!u$t!

Article 1! R,les o# Inter%retationA A$$ e%eence! to the m+!cu$ine gende in the

!+$ient po7i!ion! o% thi! (ode !h+$$ $i;e8i!eco7e the %eminine gende

B A$$ doubt! o 9ue!tion! th+t m+y +i!e in theintepet+tion o +pp$ic+tion o% thi! (ode !h+$

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be e!o$7ed in %+7o o% pomoting t+n!p+ency"+ccount+bi$ity +nd %+ine!! to the !toc;ho$de!+nd in7e!to! o% the copo+tion

Article 2! 'oar( Go&ernance The Bo+d o% )iecto! the Bo+d i! pim+i$ye!pon!ib$e %o the go7en+nce o% the copo+tion(oo$$+y to !etting the po$icie! %o the+ccomp$i!hment o% the copo+te ob?ecti7e!" it !h+$$po7ide +n independent chec; on M+n+gementA Co$%osition o# t*e 'oar(

The Bo+d !h+$$ be compo!ed o% +t $e+!t C7e5" but not moe th+n C%teen 15" membe!8ho +e e$ected by the !toc;ho$de!

A$$ comp+nie! co7eed by thi! (ode !h+$$ h+7e+t $e+!t t8o 2 independent diecto! o !uchnumbe o% independent diecto! th+tcon!titute! t8enty pecent 20E o% themembe! o% the Bo+d" 8hiche7e i! $e!!e" butin no c+!e $e!! th+n t8o 2 A$$ othecomp+nie! +e encou+ged to h+7eindependent diecto! in thei bo+d!

The membe!hip o% the Bo+d m+y be +combin+tion o% eecuti7e +nd non-eecuti7ediecto! 8hich inc$ude independent diecto!in ode th+t no diecto o !m+$$ goup o% diecto! c+n domin+te the deci!ion m+;ingpoce!!

The non-eecuti7e diecto! !hou$d po!!e!!!uch 9u+$iCc+tion! +nd !t+tue th+t 8ou$den+b$e them to e@ecti7e$y p+ticip+te in thede$ibe+tion! o% the Bo+d

B M,lti%le 'oar( Seats The Bo+d m+y con!ide the +doption o% guide$ine! on the numbe o% diecto!hip! th+tit! membe! c+n ho$d in !toc; +nd non-!toc;copo+tion! The optimum numbe !hou$d t+;einto con!ide+tion the c+p+city o% + diecto todi$igent$y +nd ecient$y pe%om hi! dutie! +nde!pon!ibi$itie!

The (hie% 'ecuti7e ce (' +nd otheeecuti7e diecto! m+y be co7eed by + $o8eindic+ti7e $imit %o membe!hip in othe bo+d!A !imi$+ $imit m+y +pp$y to independent o non-

eecuti7e diecto! 8ho" +t the !+me time"!e7e +! %u$$-time eecuti7e! in othecopo+tion! Dn +ny c+!e" the c+p+city o% thediecto! to di$igent$y +nd ecient$y pe%omthei dutie! +nd e!pon!ibi$itie! to the bo+d!they !e7e !hou$d not be compomi!ed

( T*e C*air an( C*ie# E)ec,ti&e O3cer The o$e! o% (h+i +nd (' !hou$d" +! much +!p+ctic+b$e" be !ep++te to %o!te +n+ppopi+te b+$+nce o% po8e" ince+!ed+ccount+bi$ity +nd bette c+p+city %o

independent deci!ion-m+;ing by the Bo+d Ac$e+ de$ine+tion o% %unction! !hou$d be m+debet8een the (h+i +nd (' upon thei e$ection

D% the po!ition! o% (h+i +nd (' +e uniCed" thepope chec;! +nd b+$+nce! !hou$d be $+iddo8n to en!ue th+t the Bo+d get! the beneCto% independent 7ie8! +nd pe!pecti7e!

The dutie! +nd e!pon!ibi$itie! o% the (h+i ine$+tion to the Bo+d m+y inc$ude" +mongothe!" the %o$$o8ing:

i 'n!ue th+t the meeting! o% the Bo+d +e he$d in+ccod+nce 8ith the by-$+8! o +! the (h+i m+ydeem nece!!+y<

ii Supe7i!e the pep++tion o% the +gend+ o% themeeting in coodin+tion 8ith the (opo+teSecet+y" t+;ing into con!ide+tion the!ugge!tion! o% the ('" M+n+gement +nd thediecto!< +nd

iii M+int+in 9u+$it+ti7e +nd time$y $ine! o%communic+tion +nd in%om+tion bet8een the Bo+d+nd M+n+gement

) 4,ali"cations o# Directors Dn +ddition to the 9u+$iCc+tion! %o membe!hipin the Bo+d po7ided %o in the (opo+tion(ode" Secuitie! #egu$+tion (ode +nd othee$e7+nt $+8!" the Bo+d m+y po7ide %o+ddition+$ 9u+$iCc+tion! 8hich inc$ude" +mongothe!" the %o$$o8ing:

i (o$$ege educ+tion o e9ui7+$ent +c+demic degee<ii &+ctic+$ unde!t+nding o% the bu!ine!! o% the

copo+tion<iii Membe!hip in good !t+nding in e$e7+nt indu!ty

bu!ine!! o po%e!!ion+$ og+ni>+tion!< +nd

i7 &e7iou! bu!ine!! epeience

' Dis5,ali"cation o# Directors 1 &em+nent )i!9u+$iCc+tion

The %o$$o8ing !h+$$ be gound! %o thepem+nent di!9u+$iCc+tion o% + diecto:

i Any pe!on con7icted by Cn+$ ?udgment oode by + competent ?udici+$ o+dmini!t+ti7e body o% +ny cime th+t +in7o$7e! the puch+!e o !+$e o% !ecuitie!"+! deCned in the Secuitie! #egu$+tion(ode< b +i!e! out o% the pe!on! conduct+! +n unde8ite" bo;e" de+$e

in7e!tment +d7i!e" pincip+$" di!tibutomutu+$ %und de+$e" %utue! commi!!ionmech+nt" commodity t+ding +d7i!o" oGoo bo;e< o c +i!e! out o% hi! Cduci+ye$+tion!hip 8ith + b+n;" 9u+!i-b+n;" tu!tcomp+ny" in7e!tment hou!e o +! +n+$i+ted pe!on o% +ny o% them<

ii Any pe!on 8ho" by e+!on o% mi!conduct+%te he+ing" i! pem+nent$y en?oined by +Cn+$ ?udgment o ode o% the (ommi!!iono +ny cout o +dmini!t+ti7e body ocompetent ?ui!diction %om: + +cting +!

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unde8ite" bo;e" de+$e" 5 in7e!tment+d7i!e" pincip+$ di!tibuto" mutu+$ %undde+$e" %utue! commi!!ion mech+nt"commodity t+ding +d7i!o" o Goo bo;e<b +cting +! diecto o oce o% + b+n;"9u+!i- b+n;" tu!t comp+ny" in7e!tmenthou!e" o in7e!tment comp+ny< ceng+ging in o continuing +ny conduct op+ctice in +ny o% the c+p+citie! mentionedin !ub-p++g+ph! + +nd b +bo7e" o8i$$%u$$y 7io$+ting the $+8! th+t go7en!ecuitie! +nd b+n;ing +cti7itie!

The di!9u+$iCc+tion !h+$$ +$!o +pp$y i% !uchpe!on i! cuent$y the !ub?ect o% +n ode o% the (ommi!!ion o +ny cout o+dmini!t+ti7e body denying" e7o;ing o!u!pending +ny egi!t+tion" $icen!e opemit i!!ued to him unde the (opo+tion(ode" Secuitie! #egu$+tion (ode o +nyothe $+8 +dmini!teed by the (ommi!!iono B+ng;o Sent+$ ng &i$ipin+! BS&" ounde +ny u$e o egu$+tion i!!ued by the(ommi!!ion o BS&" o h+! othe8i!e beene!t+ined to eng+ge in +ny +cti7ityin7o$7ing !ecuitie! +nd b+n;ing< o !uchpe!on i! cuent$y the !ub?ect o% +ne@ecti7e ode o% + !e$%-egu$+toyog+ni>+tion !u!pending o epe$$ing him%om membe!hip" p+ticip+tion o+!!oci+tion 8ith + membe o p+ticip+nt o% the og+ni>+tion<

iii Any pe!on con7icted by Cn+$ ?udgment oode by + cout o competent+dmini!t+ti7e body o% +n o@en!e in7o$7ingmo+$ tupitude" %+ud" embe>>$ement" the%t"

e!t+%+" counte%eiting" mi!+ppopi+tion"%ogey" bibey" %+$!e +m+tion" pe?uy oothe %+udu$ent +ct!<

i7 Any pe!on 8ho h+! been +d?udged by Cn+$ ?udgment o ode o% the (ommi!!ion" cout"o competent +dmini!t+ti7e body to h+7e8i$$%u$$y 7io$+ted" o 8i$$%u$$y +ided" +betted"coun!e$ed" induced o pocued the 7io$+tiono% +ny po7i!ion o% the (opo+tion (ode"Secuitie! #egu$+tion (ode o +ny othe $+8+dmini!teed by the (ommi!!ion o BS&" o+ny o% it! u$e" egu$+tion o ode<

7 Any pe!on e+$ie e$ected +! independent

diecto 8ho become! +n oce" emp$oyeeo con!u$t+nt o% the !+me copo+tion<

7i Any pe!on ?udici+$$y dec$+ed +! in!o$7ent<7ii Any pe!on %ound gui$ty by Cn+$ ?udgment o

ode o% + %oeign cout o e9ui7+$entCn+nci+$ egu$+toy +uthoity o% +ct!"7io$+tion! o mi!conduct !imi$+ to +ny o% the +ct!" 7io$+tion! o mi!conductenume+ted in !ub-p++g+ph! i to 7+bo7e<

7iii (on7iction by Cn+$ ?udgment o% +n o@en!epuni!h+b$e by impi!onment %o moe th+n

!i . ye+!" o + 7io$+tion o% the(opo+tion (ode committed 8ithin C7e 5ye+! pio to the d+te o% hi! e$ection o+ppointment

2 Tempo+y )i!9u+$iCc+tion The Bo+d m+y po7ide %o the tempo+ydi!9u+$iCc+tion o% + diecto %o +ny o% the%o$$o8ing e+!on!:

i #e%u!+$ to comp$y 8ith the di!c$o!uee9uiement! o% the Secuitie! #egu$+tion(ode +nd it! Dmp$ementing #u$e! +nd#egu$+tion! The di!9u+$iCc+tion !h+$$ be ine@ect +! $ong +! the e%u!+$ pe!i!t!

ii Ab!ence in moe th+n C%ty 50 pecent o%+$$ egu$+ +nd !peci+$ meeting! o% theBo+d duing hi! incumbency" o +ny t8e$7e12 month peiod duing the !+idincumbency" un$e!! the +b!ence i! due toi$$ne!!" de+th in the immedi+te %+mi$y o!eiou! +ccident The di!9u+$iCc+tion !h+$+pp$y %o pupo!e! o% the !ucceedinge$ection

iii )i!mi!!+$ o temin+tion %o c+u!e +!diecto o% +ny copo+tion co7eed by thi!(ode The di!9u+$iCc+tion !h+$$ be in e@ectunti$ he h+! c$e+ed him!e$% %om +nyin7o$7ement in the c+u!e th+t g+7e i!e tohi! di!mi!!+$ o temin+tion

i7 D% the beneCci+$ e9uity o8ne!hip o% +nindependent diecto in the copo+tion oit! !ub!idi+ie! +nd +$i+te! eceed! t8opecent o% it! !ub!cibed c+pit+$ !toc; Thedi!9u+$iCc+tion !h+$$ be $i%ted i% the $imit i!$+te comp$ied 8ith

7 D% +ny o% the ?udgment! o ode! cited in the

gound! %o pem+nent di!9u+$iCc+tion h+!not yet become Cn+$

A tempo+i$y di!9u+$iCed diecto !h+$$" 8ithin!ity .0 bu!ine!! d+y! %om !uchdi!9u+$iCc+tion" t+;e the +ppopi+te +ction toemedy o coect the di!9u+$iCc+tion D% he%+i$! o e%u!e! to do !o %o un?u!tiCede+!on!" the di!9u+$iCc+tion !h+$$ becomepem+nent

F Res%onsi6ilities7 D,ties an( F,nctions o#t*e 'oar(

1 *ene+$ #e!pon!ibi$ity

Dt i! the Bo+d! e!pon!ibi$ity to %o!te the$ong-tem !ucce!! o% the copo+tion" +nd to!u!t+in it! competiti7ene!! +nd poCt+bi$ity in+ m+nne con!i!tent 8ith it! copo+teob?ecti7e! +nd the be!t intee!t! o% it!!toc;ho$de!

The Bo+d !hou$d %omu$+te the copo+tion!7i!ion" mi!!ion" !t+tegic ob?ecti7e!" po$icie!+nd pocedue! th+t !h+$$ guide it! +cti7itie!"inc$uding the me+n! to e@ecti7e$y monitoM+n+gement! pe%om+nce

3



2 )utie! +nd Function! To en!ue + high !t+nd+d o% be!t p+ctice %othe copo+tion +nd it! !toc;ho$de!" theBo+d !hou$d conduct it!e$% 8ith hone!ty +ndintegity in the pe%om+nce o%" +mong othe!"the %o$$o8ing dutie! +nd %unction!:

+ Dmp$ement + poce!! %o the !e$ection o% diecto! 8ho c+n +dd 7+$ue +nd contibuteindependent ?udgment to the %omu$+tion o% !ound copo+te !t+tegie! +nd po$icie!Appoint competent" po%e!!ion+$" hone!t+nd high$y moti7+ted m+n+gement oce!Adopt +n e@ecti7e !ucce!!ion p$+nningpog+m %o M+n+gement

b &o7ide !ound !t+tegic po$icie! +ndguide$ine! to the copo+tion on m+?oc+pit+$ ependitue! '!t+b$i!h pog+m!th+t c+n !u!t+in it! $ong-tem 7i+bi$ity +nd!tength &eiodic+$$y e7+$u+te +nd monitothe imp$ement+tion o% !uch po$icie! +nd!t+tegie!" inc$uding the bu!ine!! p$+n!"ope+ting budget! +nd M+n+gement!o7e+$$ pe%om+nce

c 'n!ue the copo+tion! %+ith%u$ comp$i+nce8ith +$$ +pp$ic+b$e $+8!" egu$+tion! +ndbe!t bu!ine!! p+ctice!

d '!t+b$i!h +nd m+int+in +n in7e!to e$+tion!pog+m th+t 8i$$ ;eep the !toc;ho$de!in%omed o% impot+nt de7e$opment! in thecopo+tion D% %e+!ib$e" the copo+tion!(' o chie% Cn+nci+$ oce !h+$$ eeci!eo7e!ight e!pon!ibi$ity o7e thi! pog+m

e Ddenti%y the !ecto! in the community in8hich the copo+tion ope+te! o +ediect$y +@ected by it! ope+tion!" +nd

%omu$+te + c$e+ po$icy o% +ccu+te" time$y+nd e@ecti7e communic+tion 8ith them

% Adopt + !y!tem o% chec; +nd b+$+nce 8ithinthe Bo+d A egu$+ e7ie8 o% thee@ecti7ene!! o% !uch !y!tem !hou$d beconducted to en!ue the integity o% thedeci!ion-m+;ing +nd epoting poce!!e! +t+$$ time! Thee !hou$d be + continuinge7ie8 o% the copo+tion! inten+$ conto$!y!tem in ode to m+int+in it! +de9u+cy+nd e@ecti7ene!!

g Ddenti%y ;ey i!; +e+! +nd pe%om+nceindic+to! +nd monito the!e %+cto! 8ith

due di$igence to en+b$e the copo+tion to+nticip+te +nd pep+e %o po!!ib$e the+t!to it! ope+tion+$ +nd Cn+nci+$ 7i+bi$ity

h Fomu$+te +nd imp$ement po$icie! +ndpocedue! th+t 8ou$d en!ue the integity+nd t+n!p+ency o% e$+ted p+tyt+n!+ction! bet8een +nd +mong thecopo+tion +nd it! p+ent comp+ny" ?oint7entue!" !ub!idi+ie!" +!!oci+te!" 6+$i+te!" m+?o !toc;ho$de!" oce! +nddiecto!" inc$uding thei !pou!e!" chi$den+nd dependent !ib$ing! +nd p+ent!" +nd o%

inte$oc;ing diecto e$+tion!hip! bymembe! o% the Bo+d

i (on!titute +n Audit (ommittee +nd !uchothe committee! it deem! nece!!+y to+!!i!t the Bo+d in the pe%om+nce o% it!dutie! +nd e!pon!ibi$itie!

? '!t+b$i!h +nd m+int+in +n +$ten+ti7edi!pute e!o$ution !y!tem in the copo+tionth+t c+n +mic+b$y !ett$e conGict! odi@eence! bet8een the copo+tion +nd it!!toc;ho$de!" +nd the copo+tion +nd thidp+tie!" inc$uding the egu$+toy +uthoitie!

; Meet +t !uch time! o %e9uency +! m+y beneeded The minute! o% !uch meeting!!hou$d be du$y ecoded Dndependent 7ie8!duing Bo+d meeting! !hou$d beencou+ged +nd gi7en due con!ide+tion

$ Heep the +cti7itie! +nd deci!ion! o% theBo+d 8ithin it! +uthoity unde the +tic$e!o% incopo+tion +nd by-$+8!" +nd in+ccod+nce 8ith ei!ting $+8!" u$e! +ndegu$+tion!

m Appoint + (omp$i+nce ce 8ho !h+$$ h+7ethe +n; o% +t $e+!t 7ice pe!ident Dn the+b!ence o% !uch +ppointment" the (opo+teSecet+y" pe%e+b$y + $+8ye" !h+$$ +ct +!(omp$i+nce ce

* S%eci"c D,ties an( Res%onsi6ilities o# aDirector A diecto! oce i! one o% tu!t +ndconCdence A diecto !hou$d +ct in the be!tintee!t o% the copo+tion in + m+nnech++ctei>ed by t+n!p+ency" +ccount+bi$ity+nd %+ine!! Ie !hou$d +$!o eeci!e$e+de!hip" pudence +nd integity in diecting

the copo+tion to8+d! !u!t+ined poge!!

A diecto !hou$d ob!e7e the %o$$o8ing nom!o% conduct:i Con(,ct #air 6,siness transactions it*

t*e cor%oration7 an( ens,re t*at *is%ersonal interest (oes not con8ict it*t*e interests o# t*e cor%oration. The b+!ic pincip$e to be ob!e7ed i! th+t +diecto !hou$d not u!e hi! po!ition to poCto g+in !ome beneCt o +d7+nt+ge %ohim!e$% +ndo hi! e$+ted intee!t! Ie!hou$d +7oid !itu+tion! th+t m+y

compomi!e hi! imp+ti+$ity D% +n +ctu+$ opotenti+$ conGict o% intee!t m+y +i!e onthe p+t o% + diecto" he !hou$d %u$$y +ndimmedi+te$y di!c$o!e it +nd !hou$d notp+ticip+te in the / deci!ion-m+;ingpoce!! A diecto 8ho h+! + continuingm+tei+$ conGict o% intee!t !hou$d !eiou!$ycon!ide e!igning %om hi! po!itionA conGict o% intee!t !h+$$ be con!ideedm+tei+$ i% the diecto! pe!on+$ obu!ine!! intee!t i! +nt+goni!tic to th+t o%the copo+tion" o !t+nd! to +c9uie o g+in

4



Cn+nci+$ +d7+nt+ge +t the epen!e o% thecopo+tion

ii De&ote t*e ti$e an( attentionnecessar0 to %ro%erl0 an( e9ecti&el0%er#or$ *is (,ties an( res%onsi6ilities.A diecto !hou$d de7ote !ucient time to%+mi$i+i>e him!e$% 8ith the copo+tion!bu!ine!! Ie !hou$d be con!t+nt$y +8+e o% +nd ;no8$edge+b$e 8ith the copo+tion!ope+tion! to en+b$e him to me+ning%u$$ycontibute to the Bo+d! 8o; Ie !hou$d+ttend +nd +cti7e$y p+ticip+te in Bo+d +ndcommittee meeting!" e7ie8 meetingm+tei+$! +nd" i% c+$$ed %o" +!; 9ue!tion! o!ee; ep$+n+tion

iii Act :,(icio,sl0. Be%oe deciding on +ny m+tte boughtbe%oe the Bo+d" + diecto !hou$d c+e%u$$ye7+$u+te the i!!ue! +nd" i% nece!!+y" m+;ein9uiie! +nd e9ue!t c$+iCc+tion

i7 E)ercise in(e%en(ent :,(+$ent. A diecto !hou$d 7ie8 e+ch pob$em o!itu+tion ob?ecti7e$y D% + di!+geement 8ithothe diecto! +i!e!" he !hou$d c+e%u$$ye7+$u+te +nd ep$+in hi! po!ition Ie !hou$dnot be +%+id to t+;e +n unpopu$+ po!ition(oo$$+i$y" he !hou$d !uppot p$+n! +ndide+! th+t he thin;! +e beneCci+$ to thecopo+tion

7 Ha&e a or/in+ /nole(+e o# t*estat,tor0 an( re+,lator0 re5,ire$entst*at a9ect t*e cor%oration7 incl,(in+its articles o# incor%oration an( 60-las7 t*e r,les an( re+,lations o# t*eCo$$ission an(7 *ere a%%lica6le7 t*ere5,ire$ents o# rele&ant re+,lator0

a+encies. A diecto !hou$d +$!o ;eep +be+!t 8ithindu!ty de7e$opment! +nd bu!ine!! tend!in ode to pomote the copo+tion!competiti7ene!!

7i O6ser&e con"(entialit0. A diecto !hou$d ;eep !ecue +ndconCdenti+$ +$$ non-pub$ic in%om+tion hem+y +c9uie o $e+n by e+!on o% hi!po!ition +! diecto Ie !hou$d not e7e+$conCdenti+$ in%om+tion to un+uthoi>edpe!on! 8ithout the +uthoity o% the Bo+d

I Internal Control Res%onsi6ilities o# t*e'oar( The conto$ en7ionment o% the copo+tioncon!i!t! o% + the Bo+d 8hich en!ue! th+t thecopo+tion i! pope$y +nd e@ecti7e$y m+n+ged+nd !upe7i!ed< b + M+n+gement th+t +cti7e$ym+n+ge! +nd ope+te! the copo+tion in +!ound +nd pudent m+nne< c theog+ni>+tion+$ +nd pocedu+$ conto$!!uppoted by e@ecti7e m+n+gementin%om+tion +nd i!; m+n+gement epoting!y!tem!< +nd d +n independent +udit

mech+ni!m to monito the +de9u+cy +nde@ecti7ene!! o% the copo+tion! go7en+nceope+tion!" +nd in%om+tion !y!tem!" inc$udingthe e$i+bi$ity +nd integity o% Cn+nci+$ +ndope+tion+$ in%om+tion" the e@ecti7ene!! +ndeciency o% ope+tion!" the !+%egu+ding o+!!et!" +nd comp$i+nce 8ith $+8!" u$e!egu$+tion! +nd cont+ct!

i The minimum inten+$ conto$ mech+ni!m! %othe pe%om+nce o% the Bo+d! o7e!ighte!pon!ibi$ity m+y inc$ude:

+ )eCnition o% the dutie! +nd e!pon!ibi$itie!o% the (' 8ho i! u$tim+te$y +ccount+b$e %othe copo+tion! og+ni>+tion+$ +ndope+tion+$ conto$!<

b Se$ection o% the pe!on 8ho po!!e!!e! the+bi$ity" integity +nd epeti!e e!!enti+$ %othe po!ition o% ('<

c '7+$u+tion o% popo!ed !enio m+n+gement+ppointment!<

d Se$ection +nd +ppointment o% 9u+$iCed +ndcompetent m+n+gement oce!< +nd

e #e7ie8 o% the copo+tion! hum+n e!oucepo$icie!" conGict o% intee!t !itu+tion!compen!+tion pog+m %o emp$oyee!" +ndm+n+gement !ucce!!ion p$+n

ii The !cope +nd p+ticu$+! o% the !y!tem! o%e@ecti7e og+ni>+tion+$ +nd ope+tion+conto$! m+y di@e +mong copo+tion!depending on" +mong othe!" the %o$$o8ing%+cto!: n+tue +nd comp$eity o% the bu!ine!!+nd the bu!ine!! cu$tue< 7o$ume" !i>e +ndcomp$eity o% t+n!+ction!< degee o% i!;!in7o$7ed< degee o% cent+$i>+tion +ndde$eg+tion o% +uthoity< etent +nde@ecti7ene!! o% in%om+tion techno$ogy< +nd

etent o% egu$+toy comp$i+nceiii A copo+tion m+y e!t+b$i!h +n inten+$ +udit

!y!tem th+t c+n e+!on+b$y +!!ue the Bo+dM+n+gement +nd !toc;ho$de! th+t it! ;eyog+ni>+tion+$ +nd ope+tion+$ conto$! +e%+ith%u$$y comp$ied 8ith The Bo+d m+y+ppoint +n Dnten+$ Audito to pe%om the+udit %unction" +nd m+y e9uie him to epotto + $e7e$ in the og+ni>+tion th+t +$$o8! theinten+$ +udit +cti7ity to %u$C$$ it! m+nd+te The Dnten+$ Audito !h+$$ be guided by theDnten+tion+$ St+nd+d! on &o%e!!ion+&+ctice o% Dnten+$ Auditing

D 'oar( Meetin+s an( 4,or,$ Re5,ire$ent The membe! o% the Bo+d !hou$d +ttend it!egu$+ +nd !peci+$ meeting! in pe!on othough te$econ%eencing conducted in+ccod+nce 8ith the u$e! +nd egu$+tion! o% the(ommi!!ion

Dndependent diecto! !hou$d +$8+y! +ttendBo+d meeting! Jn$e!! othe8i!e po7ided inthe by-$+8!" thei +b!ence !h+$$ not +@ect the9uoum e9uiement Io8e7e" the Bo+d m+y

5



to pomote t+n!p+ency" e9uie the pe!enceo% +t $e+!t one independent diecto in +$$ it!meeting!

To monito the diecto! comp$i+nce 8ith the+ttend+nce e9uiement!" copo+tion! !h+$$!ubmit to the (ommi!!ion" on o be%oe +nu+y30 o% the %o$$o8ing ye+" + !8on cetiCc+tion+bout the diecto! ecod o% +ttend+nce inBo+d meeting! The cetiCc+tion m+y be!ubmitted though S'( Fom 1K-( o in +!ep++te C$ing

Re$,neration o# Directors an( O3cers The $e7e$! o% emune+tion o% the copo+tion!hou$d be !ucient to be +b$e to +tt+ct +ndet+in the !e7ice! o% 9u+$iCed +nd competentdiecto! +nd oce! A potion o% theemune+tion o% eecuti7e diecto! m+y be!tuctued o be b+!ed on copo+te +ndindi7idu+$ pe%om+nce(opo+tion! m+y e!t+b$i!h %om+$ +ndt+n!p+ent pocedue! %o the de7e$opment o% + po$icy on eecuti7e emune+tion odetemin+tion o% emune+tion $e7e$! %oindi7idu+$ diecto! +nd oce! depending onthe p+ticu$+ need! o% the copo+tion ,odiecto !hou$d p+ticip+te in deciding on hi!emune+tion

The copo+tion! +nnu+$ epot! +ndin%om+tion +nd poy !t+tement! !h+$$ inc$ude+ c$e+" conci!e +nd unde!t+nd+b$e di!c$o!ueo% +$$ Ced +nd 7+i+b$e compen!+tion th+t m+ybe p+id" diect$y o indiect$y" to it! diecto!+nd top %ou 4 m+n+gement oce! duing

the peceding C!c+$ ye+

To potect the %und! o% + copo+tion" the(ommi!!ion m+y" in eception+$ c+!e!" eg"8hen + copo+tion i! unde ecei7e!hip oeh+bi$it+tion" egu$+te the p+yment o% thecompen!+tion" +$$o8+nce!" %ee! +nd %ingebeneCt! to it! diecto! +nd oce!

H 'oar( Co$$ittees The Bo+d !h+$$ con!titute the popecommittee! to +!!i!t it in good copo+tego7en+nce

i The Audit (ommittee !h+$$ con!i!t o% +t $e+!tthee 3 diecto!" 8ho !h+$$ pe%e+b$y h+7e+ccounting +nd Cn+nce b+c;gound!" one o% 8hom !h+$$ be +n independent diecto +nd+nothe 8ith +udit epeience The ch+i o% the Audit (ommittee !hou$d be +nindependent diecto The committee !h+$$h+7e the %o$$o8ing %unction!:+ A!!i!t the Bo+d in the pe%om+nce

o% it! o7e!ight e!pon!ibi$ity %o theCn+nci+$ epoting poce!!" !y!tem o% inten+$ conto$" +udit poce!!" +nd

monitoing o% comp$i+nce 8ith +pp$ic+b$e$+8!" u$e! +nd egu$+tion!<

b &o7ide o7e!ight o7eM+n+gement! +cti7itie! in m+n+ging ceditm+;et" $i9uidity" ope+tion+$" $eg+$ +ndothe i!;! o% the copo+tion Thi! %unction!h+$$ inc$ude egu$+ eceipt %omM+n+gement o% in%om+tion on i!;epo!ue! +nd i!; m+n+gement +cti7itie!<

c &e%om o7e!ight %unction! o7e thecopo+tion! inten+$ +nd eten+$ +udito!Dt !hou$d en!ue th+t the inten+$ +ndeten+$ +udito! +ct independent$y %ome+ch othe" +nd th+t both +udito! +e gi7enune!ticted +cce!! to +$$ ecod!" popetie!+nd pe!onne$ to en+b$e them to pe%omthei e!pecti7e +udit %unction!<

d #e7ie8 the +nnu+$ inten+$ +udit p$+nto en!ue it! con%omity 8ith the ob?ecti7e!o% the copo+tion The p$+n !h+$$ inc$udethe +udit !cope" e!ouce! +nd budgetnece!!+y to imp$ement it<

e &io to the commencement o% the+udit" di!cu!! 8ith the eten+$ +udito then+tue" !cope +nd epen!e! o% the +udit+nd en!ue pope coodin+tion i% moe th+none +udit Cm i! in7o$7ed in the +cti7ity to!ecue pope co7e+ge +nd minimi>edup$ic+tion o% e@ot!<

%g+ni>e +n inten+$ +udit dep+tment" +ndcon!ide the +ppointment o% +n independeninten+$ +udito +nd the tem! +ndcondition! o% it! eng+gement +nd emo7+$<

g Monito +nd e7+$u+te the +de9u+cy+nd e@ecti7ene!! o% the copo+tion!inten+$ conto$ !y!tem" inc$uding Cn+nci+

epoting conto$ +nd in%om+tiontechno$ogy !ecuity<

h #e7ie8 the epot! !ubmitted by theinten+$ +nd eten+$ +udito!<

i #e7ie8 the 9u+te$y" h+$%-ye+ +nd +nnu+Cn+nci+$ !t+tement! be%oe thei !ubmi!!ionto the Bo+d" 8ith p+ticu$+ %ocu! on the%o$$o8ing m+tte!:L Any ch+nge! in +ccounting po$icie! +nd

p+ctice!L M+?o ?udgment+$ +e+!L SigniCc+nt +d?u!tment! e!u$ting %om the

+udit

L *oing concen +!!umption!L (omp$i+nce 8ith +ccounting !t+nd+d!L (omp$i+nce 8ith t+" $eg+$ egu$+toy

e9uiement! ? (oodin+te" monito +nd %+ci$it+te

comp$i+nce 8ith $+8!" u$e! +nd egu$+tion!<; '7+$u+te +nd detemine the non-

+udit 8o;" i% +ny" o% the eten+$ +udito"+nd e7ie8 peiodic+$$y the non-+udit %ee!p+id to the eten+$ +udito in e$+tion tothei !igniCc+nce to the tot+$ +nnu+$ incomeo% the eten+$ +udito +nd to the

.



copo+tion! o7e+$$ con!u$t+ncy epen!e! The committee !h+$$ di!+$$o8 +ny non-+udit8o; th+t 8i$$ conGict 8ith hi! dutie! +! +neten+$ +udito o m+y po!e + the+t to hi!independence The non-+udit 8o;" i% +$$o8ed" !hou$d be di!c$o!ed in thecopo+tion! +nnu+$ epot<

$ '!t+b$i!h +nd identi%y the epoting $ine o% the Dnten+$ Audito to en+b$e him topope$y %u$C$$ hi! dutie! +nd e!pon!ibi$itie!Ie !h+$$ %unction+$$y epot diect$y to theAudit (ommittee

The Audit (ommittee !h+$$ en!ue th+t" inthe pe%om+nce o% the 8o; o% the Dnten+$Audito" he !h+$$ be %ee %om inte%eenceby out!ide p+tie!

Fo &hi$ippine b+nche! o !ub!idi+ie! o% %oeign copo+tion! co7eed by thi! (ode"thei Dnten+$ Audito !hou$d be independento% the &hi$ippine ope+tion! +nd !hou$depot to the egion+$ o copo+tehe+d9u+te!

ii The Bo+d m+y +$!o og+ni>e the %o$$o8ingcommittee!:

+ A ,omin+tion (ommittee" 8hich m+y becompo!ed o% +t $e+!t thee 3 membe! +ndone o% 8hom !hou$d be +n independentdiecto" to e7ie8 +nd e7+$u+te the9u+$iCc+tion! o% +$$ pe!on! nomin+ted tothe Bo+d +nd othe +ppointment! th+te9uie Bo+d +ppo7+$" +nd to +!!e!! thee@ecti7ene!! o% the Bo+d! poce!!e! +ndpocedue! in the e$ection o ep$+cement o% diecto!<

b A (ompen!+tion o #emune+tion(ommittee" 8hich m+y be compo!ed o% +t$e+!t thee 3 membe! +nd one o% 8hom!hou$d be +n independent diecto" toe!t+b$i!h + %om+$ +nd t+n!p+entpocedue %o de7e$oping + po$icy onemune+tion o% diecto! +nd oce! toen!ue th+t thei compen!+tion i! con!i!tent8ith the copo+tion! cu$tue" !t+tegy +ndthe bu!ine!! en7ionment in 8hich itope+te!

T*e Cor%orate Secretar0 The (opo+te Secet+y" 8ho !hou$d be +Fi$ipino citi>en +nd + e!ident o% the &hi$ippine!"i! +n oce o% the copo+tion Ie !hou$d -

i Be e!pon!ib$e %o the !+%e;eeping +ndpe!e7+tion o% the integity o% the minute! o% the meeting! o% the Bo+d +nd it! committee!"+! 8e$$ +! the othe oci+$ ecod! o% thecopo+tion<

ii Be $oy+$ to the mi!!ion" 7i!ion +nd ob?ecti7e!o% the copo+tion<

iii Wo; %+i$y +nd ob?ecti7e$y 8ith the Bo+dM+n+gement +nd !toc;ho$de!<

i7 I+7e +ppopi+te +dmini!t+ti7e +ndintepe!on+$ !;i$$!<

7 D% he i! not +t the !+me time the copo+tion!$eg+$ coun!e$" be +8+e o% the $+8!" u$e! +ndegu$+tion! nece!!+y in the pe%om+nce o%hi! dutie! +nd e!pon!ibi$itie!<

7i I+7e + 8o;ing ;no8$edge o% the ope+tion!o% the copo+tion<

7ii Dn%om the membe! o% the Bo+d" in+ccod+nce 8ith the by$+8!" o% the +gend+ o%thei meeting! +nd en!ue th+t the membe!h+7e be%oe them +ccu+te in%om+tion th+t8i$$ en+b$e them to +i7e +t inte$$igentdeci!ion! on m+tte! th+t e9uie thei+ppo7+$<

7iii Attend +$$ Bo+d meeting!" ecept 8hen ?u!tiC+b$e c+u!e!" !uch +!" i$$ne!!" de+th inthe immedi+te %+mi$y +nd !eiou! +ccident!"pe7ent him %om doing !o<

i 'n!ue th+t +$$ Bo+d pocedue!" u$e! +ndegu$+tion! +e !tict$y %o$$o8ed by themembe!< +nd

D% he i! +$!o the (omp$i+nce ce" pe%om+$$ the dutie! +nd e!pon!ibi$itie! o% the !+idoce +! po7ided %o in thi! (ode

M T*e Co$%liance O3cer The Bo+d !h+$$ +ppoint + (omp$i+nce ce8ho !h+$$ epot diect$y to the (h+i o% theBo+d Ie !h+$$ pe%om the %o$$o8ing dutie!:

i Monito comp$i+nce by the copo+tion 8iththi! (ode +nd the u$e! +nd egu$+tion! o%egu$+toy +gencie! +nd" i% +ny 7io$+tion! +e%ound" epot the m+tte to the Bo+d +nd

ecommend the impo!ition o% +ppopi+tedi!cip$in+y +ction on the e!pon!ib$e p+tie!+nd the +doption o% me+!ue! to pe7ent +epetition o% the 7io$+tion<

ii Appe+ be%oe the (ommi!!ion 8hen!ummoned in e$+tion to comp$i+nce 8ith thi!(ode< +nd

iii D!!ue + cetiCc+tion e7ey +nu+y 30th o% theye+ on the etent o% the copo+tion!comp$i+nce 8ith thi! (ode %o the comp$etedye+ +nd" i% thee +e +ny de7i+tion!" ep$+inthe e+!on %o !uch de7i+tion

Article ;! A(e5,ate an( Ti$el0 In#or$ation To en+b$e the membe! o% the Bo+d to pope$y%u$C$$ thei dutie! +nd e!pon!ibi$itie!" M+n+gement!hou$d po7ide them 8ith comp$ete" +de9u+te +ndtime$y in%om+tion +bout the m+tte! to be t+;en inthei meeting!

#e$i+nce on in%om+tion 7o$unteeed byM+n+gement 8ou$d not be !ucient in +$cicum!t+nce! +nd %uthe in9uiie! m+y h+7e to bem+de by + membe o% the Bo+d to en+b$e him topope$y pe%om hi! dutie! +nd e!pon!ibi$itie!

K



Ience" the membe! !hou$d be gi7en independent+cce!! to M+n+gement +nd the (opo+teSecet+y

The in%om+tion m+y inc$ude the b+c;gound oep$+n+tion on m+tte! bought be%oe the Bo+d"di!c$o!ue!" budget!" %oec+!t! +nd inten+$Cn+nci+$ document!

The membe!" eithe indi7idu+$$y o +! + Bo+d" +ndin %uthe+nce o% thei dutie! +nd e!pon!ibi$itie!"!hou$d h+7e +cce!! to independent po%e!!ion+$+d7ice +t the copo+tion! epen!e

Article <! Acco,nta6ilit0 an( A,(itA The Bo+d i! pim+i$y +ccount+b$e to the

!toc;ho$de! Dt !hou$d po7ide them 8ith +b+$+nced +nd compehen!ib$e +!!e!!ment o% the copo+tion! pe%om+nce" po!ition +ndpo!pect! on + 9u+te$y b+!i!" inc$uding inteim+nd othe epot! th+t cou$d +d7e!e$y +@ect it!bu!ine!!" +! 8e$$ +! epot! to egu$+to! th+t+e e9uied by $+8

Thu!" it i! e!!enti+$ th+t M+n+gement po7ide+$$ membe! o% the Bo+d 8ith +ccu+te +ndtime$y in%om+tion th+t 8ou$d en+b$e the Bo+dto comp$y 8ith it! e!pon!ibi$itie! to the!toc;ho$de!

M+n+gement !hou$d %omu$+te" unde the!upe7i!ion o% the Audit (ommittee" the u$e!+nd pocedue! on Cn+nci+$ epoting +ndinten+$ conto$ in +ccod+nce 8ith the %o$$o8ingguide$ine!:

i The etent o% it! e!pon!ibi$ity in the

pep++tion o% the Cn+nci+$ !t+tement! o% thecopo+tion" 8ith the coe!pondingde$ine+tion o% the e!pon!ibi$itie! th+t pet+into the eten+$ +udito" !hou$d be c$e+$yep$+ined<

ii An e@ecti7e !y!tem o% inten+$ conto$ th+t8i$$ en!ue the integity o% the Cn+nci+$epot! +nd potection o% the +!!et! o% thecopo+tion !hou$d be m+int+ined<

iii n the b+!i! o% the +ppo7ed +udit p$+n!"inten+$ +udit e+min+tion! !hou$d co7e" +tthe minimum" the e7+$u+tion o% the +de9u+cy+nd e@ecti7ene!! o% conto$! th+t co7e the

copo+tion! go7en+nce" ope+tion! +ndin%om+tion !y!tem!" inc$uding the e$i+bi$ity+nd integity o% Cn+nci+$ +nd ope+tion+$in%om+tion" e@ecti7ene!! +nd eciency o% ope+tion!" potection o% +!!et!" +ndcomp$i+nce 8ith cont+ct!" $+8!" u$e! +ndegu$+tion!<

i7 The copo+tion !hou$d con!i!tent$y comp$y8ith the Cn+nci+$ epoting e9uiement! o% the (ommi!!ion<

7 The eten+$ +udito !hou$d be ot+ted och+nged e7ey C7e 5 ye+! o e+$ie" o the

!igning p+tne o% the eten+$ +uditing Cm+!!igned to the copo+tion" !hou$d bech+nged 8ith the !+me %e9uency TheDnten+$ Audito !hou$d !ubmit to the Audit(ommittee +nd M+n+gement +n +nnu+$ epoton the inten+$ +udit dep+tment! +cti7itie!e!pon!ibi$itie! +nd pe%om+nce e$+ti7e tothe +udit p$+n! +nd !t+tegie! +! +ppo7ed bythe Audit (ommittee The +nnu+$ epot!hou$d inc$ude !igniCc+nt i!; epo!ue!conto$ i!!ue! +nd !uch othe m+tte! +! m+ybe needed o e9ue!ted by the Bo+d +ndM+n+gement The Dnten+$ Audito !hou$dceti%y th+t he conduct! hi! +cti7itie! in+ccod+nce 8ith the Dnten+tion+$ St+nd+d!on the &o%e!!ion+$ &+ctice o% Dnten+Auditing D% he doe! not" he !h+$$ di!c$o!e tothe Bo+d +nd M+n+gement the e+!on! 8hyhe h+! not %u$$y comp$ied 8ith the !+id!t+nd+d!

B The Bo+d" +%te con!u$t+tion! 8ith the Audit(ommittee" !h+$$ ecommend to the!toc;ho$de! +n eten+$ +udito du$y +cceditedby the (ommi!!ion 8ho !h+$$ undet+;e +nindependent +udit o% the copo+tion" +nd !h+$po7ide +n ob?ecti7e +!!u+nce on the m+nneby 8hich the Cn+nci+$ !t+tement! !h+$$ bepep+ed +nd pe!ented to the !toc;ho$de! The eten+$ +udito !h+$$ not" +t the !+metime" po7ide inten+$ +udit !e7ice! to thecopo+tion ,on-+udit 8o; m+y be gi7en tothe eten+$ +udito" po7ided it doe! notconGict 8ith hi! dutie! +! +n independent+udito" o doe! not po!e + the+t to hi!independence

D% the eten+$ +udito e!ign!" i! di!mi!!ed oce+!e! to pe%om hi! !e7ice!" the e+!on! %o+nd the d+te o% e@ecti7ity o% !uch +ction !h+$be epoted in the copo+tion! +nnu+$ +ndcuent epot! The epot !h+$$ inc$ude +di!cu!!ion o% +ny di!+geement bet8een him+nd the copo+tion on +ccounting pincip$e! op+ctice!" Cn+nci+$ di!c$o!ue! o +udipocedue! 8hich the %ome +udito +nd thecopo+tion %+i$ed to e!o$7e !+ti!%+ctoi$y Ape$imin+y copy o% the !+id epot !h+$$ begi7en by the copo+tion to the eten+$ +udito

be%oe it! !ubmi!!ion

D% the eten+$ +udito be$ie7e! th+t +ny!t+tement m+de in +n +nnu+$ epotin%om+tion !t+tement o +ny epot C$ed 8iththe (ommi!!ion o +ny egu$+toy body duingthe peiod o% hi! eng+gement i! incoect oincomp$ete" he !h+$$ gi7e hi! comment! o7ie8! on the m+tte in the !+id epot!

Article =! Stoc/*ol(ers> Ri+*ts an( Protectiono# Minorit0 Stoc/*ol(ers> Interests

6



A The Bo+d !h+$$ e!pect the ight! o% the!toc;ho$de! +! po7ided %o in the (opo+tion(ode" n+me$y:

i #ight to 7ote on +$$ m+tte! th+t e9uie theicon!ent o +ppo7+$<

ii &e-empti7e ight to +$$ !toc; i!!u+nce! o% thecopo+tion<

iii #ight to in!pect copo+te boo;! +nd ecod!<i7 #ight to in%om+tion<7 #ight to di7idend!< +nd

7i App+i!+$ ightB The Bo+d !hou$d be t+n!p+ent +nd %+i in the

conduct o% the +nnu+$ +nd !peci+$ !toc;ho$de!meeting! o% the copo+tion The !toc;ho$de!!hou$d be encou+ged to pe!on+$$y +ttend !uchmeeting! D% they c+nnot +ttend" they !hou$d be+ppi!ed +he+d o% time o% thei ight to +ppoint+ poy Sub?ect to the e9uiement! o% theby$+8!" the eeci!e o% th+t ight !h+$$ not beundu$y e!ticted +nd +ny doubt +bout the7+$idity o% + poy !hou$d be e!o$7ed in the!toc;ho$de! %+7o

Dt i! the duty o% the Bo+d to pomote the ight!o% the !toc;ho$de!" emo7e impediment! to theeeci!e o% tho!e ight! +nd po7ide +n+de9u+te +7enue %o them to !ee; time$yede!! %o be+ch o% thei ight!

The Bo+d !hou$d t+;e the +ppopi+te !tep! toemo7e ece!!i7e o unnece!!+y co!t! +ndothe +dmini!t+ti7e impediment! to the!toc;ho$de! me+ning%u$ p+ticip+tion inmeeting!" 8hethe in pe!on o by poyAccu+te +nd time$y in%om+tion !hou$d bem+de +7+i$+b$e to the !toc;ho$de! to en+b$e

them to m+;e + !ound ?udgment on +$$ m+tte!bought to thei +ttention %o con!ide+tion o+ppo7+$

A$though +$$ !toc;ho$de! !hou$d be te+tede9u+$$y o 8ithout di!cimin+tion" the Bo+d!hou$d gi7e minoity !toc;ho$de! the ight topopo!e the ho$ding o% meeting! +nd the item!%o di!cu!!ion in the +gend+ th+t e$+te diect$yto the bu!ine!! o% the copo+tion

Article ?! Go&ernance Sel#-Ratin+ S0ste$ The Bo+d m+y ce+te +n inten+$ !e$%-+ting

!y!tem th+t c+n me+!ue the pe%om+nce o% theBo+d +nd M+n+gement in +ccod+nce 8ith thecitei+ po7ided %o in thi! (ode

The ce+tion +nd imp$ement+tion o% !uch !e$%-+ting!y!tem" inc$uding it! !+$ient %e+tue!" m+y bedi!c$o!ed in the copo+tion! +nnu+$ epot

Article @! Disclos,re an( Trans%arenc0 The e!!ence o% copo+te go7en+nce i!t+n!p+ency The moe t+n!p+ent the inten+$8o;ing! o% the copo+tion +e" the moe dicu$t it

8i$$ be %o M+n+gement +nd domin+nt !toc;ho$de!to mi!m+n+ge the copo+tion o mi!+ppopi+te it!+!!et!

Dt i! thee%oe e!!enti+$ th+t +$$ m+tei+$ in%om+tion+bout the copo+tion 8hich cou$d +d7e!e$y +@ectit! 7i+bi$ity o the intee!t! o% the !toc;ho$de!!hou$d be pub$ic$y +nd time$y di!c$o!ed Suchin%om+tion !hou$d inc$ude" +mong othe!" e+ning!e!u$t!" +c9ui!ition o di!po!ition o% +!!et!" o@b+$+nce !heet t+n!+ction!" e$+ted p+tyt+n!+ction!" +nd diect +nd indiect emune+tiono% membe! o% the Bo+d +nd M+n+gement A$!uch in%om+tion !hou$d be di!c$o!ed though the+ppopi+te 'ch+nge mech+ni!m! +nd!ubmi!!ion! to the (ommi!!ion

Article ! Co$$it$ent to Goo( Cor%orateGo&ernanceA$$ co7eed copo+tion! !h+$$ e!t+b$i!h +ndimp$ement thei copo+te go7en+nce u$e! in+ccod+nce 8ith thi! (ode The u$e! !h+$$ beembodied in + m+nu+$ th+t c+n be u!ed +!e%eence by the membe! o% the Bo+d +ndM+n+gement The m+nu+$ !hou$d be !ubmitted tothe (ommi!!ion %o it! 1/ e7+$u+tion 8ithin onehunded eighty 160 bu!ine!! d+y! %om the d+tethi! (ode become! e@ecti7e to en+b$e the(ommi!!ion to detemine it! comp$i+nce 8ith thi!(ode t+;ing into con!ide+tion the n+tue" !i>e +nd!cope o% the bu!ine!! o% the copo+tion< po7idedho8e7e" th+t copo+tion! th+t h+7e e+$ie!ubmitted thei m+nu+$ m+y" +t thei optioncontinue to u!e the !+id m+nu+$ +! $ong it comp$ie!8ith the po7i!ion! o% thi! (ode

The m+nu+$ !h+$$ be m+de +7+i$+b$e %o in!pectionby +ny !h+eho$de +t e+!on+b$e hou! onbu!ine!! d+y!

Article B! Re+,lar Re&ie o# t*e Co(e an(t*e Scorecar( To monito the comp$i+nce by co7eed copo+tion!8ith thi! (ode" the (ommi!!ion m+y e9uie themto +ccomp$i!h +nnu+$$y + !coec+d on the !copen+tue +nd etent o% the +ction! they h+7e t+;en tomeet the ob?ecti7e! o% thi! (ode

The (ommi!!ion !h+$$ peiodic+$$y e7ie8 thi! (ode

to en!ue th+t it meet! it! ob?ecti7e!

Article ! A($inistrati&e SanctionsA Cne o% not moe th+n T8o Iunded Thou!+nd&e!o! &200"000 !h+$$" +%te due notice +ndhe+ing" be impo!ed %o e7ey ye+ th+t + co7eedcopo+tion 7io$+te! the po7i!ion! o% thi! (ode8ithout pe?udice to othe !+nction! th+t the(ommi!!ion m+y be +uthoi>ed to impo!e undethe $+8< po7ided" ho8e7e" th+t +ny 7io$+tion o%the Secuitie! #egu$+tion (ode puni!h+b$e by +

/



!peciCc pen+$ty !h+$$ be +!!e!!ed !ep++te$y +nd!h+$$ not be co7eed by the +bo7ementioned Cne

Article 1! E9ecti&e Date Thi! Memo+ndum (icu$+ !h+$$ t+;e e@ect on u$y15" 200/

Signed thi! 22nd d+y o% une 200/ +tM+nd+$uyong (ity" &hi$ippine!

Fo the(ommi!!ion:Fe B B+in(h+ipe!on

10

Documents

Revised Code of Corporate Governance