Board Governance: General Responsibility
- The Board is tasked with fostering the long-term success of the corporation.
- Must sustain the corporation's competitiveness and profitability.
- Actions must align with corporate objectives.
- Must act in the best interests of stockholders and other stakeholders.
Board Governance: Duties and Functions
- The Board should uphold a high standard of best practice.
- Conduct must be characterized by honesty and integrity.
- Duties include identifying corporation’s stakeholders within the community and those affected by its operations.
- Must formulate clear policies ensuring accurate, timely, and effective communication with these stakeholders.
- The Corporate Secretary plays a key role, working fairly and objectively with the Board, Management, stockholders, and other stakeholders.
Accountability and Audit: Internal Controls
- Board must ensure an effective internal control system.
- Internal controls are designed to guarantee the integrity of financial reports.
- Protects the corporation’s assets.
- These provisions aim to benefit stockholders and other stakeholders by safeguarding corporate resources and financial transparency.
Disclosure and Transparency
- Mandates full, timely, and public disclosure of all material information affecting the corporation’s viability or the interests of stockholders and stakeholders.
- Includes earnings results, asset acquisitions or dispositions, off-balance sheet transactions, related party transactions, and remuneration of Board and Management members.
- The Board must commit to full disclosure at all times.
- Requires filing of all required disclosures through appropriate Exchange mechanisms for listed companies and submissions to the SEC.
Implementation and Compliance
- The Circular takes effect fifteen (15) days after publication in a national newspaper of general circulation.
- Corporations must update and file their Manuals of Corporate Governance reflecting these amendments with the Commission by July 31, 2014.
Authority and Signature
- The memorandum is signed by the SEC Chairperson, Teresita J. Herbosa, upon approval by the Commission on May 6, 2014, in Mandaluyong City, Philippines.