Declaration of Policy
- The State acknowledges GOCCs as vital for economic development.
- Ensures active ownership and alignment with national development.
- Key principles include:
- Judicious use of the corporate form.
- Rationalized and centralized monitoring for efficient asset/resource use.
- Transparent, responsible, accountable governance with professionalism.
- Enforced reporting and evaluation systems.
- Competent and accountable governing boards acting in the State's best interest.
- Appropriate remuneration schemes to prevent unwarranted rewards.
- Clear separation of regulatory and proprietary activities.
Definition of Terms
- Affiliates, Appointive Directors, Board, Breakthrough Results, Charter Statement, Chartered and Nonchartered GOCCs, CEO, Department, Ex Officio Members.
- Fit and Proper Rule: integrity, experience, education, competence standards for GOCC officers.
- Government Agencies, Government Corporate Governance Standards, GFIs, GICP/GCE defined.
- GOCCs defined as government-owned corporations operating for public needs.
- Officers, Ownership Manuals, Per Diems, Performance Systems, Related Corporations, Secretary roles defined.
- Strategy Map and Subsidiaries also detailed.
Coverage
- Applies to all GOCCs, GICPs/GCEs, GFIs including subsidiaries.
- Excludes BSP, state universities, cooperatives, local water districts, economic zone authorities, and research institutions.
- Economic zone authorities and research institutions’ boards partially appointed by GCG.
Creation and Powers of the GCG
- GCG attached to the Office of the President.
- Powers include:
- Evaluate the relevance and performance of GOCCs.
- Reorganize, merge, abolish, or privatize GOCCs based on set standards.
- Classify GOCCs into developmental, commercial, financial, regulatory, and other categories.
- Develop ownership and operations manuals including corporate governance standards.
- Recommend suspensions and disqualify unfit directors.
- Identify qualifications for directors and submit nominees to the President.
- Establish performance evaluation and compensation systems.
- Coordinate monitoring and align GOCCs with national policies.
- Prepare reports to the President and Congress.
- Address conflicts between regulatory and commercial functions.
Composition of the GCG
- Five members including a Chairman with Cabinet rank, two Undersecretaries, and ex officio members from Budget and Finance Departments.
Powers and Functions of the Chairman
- Oversees GCG management, presides meetings, manages personnel, appoints or disciplines staff.
Compensation and Position Classification System
- Applies to all GOCC officers and employees.
- Positions categorized and salary grades established, subject to presidential approval.
- Principles ensure just, equitable wages, comparable to private sector, and periodic compensation review.
- Incentives for performance possible, conditioned on tax and dividend compliance.
- No diminution of authorized salaries as of Dec 31, 2010.
Board of Directors/Trustees and Officers
- Duties and standards apply to all current and future GOCC board members and officers.
- Number of directors maintained as per charters.
- Ex officio board members may designate next-in-rank alternates.
- Presidential appointment of Appointive Directors from GCG shortlists.
- Fit and Proper Rule applies to all directors and officers.
- One-year term for Appointive Directors, renewable based on performance.
- CEO elected annually by the Board.
- Fiduciary duties emphasize loyalty, due care, conflict of interest avoidance, and sound financial management.
- Board can discipline or remove officers for cause.
- Compensation limits set by GCG; directors not entitled to retirement benefits.
- Restitution required for unauthorized profits or benefits; penalty includes imprisonment and fines.
Disclosure Requirements
- Mandatory website posting for public access including:
- Annual and audited financial reports.
- Quarterly reports and budgets.
- Compensation details.
- Borrowings and government subsidies.
- Performance scorecards and strategy maps.
Audit Provisions
- Top 30 GOCCs by asset size subject to periodic COA special audits for accounting completeness and fair financial presentation.
- Special audits can be ordered for other GOCCs by GCG Chairman or law.
Creation and Acquisition of GOCCs/Related Corporations
- Proposals for new GOCCs require GCG review and Presidential approval before SEC registration.
- Acquisition of controlling interest in corporations requires GCG review and Presidential approval.
Miscellaneous Provisions
- Initial GCG funding from President's Contingent Fund; future budgets via General Appropriations Act.
- Corporation Code and individual charters apply suppletorily unless inconsistent.
- Privatization Council to continue ongoing privatizations for two years, then transferred to GCG.
- Repeals inconsistent laws, orders, and regulations.
- Separability clause ensures validity despite potential invalid provisions.
- Effectivity fifteen days after publication in Official Gazette or newspapers.