MAGSAYSAY HOULDER INSURANCE BROKERS, INC.BOARD OF DIRECTORS
The Board of Directors, stockholders, management, and employees of MAGSAYSAY Houlder Insurance Brokers, Inc. (MAGSAYSAY) hereby commit ourselves (MPs) to the principles of best practices contained in this Governance Code, as our guide in the conduct of our work decision-making processes, to achieve corporate goals and objectives.
This Manual shall institutionalize the principles of good corporate governance for the entire MAGSAYSAY organization, with the end goal of instilling integrity, fairness, transparency, honesty and accountability among all MPs.
The Board of Directors, stockholders, management, and MPs believe that good corporate governance is a collective and coherent mind set and is a necessary component of a sound strategic management. Accordingly, every effort necessary to create awareness, ensure compliance and measure performance will be continuously undertaken.
When each MP follows the Code, we convey our commitment to the MAGSAYSAY Way and to the values of Excellence, Innovation, Enthusiasm, Integrity, Accountability, and We Care for our customers, employees, colleagues, shareholders, business partners, and the planet.
These Guidelines specifically require:
- Dedication to MAGSAYSAY’s mission, vision and core values and recognition that the chief function of MAGSAYSAY at all times is to serve the best interests of our stakeholders.
- The responsible and prudent management of MAGSAYSAY’s funds and assets.
- Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.
- Full, fair, accurate, and timely disclosure of relevant facts in all reports and documents dealing with matter of program, service, governance, and business administration.
- Compliance with all applicable governmental laws, rules, and regulations.
f.Treatment of all persons with respect, equity and fairness, regardless of race,religion, gender, ability, age, or national origin.
g.Respect and protection of confidential and/or privileged information to which wehave access in the course of our duties.
h.Prompt internal reporting of code violations to the appropriate person or personswithin the organization.
I.Personal accountability for adherence to this Code of Conduct.
I.GOVERNANCE AND GENERAL CODE OF CONDUCT OF THE BOARD
A.THE BOARD OF DIRECTORS
1.General Responsibility: A director’s office is one of trust and confidence. Heor she shall act in a manner characterized by integrity, fairness, transparency,honesty and accountability.
2.Fiduciary Capacity of the Board
2.1 General Fiduciary Capacity. It shall be the Board’s responsibility to foster the long-term success of MAGSAYSAY and secure its sustained competitiveness in a manner consistent with its fiduciary responsibility, which it shall exercise in the best interest of MAGSAYSAY, its shareholders, and other stakeholders. The Board shall conduct itself with utmost honesty and integrity in the discharge of its duties, functions and responsibilities.
2.2 Specific Duties and Functions. To ensure a high standard of best practice for the corporation and its stakeholders, the Board shall:
2.2.1 Install a process of selection to ensure a mix of competent directors and officers who can add value and contribute independent judgment to the formulation of sound corporate strategies and policies;
2.2.2 Determine MAGSAYSAY’s purpose, its vision and mission and strategies to carry out its objectives;
2.2.3 Provide sound strategic policies and guidelines to the corporation on major capital expenditures;
2.2.4 Ensure that MAGSAYSAY complies with all relevant laws, regulations and codes of best business practices;
2.2.5 Formulate a clear policy on maintaining open communication to easily determine their control risks;
2.2.6 Adopt a system of internal checks and balances;
2.2.7 Identify the sectors in the community in which the corporation operates or are directly affected by its operations, and formulate a clear policy of communication and cooperation with them;
2.2.8 Identify key risk areas and key performance indicators and monitor these factors with due diligence;
2.2.9 Formulate and implement policies and procedures that would ensure the integrity and transparency of the following:
126.96.36.199 related party transactions between and among the corporation and its parent company, joint ventures, subsidiaries, associates, affiliates, major stockholders, officers and directors, including their spouses, children and dependent siblings and parents, and of interlocking director relationships by members of the Board;
188.8.131.52 contractual covenants and insolvency powers of debt holders;
184.108.40.206 commitments entered into with regulators, suppliers, contractors, service provides, customers and external stakeholders;
2.2.10 Properly discharge Board functions by meeting regularly. Independent views during Board meetings shall be given due consideration and all such meetings shall be duly minuted;
2.2.11 Establish and maintain an alternative dispute resolution system in that can amicably settle conflicts or differences;
2.2.12 Keep Board authority within the powers of the institution as prescribed in the Articles of Incorporation, By-Laws and in existing laws, rules and regulation; and
2.2.13 Ensure the presence and adequacy of internal control mechanisms for good governance. The minimum internal control mechanisms for the Board's oversight responsibility include, but shall not be limited to:
220.127.116.11 ensuring the presence of organizational and procedural controls, supported by an effective management information system and risk management reporting system;
18.104.22.168 reviewing conflict of interest situations and providing appropriate remedial measures for the same;
22.214.171.124 reviewing proposed key executive appointments;
126.96.36.199 ensuring the selection, appointment and retention of qualified and competent management; and
188.8.131.52 reviewing the corporation's personnel and human resources policies, compensation plan and the management succession plan.
- Each Member of the Board
3.1 Trust and Confidence. Each Board Member assumes a position of trust and confidence. He/she must act in the best interest of the particular SBU to which Board he/she is elected, and MAGSAYSAY as a whole, at all times. His/her actions must be characterized by transparency, accountability, fairness and responsibility, with an effective exercise of leadership, prudence and integrity in directing MAGSAYSAY towards sustained progress.
3.2 Specific Duties and Functions. To ensure a high standard of best practice for the corporation and its stakeholders, each member of the Board shall:
3.2.1 Conduct fair business transactions with the corporation ensuring that personal interest does not compromise or bias Board decisions. The basic principle to be observed is that a board member shall not use his/her position to make profit or to acquire benefit or advantage for himself or his/her related interests. He/She should avoid situations that may compromise his/her impartiality. lf an actual or potential conflict of interest arises on the part of board members or senior executives, it must be fully disclosed and the concerned director should not participate in the decision- making. A board member who has a continuing conflict of interest of a material nature should consider resigning.
3.2.2 Devote time and attention necessary to the proper discharge of his duties and responsibilities. A Board Member should devote sufficient time to familiarize him/herself with the corporation's business and should be constantly aware of the corporation's condition and be knowledgeable enough to contribute meaningfully to the Board's work. He/She should attend and actively participate at Board meetings, request and review meeting materials, ask questions, and request explanations.
3.2.3 Act judiciously. Before deciding on any matter brought before the Board, a Board member should thoroughly evaluate the issues, ask questions and seek clarifications when necessary.
3.2.4 Exercise independent Judgment. A Board Member should view each problem/situation objectively. When a disagreement with other Board members occurs, he/she should carefully evaluate the situation and state his/her position. He should not be afraid to take a position even though it might be unpopular. Corollary thereto, he/she should support plans and ideas that he/she thinks are beneficial to the corporation;
3.2.5 Gain a working knowledge of the statutory and regulatory requirements affecting the MAGSAYSAY and the particular SBU on which Board he/she is a member. A Board member should also keep him/herself informed of industry developments and business trends in order to safeguard the corporation's competitiveness;
3.2.6 To have working knowledge of the statutory and regulatory requirements affecting the corporation, including the contents of its Articles of Incorporation and By-Laws, the requirements of the Commission, and where applicable, the requirements of other regulatory agencies;
3.2.7 Observe confidentiality. A Board member should observe the confidentiality of non- public information acquired by reason of his/her position as director. He/She should not disclose any information to any other person without the authority of the Board;
3.2.8 To ensure the continuing, soundness, effectiveness and adequacy of the corporation’s control environment.
3.3 Collective and lndividual Liability of Board Members
3.3.1 Board members who willfully and knowingly vote or consent to patently unlawful acts of MAGSAYSAY or the particular SBU on which he/she was elected director or who are guilty of gross negligence or bad faith in directing the affairs of MAGSAYSAY or the particular SBU on which he/she was elected director or acquire any personal or pecuniary interest in conflict with their duty as such members, shall be liable jointly and severally for all damages resulting therefrom suffered by the MAGSAYSAY or the particular SBU on which he/she was elected director, shareholders, stakeholders and/or persons, without prejudice to the imposition of criminal or administrative penalties.
3.3.2 In addition, when a Board member attempts to acquire or acquires in violation of his duty, any interest adverse to the MAGSAYSAY or the particular SBU on which he/she was elected director in respect of any matter which has been reposed in him/her in confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee therefor and must account for the profits which otherwise would have accrued to MAGSAYSAY or the particular SBU on which he/she was elected director.
3.3.3 Any Board member who enters into a transaction or contract grossly disadvantageous to MAGSAYSAY or the particular SBU on which he/she was elected director, whether he profited from it or not, shall be liable.
- BOARD COMMITTEES: When necessary, the Board shall set up specialized committees to support the performance of its functions. When the creation of specialized committees is not mandated by law, the Board shall define the cases in which the said committees may be considered by using a combination of criteria, including the size of the SBU. It is essential that specialized board committees are chaired by a non-executive and include a sufficient number of independent members.
The existence of specialized board committees should not excuse the Board from its collective responsibility in all matters. Specialized board committees should have written terms of reference that define their duties, authority and composition. Specialized board committees should report to the Board and the minutes of their meetings should be circulated to all board members.
- CORPORATE OFFICERS: The primary duties of company officers under this Manual pertain to supporting the Board fulfilling the latter’s responsibilities towards promoting good governance rather than providing assistance to Management in the conduct of the day-to-day affairs of MAGSAYSAY.
- CHAIRMAN OF THE BOARD: The Chairman of the Board shall have the primary duty of ensuring adherence to the corporate governance code and practices.
In addition to the foregoing, the following shall be his/her duties and responsibilities:
1.1 Schedule meetings to enable the Board to perform its duties responsibly while not interfering with the flow of the company’s operations;
1.2 Supervise the preparation of the meeting agenda in coordination with the Corporate Secretary, after consultation with the Chief Executive Officer, SBU heads and directors;
1.3 Ensure that meeting of the Board are held in accordance with the By-Laws or as the Chair may deem necessary;
1.4 Exercise control over qualify, quantity, and timeliness of the flow of information between management and the Board; and
1.5 Assist in ensuring compliance with company’s guidelines on corporate governance.
If the positions of Chairman of the Board and Chief Executive Officer and/or President are unified or otherwise held by the same person, the proper checks and balances should be laid down to ensure that the Board gets the benefit of independent view and perspectives.
- CHIEF FINANCE OFFICE (“CFO”): The CFO who may also be the Head/Chief Accountant of the corporation shall be responsible for the following:
2.1 Provide management with accurate, relevant and timely operating and financial reports and analysis necessary for financial planning and strategy formulation, and monitor actual implementation of budgets plans and programs towards the achievement of corporate goals.
2.2 Maintain the integrity of accounting records as the basis of the financial statements and reports provided to Management for decision-making and to government regulatory bodies in compliance with statutory requirements.
2.3 Promote investor and public confidence in MAGSAYSAY by addressing the various information requirements of the investing public and ensuring that all other legal reportorial obligations to the concerned agencies are complied with.
2.4 Strengthen internal controls by monitoring compliance with policies and recommending to Management appropriate actions and changes in systems and procedures in the exigencies of the service.
2.5 Perform such other responsibilities as the Board may impose.
- CORPORATE SECRETARY: The Corporate Secretary is an officer of the corporation and his/her loyalty to the mission, vision and specific business objectives of the corporate entity comes with his/her duties. The Corporate Secretary shall be Filipino and a resident of the Philippines. Considering his varied functions and duties, he/she must possess administrative and interpersonal skills, and if he/she is not the general counsel, then he/she must have some legal skills. He/she must also have some financial and accounting skill. Duties and responsibilities of the Corporate Secretary include the following:
3.1 Be responsible for the safekeeping and preservation of the integrity of the minutes of the meetings of the Board and its committees, as well as the other official records of the corporation;
3.2 Certify to government agencies and to the public the contents of corporate records, as well as important corporate acts and resolutions;
3.3 Keep the Stock and Transfer Book and make necessary entries therein.
3.4 Gather and analyze all documents, records and other information essential to the conduct of his/her duties and responsibilities to the corporation;
3.5 Have a working knowledge of the operations of the corporation;
3.6 As to agenda, get a complete schedule thereof at least for the current year and put the Board on notice before every meeting;
3.7 Assist the Board in making business judgment in good faith and in the performance of their responsibilities and obligations. For governance matters, advise the Board through the Chairman of the Board;
3.8 Ensure that all Board procedures, rules and regulations are strictly followed by the members;
3.9 Attend all Board meetings and maintain record of the same.
3.9.1 All material information, i.e., earnings results, acquisition or disposal of assets, board changes, related party transactions, shareholdings of directors and changes to ownership shall be included in the minutes;
3.9.2 Other information that shall always be disclosed in the minutes includes remuneration of all directors and senior management corporate strategy, and off balance sheet transactions.
3.9.3 The Board shall commit at all times to fully disclose material information dealings.
- EXTERNAL AUDITOR: An external auditor shall enable an environment of good corporate governance as reflected in the financial records and reports of the corporation. An external auditor shall be selected and appointed by the Audit Committee.
The reason/s for the resignation, dismissal or cessation from service and the date thereof of an external auditor shall be reported in the corporation’s annual and current reports. Said report shall include a discussion of any disagreement with said former external auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.
The external auditor of the corporation shall not at the same time provide the
service of an internal auditor to the same client. The corporation shall ensure that other non-audit work shall not be in conflict with the functions of the external auditor.
The corporation’s external auditor shall be rotated or the handling partner shall be changed every five (5) years or earlier.
If an external auditor believes that the statements made in the corporation’s annual report, information statement or proxy statement filed during his engagement is incorrect or incomplete, he shall present his views in said reports.
- INTERNAL AUDITOR: The corporation shall have in place an independent internal audit function which shall be performed by an Internal Auditor or group of Internal Auditors, through its Board, senior management, and stockholders with reasonable assurance that its key organizational and procedural controls, risk management and governance processes are effective, appropriate, and complied with.
Internal Auditing is defined as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
The head of Internal Audit is called Chief Audit Executive (CAE) who shall report to the Audit Committee. CAE is responsible for effectively managing the internal audit activity in accordance with the internal audit charter and the Definition of Internal Auditing, the Code of Ethics, and the International Standards for the Professional Practice of Internal Auditing. The CAE or others reporting to the CAE will have appropriate professional certifications and qualifications. Screening prior to hiring and movement of Internal Audit personnel shall be approved by CAE. No movements of the Audit personnel by the management can be done without prior consultation and approval of the CAE. The specific job title of the chief audit executive may vary as deemed necessary by the company.
The purpose, authority, and responsibility of the internal audit activity must be formally defined in an Internal Audit Charter, consistent with the Definition of Internal Auditing, the Code of Ethics, and the Standards. The Chief Audit Executive (CAE) must periodically review the Internal Audit Charter and present it to senior management and the board for approval.
Internal Auditors are governed by the Institute of Internal Auditors’ Code of Ethics which covers the principles and rules of conduct in the profession of Internal Auditing. Internal Auditors are expected to apply and uphold:
5.1 Integrity. The integrity of internal auditors establishes trust and thus provides the basis for reliance on their judgment.
5.2 Objectivity. Internal auditors exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors make a balanced assessment of all the relevant circumstances and are not unduly influenced by their own interests or by others in forming judgments. Internal auditors shall not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may be in conflict with the interests of the organization.
5.3 Confidentiality. Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so.
5.4 Competency. Internal auditors apply the knowledge, skills, and experience needed in the performance of internal audit services.
The minimum internal control mechanisms for management’s operational responsibility shall centre on the President/CEO, being ultimately accountable for the corporation’s organizational and procedural controls. The scope and particulars of a system of effective organizational and procedural controls shall be based on the following factors:
5.4.1 the nature and complexity of business and the business culture;
5.4.2 the volume, size, and complexity of transactions;
5.4.3 the degree of risk;
5.4.4 the degree of centralization and delegation of authority;
5.4.5 the extent and effectiveness of information technology; and
5.4.6 the extent of regulatory compliance.
MAGSAYSAY GROUP INTERNAL AUDIT STRUCTURE
Audit Manager MSL
Audit Manager MPRC, AMI & Affiliates
Chief Audit Executive
All Auditors are A. Magsaysay, Inc. employees to uphold independence.
Auditors will be assigned to a particular group* but will be regularly rotated.
Chief Audit Executive has oversight function over MAYSAYSAY’s Audit Department.
- DUTIES AND OBLIGATIONS OF DIRECTORS AND OFFICERS: The directors and officers of MAGSAYSAY are fiduciaries of the Stockholder. As such, they have the legal obligation and duty to always act in the best interest of MAGSAYSAY, with utmost good faith in all dealings with properties, interests and monies; and are constituted as trustees in relation to the properties, interests and monies of MAGSAYSAY.
- Duty of Diligence. - The fiduciary duty of diligence of Directors and Officers to always act in the best interest of MAGSAYSAY, also includes the obligation to:
1.1 Exercise extraordinary diligence, skill and utmost good faith in the conduct of the business and in dealing with the properties of MAGSAYSAY, using the utmost diligence of a very cautious person with due regard to all the circumstances.
1.2 Apply sound business principles to ensure the financial soundness.
1.3 Elect and/or employ MPs that are fit and proper to hold such office with due regard to the qualifications, competence, experience and integrity. Every Director or Officer, by the act of accepting such position in MAGSAYSAY, affirms and agrees:
1.3.1 to have a working knowledge of the statutory and regulatory requirements affecting the SBU / SSU he/she is to serve, including the contents of its Charter, and the By-laws; and
1.3.2 to always keep him/herself informed of industry developments and business trends in order to safeguard MAGSAYSAY's interests and preserve its competitiveness.
- Duty of Loyalty. The fiduciary duty of loyalty of Directors and officers to always act in the best interest of MAGSAYSAY and the SBUs/SSUs, with utmost good faith in all its dealings with the property and monies of the former includes the obligation to:
2.1 Act with utmost and undivided loyalty to the corporation;
2.2 Avoid conflicts of interest and declare any interest they may have in any particular matter before the Board; and
2.3 Avoid asking for themselves opportunities related to MAGSAYSAY's business, using proprietary information or position for personal gain, or competing with business opportunities.
- Avoid Conflict of Interest. Directors and officers shall at all times avoid any actual or potential conflict of interest with MAGSAYSAY. Each shall also avoid any situation that could reasonably be construed as creating an appearance of a conflict of interest. Any question about a Director's or officer’s actual or potential Conflict of interest with MAGSAYSAY or the SBU shall be brought promptly to the attention of the Chairman of the Board who will review the question and determine an appropriate course of action in accordance with these Guidelines.
- Trustee Relation to MAGSAYSAY’s Properties, lnterests, and Monies. - Except for the reimbursement for actual and reasonable expenses and incentives as authorized by the Board, any and all realized and unrealized profits and/or benefits including, but not limited to, to the share in the profits, incentives of Directors or Officers in excess of that authorized by the Board, stock options, dividends and other similar offers or grants from corporations where MAGSAYSAY or the SBU is a stockholder or investor and any benefit from the performance of Directors or Officers acting for and in behalf of the corporation in dealing with its properties, investments in other corporations' management of Subsidiaries and other interest' are to be held in trust by such Director or Officer for the exclusive benefit of the corporation represented.
- Duty of Confidentiality. Pursuant to their duties of diligence and loyalty, Directors and Officers shall not use or divulge confidential or classified information officially made known to them by reason of their office and not made available to the public, either to further their private interests, or give undue advantage to anyone; or which may prejudice the interest of MAGSAYSAY.
- EXERCISE OF OBJECTIVE AND INDEPENDENT JUDGMENT: Good practice calls for the separation of the positions of Chairman and President/Chief Executive Officer ("CEO") to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making.
- CORPORATE SOCIAL RESPONSIBILITY AND RELATIONS WITH STOCKHOLDERS
- All directors and officers are fully aware that they assume certain responsibilities to all the stakeholders of MAGSAYSAY. Consequently, each director and officer shall deal fairly with all consultants, employees, clients, principals, suppliers and other stakeholders. No director or officer shall take unfair advantage of MAGSAYSAY consultant, employees, clients, principals, suppliers and other stakeholders through manipulation, concealment, abuse of authority or confidential or proprietary information, misrepresentation of material facts, or any other unfair-dealing practices.
- MAGSAYSAY finds it inherent for the entire organization tobe socially responsible, to act and operate as a good corporate entity. MAGSAYSAY recognizes and performs its obligations towards the State, its consultants, employees, clients, principals, suppliers and other stakeholders and the communities where they operate.
- The protection of the reputation and goodwill of MAGSAYSAY is of fundamental importance such that all should be aware not to commit any breach in ethical policies laid down and implement in the entire organization. Every director, officer, consultant, employee, client, principal, supplier and MP is required to promptly report any potentially illegal, improper and/or unethical conduct that he/she may be aware of within MAGSAYSAY.
- MAGSAYSAY shall create an environment that enables its people to raise genuine and legitimate concerns. Moreover, policies shall be implemented, providing each MP with opportunities to discuss, create and continue their personal and professional development.
- Responsibility of all MPs. Reciprocally, every director, officer, consultant and employee shall keep in mind at all times that MAGSAYSAY conducts its business:
5.1 In a socially responsible and ethical manner;
5.2 With the highest respect for the law;
5.3 In full support of universal human rights and protection of the environment to ensure the greatest benefit to the communities where it works.
5.4 By putting the greatest importance to the values of integrity, accountability, excellence, innovation, enthusiasm and caring for every work accomplished.
Accordingly, every director, officer, consultant and employee shall:
- Remember that the biggest stakeholder are its people;
- Embrace the vision of MAGSAYSAY;
- Be accountable to all stakeholders;
- Listen and learn from his/her colleagues;
- Think and act as a team;
- Always strive for client / consumer satisfaction;
- Respect others;
- Communicate with stakeholders;
- Deliver results in the most efficient manner in the least amount of time;
- Protect the reputation of MAGSAYSAY
- SHAREHOLDER’S BENEFIT: MAGSAYSAY recognizes that the most cogent proof of good corporate governance is that which is visible to the eyes of its investors. Therefore the following provisions are issued for the guidance of all internal and external parties concerned, as governance covenant among MAGSAYSAY, the SBUs and all its investors:
Investor’s Rights and Protection: The Board shall be committed to respect the following rights of the stockholders:
- Voting Right
1.1 Shareholders shall have the right to elect, remove and replace directors and vote on certain corporate acts in accordance with the Corporation Code.
1.2 Cumulative voting shall be used in the election of directors.
1.3 A director shall not be removed without cause if it will deny minority shareholders representation in the Board.
- Pre-emptive Right. All stockholders shall have pre-emptive rights, unless the same is denied in the Articles of Incorporation or an amendment thereto. They shall have the right to subscribe to the capital stock of the particular SBU where they invested. The Articles of Incorporation shall lay down the specific rights and powers of shareholders with respect to the particular shares they hold, all of which shall be protected by law so long as they shall not be in conflict with the Corporation Code.
- Power of Inspection. All shareholders shall be allowed to inspect corporate books and records including minutes of the Board meetings and stock registries in accordance with the Corporation Code and shall be furnished with annual reports, including financial statements, without cost or restrictions.
- Right to Information. The Shareholders 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 MAGSAYSAY’s shares, dealings with MAGSAYSAY, relationships among directors and key officers, and the aggregate compensation of directors and officers.
The minority shareholders shall be granted 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.
The 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 shall include such information and, if not included, then the minority stockholders shall be allowed to propose to include such matters in the agenda of stockholders’ meeting, being within the definition of “legitimate purposes.”
- Right to Dividends. Shareholders shall have the right to receive dividends subject to the approval of the Board.
Each SBU shall be compelled 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 SBU 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 SBU, such as when there is a need for special reserve for probable contingencies.
- Appraisal Right. The shareholders shall have appraisal right or the right to dissent and demand payment for the fair value of their shares in the manner provided for under Section 82 of the Corporation Code of the Philippines, under any of the following circumstances:
6.1 In case any amendment to the Articles of Incorporation has the effect of changing or restricting the rights of any stockholders 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.
6.2 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.
6.3 In case of merger or consolidation.
It shall be the duty of the directors to promote shareholder 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 voting right and solution of collective action problems through appropriate mechanisms. They shall be instrumental in removing excessive costs and other administrative or practical impediments to shareholder participating in meeting 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.
- Monitoring and Assessment: All business processes and practices being performed within any SBU that are not consistent with any portion of this manual shall be revoked unless upgraded to the compliant extent.