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Professor Elizabeth Bernal


Union Banks mission is to provide product solutions, information and network
access that customers need to become financially and operationally efficient. To
achieve this mission, Union Bank has adopted a strategic plan called FOCUS 2010,
which is an acronym for Financial Value, Operational Excellence, Customer Franchise,
Union Bank Brand/Experience and Superior Innovation.


Union Banks corporate vision is to become one of the leading universal banks in
the Philippines within the first decade of the 21st century with a full range of financial
products and services for which it shall be the acknowledged leader in service,
innovation and value for money, conveniently accessible anytime and anywhere by
delighted customers, for whom it shall be the dominant financial service portal, enabled
by bold, smart and self-driven professionals.


The Major Components of FOCUS 2010 are as follows:

Financial Value: Enhance the financial value of the Banks operations;
Operational Excellence: Increase productivity while reducing costs;
Customer Franchise: Increase customer base and reduce customer attrition;
Union Bank Brand/Experience: Establish a unique brand image in strategic markets;
Superior Innovation: Continue to offer innovative products and services.

Our FOCUS 2020
We are guided by FOCUS our compass to achieving our vision to become one of the
Top 3 universal banks in the Philippines by year 2020. FOCUS centers on five strategic
initiatives we are working on with stronger resolve:
Financial Value: Enhance the financial value of the Banks operations;
Operational Excellence: Increase productivity while reducing costs;
Customer Franchise: Increase customer base and reduce customer attrition;
Union Bank Brand/Experience: Establish a unique brand image in strategic
markets; and
Superior Innovation: Continue to offer innovative products and services.
Board Committees
Executive Committee
The Executive Committee is composed of seven (7) members of the Board. It
acts and exercises such functions and powers which are reserved for the Board during
intervals between Board meetings, except the power to initiate reversals of, or departure
from fundamental policies, procedures and guidelines prescribed by the Board itself,
and subject to such restrictions as the Board may determine. All matters passed and
acted upon by the Executive Committee are reported to the Board of Directors for its
consideration and approval, when necessary. The Executive Committee exercises
certain functions as delegated by the Board, including the approval of credit proposals,
asset recovery and real and other properties acquired.
Risk Management Committee
The Risk Management Committee consists of seven (7) members of the Board of
Directors who possess a varied range of expertise and knowledge concerning the
institutions risk exposures. The Committee develops appropriate strategies for the
prevention of occurrence of risk events and minimizing losses when these happen. It
oversees the Banks risk management system to determine if it remains effective, if
authority limits are observed, and if immediate corrective actions are taken whenever
limits are breached.
The Committee also develops, and implements, a written plan defining the
strategies for managing and controlling the major risks.
Market Risk Committee
The Market Risk Committee composed of the Chairman of the Board of
Directors, the President and three (3) other members of the Board, sets policies and
standards for market risk identification, analysis and management. The Market Risk
Committee also monitors the sensitivity of the Banks financial condition to the effects of
market volatility and adverse price changes on the Groups portfolio of financial
instruments and oversees the Groups liquidity position through the Asset and Liability
Committee (ALCO).
Operation Risk Management Committee
The Operations Risk Management Committee (ORMC) is composed of three (3)
members of the Board and two members from Senior Management.

I cover the following areas of concern:
1. The adequacy of the Banks policies, procedures, organization and resources for
preventing, or limiting unexpected loss due to deficiencies in information systems;
business, operational and management processes; employees skills and supervision,
equipment and internal controls.
2. Periodic or special risk assessments conducted in various businesses and operating
units of the Bank to proactively uncover operational risks that can result to actual loss or
3. Results of internal audits, BSP examinations and investigation of administrative
cases that highlight trends indicative of present or emerging exposures to specific
operational risks.
4. Risk assessment of major information systems to be implemented in the Bank.
5. Regulatory compliance issues, whether currently existing, or anticipated to arise as a
result of new laws or regulations.
6. Business continuity strategies, plans and procedures.
Audit Committee
The Audit Committee is composed of five (5) members of the Board of Directors,
two (2) of whom are independent directors, and who have accounting, auditing, or
related financial management expertise or experience.
Name of Director Designation Number of meetings
Number of
meetings missed
Armand Braun, Jr. Chairman 19 1
Stephen Paradies Vice-Chairman 18 2
Mayo Ongsingco Member 14 6
Justice Concio
Member (Sept. Dec. 08)
Sec. Sergio Apostol Member (Sept. Dec. 08)
Sen. Ralph Recto Member (Jan - July 08)
Arturo San Gabriel Member (Jan - July 08)

The Audit Committee oversees the Banks internal and financial controls on
behalf of the Board of Directors. The Committee held 20 meetings in 2008. Prior to the
Banks annual stockholders meeting in May 2008, the Committee gave its
recommendation for the appointment of PunongBayan & Araullo as the Banks external
auditors for 2008. It later reviewed and endorsed for the Boards approval the Banks
audited financial statements for 2008, as certified by the said external auditor.

The Audit Committee is empowered to independently review the integrity of the
Companys financial reporting and oversee the independence of the external auditors.

The Internal Audit Division, which reports directly to the Audit Committee,
provides independent and objective assurance and advisory services to the Company. It
provides reasonable assurance that the Banks key organizational and procedural
controls are effective, appropriate, and complied with. The Division is composed of
Certified Public Accountants, Certified Information Systems Auditors and Certified
Internal Auditor.

It also conducts special administrative investigations when required to do so
pursuant to the Banks Code of Conduct.

The activities of the Audit Committee are further discussed in the section on
Accountability and Audit.

* External Auditor - Punongbayan & Araullo
Punongbayan & Araullo (P & A), a leading professional services firm, is one of
the countrys largets CPA firms, providing practical recommendations and ideas to
Philippine businesses and investors.

P & A was founded in 1988 by two prominent leaders in the accounting
profession in the Philippines, Benjamin R. Punongbayan and Jose G. Araullo. It grew
from a personnel complement of only seven people in 1988, to over six hundred people

P & A is a member of Grant Thornton International, one of the worlds leading
organizations of independently owned and managed accounting and consulting firms.
P & As offices are located at the 20th floor, Tower I, The Enterprise Center, 6766
Ayala Avenue, 1200 Makati City, Metro Manila.

Services to Union Bank
P & As services consist of the audit of the financial statements of the Bank as of
and for the year ending 31 December 2008 to enable them to express an opinion on the
fairness of the Banks financial position, results of operations and cash flows in
accordance with Philippine Financial Reporting Standards (PFRS). It is likewise
engaged to audit the financial statements of each Unit Investment Trust Fund (UITF)
managed by the Banks Trust and Investment Services Group, also as of and for the
year ending 31 December 2008.

Trust Committee
The Trust Committee is composed of five (5) members: three (3) who are
members of the Board, the President, and the Trust Officer. No member of the Audit
Committee may be concurrently designated as a member of the Trust Committee.

The Trust Committee acts as a body in the acceptance and closing of trust and
other fiduciary accounts. It reviews assets placed under the trustees fiduciary custody
and reviews and approves transactions between trust and/or fiduciary account. It
invests, reinvests, and disposes of funds or property. It also reviews trust and other
fiduciary accounts at least once every twelve (12) months to determine the advisability
of retaining or disposing of the trust or fiduciary assets, and to ascertain whether the
account is being managed in accordance with the instrument creating the trust or other
fiduciary relationship.

Corporate Governance Committee
The Corporate Governance Committee (CGC) serves as the primary resource for
the Board to study, evaluate and make recommendations about the structure, charter,
policies and practices of the Board and its committees in order to improve corporate
governance. It is responsible for ensuring the Boards effectiveness and due
observance of corporate governance principles and guidelines. The Corporate
Governance Committee is composed of seven (7) members, comprised of the following:
six members of the Board of Directors, two (2) of whom are independent directors; and
one (1) member from the Banks senior management.

The Committee held all four (4) of its scheduled quarterly meetings for 2008.
During these meetings, the Corporate Governance Committee proposed and approved
activities for the furtherance of good corporate practices. The Committee complied with
the mandates of pertinent regulations requiring new directors to undergo the Corporate
Governance Orientation Program. It also reviewed and approved the 2008 Corporate
Governance Scorecard for publicly-listed companies.

The Corporate Governance Committee has two sub-committees: the
Nominations Sub-Committee and the Compensation & Remunerations Sub-Committee.

Nominations Sub-Committee
The Nominations Sub-Committee consists of at least three (3) voting members of
the Board of Directors, one of whom is an independent director, and one (1) non-voting
member who is the Human Resources Director.

The Sub-Committee promulgates the guidelines or the criteria governing its
conduct of the nomination, pre-screening and selection of candidates for the Board of
Directors and key officers of the Bank. It puts in place a policy and process for the
effective review of the qualifications of the nominees for independent directors.

Compensation & Remunerations Sub-Committee
The Compensation and Remuneration Sub-Committee, which is composed of at
least three (3) members, one of whom is an independent director, is tasked to assist the
Corporate Governance Committee and the Board of Directors by recommending and
overseeing the implementation of a program of salaries and benefits for Directors and
Senior Management. It sees to it that the Bank will attract the best talents to help the
bank accomplish its objectives.

The Sub-Committee monitors the adequacy, effectiveness and consistency of
compensation programs with the Banks corporate philosophy and strategies. It also
provides guidelines for developing policies on executive remuneration and for the fixing
of the remuneration packages of corporate officers and directors. It exercises oversight
over the remunerations of senior management and of other key personnel.

As of December 31, 2007, Union Banks shareholders were as follows:
Shareholder Ownership
Aboitiz Equity Ventures Inc. 36.2%
Social Security System 23.1%
Insular Life Assurance Company, Ltd. 16.1%
Others 24.6%

Aboitiz Equity Ventures, Inc. (AEV) is Union Banks largest stakeholder with 36.2%
ownership. AEV, a member of the Aboitiz Group of Companies, is an industrial and
commercial conglomerate based in Southern Philippines that is engaged in power
generation, logistics, consumer, real estate and financial services.

More on Aboitiz Group of Companies

Social Security System (SSS), the countrys provider of social security to
workers in the private sector, holds 23.1% stake in Union Bank. The SSS aims to
develop and promote a viable, universal and equitable social protection scheme through
world-class services. As of June 2007, SSS had P219.1 Billion in investments.

More on SSS

Insular Life Assurance Co. Ltd has 16.1% ownership in Union Bank. It has the
distinction of being the first Filipino life insurance and the only Filipino mutual life
insurance company. Insular Life, through its subsidiaries, offers allied financial services
such as general insurance, banking, health care insurance, trust and investment
services. Insular Life is among the countrys top 100 corporations.