SEC Memorandum Circular No.

19 series of 2016
Code of Corporate Governance for Publicly-Listed Companies

Date back on Nov. 22, 2016, the SEC issued SEC Memorandum Circular 19,
Series of 2016, also known as the Code of Corporate Governance Publicly-
Listed Companies. Its mission is to assist businesses in developing and
maintaining an ethical corporate culture while also keeping up with new
advancements in corporate governance.

The CG Code for Publicly-Listed Companies was created to cover

corporations, branches, and subsidiaries of international firms operating in the
Philippines that have equity shares listed on a stock exchange. The code
advocates 16 principles encompassing several corporate governance topics,
including board governance obligations, disclosure and transparency, internal
control and risk management frameworks, creating a synergic connection with
shareholders/members, and stakeholder roles.

One of the most important provisions is that publicly-traded corporations must

adopt a code of business conduct and publish a new corporate governance
manual that outlines professional and ethical behavior standards as well as
acceptable and unacceptable conduct and procedures. The board of directors
is responsible for putting the code into action and ensuring that management
and employees execute it.

The code stated, among other things, the board should be made up of a
majority of non-executive directors and at least two independent directors, or
one-third of the board members, whichever is higher. The code also
encourages the formation of board committees to assist effective performance
of the board’s function, such as audit, corporate governance, and risk
oversight. In order to strengthen independence, a company's board of
directors must always ensure an appropriate mix of competence and
expertise, and that members must remain qualified for their positions
individually and collectively in order for the company to fulfill its roles and
responsibilities and respond to the organization's needs.
SEC Memorandum Circular No. 24 series of 2019
Code of Corporate Governance for Public Companies and Registered Issuers

To develop a strong corporate governance culture in the country, the

Securities and Exchange Commission mandates public companies and
registered issuers to file an Annual Corporate Governance Report (ACGR).

As outlined in the Code, Public companies are those with assets of at least
P50 million and having 200 or more shareholders holding at least 100 shares
each of equity securities. Registered issuers, meanwhile, refer to companies,
which issue proprietary and/or non-proprietary shares or certificates; equity
securities offered to the public but are not listed in an exchange; or debt
securities offered to the public and required to be registered with the SEC,
whether or not listed in an exchange.

Companies are not obligated to follow these principles, according to the Code,
but they are given "freedom" in developing corporate governance standards.
They must, however, disclose in their reports whether they are in compliance
with the Code's rules, as well as identify and explain any areas where they are
not.

While they qualify, Public Companies and Registered Issuers must be

submitted on or before May 30, 2022, for the period January to December
2021, using the proposed SEC Form-ACGR. These corporations must submit
three copies of the fully completed form to the SEC's main office or a nearby
extension office. At least one copy must be notarized and carry the signatures
of the company's chairman of the board, chief executive officer or president,
all independent directors, compliance officer, and corporate secretary in
original and manual form.

In terms of the contents, the Annual Corporate Governance Report (ACGR)

must encompass all essential information from January to December of the
given year. Companies may, however, state in the ACGR's explanation
section for their first submission that they are "newly registered." A company's
Annual Corporate Governance Report should be a thorough report that
includes all relevant corporate governance information.