a.

Boards need to consist of at least 3 independent directors or 1/3 of the board,

whichever is higher.

In my understanding, Independent Directors are persons who do not have directmaterial

relationship with the company, and are not part of their current o p e r a t i o n s o r
b u s i n e s s . W i t h t h i s , h a v i n g s u c h r e q u i r e m e n t r e g a r d i n g Independent
Directors avoid the risk of fraud as they can most likely provide a more objective stance in
every decision making situation of the Board. In support, Corporate Finance Institute stated
that,“they (Independent Directors) are not subject to undue influence from the
management team. “Meaning, they can act and decide as they wish, without unnecessary
persuasion from the management regarding various organizational policies or decisions.

b.Boards need to hold regular executive sessions of independent directors without

management present.

In my opinion, this requirement helps in ensuring that the independent directors can
openly and freely communicate their opinions and suggestions to each other. Through
these sessions, it is easier for them to deal with more sensitive or confidential
matters without receiving possible deceiving opinions from other non-independent
members or the management, which can sometimes be the basis for fraudulent acts.

c.Boards must have a corporate governance committee composed of at least 3 of the

independent directors.

As mentioned in BPI’s website, their Corporate Governance Committee “assists the

Board in fulfilling its corporate governance responsibilities, and ensures the
Board's effectiveness and due observance of sound corporate governance
principles and guidelines.”An I ndependent Direct or in t he said committee can
provide recommendations and a more honest insight in reviewing the company’s Corporate
Governance policies. Also, such directors commonly have various expertise as they are
from outside of the firm. Their background and personal experience from other sectors
can help in determining whether the current Corporate Governance policies of the firm are
well-implemented and if there are imperfections or unjust practices that are happening or can
happen.

d.Boards must have an audit committee with a minimum of three independent

directors.

The audit committee is responsible for oversight of the financial reporting processes,
accounting policies and procedures, and internal control systems. As Independent Directors,
they represent the interest of the shareholders. Hence, they must ensure that financial
reports and processes are done fairly and with i n t e g r i t y . H a v i n g a n i n t e r n a l
d i r e c t o r m o n i t o r i n g s u c h s c o p e o f t h e a u d i t committee is helpful in preventing fraud,
as they do not have any influence on the
management who may wish to commit fraudulent acts in order to present a more stable
financial statement to the shareholders. They can promote transparency within such area of
the organization

………………………………….
a. Boards need to consist of at least 3 independent directors or 1/3 of the board, whichever is
higher.

This is to ensure the independent judgment on corporate affairs and proper oversight of
managerial is observed. Through this, they ensure that no director or small group of
directors can dominate the decision making and optimal solution is achieved. It is
essential in preventing conflict of interest and balancing the competing demands in the
corporation.

b . B o a r d s n e e d t o h o l d r e g u l a r e x e c u t i v e s e s s i o n s of i n d e p e n d e n t d i r e c t o r s
w i t h o u t management present.

Executive session often discusses the effectiveness of internal control system, corporate
governance system and the performance of the management. To ensure proper check
and balances is observed, it is a must that the management is not present during the
executive session of the independent directors to ensure free and open communication
among them. Through this, they can freely scrutinize them while avoiding any mistrust issues
to arise within the organization.

c. Boards must have a corporate governance committee composed of at least 3

of the independent directors.

Corporate governance committee is tasked with ensuring with compliance and proper
obser vance of corpor ate gover nance pr inciples and pr act ices. They r eview and
constantly update the corporate governance policy, business ethics and code of conduct, anti-
corruption policy and related guidelines at least once a year. It is a must that they are
composed of at least 3 of the independent directors to avoid group thinking and to
ensure that decision made would protect the interest of all stakeholders.

d. Boards must have an audit committee with a minimum of three independent directors.

Audit Committee is responsible for overseeing the senior management in establishing and
maintaining an adequate, effective and efficient internal control framework. It ensures
that systems and processes are designed to provide assurance in areas including reporting,
monitoring compliance with laws, regulations and internal policies, efficiency and effectiveness
of operations, and safeguarding of assets. Internal auditors and external auditors can serve a vital
role in aiding in fraud prevention and deterrence. Internal audit staff and external auditors
that are experienced and trained in fraud prevention and deterrence can help to provide
assurance that risks are effectively identified and monitored,organizational processes are
effectively controlled and tested periodically, and appropriate follow-up action is taken to
address control weaknesses. The audit committee needs to ensure that internal and
external auditors are carrying out their responsibilities in connection with potential fraud.