SUMMARY IN UNIT 1: INTRODUCTION TO CORPORATE

GOVERNANCE (GBERMIC)

 CORPORATE GOVERNANCE IS A SYSTEM OF RULES, PRACTICES AND

PROCESSES BY WHICH A FIRM IS DIRECTED AND CONTROLLED, IT
ESSENTIALLY INVOLVES BALANCING THE IBTERESTS OF A COMPANY’S
MANY STAKEHOLDERS.
 IT ENCOMPASSES PRACTICALLY EVERY SPHERE OF MANAGEMENT FROM
ACTION PLANS AND INTERNAL CONTROLS TO PERFORMANCE,
MEASUREMENT AND CORPORATE DISCLOSURE. (INVESTOPEDIA.COM)
 CORPORATE GOVERNANCE IS THE ACT OF STEERING, GUIDING AND
PILOTING WHICH DESCRIES WHAT BOARDS SHOULD DO WHEN IN SESSION.
(CORPGOV.NET)
 CORPORATE GOVERNANCE IS THE SYSTEM OF STEWARDSHIP AND
CONTROL TO GUIDE ORGANIZATIONS IN FULFILLING THEIR LONG TERM
ECONOMIC, MORAL, LEGAL, AND SOCIAL OBLIGATIONS TOWARDS THEIR
STAKEHOLDERS.
 IT IS A SYSTEM OF DIRECTION, FEEDBACK AND CONTROL USING
REGULATIONS, PERFORMANCE STANDARDS AND ETHICAL GUIDELINES TO
HOLD THE BOARD AND SENIOR MANAGEMENT ACCOUNTABLE FOR
ENSURING ETHICAL BEHAVIOR – RECONCILING LONG-TERM CUSTOMER
SATISFACTION WITH SHAREHOLDER VALUE – TO THE BENEFIT OF ALL
STAKEHOLDERS AND SOCIETY.
 ITS PURPOSE IS TO MAXIMIZE THE ORGANIZATION’S LONG-TERM SUCCESS,
CREATING SUSTAINABLE VALUE FOR ITS SHAREHOLDERS, STAKEHOLDERS
AND THE NATION.
 THE CEO OR PRESIDENT SHALL SERVE AS A BRIDGE BETWEEN THE BOARD
AND MANAGEMENT AND IS EXPECTED TO GUARANTEE CONTINUOUS AND
EFFECTIVE COMMUNICATION.
 THE BOARD SHALL ALWAYS ALLOW TRANSPARENCY IN ALL ASPECTS OF
THE OPERATIONS OF THE COMPANY.
 IT SHALL ALSO AIM TOWARDS THE ATTAINMENT OF VIABILITY,
COMPETITIVENESS, AND SUSTAINABILITY.
 THE BOARD SHALL ENSURE THAT ALL RISK TO THE COMPANY SHALL BE
IDENTIFIED, ANALYZED, AND ADDRESSED EFFECTIVELY, AND ENSURE THE
ESTABLISHMENT, IMPLEMENTATION, AND MONITORING OF EFFECTIVE
 INTERNAL CONTROL PROCESSES AND STANDARDS THAT SHALL HELP THE
COMPANY OPERATE IN A DESIRED MANNER.
 PRINCIPLES ARE GUIDES THAT ALLOW US TO MAKE RIGHTS DECISIONS
AND ACTIONS.
 PRINCIPLE OF TRANSPARENCY. AN ORGANIZATION MUST PROVIDE
INFORMATION ABOUT ITS ACTIVITIES AND GOVERNANCE TO
STAKEHOLDERS THAT IS ACCURATE, COMPLETE AND MADE AVAILABLE IN
A TIMELY WAY. COMPANY SHALL PROVIDE TIMELY, ACCURATE
DISCLOSURE OF INFORMATION ABOUT ALL MATERIAL FACTS RELATING TO
ITS ACTIVITIES, INCLUDING ITS FINANCIAL SITUATION, SOCIAL AND
ENVIRONMENTAL INDICATORS, PERFORMANCE, OWNERSHIP STRUCTURE
AND GOVERNANCE OF THE COMPANY, AS WELL AS FREE ACCESS TO SUCH
INFORMATION FOR ALL STAKEHOLDERS.
 PRINCIPLE OF ACCOUNTABILITY. ACCOUNTABILITY EXIST IN A
RELATIONSHIP BETWEEN TWO PARTIES WHERE ONE HAS EXPECTATION OF
THE OTHER, AND THE OTHER IS OBLIGED TO PROVIDE INFORMATION
ABOUT HOW THEY HAVE MET THESE EXPECTATIONS OR FACE THE
CONSEQUENCES OF FAILING TO DO SO. IT IS ACCEPTING THE
CONSEQUENCE OF ONE’S ACTION.
 PRINCIPLE OF PRUDENCE. CARE, CAUTION AND GOOD JUDGEMENT AS
WELL AS WISDOM IN LOOKING AHHEAD. THE MANAGEMENT
COMMITTEE/BOARD IS RESPONSIBLE IN SAFEGUARDIG THE IBTEREST OF
THE CLARITY THROUGH GOOD PLANNING AND MANAGEMENT OF
FINANCES, ACTIVITY AND RISK.
 PRINCIPLE OF FAIRNESS. THE BOARD AND MANAGEMENT SHOULD BE
EQUITABLE IN THEIR DEALI GS INSIDE AND OUTSIDE THE COMPANY.
 ART 3 OF OUR OLD 2009 CODE OF CORPORATE GOVERNANCE OF THE
PHILIPPINES, THE BOARD OF DIRECTORS (THE “BOARD”) IS PRIMARILY
RESPONSIBLE FOR THE GOVERNANCE OF THE CORPORATION.