SEC CODE OF CORPORATE GOVERNANCE practices, which are justified in particular

The Securities and Exchange Commission (SEC) circumstances. When a Recommendation is not
adopted the following: complied with, the company must disclose and
● Code of Corporate Governance for Publicly describe this non-compliance, and explain how the
Listed Companies (SEC Memorandum Circular overall Principle is being achieved. The alternative
No. 19, series of 2016) should be consistent with the overall Principle.
● Code of Corporate Governance for Public
Companies and Registered Issuers (SEC Comply or Explain
Memorandum Circular No. 24, series of 2019) The Code is designed to allow companies
some flexibility in establishing their own corporate
The Code is consistent with the G20/OECD Principles governance practices. This is consistent with the
of Corporate Governance and other internationally principle of proportionality where the SEC addresses
recognized corporate governance principles. specific segments of the corporate sector, which may
be differentiated on the basis of company type, size,
It consistent with the principle of proportionality, access to public funds and risk profile, among others.
Recommendations (objective criteria) on how the Smaller companies may decide that the costs of some
Principles are applied vary among different types of of the provisions outweigh the benefits or are less
companies such as publicly listed companies, public relevant in their case.
companies, and registered issuers. These differences,
if any, are highlighted as the Principles and The SEC Code of Corporate Governance
Recommendations are discussed. 16 rinciples under 5 broad categories

Publicly listed companies shall cover only those 1. The board’s governance responsibilities
companies whose equity securities are listed on the ○ Establishing a competent board
Philippines Stock Exchange. ○ Establishing clear roles and
responsibilities of the board
Public company refers to a company with assets of at ○ Establishing board committees
least P50 million and having 200 or more shareholders ○ Fostering commitment
holding at least 100 shares of equity securities. ○ Reinforcing board independence
○ Assessing board performance
Registered issuer refers to a company that ○ Strengthening board ethics
1. issues proprietary and/or non-proprietary
shares/certificates; 2. Disclosure and transparency
2. issues equity securities to the public that ○ Enhancing company disclosure
are not listed in an Exchange; or policies and procedures
3. issues debt securities to the public that ○ Strengthening the external auditor’s
are required to be registered to the SEC, independence and improving audit
whether or not listed in an Exchange. quality
○ Increasing focus on non-financial and
Comply or Explain sustainability reporting
The adoption of comply or explain approach is ○ Promoting a comprehensive and cost-
to address the perceived overregulation of SEC. efficient access to relevant
information
Under the “comply or explain” operative 3. Internal control system and risk
principle, compliance with the Code is not mandatory. management frameworks
But it is mandatory to submit to SEC the company’s ○ Strengthening the internal control
annual corporate governance reports and disclose any system and risk management systems
deviations from the Recommendations of the SEC. 4. Cultivating a synergic relationship with
Such reports that shall be available to the public, shareholders/ members
including the company’s shareholders and other ○ Promoting shareholder/member
stakeholders. rights
5. Duties to stakeholders
Comply or Explain ○ Respecting rights of stakeholders and
This approach combines voluntary compliance effective redress for violation of
with mandatory disclosure. It is not a rigid set of rules. stakeholder’s rights
Rather, it is principles-based which allows company to ○ Encouraging employees’ participation
implement alternative corporate governance
 ○ Encouraging sustainability and social corporate governance at least once a year. It involves
responsibility courses on corporate governance matters relevant to
Establishing a Competent Board the company, including audit, internal controls, risk
management, sustainability and strategy.
The company should be headed by a
competent, working board to foster the long-term The Board should have a policy on board diversity.
success of the corporation, and to sustain its
competitiveness and profitability in a manner Diversity is the variation of social and cultural
consistent with its corporate objectives and the long- identities among people existing together in a defined
term best interests of its shareholders and other employment or market setting. A board diversity
stakeholders. policy considers diversity in gender, age, ethnicity,
The Board should – culture, skills, competence and knowledge. On gender
● be composed of directors with a collective diversity policy, a good example is to increase the
working knowledge, experience or expertise number of female directors, including female
that is relevant to the company’s independent directors.
industry/sector.
● be headed by a competent and qualified The Board should be assisted in its duties by a
Chairperson Corporate Secretary, who should
● provide a policy on the training of directors ➔ be a resident and citizen of the Philippines.
● have a policy on board diversity ➔ not be a member of the Board of Directors
● be assisted by a Corporate Secretary and a ➔ be a separate individual from the Compliance
Compliance Officer Officer
➔ annually attend a training on corporate
It is the shareholders’ duty to elect competent governance
board of directors and remove those who failed to ➔ have a working knowledge of the operations
maintain their qualifications. In addition, the of the Company
corporation may provide in its By-laws additional ➔ possess appropriate administrative,
directors' or trustees' qualifications consistent with interpersonal and legal skills,
the good corporate governance practices. ➔ be aware of the laws, rules and regulations
necessary in the performance of his duties or
The Board should be headed by a competent and responsibilities, and
qualified Chairperson. The Chairman shall possess all ➔ have at least an understanding of basic
the qualifications and none of the disqualifications of financial and accounting matters.
a director.

The Company should provide a policy on the The Board should ensure be assisted in its duties by
training aimed to promote effective board a Compliance Officer, who should
performance and continuing qualification of the ➔ not be a member of the Board of Directors
directors in carrying-out their duties and ➔ should annually attend a training on corporate
responsibilities. governance.
➔ have a rank of Senior Vice President or an
It is suggested that the orientation program for equivalent position with adequate stature and
first-time directors, in any company, be for at least authority in the corporation
eight hours, while the annual continuing training be
for at least four hours. Establishing Clear Roles and Responsibilities Of The
Board
New directors shall undergo at least eight-hour The fiduciary roles, responsibilities and
orientation program on the Corporation’s business accountability of the Board as provided under the law,
and corporate structure, vision and mission, corporate the company’s articles and by-laws, and other legal
strategy, Governance Codes and Policies, Articles, By- pronouncements and guidelines should be clearly
Laws, Company’s Manual of Corporate Governances, made known to all directors as well as to stockholders
the Charters, the SEC-mandated topics on governance and other stakeholders.
matters and other matters essential for the effective
performance of their duties and responsibilities. The Board is collectively responsible for the
sustainable long-term shareholder value of the
Incumbent directors shall attend a four-hour annual institution, sustain its competitiveness, profitability
continuing training program involving courses on
and industry leading position in a manner consistent other reputable external sources to further enhance
with its corporate objectives. the search for and widen the base of potential
nominees. The Committee shall assist the Board in
The Board members should act on a fully making an assessment of the effectiveness of the
informed basis, in good faith, with due diligence and processes and procedures in the nomination, election
care, and in the best interest of the company and all and replacement of a director.
shareholders.
The Board should have the overall
The elements of fiduciary duty of board responsibility in ensuring that there is a group-wide
members are the duty of care (which includes the policy and system governing related party
duty of obedience and duty of diligence) and the transactions (RPTs) and other unusual or infrequently
duty of loyalty. occurring transactions, particularly those which pass
certain thresholds of materiality. The policy should
Duty of obedience requires compliance with include the appropriate review and approval of
law, rules, and court orders. The directors or trustees material or significant RPTs, which guarantee fairness
elected shall perform their duties as prescribed by and transparency of the transactions. The policy
law, rules of good corporate governance, and bylaws should encompass all entities within the group, taking
of the corporation. Directors, trustees, and officers into account their size, structure, risk profile and
have the duty to act intra vires and within authority. complexity of operations.

Under duty of diligence, directors, trustees, The Management is primarily accountable to

and officers are required to exercise good faith and the Board for the operations of the Company. In the
due care in the performance of their functions, selection process, fit and proper standard should be
otherwise, they shall be held liable. applied. In this regard, the following shall be
considered: integrity, probity, physical and mental
The duty of loyalty mandate that fitness, competence, relevant education or training;
directors/trustees should not give preference to their possession of competencies relevant to the job, such
own personal amelioration by taking the opportunity as technical expertise and experience in the company,
belonging to the corporation. skills, diligence and independence of mind, and
sufficiency of time to fully carry out responsibilities.
The Board should oversee the development of
and approve the company’s business objectives and
strategy, and monitor their implementation, in order
to sustain the company’s long-term viability and The Board shall appoint the executive officers who are
strength. the:
● President or the Chief Executive Officer,
The Board should be responsible for ensuring ● the Vice-Presidents (or their equivalent roles
and adopting an effective succession planning in the Company structure),
program for directors, key officers and management. ● the Treasurer and/or the Chief Finance Officer
The smooth and efficient transition of company (CFO),
leadership to highly competent and qualified ● Chief Risk Officer,
individuals is the goal of succession planning. This will ● Chief Compliance Officer,
ensure growth and a continued increase in the ● the Corporate Secretary, and
shareholders’ value. ● Chief Audit Executive.

Directors shall not receive any compensation, The Board should establish an effective
as such, except for reasonable per diem, unless such performance management framework that will
compensation is provided in the By-Laws or granted ensure that the Management, including the Chief
by a vote of the stockholders representing at least a Executive Officer, and personnel’s performance is at
majority of the outstanding capital stock of the par with the standards set by the Board and Senior
Company. The Directors shall not decide on their own Management.
compensation, other than per diem.
The Board should oversee that an appropriate
The Board should have a formal and internal control system is in place, including setting up
transparent board nomination and election policy. a mechanism for monitoring and managing potential
The Committee may use external sources, such as conflicts of interest of Management, board members,
professional search firms, director databases and/or
and shareholders. The Board should also approve the
Internal Audit Charter. The Board should establish a Corporate Governance
Committee that should be tasked to assist the Board
The Board should oversee that a sound enterprise in the performance of its corporate governance
risk management (ERM) framework is in place to responsibilities, including the functions that were
effectively identify, monitor, assess and manage key formerly assigned to a Nomination and Remuneration
business risks. The risk management framework Committee. It should be composed of at least three
should guide the Board in identifying units/business members, all of whom should be independent
lines and enterprise-level risk exposures, as well as directors, including the Chairman.
the effectiveness of risk management strategies.
Subject to a corporation’s size, risk profile and
The Board should have a Board Charter that complexity of operations, the Board should establish a
formalizes and clearly states its roles, responsibilities separate Board Risk Oversight Committee (BROC)
and accountability in carrying out its fiduciary duties. that should be responsible for the oversight of a
The Board Charter should serve as a guide to the company’s Enterprise Risk Management system to
directors in the performance of their functions and ensure its functionality and effectiveness.
should be publicly available and posted on the
company’s website. Subject to a corporation’s size, risk profile and
complexity of operations, the Board should establish a
Establishing Board Committees Related Party Transaction (RPT) Committee, which
The Revised Corporation Code allows the should be tasked with reviewing all material related
Board to create Executive Committee and other party transactions of the company and should be
special committees, which it can delegate its functions composed of at least three non-executive directors,
but not its responsibilities. It is a good governance two of whom should be independent, including the
practice to establish board committees that focus on Chairman.
specific board functions to aid in the optimal
performance of its roles and responsibilities. The Nomination Committee shall be primarily
tasked with the duty of implementing a formal and
transparent board nomination and election policy that
should include how it accepts nominations from the
The Board may establish the following committees: shareholders, including minority and non-controlling,
● Audit Committee and how it reviews the qualifications of nominated
● Corporate Governance Committee candidates.
● Board Risk Oversight Committee
● Related Party Transactions Committee The Remuneration Committee is primarily tasked
● Nomination Committee with the establishment and implementation of a
● Remuneration Committee formal and transparent procedure and policy for
● Committee of Inspectors of Ballots and determining the remuneration of directors and
Proxies officers that is consistent with the Company’s culture
● Finance Committee and strategy as well as the business environment in
● Technology Strategy Committee which it operates.
● Technical Support to Committees
The Board shall appoint three (3) persons (who
If the bylaws so provide, the board may create an need not be stockholders) to act as the Committee of
executive committee. In the absence of a provision in Inspectors of Ballots and Proxies which shall be
the by-laws, the board, by itself, cannot create an empowered to pass on the validity of proxies.
executive committee.
The Committee of Inspectors of Ballots and Proxies
If the executive committee was not validly shall be guided by existing laws, and rules and
constituted, the members thereof maybe considered regulations of the SEC regarding proxies. The term of
de facto officers. office of the Committee members shall be fixed by the
Board. In the event of vacancy in the Committee
The Board should establish an Audit Committee to membership, the Board may appoint another member
enhance its oversight capability over the company’s to fill such vacancy.
financial reporting, internal control system, internal
and external audit processes, and compliance with The Finance Committee shall have the principal
applicable laws and regulations. oversight responsibility with respect to the company’s
capital allocation process, financial operation, and its The right combination of non-executive
treasury-related activities and policies. The Finance directors, which include independent directors, and
Committee shall define its own charter and fix its own executive directors, ensures that no director or small
rules of procedures. The Finance Committee shall be group of directors can dominate the decision-making
responsible for reviewing and evaluating the financial process.
affairs of the Corporation from time to time.
Executive director is a director who has
All established committees should be required to executive responsibility of day-to-day operations of a
have ‘Committee Charters’ stating in plain terms their part or the whole of the organization. Non-executive
respective purposes, memberships, structures, director is a director who has no executive
operations, reporting standards for evaluating the responsibility and does not perform any work related
performance of the Committees. It should also be fully to the operations of the corporation. Independent
disclosed on the company’s website. The Committee director is a person who is independent of
Charter clearly defines the roles and accountabilities management and the controlling shareholder and is
of each committee to avoid any overlapping functions, free from any business or other relationship which
which aims at having a more effective board for the could, or could reasonably be perceived to, materially
company. This can also be used as basis for the interfere with his exercise of independent judgment
assessment of committee performance. in carrying out his responsibilities as a director.

Fostering Commitment The position of Chairman of the Board and

The Board shall hold regular meetings on the President/CEO shall be held by separate individuals,
date and time schedules in the by-laws. Otherwise, who are not related to each other, and each shall
the meetings shall be held monthly. The Board shall have clearly defined responsibilities.
convene for special meetings when required by
business exigencies. A director with a material or potential interest
in any transaction affecting corporation should fully
Independent and non-executive directors may disclose his adverse interest, abstain from taking part
concurrently serve in Boards of other companies, in deliberations for the same and recuse from voting
provided, at any given time, it will not exceed on the approval of the transaction.
● Five publicly listed companies,
● Ten public companies and/or registered The contract of the corporation with a self-dealing
issuers, or director/trustee, his spouse, or relative within fourth
● Five public companies and/or registered civil degree of consanguinity or affinity is voidable.
issuers if the director also sits in at least three However, the contract is perfectly valid if all the
publicly listed companies following conditions are present.
● The presence of such director or trustee in the
A company may provide a policy for the directorship board meeting in which the contract was
limits of executive directors. A company may also approved was not necessary to constitute a
consider directorship in related companies such as quorum for such meeting;
subsidiaries, affiliates, parent corporation, and ● The vote of such director or trustee was not
affiliates and subsidiaries of the parent corporation as necessary for the approval of the contract;
one or exclude those from the limitations in the ● The contract is fair and reasonable under the
number of directorships. circumstances;
● In case of corporations vested with public
Reinforcing Board Independence interest, material contracts are approved by
The Board should endeavor to exercise at least a majority of the independent
objective and independent judgment on all corporate directors voting to approve the material
affairs. contract; and
● In case of an officer, the contract has been
Independence of the board rests on the previously authorized by the board of
proper mix of executive and non-executive directors, directors.
on the separation of the positions of Chairperson and ● If any of the above conditions are not present,
Chief Executive Officers, and on the proper disclosure the corporation, through its board of
of adverse interests of directors affecting the directors/trustees, can annul the contract in a
corporation. judicial proceeding within the prescriptive
period, otherwise, the contract remains in
force.
 ● From its nature, is in line with corporation’s
However, even if the corporation decides to annul business and is of practical advantage to it;
the contract, the stockholders/members can ratify the and
contract with self-dealing director/trustee: ● The corporation has an interest or a
● By stockholders representing at least two- reasonable expectancy.
thirds (2/3) of the outstanding capital stock or
of at least two-thirds (2/3) of the members in The rule applies even if the director risked one's
a meeting called for the purpose own funds in the venture. If the act has been ratified
● Full disclosure of the adverse interest of the by a vote of the stockholders owning or representing
directors or trustees involved is made at such at least two-thirds (2/3) of the outstanding capital
meeting and stock, the director is excused from remitting the profit
● The contract is fair and reasonable under the realized.
circumstances.

Fairness typically requires that the transaction The doctrine is not applicable to the following
reflect terms one would expect in an arm’s length instances:
transaction. ● When a director engages in a distinct
enterprise of the same general class of
For contracts with self-dealing officers, business as that which his corporation is
stockholders/members ratification is not required. It engaged in, so long as he acts in good faith;
is within the power of the board to ratify the subject ● The opportunity is one which is not essential
contracts. to the corporation’s business, or employment
of company’s resources, or where the director
Contracts with interlocking directors are likewise or officer embracing opportunity personally is
subject to limitations. Interlocking directorship by not brought into direct competition with the
itself is not prohibited. But the by-laws may prohibit corporation; or
interlocking directorship. There is an interlocking ● When the property or business opportunity
director when one of the directors in one corporation has ceased to be a “corporate opportunity”
is also a director in another corporation. and has transformed into a “personal
opportunity”. In such a case the corporation is
The contract entered between such corporation is definitely no longer able to avail itself of the
valid but subject to the following rules: opportunity, which may “arise from financial
● the contract is valid or shall not be invalidated insolvency”, or from legal restrictions, or from
on the sole ground of interlocking any other factor which prevents it from acting
directorship; provided that: contract is not upon the opportunity for its own advantage.
fraudulent and the contract is fair and ● If the action was made after the resignation of
reasonable the director.
● if the interest of the interlocking director in ● When two related corporations are involved
one (1) corporation is substantial and the even if there is interlocking directorship.
interest in the other corporation or
corporations is merely nominal, the rules on Assessing Board Performance
self-dealing directors shall apply. Stockholding The best measure of the Board’s effectiveness
exceeding twenty percent (20%) of the is through an assessment process. The Board should
outstanding capital stock shall be considered regularly carry out evaluations to appraise its
substantial for purposes of interlocking performance as a body and assess whether it
directors. possesses the right mix of backgrounds and
competencies.
Each director has a duty of loyalty to the
corporation. Breach of this loyalty will subject the The Board should conduct an annual self-
director to liability. Under the Doctrine of Corporate assessment of its performance, including the
Opportunity, unless ratified by stockholders, a performance of the Chairman, individual members
director shall refund to the corporation all the profits and committees. For publicly listed companies, the
he realizes on a business opportunity which: annual self-assessment shall, as practicable, be
● The corporation is financially able to supported by an external facilitator every three years.
undertake;
Strengthening Board Ethics
 Members of the Board are duty-bound to individual board members and key executives to
apply high ethical standards, taking into account the evaluate their experience and qualifications and
interests of all stakeholders. assess any potential conflicts of interest that might
affect their judgment.
The Company shall adopt, implement and monitor
compliance with:
A. a Code of Business Conduct and Ethics
that provides the general standards for
professional and ethical behavior for the Strengthening the External Auditor’s Independence
Company, its Directors, Officers, and Improving Audit Quality
Executives and employees in their internal The company should establish standards for
and external dealings, and the appropriate selection of an external auditor, and
B. policies implementing the Code of exercise effective oversight of the same to strengthen
Business Conduct and Ethics, governing, the external auditor’s independence and enhance
among others: audit quality.
● Conflict of Interest;
● Gift-Giving and Anti-Corruption; It is the responsibility of the Audit Committee to
● Gifts, Entertainment and Sponsored ● recommend the appointment,
Travel; reappointment, removal, and fees of the
● Whistleblowing; and external auditor
● Supplier/Contractor Relations. ● assessing the integrity and independence of
external auditors
Enhancing Company Disclosure Policies and ● disclose the nature of non-audit services
Procedures performed by its external auditor
The company should establish corporate
disclosure policies and procedures that are practical Financial Statements covered by SRC Rule 68 shall
and in accordance with best practices and regulatory be audited by independent auditors who are duly
expectations. registered with the Board of Accountancy (BOA) of
the Professional Regulation Commission (PRC) in
All corporations are required to submit to accordance with the rules and regulations of said
SEC the reportorial requirements required under SEC professional regulatory bodies. A corporation with
Memorandum Circular No. 2, series of 2020. In financial statements audited by an independent
addition to the SEC requirements, publicly listed auditor who is not registered with the BOA shall be
companies are required to comply with the PSE subject to appropriate fines.
Disclosure Rules.
Increasing Focus on Non-Financial and Sustainability
Section 23 of the Securities Regulation Code Reporting
prescribed that a director or an officer of the issuer of
the security, shall file, at the time either such The company should ensure that material
requirement is first satisfied or within ten (10) days and reportable non-financial and sustainability issues
after he becomes such a beneficial owner, director, or are disclosed.
officer, a statement with the SEC and to the PSE and
the PDEX (if the security is listed for trading) of the The Board should have a clear and focused
amount of all equity securities of such issuer of which policy on the disclosure of non-financial information,
he is the beneficial owner, and within ten (10) days with emphasis on the management of economic,
after the close of each calendar month thereafter, if environmental, social and governance (EESG) issues
there has been a change in such ownership during of its business, which underpin sustainability.
such month. Companies should adopt a globally recognized
standard/framework in reporting sustainability and
The company’s corporate governance policies, non-financial issues.
programs and procedures should be contained in its
Manual on Corporate Governance, which should be On February 15, 2019, SEC issued the
submitted to the regulators and posted on the Sustainability Reporting Guidelines for Publicly Listed
company’s website. Companies (Memorandum Circular No. 4, series of
2019). The Board shall be instrumental in maintaining
In addition, publicly listed companies should the standards espoused in the Corporation’s
fully disclose all relevant and material information on sustainability framework and the policies thereof.
Promoting a Comprehensive and Cost-Efficient Shareholders’ rights relate to the following, among
Access to Relevant Information others:
The company should maintain a a. Right to participate in the management by
comprehensive and cost-efficient communication exercising the right to vote. Corollary, the
channel for disseminating relevant information. This right to vote carries the following rights of
channel is crucial for informed decision-making by stockholders:
investors, stakeholders and other interested users. ● Right to nominate candidates to the
Board of Directors;
Companies should have a website, at the very least. ● Right to participate in the approval of
A company website should contain, among others: certain corporate acts
● the Manual on Corporate Governance, ● Right to nominate candidates to the Board of
● Annual Corporate Governance Report, Directors;
● Board Charter, ○ Right to be informed of the
● Committee Charters, nomination and removal
● the company’s Code of Business Conduct and process;
Ethics. ○ Right to be informed of the
voting procedures that would
Publicly listed companies should include media and govern the Annual and Special
analysts’ briefings as channels of communication. Shareholders’/Members
Meeting.
Companies may also utilize participation in investor ○ Right to elect directors
conferences, adhoc briefings, roadshows, conference ○ Right to remove directors
calls and one-on-one meetings; and timely official ● Right to participate in the approval of certain
disclosures via PSE EDGE. The Corporation may also corporate acts
use other available media channels to extend ○ Right to notice of meetings
communication to stakeholders, as applicable. and right to attend meetings
○ Right to appoint a proxy
Strengthening the Internal Control System and ○ Right to Propose the Holding
Enterprise Risk Management Framework of Meetings and to Propose
Agenda Items
To ensure the integrity, transparency and proper b. Appraisal Rights
governance in the conduct of its affairs, the company c. Right to income and assets of the corporation
should have a strong and effective internal control ○ Right to Dividend;
system and enterprise risk management framework. ○ Proportionate participation in the
distribution of assets in liquidation
The Company should have an adequate and d. Right to protect/transfer ownership
effective internal control system and an enterprise ○ Right to issuance of stock certificate
risk management framework in the conduct of its for fully paid shares
business, taking into account its size, risk profile and ○ Right to transfer of stock in corporate
complexity of operations. books
○ Pre-emptive rights;
Promoting Shareholder Rights ○ Right of first refusal, if granted
The company should treat all shareholders e. Right to information
fairly and equitably, and also recognize, protect and ○ Right to inspect books and records
facilitate the exercise of their rights. ○ Right to be furnished of the most
recent financial statement/financial
It is the duty of the Board to promote report
stockholder rights, remove impediments to the ○ Right to be notified of certain
exercise of stockholder rights and provide effective corporate acts
redress for violation of their rights. f. Remedies for infringement of Shareholder
rights such as individual suit, representative
The Board should ensure that basic suit, derivative suit, or alternative dispute
shareholder rights are disclosed in the Manual on resolution
Corporate Governance and on the company’s website.
It is the responsibility of the Board to adopt a policy Respecting Rights of Stakeholders and Effective
informing the shareholders of all their rights. Redress for Violation of Stakeholder’s Rights
 grow its business, while contributing to the
The rights of stakeholders established by law, advancement of the society where it operates.
by contractual relations and through voluntary
commitments must be respected. Where Sustainable development means that the
stakeholders’ rights and/or interests are at stake, company not only complies with existing regulations,
stakeholders should have the opportunity to obtain but also voluntarily employs value chain processes
prompt effective redress for the violation of their that takes into consideration economic,
rights. environmental, social and governance issues and
concerns. In considering sustainability concerns, the
The Board should identify the company’s company plays an indispensable role alongside the
various stakeholders and promote cooperation government and civil society in contributing solutions
between them and the company in creating wealth, to complex global challenges like poverty, inequality,
growth and sustainability. unemployment and climate change.

Stakeholders in corporate governance

include, but are not limited to, customers, employees,
suppliers, shareholders, investors, creditors, the
community the company operates in, society, the
government, regulators, competitors, external
auditors, etc.

In formulating the company’s strategic and

operational decisions affecting its wealth, growth and
sustainability, due consideration is given to those who
have an interest in the company and are directly
affected by its operations.

The Board should adopt a transparent

framework and process that allow stakeholders to
communicate with the company and to obtain redress
for the violation of their rights.

Encouraging Employees’ Participation

A mechanism for employee participation
should be developed to create a symbiotic
environment, realize the company’s goals and
participate in its corporate governance processes.

Encouraging Sustainability and Social Responsibility

The company should be socially responsible
in all its dealings with the communities where it
operates. It should ensure that its interactions serve
its environment and stakeholders in a positive and
progressive manner that is fully supportive of its
comprehensive and balanced development.

The company should be socially responsible

in all its dealings with the communities where it
operates. It should ensure that its interactions serve
its environment and stakeholders in a positive and
progressive manner that is fully supportive of its
comprehensive and balanced development.

The company should recognize and place an

importance on the interdependence between
business and society and promote a mutually
beneficial relationship that allows the company to