SEC MEMORANDUM CIRCULAR NO.
19 Principle 6:
To: Publicly-listed Companies
Subject: Code of Corporate Governance for Publicly-Listed Companies
Date: November 22, 2016
Purpose: to promote the development of a strong corporate governance
culture and keep abreast with the recent developments in corporate
governance.
CODE OF CORPORATE GOVERNANCE FOR PUBLICLY LISTED COMPANIES
The Board’s Governance Responsibilities
Principle 1:
 The company should be headed by a competent, working board to
foster the long term success of the corporation,
 To sustain its competitiveness and profitability in a manner
consistent with its corporate objectives and the long-term best
interests and other stakeholders.
Principle 2:
 Ang fiduciary roles, responsibilities and accountabilities ng board as
provided under the law, ang company’s articles and by-laws, and
other legal pronouncements at guidelines, dapat clearly made
known sa lahat ng directors, stockholders, and other stakeholders.
Principle 3:
 Ang Board committees dapat nakaset up to the extent possible to
support the effective performance of the Board’s function, lalo na
sa audit, risk management, related party transactiions, and other
key corporate governance concerns, kagaya ng nomination and
renumeration.
 Ang composition, functions, and responsibilities ng lahat ng
committee na naestablish dapat contained in a publicly available
Committee Charter.
Principle 4:
 Para mapakita ang full commitment sa company, ang mga director
dapat idevote ang time at attention na kailangan to properly and
effectively perform their duties and responsibilities, including
sufficient time to be familiar with the corporation’s business.
Principle 5:
 Ang Board should endeavour to exercise objective and independent
judgment on all corporate affairs.
 And best measure ng Board’s effectiveness is through assessment
process. And Board dapat regularly nag e-evaluate to appraise its
performance as a body. At i-assess kung napopossess ba ang right
mix of backgrounds and competencies.
Principle 7:
 Ang mga member ng Board are duty-bound to apply high ethical
standards, taking into account ang interest ng lahat ng stakeholders.
Disclosure and Transparency
Principle 8:
 Ang company dapat mag establish ng corporate disclosure policies
and procedures na practical at in accordance with best practices and
regulatory expectations.
Principle 9:
 Ang company dapat mag establish ng standards para sa appropriate
na pagpili ng external auditor, at maexercise yung effective na
oversight ng external auditor para mapalakas yung independence ng
external auditor at maenhance yung audit quality.
Principle 10:
 Ang company dapat masigrado na yung material and reportable
non-financial sustainability issues ay madisclose.
Principle 11:
 Ang company dapat mamaintain ang comprehensive and cost-
efficient communication channel for disseminating relevant
information. This channel is crucial for informed decision-making by
investors, stakeholders, and other interested users.
Internal Control system and Risk Management
Principle 12:
 Para masigurado and integrity, transparency, at tamang governance
sa pag conduct ng affairs nito, and company dapat may malakas at
effective internal control system and enterprise risk management
framework.
Cultivating a Synergic Relationship with Shareholders
Principle 13:
  Ang company dapat i-treat lahat ng shareholders fairly and
equitably, at i-recognize, protektahan at i-facilitate and exercise of
their rights.
Duties to Stakeholders
Principle 14:
 Ang rights ng stakeholders na ini-establish ng law, by contractual
relations and through voluntary ocmmitments must be respected.
Na kung saan ang mga stakeholders’ rights or interests are at stake,
stakeholders should have the opportunity to obtain prompt
effective redness for the violation of their rights.
Principle 15:
 Ang mechanism para sa employee participation ay dapat madevelop
para makagawa ng symbiotic environment, realize the company’s
goals at participate in its corporate governance processes.
Principle 16:
 Ang company dapat ay socially responsible sa lahat ng dealing sa
communities kung saan ito nagooperate. Dapat masigurado na and
interactions serve its environment and stakeholders in a positive
and progressive manner na fully supportive of its comprehensive
and balanced development.
INTRODUCTION
The code of the governance – intended to raise the corporate governance
standards of PH Corporation to a level at par with its regional and
global counterparts.
It will adopt the “COMPLY OR EXPLAIN” approach.
This approach combines voluntary compliance with mandatory
disclosure. (Yung mga companies na hindi need mag-comply sa
code, dapat naka-state sa annual corporate governance reports nila kung
magco comply sila, i-identify kung anong mga areas ang di need
mag- comply, at reasons kung bakit hindi need mag-comply.
It is arranged as follows:
Principles, recommendation, and Explanations.
Principles – considered as high-level statements of corporate governance
good practice, at applicable sa lahat ng companies.
Recommendations – objective criteria na intended para ma-identify yung
mga specific features ng corporate governance good practice na
recommended sa companies operating na ayon sa Code. Kung hindi
na complied and recommendation, then disclose why and explain
why the principle is achieved kahit di sumunod sa recommendation.
Dapat consistent, description at explanations ay dapat nakasulat in
plain language and in a clear, compete, objective and precise
manner, para yung shareholders at other stakeholders can assess the
company’s governance framework.
Explanation – strives to provide companies with additional info. On the
recommended best practice.
The code does not prescribe “ONE SIZE FITS ALL”.
Large companies – expected to follow most of the code’s provisions
Small companies – may decide that the costs of some of the
provisions are less relevant in their case.
Principle of Proportionality – considered in the application of its
provision.
This code for public keneme – the first of a series of Codes na intended to
cover all types of corporations sa Pilipinas under supervision of the SEC.
The key references materials in the drafting of this code – latest G20/0ECD
Principles of Corporate governance and the Association of
Southeast Asian Nations Corporate Governance Scorecard.
DEFINITION OF TERMS
Corporate Governance – system of stewardship and control to guide org in
fulfilling their long-term economic, moral, legal, and social obligations
towards their stakeholders.
System of direction, feedback and control
To maximize the org’s long term success
Board of Directors – governing body elected by the stockholders that
exercises the corporate powers of a corp. conducts all its business and
control its properties.
Management – a group of executives given the authority by the BOD to
implement the policies.
Independent Director – a person who is independent of management and 3. Establishing board committees
the controlling shareholder, free from any business or other relationship. To
provide objective opinion.
Executive Director – a director who has executive responsibility from day-to-
day operations.
Non-executive director – kabaligtaran 4. Fostering Commitment
Conglomerate – a group of corp. that has diversified business activities in
varied industries whereby the operation are controlled and managed by a
parent corp. entity.
Internal control – process designed and effected by the BOD, senior
management, and all levels of personnel to provide reasonable assurance 5. Reinforcing Board independence
on the achievement of objectives through efficient and effective operations.
Enterprise risk management – process, effected by an entity’s BOD,
management, and other personnel, applied in strategy setting and across
the enterprise that is designed to identify potential events that may affect
the entity. 6. Assessing board performance
Related party – cover the company’s subsidiaries, as well as affiliates and
any party.
Related Party Transactions – transfer of resources, services or obligations
between a reporting entity and a related party regardless kung yung price is
nacharge. 7. Strengthening board ethics
Stakeholders - Any individual, org, or society at large who can either affect
or be affected by the company’s strategies, policies, business decisions and
operations. Includes customers, creditors, employees, suppliers, investors,
government, and community kung saan nag o-operate.

THE BOARD’S GOVERNANCE RESPONSIBILITIES DISCLOSURE AND TRANSPARENCY

1. Establishing a competent board 8. Enhancing company disclosure policies and procedures

2. Establishing clear roles and responsibilities of the board 9. Strengthening the external auditor’s independence and improving audit
quality
10. Increasing focus on non-financial and sustainability reporting
16. Encouraging sustainability and social responsibility

11. Promoting a comprehensive and cost-efficient access to relevant

information

INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT FRAMEWORK

12. Strengthening the internal control system and enterprise risk
management framework

CULTIVATING A SYNERGIC RELATIONSHIP WITH SHAREHOLDERS

13. Promoting shareholder rights

DUTIES TO STAKEHOLDERS
14. Respecting the rights of stakeholders and effective redress for violation
of stakeholders rights

15. Encouraging employees’ participation