1. THE BOARD’S GOVERNANCE RESPONSIBILITIES (7)
P1: Establishing a Competent Board
The company should be headed by a competent, working board
a. to foster the long-term success of the corporation, and
b. to sustain its competitiveness and profitability in a manner consistent with its
corporate objectives and the long-term best interests of its shareholders and other
stakeholders.
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collective working knowledge, experience, or expertise that is relevant to the
company’s industry or sector
appropriate mix of competence and expertise
majority of non-executive directors to help secure objective and independent
judgment on corporate affairs
relevant annual continuing training for all directors
policy on board diversity
assistance by a Corporate Secretary
duties and responsibilities of the Corporate Secretary
assistance by a Compliance Officer
duties and responsibilities of the Compliance Officer
P2: Establishing Clear Roles and Responsibilities of the Board
The fiduciary roles, responsibilities and accountabilities of the Board as provided under
a. the law,
b. the company’s articles and by-laws, and
c. other legal pronouncements and guidelines
should be clearly made known to all directors as well as to stockholders and other
stakeholders.
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how the board members should act: on a fully informed basis, in good faith, with
due diligence and care, and in the best interest of the company and all
shareholders
2 key elements of the fiduciary duty of board members
What is fiduciary duty
competent and qualified Chairperson
roles and responsibilities of the Chairman/Chairperson
succession planning program for directors, key officers, and management
remuneration of key officers and board members
formal and transparent board nomination and election policy
grounds for permanent and for temporary disqualification of a director
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group-wide policy and system governing related party transactions
primary responsibility for approving the selection and assessing the performance
of the Management
effective performance management framework
Board’s oversight responsibility over an appropriate internal control system and a
sound enterprise risk management (ERM) frameworks
P3: Establishing Board Committees
Board committees should be set up to the extent possible to support the effective
performance of the Board’s functions, particularly with respect to
a. audit,
b. risk management,
c. related party transactions, and
d. other key corporate governance concerns, such as nomination and remuneration.
The composition, functions and responsibilities of all committees established should be
contained in a publicly available Committee Charter.
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board committees that focus on specific board functions
Audit Committee and its duties and responsibilities
Corporate Governance Committee (CG Committee) and its duties and functions
Board Risk Oversight Committee (BROC) and its duties and responsibilities
Related Party Transaction (RPT) Committee and its functions
Committee Charters
P4: Fostering Commitment
To show full commitment to the company,
the directors should devote the time and attention necessary to properly and
effectively perform their duties and responsibilities,
including sufficient time to be familiar with the corporation’s business.
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presence and active participation in all meetings of the Board, Committees, and
Shareholders
limit on board directorships
P5: Reinforcing Board Independence
The Board should endeavor to exercise objective and independent judgment on all
corporate affairs.
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minimum number of independent directors
qualifications, disqualifications, and maximum term of an independent director
roles and responsibilities of the Chief Executive Officer (CEO)
lead director and his/her functions
abstention of a director from participating in meetings on which he/she has a
material interest
non-executive directors
P6: Assessing Board Performance
The best measure of the Board’s effectiveness is through an assessment process.
The Board should regularly carry out evaluations
a. to appraise its performance as a body, and
b. assess whether it possesses the right mix of backgrounds and competencies.
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self-assessment of performance
guidelines in determining Board performance
P7: Strengthening Board Ethics
Members of the Board are duty-bound to apply high ethical standards, taking into account
the interests of all stakeholders.
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adoption of Code of Business Conduct and Ethics
implementation and monitoring of compliance with the Code
2. DISCLOSURE AND TRANSPARENCY (4)
P8: Enhancing Company Disclosure Policies and Procedures
The company should establish corporate disclosure policies and procedures that are
a. practical and
b. in accordance with best practices and regulatory expectations.
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importance of establishing disclosure policies and procedure
period to disclose any dealings in the company’s shares
full disclosure of relevant and material information on individual board members
and key executives
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disclosure of remuneration policies and procedure
disclosure of policies governing Related Party Transactions (RPTs)
disclosure of material facts and events
Manual on Corporate Governance
P9: Strengthening the External Auditor’s Independence and Improving Audit
Quality
The company should establish standards for the appropriate selection of an external
auditor, and exercise effective oversight of the same to strengthen the external auditor’s
independence and enhance audit quality.
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appointment, reappointment, removal, and fees of the external auditor
Audit Committee Charter
disclosure of the nature of non-audit services performed by its external auditor