Key Role and Responsibilities
Overall stewardship of the Company rests on the Board Of Directors, the highest governing authority within CHI's management structure. Collectively, the Board Of Directors is responsible for the success of the Company and ensures that the Company's obligations to its stakeholders are met.

Composition
The Board brings to the organization a balanced mix of business, legal, and finance competencies, with each director capable of adding value and rendering independent judgment in relation to the formulation of sound corporate policies, on issues of strategy, resources, standards and performance related to corporate social responsibility, environmental and economic sustainability.

Decision-making at the Board level adheres to an objective process that does not undermine the independence and integrity of judgment of each individual director.

None of the members of the Company's directors and management own two percent or more of the outstanding capital stock of the Company.

Independent Directors
As a publicly listed company in the Philippine Stock Exchange (PSE), Cebu Holdings, Inc. conforms to the legal requirement to have at least two independent directors or at least twenty percent of its board size, whichever is less. CHI has three independent directors, Fr. Roderick C. Salazar, Jr., Enrique L. Benedicto and Hernando O. Streegan.

The Company defines an independent director as holding no interests or relationships with the Company that may hinder his independence from the Company or management or would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Company complies with the rules of the Securities and Exchange Commission (SEC) with regard to the nomination and election of the independent director.

Chairman
The Chairman of the Board is Jaime I. Ayala, who assumed the position in 2004. Francis O. Monera holds the position of president . The existing board structure provides a clear division of responsibilities at the top of the Company, between the working of the Board and the executive responsibilities for the business. The respective roles of the chairman of the Board and the president are complementary. This ensures an appropriate balance of power, increased accountability and further provides a greater capacity of the Board for independent decision making.

Board Performance
Board meetings are held at least twice a year or as often as necessary to fulfill its role. The Board has separate and independent access to the Corporate Secretary who, among other functions, oversees the adequate flow of information to the Board prior to meetings and serves as an adviser to the directors on their responsibilities and obligations.

Discussions during Board meetings are open and independent views are given due consideration. The Board held three meetings in 2008. The record of attendance of the Company's directors during the Board meetings is shown below.

In 2008, the Board of Directors conducted a self-assessment of their performance covering the year, focusing on the level of Board's compliance with leading practices and principles on good governance, both as an individual member and as a Board's collective governing role. The formal self-rating system takes into account factors such as independence, experience, judgment, knowledge, time commitment and teamwork, and identifies areas for improvement.

Board Committees
The Board has established committees to assist in exercising its authority including monitoring the performance of the business. To aid in good governance, our committees support the Board in the performance of specific functions. The committees are the Executive Committee, the Compensation Committee, the Nomination Committee and the Audit Committee.

Executive Committee. The Executive Committee acts in accordance with the authority granted by the Board or in case of absence of the Board on specific matters within the competence of the Board of Directors as prescribed in the Company's By-Laws, except with respect to any action for which shareholders' approval is also required such as distribution of cash dividends; filling of vacancies in the Board or in the Executive Committee; amendment or repeal of By-Laws or the adoption of new By-Laws; amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable; and the exercise of powers delegated by the Board exclusively to other committees.

Compensation Committee. The Compensation Committee establishes a formal and transparent procedure for fixing the remuneration packages of corporate officers and directors. It provides oversight over remuneration of senior management and other key personnel.

In 2008, the Compensation Committee considered and approved: 1) the 2007 performance evaluation and promotion of associates, managers and executives 2) 2007 Performance Bonus for the associates, managers and executives; 3) the salary adjustments for the qualified managers and executives for year 2008.

Nomination Committee. The Nomination Committee's main function is to install and maintain a process to ensure that all directors to be nominated for election at the annual stockholders' meeting have all the qualifications and none of the disqualifications for directors as stated in the By-Laws, the Manual of Corporate Governance of the Company and the pertinent rules of the Securities and Exchange Commission. Also, the Committee is tasked to review and evaluate the qualifications of all persons nominated to positions in the Company which require appointment by the Board.

In 2008, the Nomination Committee considered and approved the final list of nominees for directors for the year 2008-2009.

Audit Committee. The Audit Committee's roles and responsibilities are defined in the Audit Committee Charter approved by the Board of Directors. The Audit Committee provides assistance to the Board of Directors in fulfilling its oversight responsibility to the shareholders relating to: a) the Company's financial statements and the financial reporting process, b) the systems of internal controls and financial reporting controls, c) the internal audit activity,
d) the annual independent audit of the Company's financial statements and, e) compliance with legal and regulatory matters.

The Audit Committee had 4 meetings in 2008. During these meetings, the Audit Committee reviewed and approved the following: 1) internal and external audit plans, 2) re-appointment of SGV as the external auditors of the company, 3) quarterly unaudited financial statements, 4) consolidated audited financial statements as prepared by the external auditors SGV & Co., and 5) internal audit results.

In 2008, the Audit Committee was also oriented on other aspects of the Company apart from internal audit, financial reporting and external audit. This is for the Committee's further awareness and appreciation of Company's initiatives and programs.

The following matters were taken up in 2008: (1) Review of the Company's Internal Control Framework, (2) Corporate Social Responsibility, (3) Quality, Environment, Health & Safety Management System and (4) Information Systems. The Audit Committee will continue to get sessions on the other initiatives and programs in the succeeding years.

Director and Senior Executive Compensation
Non-executive directors, are defined as members of the Board of Directors who are neither officers nor consultants of the Company, receive remuneration consisting of a per diem of P20,000.00 for each Board meeting attended and P10,000.00 per Board committee meeting actually attended. The said remuneration of non-executive directors was implemented effective April 28, 2006.

None of the directors, in their personal capacity, has been contracted and compensated by the Company for services other than those provided as a director.

The Company adopts a performance-based compensation scheme for its senior executives as incentive. Performance assessment of top management and associates is based on the corporate and functional Balanced Scorecard (BSC) Management System in which targets include, but are not limited to the financial aspects of the business. Other key result areas focus on non-financial aspects such as the Company's customers, internal business processes, and the organization's learning and growth that cover the requirements of the Company's Quality, Environment, Health and Safety (QEHS) Management Systems. The QEHS Management Systems establish the processes of implementing and monitoring programs and initiatives related to quality products and services, customer satisfaction, environmental sustainability and social responsibility.

The total compensation paid to non-executive directors as well as officers is disclosed annually in the Definitive Information Statement sent to shareholders, together with the Notice of Regular Annual General Meeting 15 business days prior to the Annual General Meeting. The total annual compensation includes the basic salary and other variable pay (i.e. guaranteed bonus and performance-based incentive).