GOVERNANCE


Corporate Governance

Given the large impact of Cebu Holdings, Inc.’s (CHI’s) operations on Cebu, our company’s governance should always be inclusive and responsive to the needs of all stakeholders.

Toward this end, CHI maximizes the capacity of good governance to guarantee that stakeholder rights and the company’s core values are upheld over short-term gains.

CHI follows a comprehensive set of oversight controls to achieve these goals. We also advance shared-value strategies and have voluntarily embedded global sustainability frameworks in our operations.

  1. Corporate Governance Practices
  2. Governance Structure
  3. Board of Directors
  4. Management Committee
  5. Management Team
  6. Enterprise-wide Risk Management
  7. Mechanisms for Enforcement and Compliance

CHI has been listed with the Philippine Stock Exchange (PSE) since 1994. The company fully complies with the Code of Corporate Governance as mandated by the Securities and Exchange Commission (SEC). This code specifies the role, duties, and responsibilities of our Board of Directors in line with Philippine laws, and is fully consistent with the recognized principles of good corporate governance.

We regard corporate governance as the primary system of stewardship and control to guide CHI in fulfilling its long-term economic, moral, legal, and social obligations. By constantly aiming for high governance standards, the company’s Board and Management are held accountable for upholding ethical behavior at all times. This in turn guarantees CHI’s long-term ability to create value for shareholders, stakeholders, and the nation.

We adopt the ASEAN Corporate Governance Scorecard for assessing our performance and reporting on other matters related to governance. The scorecard allows us to communicate our practices related to upholding shareholder rights, fostering equitable treatment of shareholders, promoting the role of stakeholders, advancing transparency in disclosure, and streamlining board responsibilities and processes.

 

2017 Best Practices in Corporate Governance

Highlights

These initiatives were implemented to ensure transparency, independence of the board, and the protection of the interests of our shareholders.

  • We revised our Corporate Governance Manual in compliance with SEC and implemented/strengthened the following:
    • Appointment of Lead Director to ensure independent views and perspective, avoid abuse of power and authority and potential conflict of interest in the Board.
    • Set term limit of independent directors to nine years. This allows progressive refreshing of the Board and maintains an appropriate balance of skills and experience.
    • Set limit of five board seats for independent directors to ensure that adequate time and attention is given to fulfillment of each director’s duties and that members of the BOD are able to commit themselves to the performance of their roles and responsibilities.
  • In compliance with the Revised Code of Corporate Governance for PLCs, the company did the following:
    • Revised its Corporate Governance Manual
    • Updated the Charters for the following Committees: Audit Committee, Risk Oversight Committee, Corporate Governance & Nomination Committee
    • Created a Related Party Transactions Review Committee, and the Corporate Governance & Nomination Committee
  • We implemented a Non-Disclosure Policy that requires that all information pertaining to the company’s business affairs are strictly confidential. All employees are required to sign a Non- Disclosure Undertaking annually.
  • We established and strengthened our social media presence with a Facebook page for our flagship project, Cebu Business Park, and subsidiary CPVDC’s Cebu IT Park, which serves as a channel to disseminate relevant and timely information about the estate. Our stakeholders, in turn, are able to give feedback with their comments on posts or private messages. We have a “within the hour” response rate to concerns and question on our page. With more stakeholders going digital, this allows for a wider audience reach, encourages stakeholder engagement, and provides a faster feedback mechanism. Among the notable instances where we were able to react quickly to stakeholder concerns is in adapting our bus service to fit the needs of the riding public, and enhancing security in poorly lit areas at the perimeter of our property for the safety of the community.
  • To encourage collaboration and creativity in the workplace, we introduced the activity-based workplace in our new corporate office. The open space concept allows employees to easily interact, thus resulting in better productivity.
  • As a real estate company, we realize that our impacts to the economic, social and physical environments are significant and long lasting. We strictly monitor compliance to reporting and disclosure requirements of bodies that regulate the industry.
  • We ensure the privacy of customer data entrusted to us as part of our business transactions – whether it is personal data in relation to buying property, shopper data or details of corporations we deal with.

 

Improvements in Governance Processes

We enhanced our existing systems and processes to further strengthen the governance framework that leads our organization.

CHI strives to maintain a culture of transparency, compliance with regulatory requirements and observance of best practices in corporate governance in the ASEAN region.

With our position as the leading real estate developer in Cebu, we hope to be able to influence our partners and stakeholders to maintain the same standards in conducting their businesses as well.

  • To ensure transparency with our shareholders and timeliness of information disclosed, we adhere to the required timelines in disclosure to the Securities and Exchange Commission and the Philippine Stock Exchange and uploaded on the company website within three trading days from date of event. In addition, information is disclosed in the SEC ACGR within five trading days from date of event.
  • We used technology to our advantage in actively engaging the company’s shareholders. We developed an electronic Registration and Voting System during Annual Stockholders Meeting to determine quorum and vote on items on the agenda. The system, which was designed in-house, allows shareholders to see voting turnout for significant items in the agenda in real time while the meeting is being conducted.
  • To keep our Board and key officers abreast on relevant corporate governance practices, laws, regulations and changing risks, we ensure 100 percent attendance to the Ayala Group continuing education program on corporate governance. In August 2017, all nine members of the Board and three key officers from management attended the Ayala Group Corporate Governance and Risk Management Summit.
  • The company provides equal, timely and cost efficient access to relevant information to its various stakeholders. It also adopts transparency and open communication to the public. These are done through:
    • Regular media and analyst briefings to allow investors to make informed decisions and show transparency and open  communication to the public;
    • Making the Investor Relations and other concerns easily reportable on the homepage of the company’s website. Stakeholders can use this channel to voice their concerns, inquiries or complaints for possible violation of their rights; and
    • Regularly updating disclosures and Investor Relations materials on the company website for easier access.
  • We enhanced our Stakeholder Engagement Program with policies and practices that allow the company to engage, listen and respond to its key stakeholders.
    • We have established various two-way communications channels – both online and offline – to allow our customers and other stakeholders to give feedback on our products and services.
    • Internally, we implemented the activity-based workplace at our new corporate offices to promote collaboration and productivity. We also continue to enhance our employee health, safety and wellness programs with various fitness activities, volunteerism programs and safety drills.
  • The company adopts high standards of business ethics through various programs and policies to ensure the integrity of the way we conduct our business. These include:
    • The Code of Ethical Behavior and Code of Conduct outlines the general expectations and standards of behavior and ethical conduct of everyone in the company.
    • Conflict of Interest Policy provides the parameters by which employees are guided in the propriety of their actions, decisions and business practices. All employees are required to sign an Annual Conflict of Interest Disclosure.
    • The company’s Insider Trading Policy covers all directors, officers and employees. Trading blackout periods are consistently observed.
    • Non-Disclosure Policy requires that all information pertaining to the company’s business affairs are strictly confidential. All employees are required to sign annually a Non-Disclosure Undertaking.
  • Vendor Integrity Program. As a major real estate player in the region, we acknowledge that we can influence the industry in upholding the highest standard of quality and business integrity. Thus, we have implemented the Vendor Code of Ethics applicable to the vendors of CHI and its subsidiaries. We enhanced the program by integrating the Vendor Code of Ethics into our purchasing process so that violations are flagged before any further transaction with possible erring suppliers.
  • The company’s Whistleblowing Policy encourages transparency and empowers all employees, third-party business partners and stakeholders to report any suspected or known illegal or unethical activity. Our Online Whistleblowing Report allows reporting through the website making it open and easily accessible to all stakeholders. We have an identified Ethics Committee at both the management and Board level to handle complaints.

We observe best practices in the composition of Board committees. CHI’s Audit Committee is comprised entirely of independent directors.

The company has a Related Party Transactions Review Committee to review material and significant Related Party Transactions to determine whether these are in the best interest of the company.

To ensure that the company is on track with its goals and compliances, the Board of Directors undergoes an annual Performance Appraisal as a body as part of its regular assessment process.

In growing globally as a company, we benchmark with best practices in corporate governance not only in the Philippines, but with the rest of the ASEAN. We conducted self-checks and implemented policies and programs to align with corporate governance standards within the ASEAN region.

 

Sustainability

We continue to develop programs and initiatives that contribute to sustainable development, always keeping in mind the well-being of all our stakeholders. These include:

  • Promoting local hiring to address manpower requirements
  • Forging partnerships beyond the parent company
  • Conducting intensified disaster readiness program
  • Implementing sustainability impact projects based on Four Focus Areas namely: Site Resilience, Pedestrian Mobility and Transit Connectivity, Eco-efficiency and Local Economic Development.