Board Processes

Board Meetings and Attendance

Board meetings are scheduled at the beginning of the year. The Board shall designate the days when it shall meet, at a time and place determined by its Chairman, with further meetings to occur when deemed necessary by the Chairman or at least the request of two directors. The Board shall meet in person, teleconference or video conferencing facility or through such other similar means.

Two-thirds of the number of directors as fixed in the articles of incorporation shall constitute a quorum for the transaction of corporate business.

Directors are encouraged to attend all Board meetings, either in person or via teleconferencing facility. A minimum attendance of more than 75 percent for all Board meetings shall be required for a director to be eligible for re-election except in cases where a director contracts illness, death in the immediate family, serious accident or performs civic obligations.

In Board and Committee meetings, the director should review meeting materials and if called for, ask the necessary questions or seek clarifications and explanations.

The Board may, to promote transparency, require the presence of at least one independent director in all of its meetings. However, the absence of an independent director shall not affect the quorum requirement if he is duly notified of the meeting but notwithstanding such notice fails to attend.

In 2019, the Board had four regular and organizational meetings. All the board members attended at least 75 percent of the meetings for the year. The Executive Committee likewise convenes regularly in lieu of the Board. Attendance of all directors is detailed in the table found on CHI ATTENDANCE OF DIRECTORS IN 2019


The Corporate Secretary

The Corporate Secretary, although not a member of the Board of Directors, plays a key role in supporting the Board in the discharge of its functions and must share the visions and decisiveness of the CEO. He or she is a Filipino with excellent legal, financial, accounting, administrative, and interpersonal skills.

The Corporate Secretary is tasked to attend to the correspondences and files of the company, and signs jointly with the president all stock certificates. The position is tasked to also record and process all movements of stock certificates.

He or she is also primarily responsible to the Corporation and its stakeholders and has, among others, the following duties and responsibilities:

  • Serve as an adviser to the directors on their responsibilities and obligations;
  • Assists the Board and the Board committees in the conduct of their meetings including preparing an annual schedule of Board and committee meetings and the annual Board calendar, and assisting the chairs of the Board and its committees to set agendas for those meetings.
  • Safekeeps and preserves the integrity of the minutes of the meetings of the Board and its committees, as well as other official records of the Corporation in a book or books kept for that purpose, and shall furnish copies thereof to the Chairman, the President, and other members of the Board as appropriate;
  • Keep in safe custody the seal of the Corporation and affix it to any instrument requiring the same;
  • Have charge of the stock certificate book and such other books and papers as the Board may direct;
  • Keeps abreast on relevant laws, regulations, all governance issuances, relevant industry developments and operations of the Corporation, and advises the Board and the Chairman on all relevant issues as they arise;
  • Works fairly and objectively with the Board, Management, and stockholders and contributes to the flow of information between the Board and Management, the Board and its committees, and the Board and its stakeholders, including shareholders;
  • Advises on the establishment of Board committees and their terms of reference;
  • Informs members of the Board, in accordance with the By-Laws, of the agenda of their meetings at least five working days in advance, and ensures that the members have before them accurate information that will enable them to arrive at intelligent decisions on matters that require their approval;
  • Attend to the giving and serving of notices of Board and shareholder meetings;
  • Attends all Board meetings, except when justifiable causes, such as illness, death in the immediate family and serious accidents, prevent him/her from doing so;
  • Performs required administrative functions;
  • Oversees the drafting of the by-laws and ensures that they conform with regulatory requirements;
  • Ensure fulfillment of disclosure requirements to SEC and PSE.
  • Performs such other duties and responsibilities as may be provided by the SEC.

The Board has separate and independent access to the Corporate Secretary.

As of February 2014, Atty. June Vee D. Monteclaro-Navarro, Filipino, is the Corporate Secretary of the Company.


Board Appointments and Re-election

The directors are elected by ballot, and each shareholder is entitled to cast as many votes as the number of his/her shares, multiplied by the number of slots for election. Pursuant to the Corporation Code, any shareholder—including minority shareholders—shall have the right to nominate candidates to the Board. For the election of directors, it is necessary for one-half plus one of the outstanding shares of stock to be represented.

The Committee of Inspectors of Proxies and Ballots appointed by the Board supervises the election.

Directors hold office for the term of one year or until their successors shall have been elected and qualified, in accordance with the by-laws.

The company bars an independent director from serving in such capacity after the term limit of nine (9) years, but may continue to qualify for nomination and election as a non-independent director. In the instance that the company retains an independent director in the same capacity after nine years, the board provides meritorious justification and seeks shareholders’ approval during the annual shareholders’ meeting.

In 2019, SGV & Co. was appointed to validate the records.


Board Independence and Conflict of Interest

Members of the Board are obligated to follow high ethical standards while bearing in mind the interests of all stakeholders.

Directors are expected to act only in the best interest of the company and are required to comply with the Code of Ethics. Thus, they are required to disclose annually any conflict of interest through a Disclosure Form. Any material conflict of interest found shall cause disqualification from the Board. Moreover, directors are required to abstain from participating in discussions and voting on any matter where they are in conflict of interest.

In line with the insider trading policy of the company, each director is required to notify the Board at least one day before dealing in the company’s shares of stock.

No person shall qualify or be eligible for nomination or election to the Board if he or she is engaged in any business which competes with, or is antagonistic to, that of the company in accordance with the company’s by-laws.

Directors should keep the information contained in confidential reports or discussions for at least two years, and ensure that all persons who have access to this information on their behalf comply with this rule.

If a director is interested in accepting a directorship in another company, he/she should first notify the CHI’s board before accepting it. He/She shall provide copy of written notification to the board or minutes of board meeting wherein the matter was discussed.

Executive directors shall hold no more than two board seats in listed companies outside the Corporation’s group.

Independent directors may serve for a period of not more than nine years and may hold only up to five board seats in publicly-listed companies simultaneously. This ensures that they have sufficient time to fully prepare for meetings, challenge Management’s proposals/views, and oversee the long-term strategy of the company.



Remuneration Policy

The Board of Directors determines a level of remuneration for its members that is sufficient to attract and retain those who are competent, and compensate them not only for their performance of numerous responsibilities but also for undertaking certain risks as a Board member. The compensation which maybe in the form of cash remuneration and/or stock option plans, shall be fixed by way of a resolution of the Board of Directors.

The compensation is determined through a resolution of the Board, who may provide that only non-executive directors shall be entitled to such compensation. Moreover, the company may purchase insurance coverage for its directors at its own expense.

No director should be involved in deciding his or her own remuneration. Furthermore, the company does not have stock rights, options, and warrants for directors, executives, and employees.

Non-executive directors, defined as members of the Board who are neither officers nor consultants of the company, receive a per diem of P40,000 for each Board meeting attended and P20,000 per Board committee meeting actually attended. These amounts were implemented effective April 28, 2006.

Remuneration Process Discussion and approval of remuneration for CEO and management officers are done through the Personnel and Compensation Committee. The committee establishes a formal and transparent procedure for establishing a formal and transparent procedure for developing a policy for determining the remuneration of directors and officers that is consistent with the Corporation’s culture and strategy as well as the business environment in which it operates. It also provides oversight over remuneration of senior management and other key personnel.

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.


Diversity, Skills and Competencies

The company is headed by a competent, working board that fosters its long-term competitiveness and profitability in a manner consistent with its corporate objectives and the longterm interests of its shareholders and other stakeholders.

The company has a policy ensuring diversity of experience and background of directors in the Board.

The Revised Manual of Corporate Governance reflects the relevant qualifications of directors, including their membership to the Board’s various committees. Apart from educational requirements, a director should have sufficient understanding of business fundamentals and experience in managing a business.

The CHI 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, and environmental and economic sustainability.

The Company also requires that at least one of its non-executive directors should have prior working experience in the sector or broad industry group to which our company belongs.

The Board’s composition must reflect the necessary knowledge, skills and experience required to properly perform its duties. Thus, it regularly reviews its own composition, taking into account the evolving requirements of the company and best practices in corporate governance. CHI encourages the selection of a mix of competent directors, where each can add value and contribute independent judgment to the formulation of sound corporate strategies and policies. The corporation seriously considers the objectives set by the Board regarding its composition, as well as the required knowledge, abilities and experience needed to successfully manage the corporation.

CHI gives careful attention to ensure that there is independence and diversity, and appropriate representation of women in the Board, subject to possession of knowledge, abilities, skills and experience determined by the Board as necessary for the Board to properly perform its functions. The Board is currently composed of eight male members and one female member. The Chairman of the Board is female.

It is important to have Board diversity to avoid groupthink and ensure that optimal decision-making is achieved. Diversity is not limited to gender and includes age, ethnicity, culture, skills, competence and knowledge.


Development and Training

The company, particularly the Chairman of the Board, assures the availability of proper orientation for first-time directors and continuing training opportunities for all directors. The Compliance Officer ensures the attendance of board members and key officers to relevant trainings. The Corporate Secretary shall have such other responsibilities as the Board may impose upon him or her, including the facilitation of trainings for directors when necessary.

Prior to assuming office, a director shall attend a seminar on corporate governance which shall be conducted by a duly recognized private or government institution. The reelected Directors shall likewise attend at least once a year, a seminar on corporate governance which shall be conducted by training providers that are duly accredited by the SEC. If necessary, funds shall be allocated by the Corporation for this purpose.

To keep our Board and key officers abreast on relevant corporate governance practices, laws, regulations and changing risks, the company ensures 100 percent attendance to the Ayala Group continuing education program on corporate governance. The company also actively encourages and supports its directors to attend continuing education programs on corporate directorship.

The company encourages Board members to participate in continuing professional education programs particularly on corporate governance. An orientation program for new directors is held whenever necessary to properly equip and prepare them for their role as members of the Board.

In 2019, we ensured the attendance of the members of the Board to the SEC-accredited Ayala Group Corporate Governance and Risk Management Summit and the ICD’s Corporate Governance and Orientation Program. That same year, a third party assessment was conducted.


Performance Appraisal

Following best practices, the Board measures its assessment process and regularly carries out evaluations to appraise its performance and ensure a balanced composition or mix of backgrounds and competencies.

The Board makes use of a self-assessment exercise, conducted and facilitated by CHI’s external partner, AON, implemented in the form of a formal questionnaire and cuts across each top management group based on four review clusters. The Assessment covers the Board of Directors, the Board Committees, individual directors, and the president and CEO.

The results are compiled by the Compliance Officer and submitted back to the Board for discussion and appropriate action through the corporate secretary. This self-assessment survey covers compliance with the Corporate Governance Manual, individual committee charters, and performance scorecard for the president/ CEO. Results of the 2019 self-assessment were presented by the compliance officer to the board on February 26, 2020.