Board Processes

Board Meetings and Attendance

Board meetings are scheduled at the beginning of the year. The presence of two-thirds of all Board members constitutes a quorum. The dissemination of agenda, presentation materials and items for approval are made available at least three business days prior to the meeting schedule.

In 2017, the Board had five regular and organizational meetings. All the board members attended 100 percent of the meetings for the year. The Executive Committee likewise convenes regularly in lieu of the Board.


The Corporate Secretary

The Corporate Secretary 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 also is tasked to record and process all movements of stock certificates.

The Corporate Secretary is primarily responsible to the Corporation and its stakeholders and has, among others, the following duties and responsibilities:

  • 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;
  • 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 (5) 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;
  • 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; and
  • Performs such other duties and responsibilities as may be provided by the SEC.

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


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.

In 2017, 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.



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 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 fixing the remuneration packages of corporate officers and directors, and 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 long-term 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.

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 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.

Aside from the regular corporate governance training facilitated by the ICD, we ensured the perfect attendance of all members of the Board to the Ayala group of companies’ annual SEC-accredited corporate governance summit in 2017. The Corporate Governance and Risk Management Summit was held on August 11, 2017 at the Fairmont Hotel.


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.

One of the tools used by the Board to monitor and improve its performance is an annual self-assessment exercise. This peer review is 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 basically covers compliance to the Corporate Governance Manual, individual committee charters, and performance scorecard for the president/CEO. The survey questions are reviewed regularly and administered in May each year.