GOVERNANCE


Equitable Treatment of Shareholders

We treat all shareholders equitably, and recognize, protect, and facilitate the exercise of their rights through constant and open communication. Adequate protection is given to minority shareholders against any unfair conduct on the part of the majority. We impose well-defined rules and explicitly prohibit any shareholder, officer or employee from unfairly gaining advantages by withholding information from minority shareholders and the general public.

 

A. Shares and Voting Rights

We respect each of our shareholder’s right to participate and vote in the Annual Stockholders’ Meeting. Shareholders are entitled to one vote per common share of stock. CHI adopts and observes the basic principle of “one vote per one common share.”

The vote may be made in person, by proxy, or electronically. Strict adherence to applicable rules and regulations is followed in cases of proxy voting or voting in absentia.

The rules provide that a stockholder may vote manually using the ballot provided to him upon his registration and placing the voted ballot in the ballot box located in the registration area.

A stockholder may also vote electronically using any of the computers in the station for electronic voting near the registration area. The paper ballot and the website platform for electronic voting set forth the proposed resolutions for consideration by the stockholders and each proposed resolution would be shown on the screen in front as it is taken up.

We also allowed voting in absentia by sending out to each stockholder a ballot with a proxy form, submitted at least seven (7) days before the meeting. The votes in the ballot were counted even if the stockholder did not personally attend because every stockholder could participate in the meeting under the Corporation Code and the By- Laws through his designated proxy or the Chairman of the meeting as the proxy in default in the absence of a designated proxy.

Each outstanding share of stock entitles the registered stockholder to one vote.

The stockholders may cast their votes anytime during the meeting. All votes received shall be tabulated by the Office of the Corporate Secretary and the results of the tabulation shall be validated by the external auditor, SyCip Gorres Velayo & Co. (SGV). As the stockholders take up an item in the Agenda, the Secretary would report on the votes that have been received and tabulated and the final tally of votes would be reflected in the minutes of the meeting.

 

B. Notice of Annual Stockholder’s Meeting

We mail a Notice of Annual Stockholders’ Meeting to shareholders at least 21 days before the scheduled date. In 2018, the notice for the April 10, 2018 Annual Stockholders’ Meeting was sent 42 calendar days prior to the meeting date, well ahead of the standard number of days required. For the convenience of stockholders, we held the meeting at 19th Floor, Ayala Center Cebu Tower, Bohol Street, Cebu Business Park, Cebu City.

The notice specifies the agenda and rationale for each item, and the date, time and place for validation of proxies, which should be no later than five business days prior to the Annual Stockholders’ Meeting. A proxy form is attached to every notice. The notice likewise includes the profiles of directors seeking election or re-election. Our Board’s Audit Committee clearly identified and recommended our principal accountant and external auditor of the company, SyCip, Gorres, Velayo & Company (SGV& Co.), for reelection at the meeting.

 

C. Prohibition of Insider Trading

We adhere to a uniform Insider Trading Policy in all securities dealings. This means that directors, officers and employees who are considered to have knowledge of material facts or changes in the affairs of CHI that have not been disclosed to the public—including any information likely to affect the market price of the securities of the company—are prohibited from buying or selling the company’s securities during trading blackout periods.

Trading blackouts are required covering 10 trading days before, and three trading days after, the disclosure of quarterly and annual reports. CHI’s shares of stocks, options to purchase stocks, bonds and other evidence of indebtedness are all covered under this policy, as are all members of the Board of Directors, key officers (including their immediate families), consultants, advisers and employees who are made aware of undisclosed material information.

In 2018, our company required all directors and officers to disclose their transactions in shares of the company within three business days from the date of the transaction. Our company also requires employees to accomplish an annual disclosure statement. We were in full compliance with all laws and regulations, and thus no case was found of any violation of the company’s policy in 2018.

 

D. Related Party Transactions

Related party transactions (RPTs) are conducted on an arm’s length basis and in a manner that ensures fairness to the company’s best interest, and no less favorable than those generally available to non-related parties under the same or similar circumstances. We require directors and key management personnel to inhibit themselves from participating in discussions on a particular agenda when they are conflicted. Independent directors are likewise requested to review material and significant RPTs to determine whether these are in the best interests of the company.

All directors and employees of CHI and its subsidiaries are required to promptly disclose any business and family related transactions to the company and/or its subsidiaries to ensure that potential conflicts of interest are immediately brought to the attention of management. Directors are required to disclose annually any conflict of interest through a Disclosure Form. The company also has a policy on granting loans to directors, either forbidding the practice or ensuring that the transaction is conducted at arm’s length basis and at market rates.

Should there be any related party transaction, it is identified, reviewed, and approved by the Related Party Transactions Review Committee. Material or significant related party transactions will have to be endorsed to the Board for approval. The Board may, at its option, also require that a related party transaction that it has approved be also submitted to the stockholders for consideration and ratification. In 2018, no RPTs were classified as financial assistance to entities other than wholly owned subsidiary companies.

Resolution of Disputes

We avoid anti-takeover measures or similar devices that may entrench ineffective management or the existing controlling shareholder group.) CHI abides by Republic Act No. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, as a way to settle disputes without resorting to excessive litigation. The company has a team that handles investor relations to ensure constant engagement with its shareholders. This sets up an avenue to receive feedback, complaints, and queries from shareholders and assures their active participation with regard to activities and policies of the company. Furthermore, representatives from the Investor Relations Office (IRO) are present every shareholders’ meeting to support these objectives.