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CODE
OF CORPORATE GOVERNANCE
VI. Evaluation
Systems
The management may establish a
performance evaluation system to measure the performance of the Board and
top-level management of the corporation.
The establishment of such evaluation
system, including the features thereof, may be disclosed in the
company’s annual report (SEC Form 17-A).
VII. Disclosure
and Transparency
A dominant theme in all issues related
to corporate governance is the vital importance of disclosure. The more transparent the internal workings of the company and cash
flows, the more difficult it will be for management and controlling
shareholders to misappropriate company assets or mismanage the company.
The most basic and all encompassing
disclosure requirement is that all material information, i.e., any thing
that could potentially affect
share price, should be publicly disclosed. Such information would include
earnings results, acquisition or disposal of assets, board changes,
related party transactions, shareholdings of directors and changes to
ownership. Other information that should always be disclosed includes
remuneration (including stock options) of all directors and senior
management corporate strategy, and off balance sheet transactions. All disclosed information should be released via the approved stock
exchange procedure for company announcements as well as through the annual
report.
The Board shall therefore, commit at
all times to full disclosure of material information dealings. It shall cause the filing of all required information for the
interest of the stakeholders.
VIII. Commitment
to Corporate Governance
Corporations shall promulgate and
adopt its corporate governance rules and principles in accordance with
this Code. Said rules shall
be in manual form and available as reference by the directors. It shall be
submitted to the Commission, which shall evaluate the same and their
compliance with this Code taking into account the size and nature of
business. The said manual shall be available for inspection by any
stockholder of the corporation at reasonable hours on business days. The
Chairman of the Board shall be specifically tasked with the responsibility
of ensuring adherence to the corporate governance code and practices.
Unless mandated by law, other
corporations are likewise encouraged to observe this Circular in the
absence of any mandated corporate governance rules adopted by other
agencies.
IX. Administrative
Sanction
Failure to adopt a manual of
corporate governance as specified therein shall subject a corporation,
after due notice and hearing, to a penalty of P100,000.00.
X. Transitory
Provision
All corporations affected by
this Code shall submit their manual by July 1, 2002 to be effective
January 1, 2003. A model manual will be drafted by the Commission and will
be available by May 15, 2002 in the SEC web page.
XI. Effective
Date
This Memorandum Circular shall
take effect after fifteen (15) days from publication in a newspaper of
general circulation.
April 5, 2002.
Mandaluyong City, Philippines.
LILIA
R. BAUTISTA
Chairperson
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