CORPORATE GOVERNANCE > GOVERNANCE PRACTICES
The Company’s Board of Directors is primarily responsible for the governance of the Corporation and is structured to provide an independent check on management. Each director has the obligation to contribute independent judgment to the formulation of sound corporate strategies and policies. The Company’s Board of Directors is composed of three (3) executive directors and twelve (12) non-executive directors, three (3) of whom are independent directors. The Company’s independent directors comply with Rule 38 of the Implementing Rules of the SRC on the qualifications, nomination and election of independent directors and has no business or other relationship with the Company that could, or could reasonably be perceived to materially interfere with the exercise of his/her independent judgment in carrying out his/her responsibilities as an independent director.
The schedule for board of directors meetings for the coming year is approved by the Board during the last meeting of the previous year taking into consideration the scheduled meetings of the subsidiaries and other operating companies in order to ensure that conflicts in meeting schedules will be avoided. The dissemination/reminder of the scheduled board of directors meetings are handled by the office of the Corporate Secretary as assisted by the PR and Corporate Communications Department of the Company.
For 2019, the following is the approved board meeting schedule for the year:
|Activity||MPIC’s Board Meeting Date|
|FY 2018 Results||March 5, 2019 (Tuesday)|
|1Q 2019 Results||May 2, 2019 (Thursday)|
|Pre-AGM Meeting||May 27, 2019 (Friday)|
|1H 2019 Results||August 1, 2019 (Thursday)|
|3Q 2019 Results and 2020 Budget||November 6, 2019 (Wednesday)|
The Company’s non-executive directors meet at least once a year to discuss matters relating to the affairs of the Company. The non-executive directors may, at their discretion, request the presence of the Company’s external auditor, internal auditor, Chief Risk Officer and Compliance Officer, depending on the agenda of their meeting. The last meeting of the Company’s non-executive directors was held on November 7, 2018, which was attended by all of the Company’s independent directors and four (4) other non-executive directors. The meeting was presided by the Company’s Lead Independent Director.
The MPIC Board meetings for 2018 and the corresponding attendance of directors therein are provided below:
|Board Position||Name||Date of Election||Number of Meetings Held During the Year||Number of Meetings Attended||%|
|Chairman||Mr. Manuel V. Pangilinan||May 18, 2018||5||5||100%|
|Member||Jose Ma. K. Lim||May 18, 2018||5||5||100%|
|Member||David J. Nicol||May 18, 2018||5||5||100%|
|Member||Ray C. Espinosa||May 18, 2018||5||4||80%|
|Member||Ramoncito S. Fernandez||May 18, 2018||5||5||100%|
|Member||Robert C. Nicholson||May 18, 2018||5||5||100%|
|Member||Augusto P. Palisoc Jr.||May 18, 2018||5||5||100%|
|Member||Alfred V. Ty||May 18, 2018||5||5||100%|
|Member||Rodrigo E. Franco||May 18, 2018||5||5||100%|
|Member||Jose Jesus G. Laurel||May 18, 2018||3||3||100%|
|Independent Director||Edward S. Go||May 18, 2018||5||3||60%|
|Independent Director||Lydia B. Echauz||May 18, 2018||5||5||100%|
|Independent Director||Chief Justice Artemio V. Panganiban||May 18, 2018||5||5||100%|
The Board ensures that the remuneration of its directors, officers and employees is consistent with the Company’s Vision, Mission, culture, strategy and the business environment in which it operates and aligned with the long-term interest of the Company.
The compensation of directors and other officers must be competitive and at a level that will attract and retain talent and drive them to steadily contribute to the long-term success of the Company. Directors, as such, do not receive any compensation unless approved by the stockholders or provided in the By-Laws of the Company. No director participates in the approval of his compensation. However, the Board may, from time to time, approve a reasonable per diem that a director may receive for attendance in Board and Board Committee meetings.
The Company’s directors receive a per diem allowance for their attendance in the Board and Board Committee meetings. Each director is entitled to a per diem allowance of PhP100,000.00 for every board meeting attended and PhP50,000.00 for every committee meeting.
The Company’s directors are likewise eligible to participate in the Company’s incentive programs such as the Restricted Stock Unit Plan (RSUP).
President and CEO and Key Officers
Key executives of the Company, including the President and CEO, are entitled to receive fixed and variable remuneration, in accordance with the compensation plans approved by the Board. Factors considered in fixing remuneration packages of key officers or salaries paid by comparable companies, time commitment and responsibilities of corporate officers and employment conditions elsewhere in the group. Further, the Company adopts incentive programs for its key executives that take into account the achievement of an approved target core income of the Company as a condition for the vesting of the incentive. Among such programs are the Long-Term Incentive Plan (LTIP) and the Restricted Stock Unit Plan (RSUP). Each LTIP performance cycle generally covers 3 years with payment intended to be made at the end of each cycle (without interim payments) and is contingent upon the achievement of an approved target core income of the Company by the end of the performance cycle. On the other hand, the RSUP is designed, among others, to reward the Directors and certain key officers of MPIC who contribute to its growth to stay with MPIC for the long term.
All regular employees of the Company are entitled to receive, fixed and variable remuneration, in accordance with the employment contract signed and executed by each employee with the Human Resources Department under the supervision of the President and CEO. The Company likewise adopts policies relating to payment of bonuses and long-term incentives to its employees, the amount of which depends on the performance of the company and the individual employee. The performance appraisal is conducted on a semi-annual basis.
Pursuant to the mandate of its Charter, the Corporate Governance Committee designed an orientation program for new directors to brief and update them on important details and processes relating to the Company, the functions and relevant mechanisms of the Company’s board committees and the dealings of the Company with its investors and business partners.
|Introduction to MPIC||Brief introduction to the company’s Vision & Mission, Articles of Incorporation, By-laws and Code of Business Ethics||Corporate Governance Officer|
|Key Obligations of MPIC Board of Directors||Disclosure Requirements:
|Insider Trading – MPIC Blackout Rule|
|SEC-mandated Corporate Governance Training|
|Relevant Operations||Internal Audit – Background and Relevant Updates||Internal Auditor|
|Risk Management – Background and Relevant Updates||Chief Risk Officer|
|Investor Relations – Background and Relevant Updates||VP – Investor Relations|
|Business Updates – Status||VP – Business Development|
Continuing Education Programs
The Company adopts a policy requiring each MPIC director to undergo a continuing training program for at least four (4) hours each year to promote board performance and continuing qualification in carrying out directors’ duties and responsibilities. This annual continuing training program shall ensure that directors are continuously informed of the developments in the business and regulatory environments, including emerging risks relevant to the Company. It may cover courses on corporate governance matters, including audit, internal controls, risk management, sustainability and strategy.
The Board acknowledges the importance of a regular performance assessment, individually and collectively as part of their accountability. Performance assessments were done to evaluate their specific and overall performance for the past calendar year. The assessment of their 2017 Board, Board committee and CEO performance was conducted on March 1, 2018.
The Board evaluated their individual and collective performances regarding the Board and its committees’ structures, processes and responsibilities. The Board also assessed the 2017 performance of the Company’s President & CEO based on his leadership, working relations with the Board, Management, and communication.
Four assessment instruments were accomplished by the directors:
- (i) Board Self-Assessment;
- (ii) General Board Committee Performance Assessment;
- (iii) Board Committee Self-Assessment; and
- (iv) President & CEO Performance Assessment
MPIC’s current dividend policy calls for the payment of regular cash dividends in an amount of up to 25% of the audited consolidated core net income for the year, subject to approval of the Board of Directors, taking into consideration the interest of the shareholders, the Company’s debt covenants, and the requirements dictated by working capital, expansion plans, capital expenditures and debt servicing.
Payment of dividends shall always be subject to the availability of unrestricted retained earnings in accordance with the guidelines of the Securities and Exchange Commission.
Further, the Company commits to pay dividends to its shareholders within 30 days from the date of its declaration.
The Company’s Dividend Policy was approved by the Board on November 7, 2018.
Strategic Planning and Monitoring
The Board, together with the Management, assesses annually the continuing appropriateness of the Company’s long-term vision, mission and strategic objectives. This assessment takes place during the last quarterly board meeting of the Company when the budget for the succeeding year is likewise submitted for approval. The Company’s long-term targets, as well as the execution strategy for the same, are discussed with the key executives of each operating unit.
The Board exercises oversight on Management in its execution of the strategic direction and implementation of the policies set by the Board through regular briefings on material events and transactions from the Management. To monitor performance and ensure alignment with the changing business environments and culture, key executives from each operating unit report to the Board in its regular quarterly board meetings. Further, the Board reviews and guides major plans of action and oversees major capital expenditures, acquisitions and divestitures of the Company.
10th Floor, Makati General Office Building
Legazpi corner Dela Rosa Street
Legazpi Village, 0721 Makati City
10th Floor, Makati General Office Building
Legazpi corner Dela Rosa Street
Legazpi Village, 0721 Makati City
© 2019 Metro Pacific Investments Corporation