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What is Corporate Governance (CG)?
Our Chief Governance Officer, Atty. René G. Bañez, defines Corporate Governance as that set of rules that governs the internal relations of various stakeholders within the corporate organization and in the community where it operates, in order to provide honest decision making and to ensure transparency and accountability in the system.
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Why is CG necessary in PLDT?
Good corporate governance has always been the commitment of PLDT to stakeholders. It is the cornerstone of top management's strategy since 1998 when First Pacific made its investment in the company.
CG is also necessary because, first of all, it is mandated by the Philippine and US Securities and Exchange Commission regulations, and corporate governance standards set by the Philippine and New York Stock Exchange. Secondly, CG is becoming a global trend that positively impacts a corporation's market value. Thirdly, adoption of compliance programs likewise caused the absolution of directors from personal liability for breach of fiduciary obligations. The regulators found that a company's compliance efforts served as evidence of good-faith attempts of management to educate employees and comply with the law.
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What are the laws and rules that PLDT needs to comply with?
Since it is both listed in the Philippine Stock Exchange ("PSE") and New York Stock Exchange ("NYSE"), PLDT needs to comply with the Philippine SEC Code of Corporate Governance (Memorandum Circular No.2 Series of 2002) and Section 303A of the NYSE Listed Company Manual (NYSE Corporate Governance Rules).
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What are the internal CG related policies and rules of PLDT?
PLDT has a Manual on Corporate Governance, approved by the PLDT Board of Directors ("Board") on September 24, 2002, that covers policies on, among others: (a) independent directors, (b) key Board Committees (i.e., Audit Committee, Executive Compensation Committee, and Governance and Nomination Committee), (c) independent auditors, (d) internal audit, (e) stockholder rights, (f) internal controls, and (g) penalties for non-compliance.
PLDT also has a Code of Business Conduct and Ethics (approved on March 30, 2004) that sets out standards of business conduct and ethics, namely, the standards of: (a) compliance, (b) competition and fair dealing, (c) confidentiality of information and proper use of property, (d) conflicts of interests and corporate opportunities, (e) disclosure, (f) risk management, and (g) relations with shareholders and investors.
The most recently established policy is the Conflict of Interest Policy that was approved by the Board on October 4, 2005 meeting. This expanded and superseded the Company's Self-Dealing and Conflict of Interest Guidelines (Administrative Order No.1256-99 dated November 12, 1999).
Other policies in the pipeline are Gifts, Entertainment & Travel and Supplier Relations
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Who are covered by these policies/rules?
All employees including the Board of Directors and officers are covered by these policies/rules.
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Is PLDT Sarbanes-Oxley compliant?
o PLDT already commenced its Sarbanes-Oxley 404 Compliance Project in June 2004, spearheaded by our Audit and Assurance Group, to ensure that internal controls will support the annual internal control report on management's assessment of internal controls that will be certified by the chief executive officer and the chief financial officer starting 2006.
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Does PLDT have a Code of Conduct?
Yes, the Code of Business Conduct and Ethics or the "Code" was approved by the PLDT Board of Directors on March 30, 2004. The Code sets out standards of business conduct and ethics, namely, the standards of: (a) compliance; (b) competition and fair dealing; (c) confidentiality of information and proper use of property; (d) conflicts of interests and corporate opportunities; (e) disclosure; (f) risk management; and (g) relations with shareholders and investors. These standards seek to promote the values of accountability, integrity, fairness and transparency.
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Does PLDT have Governance Guidelines?
Yes, it is set forth in the PLDT Manual on Corporate Governance (the "Manual"), which was approved by the PLDT Board of Directors on September 24, 2002. The Manual complies with the requirements of the Philippine Securities Exchange Commission, and covers policies on, among others: (a) independent directors; (b) key Board Committees (i.e., Audit Committee, Executive Compensation Committee and Nomination Committee); (c) independent auditors; (d) internal audit; (e) stockholder rights; (f) internal controls; and (g) penalties for non-compliance. It has been disseminated to the officers, employees and related third parties of the Company, and is available for inspection by any stockholder.
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Is there a confidential procedure for employees to raise accounting, audit or ethical concerns related to PLDT?
Yes, it is embodied in the Group Administrative Order on "Employee Disclosure on Questionable Accounting or Auditing Matters" (Group Administrative Order No. 1659-04 May 2, 2004). Employee's can download the relevant disclosure forms from PLDT Intranet .
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