Board Committee Charters
In order to ensure the compliance by the Company with the principles of good governance, the Board shall constitute the following committees:
- Nomination and Remuneration Committee
The Board shall create a Nomination and Remuneration Committee which shall have at least three (3) members of the Board and one (1) non-voting member in the person of the Human Resources Director or Manager and/or a qualified appointee of the Board who shall have the rank of VP.
The Nomination and Remuneration Committee shall pre-screen and shortlist all candidates nominated to become a member of the Board of Directors, in accordance with the minimum qualifications and disqualifications hereunder set forth. The Nomination and Remuneration Committee may include additional qualifications and disqualifications as it may deem fit for good corporate governance.
In consultation with the Board or the executive or management committees, re-define the roles, duties and responsibilities of the Chief Executive Officer by integrating the dynamic requirements of the business as a going concern and further expansionary prospects of the Company within the realm of good governance at all times, if the need arises.
The Nomination and Remuneration Committee shall consider the following in the determination of the number of directorships in other corporations for the members of the Board:
(a) The nature of the business of the corporation in which the director is also a member of the board;
(b) The age of the director;
(c) The number of directorships or active memberships and officerships in other corporations or organizations; and
(d) Possible conflict of interest.
The optimum number shall be related to the capacity of a director, on a case-to-case basis, to perform his duties diligently in general.
The Chief Executive Officer and other executive directors of the Company shall submit themselves to a low indicative limit on membership in other corporate boards. The same low limit shall apply to independent, non-executive directors who serve as full-time executives in other corporations. An exception to this rule may be applied to memberships in the corporate boards of subsidiaries or affiliates of the Company. In any case, the capacity of directors to serve the Company with diligence shall not be compromised.
The nomination and Remuneration Committee shall further have the following duties and responsibilities relating to compensation and remuneration of the directors, corporate officers and senior management:
(a) Establish a formal and transparent procedure for developing a policy on executive remuneration packages of corporate officers and directors and for fixing the remuneration packages of individual directors and corporate officers;
(b) Provide oversight over remuneration of senior management and other key personnel;
(c) Ensure that the compensation and remuneration for the directors, officers, and senior management is consistent with the Company’s culture, strategy and control environment;
(d) Designate amount of remuneration which shall be in a sufficient level to attract and retain directors and officers who are needed to run the Company successfully;
(e) Develop a form on Full Business Interest Disclosure as part of the pre-employment requirements for all incoming officers. It shall, among others, compel all officers to declare under the penalty of perjury all their existing business interests or performance of duties once hired;
(f) Disallow any director to decide his or her own remuneration;
(g) Provide in the Company’s annual reports and information or proxy statements a clear, concise and understandable disclosure of compensation of its executive officers for the previous fiscal year and ensuing year;
(h) Regularly review the existing Personnel Policy Manual of the company in order to strengthen the provisions on conflict of interest, salaries, and benefits policies, promotion and career advancement directives and compliance of personnel concerned with all statutory requirements that must be periodically met in their respective posts.
- Audit Committee
The Audit Committee shall be composed of at least three (3) members of the Board, one (1) of whom shall be an independent director who shall serve as the Chairman of the Committee and another with audit experience. Each member shall have adequate understanding at least or competence at most of the Company’s financial management systems and environment. The chairman of the Audit Committee must be an independent director of the Company.
The Audit Committee shall have the following functions:
(a) Check all financial reports against its compliance with both the internal financial management handbook and pertinent accounting standards, including regulatory requirements;
(b) Perform oversight financial management functions specifically in the areas of managing credit, market, liquidity, operational, legal and other risks of the Company, and crisis management;
(c) Pre-approve all audit plans, scope and frequency one (1) month before the conduct of external audit;
(d) Perform direct interface functions with internal and external auditors;
(e) Elevate to prevalent international standard the accounting and auditing processes, practices and methodologies of the Company, and develop the following in relation to this duty:
(f) A definitive timetable within which the accounting system of the Company will be one hundred percent (100%) compliant with the International Accounting Standards (IAS); and
(g) An accountability statement that will specifically identify officers and personnel directly responsible for the accomplishment of such task;
(h) Regularly review and improve, if necessary, the Company’s Controller’s Policies and Procedures Manual, in order to provide for a transparent financial management system that will ensure the integrity of internal control activities throughout the Company and the entire organization; and
(i) Recommend to the stockholder s the external auditor of the Company.
- Executive Committee
The Executive Committee shall be composed of all Executive Directors of the Company, with the Chairman and CEO acting as Chairman for this Committee. The Executive Committee, in accordance with the authority granted by the Board, or during the absence of the Board, shall act by majority vote of all its memberson such specific matters within the competence of the Board of Directors as may from time to time be delegated to the Executive Committee in accordance with the Corporation’s By-Laws, except with respect to:
a.) approval of any action for which shareholders’ approval is also required;
b.) the filling of vacancies on the Board or in the Executive Committee;
c.) the amendment or repeal of By-Laws or the adoption of new By-Laws;
d.) the amendment or repeal of any resolution of the Board of Directors
which by its express terms is not so amendable or repealable;
e.) the distribution of cash dividends;
f.) the exercise of powers delegated by the Board exclusively to other committees, if any.
- Risk Management and Corporate Governance Committee
The Risk Management and Corporate Governance Committee shall be composed of four (4) members of the Board, at least one of whom should be an Independent Director, and shall also be composed of non-voting members which shall include the Company’s Chief Finance Officer, Head of the Risk Management and the Chief Compliance Officer.
The Risk Management and Corporate Governance Committee assists the Board of Directors in fulfilling its responsibility for oversight of the organization’s risk management and corporate compliance and governance processes. It reviews and endorses to the Board changes or amendments to the company’s policies, as well as the adequacy and effectiveness of the Company’s enterprise risk management process. The Risk Management Committee provides a report to the Board on its assessment of the effectiveness of the risk management process and reviews reports from Internal Audit with regard to the independent validation of compliance with the approved Risk Policy and assessment of current state of Risk Management framework.
Specifically, Risk Management and Corporate Governance Committee shall have the following functions:
a.) exercise oversight of management’s responsibilities, and review the risk profile of the organization to ensure that risk is not higher than the risk appetite determined by the board.
b.) ensure that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities in compliance as well to the Corporate Governance policies.
c.) assist the Board in setting risk strategies, policies, frameworks, models and procedures in liaison with management and in the discharge of its duties relating to corporate accountability and associated risk in terms of management assurance and reporting.
d.) review and assess the quality, integrity and effectiveness of the risk management and compliance systems and ensure that the risk policies and strategies are effectively managed
e.) provide oversight, identify and assesses significant social, ethical and environmental interdependencies that might impact on the long-term business objective of the Company to be recognized as a responsible and sustainable Corporation in the real estate property sector;
f.) Guide policy-making in the Corporation’s sustainability program, and ensure full Corporation support and alignment with the Company’s subsidiaries and affiliates’ commitment to sustainable development;
g.) review and recommend the implementation of structures and procedures to facilitate the Board’s independence from management and to avoid conflicts of interest;
h.) monitor relationships between senior management and the Board, and recommend procedures to allow directors to have access to, and an effective relationship with, senior management;
- Related Party Transactions Committee
The Related Party Transactions Committee is the Board Committee tasked to review and evaluate Material Related Party Transactions, which shall be composed of two independent directors and 2 executive directors of the Company, chaired by an Independent Director.
The Board together with the Related Party Transactions Committee and CPG Related Party Transactions Evaluation Panel shall determine and provide pre-approved RPTs and thresholds subject for their review and approval.
For purposes of this Policy, the threshold value for Related Party Transactions that will fall within the Related Party Transactions Committee’s jurisdiction is no less than PHP50,000,000.00.
Material Related Party Transactions (“Material RPTs”) shall be reviewed and evaluated by the Committee and endorsed to the Board of Directors for ratification.. The Committee shall approve a material RPT before its execution and commencement. If not identified beforehand, the material RPT must be subsequently reviewed by the Committee and ratified by the Board of Directors or the same may be discontinued, rescinded or modified to make it acceptable for ratification.
In the review and approval of the Material RPTs, the Committee shall consider the following factors:
- Whether the transaction is at arm’s length;
- The benefits to the Company of entering into the transaction;
- The extent of the Related Party’s interest;
- Aggregate value of the Material RPT;
- Whether the terms of the Material RPT are fair to the Company and would apply on the same basis if the transaction did not involve a Related Party;
- Whether the Material RPT would impair independence if the Related Party is a director, an immediate family member of a director or an entity in which a director is a shareholder or of which a director is a senior executive officer, director, general partner, managing member or a person in a similar position;
CPG shall require directors and key management personnel to abstain and/or inhibit themselves from participating in discussions on a particular agenda when they are conflicted.