Governance committee charter review a board priority

Governance committee charter review a board priority | Daily Tribune

As the Board prepares for 2026, it is timely and necessary to undertake a comprehensive review of all Board Committee Charters from the foundational audit and risk to what is now an equally necessary Corporate Governance Committee — covering key items such as the related party transactions, proxy validation, compensation and remunerations as a default once deemed necessary. The Philippine operating environment for listed corporations is as complicated as it has ever been, exacerbated by the flood control corruption crisis, climate-related typhoons and major earthquakes in Visayas and Mindanao. Ever-changing regulatory developments, heightened stakeholder expectations, technology-driven risks, and a broader shift toward sustainability has reshaped perceptions on what is truly long-term value creation.

The need for Board Committee Charters therefore are dynamic documents; they are key instruments that define fiduciary duties in practice. A periodic, structured review ensures that mandates remain aligned with strategy, risks, and regulatory expectations. Without this, we are putting the corporations we have been elected into, hence accountable to, in a compromising situation.

The year 2025 was simply another year filled with events that have reinforced good governance as a key foundation for sustainability and success. The charter should clearly reflect its role as a strategic enabler of good governance — moving beyond formal compliance toward disciplined oversight, accountability, and culture-setting at the Board and management levels.

From a regulatory standpoint, expectations have become more explicit. Last week’s issue covered one of many long-term initiatives that will be part of a corporate DNA — the SECs Sustainability Reporting (SuRe) Form — disclosure requirements that elevate governance oversight of environmental, social and governance disclosures. The SuRe form is not merely a reporting template; it is a signal that Boards are expected to understand, challenge, and stand behind sustainability-related information, controls, and assumptions. This places the Governance Committee at the center of ensuring consistency between stated commitments, actual practices, and disclosures, working closely with the Audit and Risk Committees to avoid fragmentation.

At the same time, the Philippine market is experiencing a cultural shift toward higher governance standards and transparency. Recognition frameworks such as the Golden Arrow Awards of the Institute of Corporate Directors should be understood not as awards to be pursued for their own sake, but as benchmarks of governance maturity. They represent disciplined disclosure, credible board oversight, and alignment with regional and global best practices. For the Board, this reinforces the importance of governance as a competitive differentiator — strengthening investor confidence, reducing reputational risk, and supporting access to capital.

The Governance Committee Charter must therefore clearly articulate responsibilities across several critical areas: board composition and skills, director independence, performance evaluation, succession planning, ethics and conduct, and oversight of governance-related disclosures. Equally important is clarity on how the Committee interfaces with management and other Board committees, ensuring that governance issues are escalated, discussed, and resolved in a timely and coordinated manner.

If our country truly wants to improve on our capital markets, access to funds and a profound impact to our economy for the long term, we have to get the ball rolling faster in global best practices for good governance. It is actually self-fulfilling…