Board priority: A governance committee charter that works
This Charter shall be reviewed periodically and updated.
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This Charter shall be reviewed periodically and updated.
Happy New Year! Time to celebrate! Time to revise Board Charters too…
Let us begin with the Governance Charter, arguably the most important Board Committee these days. This Charter sets out the mandate, authority, composition, responsibilities and operating procedures of the Governance Committee of a listed company in the Philippine Stock Exchange (PSE). What do you think of it?
Note that it is adopted in furtherance of the Board of Directors’ fiduciary duties and the company’s commitment to integrity, transparency, accountability and sustainable long-term value creation. This Charter also strengthens governance oversight of sustainability reporting and disclosure excellence aligned with evolving regulatory expectations, including the SEC Sustainability Reporting requirements.
I. Purpose and Objective
The Governance Committee exists to oversee and promote the company’s compliance and adherence to its Manual of Corporate Governance, the Code of Conduct, Board and Committee policies, and all applicable corporate governance-related laws, regulations, and listing standards. It shall support the Board by ensuring that corporate governance practices remain effective, responsive to emerging risks, aligned with best practices, and embedded in corporate culture.
II. Membership and Appointment
1. The Committee shall be composed of at least five directors, chaired by an Independent Director.
2. The Board shall appoint the members and the chairman of the committee from among its members following the annual meeting of stockholders at which directors are elected.
3. In case of vacancy, the Board shall appoint a replacement to fill the vacancy at any meeting of the Board.
4. Members shall possess adequate background, exposure, or training in corporate governance and leading practices supporting sound governance oversight.
III. Authority
The Committee is authorized to:
1. Access information, records, and management resources necessary for the discharge of its functions;
2. Request presentations, assessments and governance compliance updates from relevant officers; and
3. Recommend to the Board such measures, corrective actions and governance enhancements as it deems appropriate.
IV. Duties and Responsibilities
The Committee shall:
1. Oversee the review and assessment of the adequacy of the company’s corporate governance principles and policies, including the Manual of Corporate Governance and Code of Conduct, to ensure continued appropriateness and compliance with applicable laws, regulations and listing standards, and recommend desirable changes to the Board.
2. Review and advise the Board on governance structure and business practices in support of good governance and high ethical standards.
3. Oversee the development and recommend for Board approval a system for evaluating and measuring compliance with governance requirements, including the Manual, Code, and governance laws, rules, and regulations.
4. Consider, resolve and decide governance issues arising from time to time and recommend appropriate actions to the Board, including sanctions or penalties when necessary.
5. Monitor compliance and adherence to all Board and Committee policies and applicable governance-related laws and regulations.
6. Take such other actions relating to governance practices and related matters that are in the best interest of the company or as may be required by regulatory bodies having jurisdiction.
7. Oversee governance quality and compliance of the company’s Sustainability Report and sustainability-related disclosures, ensuring adherence to SEC Sustainability Reporting requirements, including the SuRe Form, and continued advancement toward global best-practice sustainability reporting standards.
8. Promote disclosure discipline and transparency excellence aligned with governance maturity benchmarks, supporting the company’s aspiration to be recognized at the highest levels of disclosure quality, including a Five Golden Arrow standard of the Institute of Corporate Directors (ICD), as a measure of investor trust, governance credibility, and brand value.
V. Meetings and Procedures
1. The Committee shall meet quarterly on the first Thursday of every third month, and more frequently as directed by the Board or as called by the chairman.
2. Quorum shall consist of a majority of the Committee members.
3. The Corporate Secretary shall record the minutes of Committee meetings.
VI. Reporting to the Board
The Corporate Secretary shall report to the Board the actions taken by the Committee at the Board meeting immediately following Committee meetings.
VII. Review of the Charter
This Charter shall be reviewed periodically and updated as may be required by the Board or evolving governance regulations and standards.
This is a combination of global best practices and the Philippine corporate governance scenario. Surely a work in progress, however, it is a never-ending journey after all. Cheers to 2026!
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