PCEV Corporate

Corporate Governance

Corporate Governance in PCEV

Commitment

PCEV is committed to doing business in accordance with the highest ethical standards and aspire to achieve this by institutionalizing a clear and comprehensive governance framework and fostering an ethical and responsible culture at all levels of the organization, in relationships among internal stakeholders, and in its dealings with its customers, suppliers, competitors, business partners, regulators and the public.

Conviction

PCEV believes good corporate governance provides the foundation for good corporate performance and is essential in attaining long-term, sustainable growth and prosperity.  While recognizing that corporate governance may hinge on many factors, PCEV considers fairness, integrity, transparency and accountability as fundamental to good governance and have therefore adopted these as the cornerstones of its corporate governance framework.

Our Corporate Governance Structure

PCEV Corporate Governance Structure

Click on photo to enlarge


The Board of Directors

The Board has overall responsibility for the leadership, control and performance of the Company and each member of the Board has a duty to act in good faith in the best interests of the Company.

Board Composition

With the approval by the SEC of the Company’s Amended Articles of Incorporation decreasing the number of directors from thirteen to eleven, PCEV has eleven (11) directors, three (3) of whom are independent directors who provided objective and independent opinion in its eleven-man Board.

In line with international best practices, PCEV has maintained the Board’s independence from Management by separating the posts of Chairman of the Board and the President and CEO.  Each position has been given distinct and separate duties pursuant to the provisions of PCEV’s By-Laws and its Manual on Corporate Governance.

Board Function

In performing its functions, the Board convened seven (7) meetings in 2010.  The following is the attendance performance of each Member of the Board.

Board Committees

PCEV has in place a three-man Nomination Committee chaired by Mr. Victor S. Chiongbian, an independent director.  The Committee meets at least once each year to pre-screen and review the qualifications of the nominees to the Company’s Board as nominated by various stockholder groups, as well as the qualifications of the Company’s key officers.

PCEV has also in place a four-man Audit Committee chaired by Mr. Edward S. Go, an independent director.  Another member of the Committee, Mr. Juan B. Santos, is also an independent director.  The Committee meets at least quarterly to review the financial highlights and operations of the Company.  Parenthetically, PCEV has outsourced to its parent company Smart, various services including the internal audit function.  Smart on the other hand as a material subsidiary of the PLDT, has in place and adheres to similar corporate governance codes, policies and standards that both PCEV and PLDT subscribe to as publicly-listed companies.

Ethics and Compliance Program

PCEV has a robust Ethics and Compliance Programme, the tone of which is set by the Board itself.  It has corporate governance policies and procedures, as well as business process maps, financial reporting and controls and internationally accepted accounting and auditing standards in place.

Corporate Governance Policies

PCEV’s advocacy of and approach to corporate governance are laid out in its Manual on Corporate Governance (the “Manual”) which was approved by the Board on November 4, 2002.  The Manual seeks to institutionalize the principles of good governance and conforms with the requirements of the Code of Corporate Governance pursuant to SEC Memorandum Circular No. 2, Series of 2002, as amended by SEC Memorandum Circular No. 6, Series of 2009.  It covers the following key areas:

  1. The qualifications and grounds for disqualification for directorship;
  2. The requirement that at least two members or twenty percent (20%) of the members of our Board, whichever is lesser, must be independent directors and the standards/criteria for the determination of independent directors;
  3. The duties and responsibilities of our Board and the individual directors;
  4. Our Board committees, specifically, the Nomination Committee and Audit Committee and the composition and the principal duties and responsibilities of such committees;
  5. The role of our chairman in ensuring compliance with the corporate governance principles;
  6. The role of our president/chief executive officer in ensuring that our organizational and procedural controls are adequate and effective to ensure reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets and compliance with laws, rules, regulations and contracts;
  7. The duties and responsibilities of our corporate secretary/assistant corporate secretary in terms of the support services that they need to provide our Board in upholding sound corporate governance;
  8. The duties and responsibilities of the head of our internal audit organization that would provide our Board, management and shareholders with reasonable assurance that our key organizational and procedural controls are appropriate, adequate, effective and reasonably complied with;
  9. The functions of our independent auditors that would reasonably ensure an environment of sound corporate governance as reflected in our financial records and reports; the requirement that non-audit work of the independent auditors should not conflict with their function as independent auditors; the requirement to rotate, at least once every five years, the independent auditors or the lead partner assigned to handle the independent audit of our financial statements;
  10. Our commitment to respect and promote shareholders’ rights such as voting right, pre-emptive right, inspection right, dividend right, appraisal right, and right to receive information about the background, business experience, compensation and shareholdings of our directors and officers and their transactions with us;
  11. The requirement to appoint a compliance officer and the duties and responsibilities of such compliance officer including the establishment of an evaluation system to determine and ensure compliance with the provisions of our Governance Manual; and
  12. The penalties for violations of our Governance Manual.

As required by the SEC Code of Corporate Governance and its Manual, PCEV has a Corporate Governance Compliance Officer whose duties include among others the monitoring of compliance by the Company, its directors, officers and employees with the Manual as well as their adherence to sound corporate governance principles and best practices.

In addition to its Manual on Corporate Governance, PCEV’s avowed principles and core values of fairness, integrity, transparency and accountability are embodied in its Code of Business Conduct and Ethics (the “Code”) which was approved by the Board on August 3, 2005.  The Code sets forth the business principles and values which guide and govern all business actions of our company, its directors, officers and employees, when performing their respective duties and responsibilities, especially with respect to the following:

  1. Compliance with applicable laws, rules and regulations;
  2. Ethical handling of conflicts of interest, corporate opportunities and confidential information;
  3. Protection and proper use of Company assets;
  4. Fair dealing with our employees, customers, service providers, suppliers, and competitors;
  5. Compliance with our reporting and disclosure obligations to the relevant regulators and to investors;
  6. Compliance with our disclosure and financial reporting controls and procedures;
  7. Assessment and management of risks involved in our business endeavors; and
  8. Adoption of international best practices of good corporate governance in the conduct of our business. 

Supplementing the Code, PCEV’s Board likewise approved and adopted on December 11, 2006 a Conflict of Interest Policy which helps ensure that work-related actions of our directors, officers, employees and consultants are based on sound business principles and judgment devoid of bias;  Policy on Gifts, Entertainment and Sponsored Travel which provides safeguards so that the custom of giving/accepting gifts, providing entertainment, and sponsoring travel are handled in accordance with the principles of fairness, integrity, transparency and accountability, and is not abused;  and the Expanded Whistleblowing Policy (Policy on Handling of Employee Disclosures and Complaints Regarding Violations of the Corporate Governance Rules, Questionable Accounting or Auditing Matters and Offenses Covered by the

Company’s Code of Discipline) which provides guidelines on handling employee complaints, protects whistleblowers from retaliation, ensures confidentiality and fairness in the handling of a disclosure or complaint and safeguards against malicious whistleblowing to protect the reputation of innocent persons.

On January 29, 2007, PCEV’s Board also approved and adopted a Supplier/Contractor Relations Policy which seeks to ensure that our Company upholds the highest professional standards in business practices and ethics in its dealings with contractors in the procurement of goods and services. 

All these corporate governance policies form the cornerstone of the relationship between PCEV, its directors, officers, employees, as well as its business partners, the regulators and the general public and these are all available, including material disclosures and corporate governance reports as required by law and regulations, in the Company’s website for easy access and reference by the investing public.

PCEV Revised Corporate Governance Manual

Code of Business Conduct and Ethics

Conflict of Interest Policy

Gifts, Entertainment and Travel Policy

Supplier/Contractor Relations Policy

Expanded Whistleblowers Policy

Regulatory Compliance

In compliance with SEC Memorandum Circular No. 12, Series of 2009, dated August 18, 2009, the Corporate Governance Compliance Officer, using the 2009 Corporate Governance Scorecard for Publicly-listed Companies, measured or determined the level of compliance by the Company, its directors, officers and employees with the provisions of the Manual, the Code and other laws, rules and regulations regarding corporate governance.  This Scorecard replaced the CG-SRF which was approved and adopted by the Board of the Company as a performance evaluation system, and which has been patterned after a similar form that was issued by the SEC under Memorandum Circular No. 5, Series of 2003, dated April 3, 2003.  The Company’s 2009 CG Scorecard was submitted to the SEC on November 22, 2010.

Also, in compliance with Section 5.5.2 (b) (v) of the Company’s Manual on Corporate Governance, Part E, Section 16 of SEC Memorandum Circular No. 3, Series of 2007, and SEC Memorandum Circular No. 6, Series of 2009, the Company’s Corporate Secretary submitted to the SEC a Certificate of Attendance of the directors in the board meetings and the annual meeting of stockholders during the year 2010.

The Company’s Corporate Governance Compliance Officer further submitted the Certification on Compliance with its Manual on Corporate Governance for Year 2010 to the SEC and the PSE on January 10, 2011, confirming that PCEV has conformed to and complied with the provisions and leading practices and principles on good corporate governance as set forth in the Manual and the SEC Code of Corporate Governance, as amended.  In addition, the Company likewise submitted its Compliance Report on Corporate Governance for Year 2010 to the PSE reflecting the Company’s level of adoption of the PSE recommended corporate governance guidelines for a well-governed company under PSE Memorandum No. 2010-0574 dated November 26, 2010.  Except for the (a) non-existence of a risk and governance committee in the Board; (b) an effective shareholder voting mechanism such as supermajority or “majority” of minority requirements to protect minority shareholders against actions of controlling shareholders; and, (c) having at least thirty percent (30%) public float to increase liquidity in the market, the Company has in most part substantially complied with said PSE recommended corporate governance guidelines.  The Company nonetheless informed the PSE that the Audit Committee of the Board has oversight responsibility with respect to Management’s identification, monitoring and management of risks, and that the Board itself exercises responsibility over governance.  As for the shareholder voting requirement, the Company complied with the voting requirements provided in the Corporation Code where, for fundamental corporate actions, at least two-thirds vote is required.  Finally, with respect to the requirement of a thirty percent (30%) public float, the Company informed the PSE on November 30, 2010 that it is evaluating its options on how to be compliant with the Rule on Minimum Public Ownership under Section 3, Article XVIII of the Continuing Listing Requirements of the Listing and Disclosure Rules within the one-year grace period given to it under the Rules.

Moving forward, the Company shall continue to embed its core corporate governance principles of fairness, integrity, transparency and accountability with its day-to-day operational concerns and business process standards through continuous training and workshop for its Board, officers, executives and employees.  It will likewise continue to enforce and monitor compliance with the Manual and related issuances by regulatory agencies to ensure that its core corporate governance principles are actually embraced and observed by everyone in the Company.  The Company, through the Corporate Governance Compliance Officer, will also be on the lookout for fresh and innovative ideas, best practices and benchmarks, and when appropriate, adapt it to its governance culture.  It shall continue networking with like-minded companies, individuals, and other entities/institutions, to advance its corporate governance agenda among business, government and the public at large.