Manual on Corporate Governance
Code of Conduct and Business Ethics
Annual Corporate Governance Report
Board Committees and Charters
2015 SMPC Integrated Annual Report
Good Governance Guidelines for the Board of Directors
(As amended by the Board of Directors on April 30. 2012)
The following good governance guidelines have been approved by the Board of Directors (“Board”) of Semirara Mining and Power Corporation, and along with the Amended Manual on Corporate Governance, good governance Board Committee charters and Codes of Conduct, provide the Company’s commitment to promote transparency, accountability and framework for the governance of the Company.
Mission of the Board
The mission of the Board is to oversee the business affairs of the Company in order to ensure the long-term financial strength of the Company and the creation of enduring stockholder value. The Board must also maintain a sense of responsibility to the Company’s customers, employees, suppliers and the communities in which it operates.
1. Directors’ Tenure Policy
The Board believes that it is in the best interests of the Company that:
a. any Employee/Executive Director whose employment at the Company terminates for any reason (including normal retirement) is expected to promptly resign from the Board, unless expressly agreed otherwise in advance;
b. any non-Executive Director who has a change of employer or primary occupation, or whose occupational responsibilities are substantially changed from when the Director was elected to the Board (excluding retirement), will submit an offer of resignation to the Chairman of the Board (such resignation may be accepted or rejected by the Board in accordance with the recommendation of the Nomination and Election Committee, which will review whether the new occupation of the Director is consistent with the specific rationale for originally selecting that individual); and
2. Term Limits and Re-election
The Board believes that a regular Director may serve without limit to the number of terms because of the time and effort necessary for each Director to become familiar with the business of the Company. As an alternative to term limits, the Nomination and Election Committee will review critically each Director’s continuation on the Board every year.
An Independent Director (ID) shall be subject to the prevailing rules on term limit of ten (10) years and re-election as prescribed by the SEC and PSE, such as the following:
1. An ID can serve as such for five (5) consecutive years, followed by a regulatory “cooling off” period of two (2) years;
2. After the “cooling off” period, an ID may be re-elected as such for another five (5) consecutive years, provided that he has not engaged in any activity that shall disqualify him from being elected as ID under existing regulatory rules and qualifications required of an ID.
3. Service on Other Boards
The Company recognizes that regular Board Directors benefit from service on boards of other companies, so long as such service does not conflict with the interests of the Company. Acknowledging the negative impact of competing time commitments when directors serve on multiple boards, Directors are encouraged to limit the number of other boards (excluding non-profit) on which they serve, taking into account the potential impact on attendance, participation and effectiveness with respect to the Company’s Board.
An Independent Director elected as such can be elected to only five (5) companies within the DMCI Group conglomerate.
Directors should advise the Chairman of the Board and the Chairman of the Nomination and Election Committee in advance of accepting an invitation to serve on the board of another listed company.
4. Conflicts of Interest
Directors are required to disclose to the Board (and any applicable committee) any financial interest or personal interest in any contract or transaction that is being considered by the Board for approval. The interested Director should abstain from voting on the matter and, in most cases, should leave the meeting while the remaining directors discuss and vote on such matter. The same rule shall apply for approval of contract or transaction between the Company and another corporation with interlocking directors. Disclosed conflicts of interest will be documented in the minutes of the meeting.
Directors will make business opportunities related to the Company’s business, available to the Company before pursuing the opportunity for the Director’s own or another’s account.
If a Director has any significant conflict of interest with the Company that cannot be resolved, the Director will promptly resign.
5. Corporation Loans
The Company will not make any personal loans or extensions of credit to Directors unless approved by the Board.
6. Director Orientation and Continuing Education
The Compliance Officer and Good Governance Officer will be responsible for providing an orientation for new Directors, and for periodically providing materials for all Directors on subjects relevant to their duties as Board members. Director orientation and on-going training will include presentations by senior management to familiarize Directors with the Company’s strategic plans, its significant financial, accounting and risk management issues, compliance programs and Code of Conduct, among others.
All Directors will avail themselves of educational opportunities as appropriate to enable them to perform their duties as Directors.
Each Director is encouraged to visit the Company’s operating sites at least once every two years.
7. Annual Board Evaluation
The Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively.
The Nomination and Election Committee will establish a process for the evaluation of the performance of the Board, which should include a solicitation of comments from all Directors and a report annually to the Board on the results of this evaluation.
8. CEO and COO Evaluation
The Compensation & Remuneration Committee will conduct an annual review of the CEO’s and COO’s performance and report the results thereof to the Board. The evaluation should be based on criteria including performance of the business, accomplishment of long-term strategic objectives, the handling of extraordinary events and development of management. The criteria should ensure that the CEO’s and COO’s interests are aligned with the long-term interests of the Company’s stockholders.
9. Succession Planning for Management
The Nomination and Election Committee should make an annual report to the Board on succession planning of which should include policies and principles for CEO selection and performance review as well as policies regarding succession in the event of an emergency or the retirement of the CEO. The entire Board will work with the Nomination and Election Committee to evaluate and nominate potential successors to the CEO.