CHAPTER 2

• Board of Directors


  Body comprised of directors tasked to perform oversight, governance, and strategic duties in a corporation
• Chief Executive Officer


  Corporate executive who is tasked to spearhead the crafting and execution of the company's business strategies and plans; the HIGHEST executive officer in a company
• Chief Financial Officer


  A corporate officer tasked to perform treasury, investments, and other financial functions
• Contingency funding plan


  A plan containing specific actions that must be done by management during emergency or crisis situations intended to increase and preserve the company's cash position
• Divestments


  Pertains to disposal or sale of ownership in a company
• Enterprise Risk Management


  A process applied in strategy setting and across the enterprise that is designed to identify potential events that may affect the entity, manage risks to be within its risk appetite, and provide reasonable assurance regarding the achievement of entity objectives
• Executive Director


  Director of the company who has executive responsibility of day-to-day operations of a part or the whole of the organization
• Independent Director


  A person who is independent of management and free from any business or relationship
• Internal Audit


  Independent and objective assurance, and consulting services designed to add value and improve the company's operations
• Internal Control


  A process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the reliability of financial reporting, the effectiveness and efficiency of operations, and compliance with applicable laws and regulations
• Mergers


  The combining of two or more corporate entities
• Nonexecutive Director


  One who has no executive responsibility and does not perform any work related to the operations of the corporation
• Off-balance sheet


  An accounting term for asset, liability, or any transaction that is NOT recorded on the balance sheet
• Operating Lease


  Type of lease that is not reflected as a liability on the balance sheet
• Parent Company


  The company that controls/governs the operating and financial policies of another company called the subsidiary
• Publicly-listed Companies


  Entities whose shares of stock are traded on the stock market such as the Philippine Stock Exchange
• Related Party Transactions (RPT)


  Transfers of resources, services, or obligations between the company and a related party
• Sarbanes-Oxley Act (SOX)


  A legislation in the US intended to give protection to corporate investors. Also known as Public Company Accounting Reform and Investor Protection Act of 2002
• Subsidiary company


  A company that is being controlled by the parent company
• Trustees


  The term applied to directors of a nonprofit, nonstock corporation
• Compliance Officer


  Corporate officer tasked to perform oversee and monitor the company's degree of adherence to applicable laws and regulations
• Republic 11232


  Revised Corporation Code of the Philippines
• Management


  How executives ran the company
• Governance


  Making sure that the business is being ran properly
• Oversight


  In-depth review and scrutiny of the effectiveness of operations, finances, and management actions
• Self-dealing


  An officer of the company executes or approves a corporation transaction that will benefit his/her own personal interest
• Comply or Explain approach


  Combines voluntary compliance with mandatory disclosure
• Securities and Exchange Commission approved the Code of Corporate Governance for publicly listed companies


  November 10, 2016
• Goal of the Code of Corporate Governance


  To help companies develop and sustain an ethical corporate culture and keep abreast with recent developments in corporate governance
• Fundamental Pillars of Corporate Governance

  • Accountability
  • Transparency
  • Responsibility
  • Fairness
• Corporate governance


  The system of stewardship and control to guide organizations in fulfilling their long-term economic, moral, legal and social obligations towards their stakeholders
• Board of Directors


  The governing body elected by the stockholders that exercises the corporate powers to a corporation, conducts all its business and controls its properties
• Management


  A group of executives given the authority by the Board of Directors to implement the policies it has laid down in the conduct of the business of the corporation
• Independent Director


  A person who is independent of management and the controlling shareholder, and is free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director
• Executive Director


  A director who has responsibility of day-to-day operations of a part or the whole of the organizations
• Non-executive Director


  A director who has no executive responsibility and does not perform any work related to the operations of the corporation
• Conglomerate


  A group of corporations that has diversified business activities industries, whereby the operations of such businesses are controlled and managed by a parent corporate entity
• Internal Control


  A process designed and effected by the board of directors, senior management, and all levels of personnel to provide reasonable assurance on the achievement of objectives through efficient and effective operations; reliable, complete and timely financial and management information; and compliance with applicable laws, regulations, and the organization's policies and procedures
• Enterprise Risk Management


  A process, effected by an entity's Board of Directors, management and other personnel, applied in strategy setting and across the enterprise that is designed to identify potential events that may affect the entity, manage risks to be within its risk appetite, and provide reasonable assurance regarding the achievement of entity objectives
• Related Party


  Shall cover the company's subsidiaries, as well as affiliates and any party (including their subsidiaries, affiliates, and special purpose entities), that the company exerts direct or indirect control over or that exerts direct or indirect control over the company; the company's directors; officers; shareholders and related interests (DOSRI), and their close family members, as well as corresponding persons in affiliated companies