CORPORATE GOVERNANCE
CORPORATE GOVERNANCE HIGHLIGHTS
LATEST DISCLOSURES
ASEAN CORPORATE GOVERNANCE SCORECARD
PHINMA Corporation received two (2) Two-Arrow Award recognitions based on the results of the 2021, 2022 and 2023 ASEAN Corporate Governance Scorecard (ACGS) assessments. The Golden Arrow is awarded by the Institute of Corporate Directors (ICD) to publicly-listed companies that exhibited observable conformance with the Philippine Code of Corporate Governance and internationally recommended corporate governance practices as espoused by the ACGS.
BOARD PERFORMANCE ASSESSMENT
Policy
The Board Assessment Policy and Procedures prescribe a self-assessment process that uses a five-point rating scale to evaluate the performance of the Board as a body, the Board Committees, individual directors, Chairman of the Board and Key Officers. The criteria used in this assessment covered the key areas of governance, based on the duties and responsibilities listed in the Manual on Corporate Governance, Board Charter, and other relevant company policies.
Results and Action Plans
The Board of Directors of PHINMA Corporation obtained an overall rating of Excellent for their performance in the year 2024. All (15) fifteen directors of the company participated in the online assessment exercise completed in February 2025. The results of the board evaluation and action plans were presented to the Corporate Governance Committee and to the Board of Directors in March 2025.
Third Party Facilitator
As duly-endorsed by the Corporate Governance Committee and approved by the Board in August 2022, the company engaged Good Governance Advocates & Practitioners of the Philippines (GGAPP) as the Third Party Board Evaluation Facilitator. SEC Code of Corporate Governance for PLCs recommends that a third-party facilitates the board evaluation after three years. In March 2023, the summary of results of the Board Evaluation for year-end 2022 facilitated by GGAPP were reviewed and the action plans presented to the Board.
BOARD COMMITTEES AND CHARTERS
THE BOARD
The Board of Directors consists of fifteen (15) members, nominated in accordance with the By-Laws of the Corporation. In compliance with the legal requirement of SEC for publicly listed corporations, PHINMA’s Board of Directors includes seven (7) independent directors. The independent directors hold no interest or have no relationship with the corporation that may hinder their independence from the corporation or management or would interfere with the exercise of independent judgment in carrying out their responsibilities.
BOARD COMMITTEES
To assist it in discharging its duties and responsibilities, the Board constitutes committees which directly report to the Board in accordance with duly approved procedures.
Executive Committee
The Committee shall advise the Board in matters concerning its interests and the management of its business and may exercise powers delegated to it in the By-Laws or by majority vote of the Board. In carrying out its duties, the Committee may request the assistance of the officers of the Corporation.
Compensation Committee
The duties and responsibilities of this Committee include establishing formal and transparent process for developing a policy on the compensation packages of corporate officers and directors, and providing oversight over compensation of senior management and other key personnel, ensuring that compensation is consistent with the Company’s culture, strategy, control environment, geographic operations and long-term objectives.
Audit and Related Party Transactions Committee
The Committee assists the Board of Directors in fulfilling its oversight responsibility to the shareholders relating to the financial statements and financial reporting process, internal control system, internal and external auditor’s performance, and compliance with legal and regulatory matters including approving and recommending the appointment, reappointment, removal, fees and assessing the integrity and independence of the external auditor. The Committee also performs oversight function on the review and approval of related party transactions.
Risk Oversight Committee
The Committee assists the Board of the Corporation in fulfilling its corporate governance responsibility with respect to its oversight of the Corporation’s risk management framework. While the Committee has responsibilities and powers set forth in the Charter, the Corporation’s management is ultimately responsible for designing, implementing, and maintaining an effective risk management program.
Corporate Governance Committee
The Committee is tasked to assist the Board in the performance of its corporate governance responsibilities which include the implementation and periodic review of the corporate governance rules, policies and framework, annual board self-assessment and continuing training program for directors.
Nominations Committee
The Committee oversees the nomination and election process for the company’s Board of Directors. The Committee reviews the qualifications of candidates and submits a list of qualified nominees.
BOARD PERFORMANCE
During the year, the Board of Directors held a total of six (6) meetings, five (5) regular board and one (1) organizational meeting. The details of the matters taken up during the Board meetings are detailed in the Definitive Information Statement sent to shareholders.
The attendance of the directors to the Annual Stockholders Meeting, Organizational Meeting and Board Meetings in 2024 is as follows:
PHINMA values diversity and supports workforce equality and is strongly against discrimination of any form at all levels thus it ensures that its board members are a combination of executive, non-executive and independent directors with varied but substantial professional knowledge and experience on the industries it operates in which creates a platform for balanced-view discussion necessary to arrive at key business decisions.
BOARD COMMITTEE ATTENDANCE
AUDIT AND RELATED PARTY TRANSACTIONS (RPT) COMMITTEE. In 2024, the Committee held five (5) meetings. All meetings obtained complete attendance. The Committee reviewed the audited financial statements for 2023 and the interim statements for the quarters ending March 31, June 30, and September 30 for the year 2024. The Committee reviewed and approved the scope and deliverables of the PwC audit plan. The Committee approved the Internal Audit plan for 2024 and 2025, reviewed the audit reports, and evaluated Internal Audit’s performance. The Committee reviewed the material related party transactions for 2024, the 2025 top risks and the corresponding mitigating controls of the Company, and activities related to the Integrity Assurance programs. The Committee also performed a self-assessment of the Committee’s performance against the approved Charter, in line with the guidelines issued by the SEC. The Committee also attended the annual PHINMA Group Corporate Governance Training conducted by SGV & CO. on Overview of Corporate Governance, Cybersecurity, Business Continuity Management and Sustainability and attended the meeting of the Non-Executive Directors (NED) on December 10, 2024.
CORPORATE GOVERNANCE (CG) COMMITTEE. In 2024, the Committee held two (2) meetings on February 20, 2024 and July 31, 2024. The Committee reviewed the summary of results of the Board Evaluation for year-end 2023 and reviewed the CG Calendar of Activities for the Year 2024 in February 2024. The Committee submitted and presented to the Board the Report of the CG Committee for the Year 2023. The Committee reviewed and approved for submission the Integrated Annual Corporate Governance Report (I-ACGR) for year-end 2023. The Committee reviewed the proposals by SEC-accredited training providers and approved SGV & Co. who conducted the annual training for directors. The Committee also reviewed the summary of results of the Annual Corporate Governance Scorecard assessment and Gap Analysis for year-end 2022 noting the Areas for Improvement. The Committee also reviewed and approved the CG Committee Self-Assessment Tool. The Committee also attended the annual PHINMA Group Corporate Governance Training conducted by SGV & CO. on Overview of Corporate Governance, Cybersecurity, Business Continuity Management and Sustainability and attended the meeting of the Non-Executive Directors (NED) on December 10, 2024.
RISK OVERSIGHT COMMITTEE (ROC). In 2024, the Risk Oversight Committee held two (2) meetings on August 28, 2024 and October 29, 2024. While the Committee has responsibilities and powers set forth in the Charter, the Corporation’s management is ultimately responsible for designing, implementing, and maintaining an effective risk management program The Committee reviewed the Corporation’s Risk Management Framework and its Top Business Risks, including strategic risks, business risk assessments and corresponding mitigation plans. In doing so, the Committee also reviewed the Top Business Risks and corresponding mitigation plans of its subsidiary companies.
NOMINATIONS COMMITTEE. The Nominations Committee held one (1) meeting on February 6, 2024 with all members present. The Committee reviewed and endorsed to the Board the Nominations Committee Charter and the Nominations and Election policy and evaluated the qualifications and endorsed to the Board the nomination of new directors consisting of three (3) Independent Directors and one (1) Non- Executive Director, nomination of eleven (11) incumbent Directors, including four (4) Independent Directors, proposed composition of the Board Committees, reappointment of Management Officers and the inclusion of the Chief Audit Executive in the list of Management Officers.
MANUAL ON CORPORATE GOVERNANCE
PHINMA Corporation (the "Corporation") believes that good governance is an integral component of sound business management and exerts every effort necessary to ensure compliance within the organization.
In accordance with the State’s policy to actively promote corporate governance reforms aimed to raise investor confidence, develop capital market and help achieve high sustained growth for the corporate sector and the economy, the Board of Directors, Management, and Employees of PHINMA Corporation commit to the principles and best practices contained in the Manual on Good Corporate Governance approved in August 2002 and as amended in March 2004, February 2008, March 2011, June 2014. The Manual was further amended to substantially adopt the 2016 Code of Corporate Governance for Publicly-Listed Companies in May 2017 and March 2018. Relevant provisions from the 2019 Revised Corporation Code of the Philippines (R.A. 11232) were incorporated into the Manual in November 2020 and in Novermber 2022.
CODE OF BUSINESS CONDUCT AND ETHICS
The Code of Conduct of the company contains policies on professional decorum, conflict of interest and penalties for violations.
Employees are required to always act in the best interest of the company. As a matter of policy, every employee and officer of the company should avoid any situation that could interfere or appear to interfere with their independent judgment in performing their duties. The policy also prohibits using one’s official position to secure a contract or employment for a related party, soliciting gifts or any property for personal gain from any individual or organization that deals with the company, and using company information for personal gain. No employee may engage in any business or undertaking that is indirectly or directly in competition with or prejudicial to the interests of the company.
ARTICLES OF INCORPORATION AND BY-LAWS
COMPANY POLICIES
INTERNAL AUDIT CHARTER
CORPORATE GOVERNANCE TRAINING
It is the company’s policy to provide onboarding training to new directors within the first month of their election or before the next Board meeting to orient the new directors on business structure, strategy, Governance Codes and Policies, Articles, By-Laws, Corporate Governance Manual, Board and Committee Charters, SEC-mandated governance and related matters necessary for the effective performance of their duties and responsibilities.
Proposals from SEC-accredited training providers were reviewed and the Board approved SGV & Co. who conducted the online training for directors and officers on Overview of Corporate Governance, Cybersecurity, Business Continuity Management and Sustainability on December 5, 2024. The training was likewise attended by directors and key officers from the Strategic Business Units.
For the past four years, the directors and key officers have attended trainings on Data Analytics, Artificial Intelligence (AI), Workplace Reimagined, Internal Control Environment, Sustainability Reporting, Change Management, Succession Planning, Business Continuity Planning and SEC Updates including the Revised Corporation Code of the Philippines conducted by SEC-accredited training providers.
COMPANY DISCLOSURES
ANNUAL CORPORATE GOVERNANCE REPORTS
The Integrated Annual Corporate Governance Report combines the corporate governance reportorial requirements of the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) including corporate governance practices expected of listed companies. PHINMA Corporation discloses its compliance or non-compliance with the recommendations following the “comply” or “explain” approach. PHINMA Corporation submitted its Integrated Annual Corporate Governance Report for year-end 2024 on May 23, 2025.