First Philippine Holdings Corporation (First Holdings) has instituted corporate governance as a working philosophy. It has adopted a Manual on Corporate Governance, then a Manual on Anti- Money Laundering, and finally a Code of Corporate Conduct intended to serve as a guide in dealing with stakeholders.
Indeed, First Holdings finds the philosophy of corporate governance dovetailing with the commitment, articulated by the company’s founders and pursued to this day, of “sound strategic business management to improve the economic and commercial prosperity of the corporation and enhance shareholder value.”
This philosophy finds serious practical adherence in the very composition of First Holdings’ board, which sits persons of proven competence and integrity. The nomination committee itself initially passes upon prospects for new board members, demanding among other qualifications the capability to “bring prudent judgment to bear on the decisionmaking process.”
The philosophy is passed on down the line. For instance, a compensation and remuneration committee oversees a rewards system, closely observing a policy intended to promote a culture that supports enterprise and innovation.
The chairman’s own remuneration is subject to review by a committee composed of the vice-chairman and the other directors themselves.
The audit committee is itself chaired by an independent director. Its duty, among others, is to ensure transparency and integrity in financial management. External and internal auditors assist in this work.
First Holdings has an Internal Audit Group (IAG) headed by a vice-president, with a manpower complement of eight senior and junior audit personnel, all certified public accountants and mostly certified internal auditors. The IAG reports to the board through the audit committee.
The IAG provides assurance and consulting functions for First Holdings and its subsidiaries in internal control, corporate governance, and risk management. It observes faithfully the International Standards for Professional Practice of Internal Auditing (ISPPIA).
Since the company focuses on finding appropriate financing and business prospects, First Holdings has also constituted a finance and investment committee, whose job, among others, is to review investment objectives and strategies, fund raising, major capital expenditures, investment opportunities, and divestments.
For further transparency, the company has allowed one board observer at board meetings. Previously, there were two observing as creditors’ representatives. In any event, complete, prompt and timely disclosures of material information have been made by the company to the Securities and Exchange Commission (SEC) and to the Philippine Stock Exchange for the benefit of the investing public.
The law requires a company to have only two independent directors. First Holdings has three. Their presence provides the board with broad and impartial viewpoints, thus allowing for deliberations.
For corporate governance, a compliance officer and assistant have been designated. These are concurrently corporate secretary and assistant corporate secretary. First Holdings is ISO certified, and regulatory compliance is one of the processes that are subject to periodic audit under this system.
Among the current governance compliance steps taken by the company are: (1) the annual certification to the SEC regarding compliance by the corporation, its directors, officers, and employees with the leading practices and principles on good governance as embodied in the company’s manual, and (2) the secretary’s certification as to attendance and sworn declarations by all independent directors as to their qualifications as required under the SEC Notice dated October 20, 2006.
First Holdings keeps an abiding commitment to a type of governance that is sound, transparent, responsive, and equipped with a system of checks and balances.