search

Corporate Governance

Corporate Governance

 

FPH adopted its Manual on Corporate Governance (the “Manual”) on January 1, 2003. Its most recent iteration was just last July 31, 2014 when the Company filed an amended Manual enhancing and clarifying its provisions.  As part of its governance initiatives, FPH continues to participate in the programs of the Institute of Corporate Directors (“ICD”) where some of its officers are accredited as fellows of the ICD.  FPH likewise supports the Good Governance Advocates and Practitioners of the Philippines (“GGAPP”) and is a member of the Philippine Association of Publicly-Listed Companies.

 

FPH continues to abide by all governance regulatory requirements.  Last September 2014, its directors and officers attended the SGV Corporate Governance Seminar.  FPH participated in the 13th Annual Working Session of the ICD with the theme: “Going for the Gold: Competing Successfully in the ASEAN Corporate Governance Scorecard.” It uploaded on its website the 2014 Consolidated Changes in the ACGR last January 12, 2015 and further governance details may be found there.

 

FPH has submitted to the Philippine Stock Exchange (PSE) its responses to the Disclosure Template on Corporate Governance Guidelines for Listed Companies.  It has also participated in the ASEAN Corporate Governance Scorecard Workshop for Publicly Listed Companies, the SEC Corporate Governance Orientation Program and the SEC Corporate Governance Roundtable Discussion with PLCs’ Compliance Officers.

Apart from the mandated Manual, FPH has also adopted a Corporate Code of Conduct.  The Code embodies the principles and guidelines for the conduct of the business of the Company and in dealing with its stakeholders.  Further, FPH, through its Board of Directors, annually reviews and updates, as necessary, the vision and mission of FPH.  The latest amended vision and mission was disseminated in the 2013 Annual Report and will be part of future reports.

FPH’s current board composition serves to insure independent, impartial and fair discussions having five independents, five non-executive and five executive members.  The board meetings are scheduled at the beginning of the year and are set for every first Thursday of the month.  A separate meeting involving non-executive directors is also being scheduled at the beginning of the year. The Company conducts annual strategic sessions with management and members of the board.  Last year, a Strategies and Synergies Planning Conference was held on July 21 to 22, 2014. The last annual board retreat was also held on October 2, 2014 and November 6, 2014. Both provide an opportunity to go over strategies and the possibility of harmonizing common objectives.

 

The Company uses professional search firms or other external sources of candidates (such as director databases set up by the ICD) when searching for candidates to the board.  Each director is furnished a director’s kit, which contains, among other things, the relevant PSE Rules, Manual for Corporate Governance, Code of Conduct and Committee Charters. The Company also encourages directors/commissioners to attend on-going or continuous professional education programmes.

 

Pursuant to the Manual on Corporate Governance, the Board has formed chartered standing committees: a Nomination, Election and Governance Committee, a Compensation and Remuneration Committee; an Audit Committee; a Finance and Investment Committee; and a Risk Management Committee.

 

FPH also has an Internal Audit Group (“IAG”) composed of Certified Public Accountants (CPA), Certified Internal Auditors (CIA), Certified Information Systems Auditor (CISA), among others.  The IAG reports to the Board through the Audit Committee. The IAG provides assurance and consulting functions for FPH and its subsidiaries in the areas of internal control, corporate governance and risk management. It conducts its internal audit activities in accordance with the International Standards for the Professional Practice of Internal Auditing (ISPPIA) under the International Professional Practices Framework (IPPF). There are two board committees looking into compliance requirements – Audit Committee and Risk Management Committee. There is a documented process that monitors regulatory and lender compliance.

 

It bears mention that the audit and risk management committees are chaired by independent directors.  FPH continues to have five (5) independent directors over and above the legal requirement for two (2) such directors. The Chairman of the Compensation and Remuneration Committee is effectively an independent director by virtue of his not having been employed by the Company in an executive capacity within the last five (5) years and is not a beneficial owner of more than ten percent (10%) of any class of the Company’s equity, among other things, pursuant to the qualifications for independent director provided by the Securities and Exchange Commission and the Company’s Manual for Corporate Governance.  FPH appointed Mr. Renato A. Castillo as Risk Management Officer in connection with the Risk  Management Committee’s functions. Mr. Castillo is in charge of the FPH group’s risk management concerns.

 

FPH has always sought to keep communications open with its stockholders and encourages them to participate in the meeting of shareholders either in person or by proxy.  Shareholders are free to write to the Nomination Committee should they have recommendations and/or nominations for board directorship. FPH undertakes specific activities to listen and learn from stakeholders regarding their requirements, needs and changing expectations. FPH takes the effort to meet its stakeholders and communicates person-to-person with shareholders through one-on-one meetings, investors’ conferences, annual stockholders’ meetings, disclosures and press releases.

 

The company continues to look at making improvements in terms of governance. It will be implementing a recommendation of the Audit Committee that henceforth, the fines imposed by the Philippine Stock Exchange for violation of the trading black-out rule will be shouldered personally by the officer or director concerned.  This highlights how the Company would like compliance with requirements to be enforced.

 

FPH likewise implements corporate excellence initiatives both at the parent and subsidiary levels.  On September 24, 2014, the Chairman co-led the Lopez Group’s awarding ceremonies for the Lopez Achievement Awards (LAA) 2013 Cycle. The LAA aims to recognize and reward outstanding team or individual achievements that are exemplary in nature, contribute to business objectives and exemplify the Lopez Values.

 

Corporate Social Responsibility (CSR)

 

FPH is committed to lending our strength and expertise toward the causes of education, safety, and disaster recovery; poverty alleviation and culture; and environmental responsibility, recognizing that our businesses flourish best when the communities in which we operate flourish. In 2014, we focused our efforts in these three areas.

 

Rebuilding Leyte

 

  • Through the ABS-CBN Lingkod Kapamilya Foundation’s Sagip Kapamilya Program, we were able to complete nine school buildings with 24 typhoon-resilient classrooms in Isabel, Palo, and Ormoc City.

 

Our subsidiary Energy Development Corporation (EDC) directly supervised the construction, which involved many measures to ensure the structures withstand winds of up to 250 kilometers per hour, per Department of Public Works and Highways typhoon-resilience standards. These include walls twice as thick as the previous ones, and inclined floors with drain canals, replacing gutters which used to be the weak points where roofs were ripped off. The construction also featured improved ventilation, toilet facilities, and chairs built from fallen trees.

 

50 more classrooms are currently undergoing construction, with the end goal of future-proofing 23 sites, benefiting approximately 20,000 students.

 

  • Our Kananga-EDC Institute of Technology (KEITECH) proudly guided 197 graduates through its National Certification short courses in 2014.  These provided the participants with training in carpentry, plumbing, and electrical installation and maintenance – skills that have already seen the majority of graduates employed by local contractors, for rebuilding efforts in the devastated province, including our own school construction projects.

 

KEITECH intends to train over 1,000 more graduates in nine batches by 2016.

 

  • To date, the Lopez Group of Companies has committed Php136.3 million toward the rehabilitation of Leyte province.

 

Orchestra of the Filipino Youth (OFY)

 

  • Furthering our goal to help alleviate poverty through social change and enrich the youth with the discipline of classical music, Ang Misyon welcomed Malaysian violinist and social worker Siew Ngan Wong into its Visiting Mentors Program and El Sistema advocate Eric Booth to the Philippines. El Sistema is a global movement supporting intensive youth music programs, in keeping with which Mr. Booth conducted a corporate and artistic social responsibility forum called ‘Playing the Music Forward’.

 

  • The OFY enjoyed its first concert tour outside of Luzon in August, debuting at the University of San Agustin auditorium in Iloilo. This was followed in October by a debut tour of Isabela, where we hope to launch another Ang Misyon satellite.

 

  • Ang Misyon’s first-ever satellite showdown, ‘Twinkle, Twinkle, Little Star Wars’, was held in December, showcasing 200 young musicians from 6 satellites, along with the OFY and OFY Prep Club. St. Petersburg Chamber Philharmonic founder and music director Jeffery Meyer conducted Beethoven’s 5thand 9th Symphonies.

 

Oscar M. Lopez Center for Climate Change Adaptation and

Disaster Risk Management Foundation (OML Center)

 

  • The OML Center recognized two leading scientists with its Professorial Chair Award (PCA) in 2014 – the Department of Science and Technology’s Disaster Risk and Exposure Assessment for Mitigation Program Leader Dr. Enrico Paringit, and Dr. Carlos Primo David, head of the University of the Philippines National Institute of Geological Sciences’ Environment Monitoring Laboratory. The PCA aims to encourage scientists to advance knowledge and learning in the various fields of climate change adaptation and disaster risk management.

 

  • The OML Center website, launched in March 2013, continued to gain steam in 2014, earning close to 10,000 new users. The website keeps viewers updated on the progress of the OML Center’s projects and results of studies, and also hosts the Climate Knowledge Portal for the Philippines, a one-stop shop that provides location-specific climate change and disaster-related information.

 

  • The OML Center allotted Php1M for the 2014 Pan-Asia Risk Reduction (PARR) Fellowship Award, and hosted four fellows from Indonesia and Malaysia.

 

  • Altogether, in 2014, the OML Center:

o   supplied over Php7.6M to fund seven research grants and two thesis grants

o   organized ten events, sponsored five events, and participated in nearly 80 more