Roles, Responsibilities and Liabilities of Board Directors

MONDAY, SEPTEMBER 11, 2023 * 2:00PM TO 4:00PM VIA ZOOM

I. Role of the Board of Directors, Composition, Number of Directorships, Term

The Board makes decisions as a fiduciary on behalf of stockholders. It is responsible for helping a corporation set broad goals, exercising oversight function over management, and ensuring that the company has adequate, well-managed resources at its disposal. It ensures the company’s prosperity by collectively directing its affairs, while meeting the appropriate interests of its shareholders and relevant stakeholders.

Under the Revised Corporation Code of the Philippines, the Board exercises the corporate powers, conduct all business, and control all properties of the corporation.

Composition

Per RCCP

2/3/4/ at least 5 but not more than 15
At least 20% of the Board are independent directors

No. of Directorships

Non-Executive Directors - up to 5 PLCs
        up to 10 registered issuers or public companies
        if he sits in at least 3 PLCs, only 5 of the 10

Term

For ordinary stock corporations – 1 year
For non-stock corporations – 3 years
For independent directors – 9 years reckoned from 2012

II. Board Governance Responsibilities

          • Establishing a Competent Board
          • Establishing Clear Roles and Responsibilities of the Board
          • Establishing Board Committees
          • Fostering Commitment
          • Reinforcing Independence
          • Assessing Board Performance
          • Strengthening Board Ethics

III. Fiduciary Obligations

          • Duty of Care
          • Duty of Loyalty
          • Disloyalty of Directors
          • Dealings of Directors
          • Conflict of Interest

IV. Illegal activities of directors/ officers

          • Insider trading
          • Short Swing Transactions
          • Per RCCP Provisions

V. Disclosure and Transparency

          • Enhancing Company Disclosure Policies and Procedures
          • Strengthening External Auditor’s Independence and Improving Audit Quality
          • Increasing Focus on Non-financial and Sustainability Reporting
          • Promoting a Comprehensive and Cost-Efficient Access to Relevant Information

VI. Internal Control System and Risk Management Framework

          • Strengthening Internal Control and Risk Management Systems

VII. Cultivating a Synergistic Relationship with Shareholders

          • Promoting Shareholder/Member Rights

VIII. Duties to Shareholders

          • Respecting Rights of Stakeholders and Effective Redress for Violation of Stakeholders’ Rights
          • Encouraging Employees’ Participation
          • Encouraging Sustainability and Social Responsibility

IX. Duties to Stakeholders

          • Respecting Rights of Stakeholders and Effective Redress for Violation of Stakeholders’ Rights
          • Encouraging Employees’ Participation
               - Establish a suitable framework for whistleblowing
          • Encouraging Sustainability and Social Responsibility
               - Voluntarily employ value chain processes that take into account ESG (environmental, social and governance) issues and concerns.

X. Related Party Transactions (RPTs)

          • Definition
          • Material RPTs
          • Thresholds
          • Related Parties

 

Attendees from the government are exempted from the P2,000.00 limit set by COA for attending training provided by the private sector based on Department of Budget and Management Circular No. 563 dated April 22, 2016.

Attending this training is not covered by Philippine Procurement Law or RA 9184 based on its Revised IRR’s Section 4.5-b. which classifies training continuing education, conferences and similar activities as "non-procurement activities that shall be governed by applicable COA, CSC, and DBM rules".