Corporate Governance

Corporate Governance

Board Governance

The Board of the Bank represents the owners’ interests in the Bank’s objective to sustainably increase shareholder value and to ensure the long-term success of the
business. The Board is actively responsible in ensuring that the Bank is properly managed in attaining this objective. In addition to fulfilling the Board’s obligations for increased shareholder value, it also has the responsibility to protect the interests of other stakeholders which include, among others, customers, employees, suppliers, financiers, government and community in which it operates.

The Board is primarily responsible for the observance of governance, including business and risk strategies, organization, and financial soundness of the Bank. Corollary to setting the policies for the accomplishment of the corporate objectives, it shall provide an independent checking and effective oversight of the Management.

Composition of the Board

The Board is composed of 11 members elected by the stockholders, five of whom are independent. All members of the Board are Filipinos and possess all the qualifications and none of the disqualifications to hold a directorship as prescribed under the Corporation Code and existing rules and regulations of the BSP and the Securities and Exchange Commission (SEC). They all passed the fit and proper test for the position of a director of the Bank, taking into account their integrity and probity, physical and mental fitness, competence, relevant education, financial literacy and training, diligence and knowledge and expertise. They are known for their independence and professionalism, and for making decisions with complete fidelity to the Bank while cognizant of their responsibilities under existing applicable laws, rules, and regulations.

The Board determines the appropriate number of its members to ensure that the number thereof is commensurate with the size and complexity of the Bank’s operations. To the extent practicable, the members of the Board of Directors have been selected from a broad pool of qualified candidates. A sufficient number of qualified non-executive members had been elected to promote independence of the Board from the views of the senior management. For this purpose, non-executive members of the Board are those who are not part of the day-to-day management of banking operations.

The Chairman of the Board ensures that the meetings of the Board are held in accordance with the by-laws; makes certain that the meeting agenda focuses on strategic matters, including the overall risk appetite of the corporation; and guarantees that the Board receives accurate, timely, relevant, insightful, concise, and clear information to enable to make sound decisions. Likewise, the Chair makes sure that performance of the Board is evaluated at least once a year and discussed / followed up on.

The five independent directors (ID) are independent of Management and are free from any business or other relationship which could or could reasonably be perceived, to materially interfere with their exercise of independent judgment in carrying out their responsibilities as a director. They hold no interests or relationships with the Bank that may hinder their independence from the Bank or management or will interfere with the exercise of independent judgment in fulfilling their responsibilities. They are compliant with all the qualifications required of an independent director and none of the disqualifications as provided in the MORB. There was no change in the Board composition for this year.

Board Meetings and Supply of Information

As provided for in the Bank’s By-Laws, the Board schedules and holds regular monthly meetings and convenes special meetings when necessary. The Corporate Secretary provides the directors the notice, agenda, and meeting materials prior to each meeting. Proceedings of the meetings are properly documented and duly minuted.

In accordance with the rules and regulations of the SEC and the BSP, the members of the Board attend regular and/or special meetings in person or through teleconferencing and video conferencing which allows the directors to actively participate in the deliberations on matters taken. The Bank ensures availability of teleconferencing facilities if and when a director cannot physically attend due to unavoidable circumstances. A director may also attend the meetings by submitting written comments on the agenda to the Corporate Secretary and the Chairman prior to the meeting pursuant to Subsection X141.1 of the MORB.

In 2017, all members of the Board have substantially complied with the attendance requirement and actively participated in the deliberations on matters taken up during the regular and/or special meetings.

Name of DirectorsNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
1.) Lance Y. Gokongwei1313100.00
2.) Frederick D. Go131292.00
3.) Elfren Antonio S. Sarte1313100.00
4.) Robina Y. Gokongwei-Pe131077.00
5.) Patrick Henry C. Go131292.00
6.) Omar Byron T. Mier1313100.00
7.) Angeles Z. Lorayes (ID)1313100.00
8.) Hermogenes S. Roxas (ID)1313100.00
9.) Esperanza S. Osmeña (ID)131185.00
10.) David C. Mercado (ID)131292.00
11.) Roberto S. Gaerlan (ID)1313100.00

Board Committees

In order to increase efficiency and gain deeper focus in specific areas, the Board has created committees, which are relative and consistent to the size, complexity of operations, long-term strategies, and risk tolerance level of the Bank. The scope, authority and responsibilities of these committees are defined in their respective board-approved charter which is subject to regular review and updated at least annually or whenever there are significant changes.

The Board has appointed the members of the committees taking into account the optimal mix of skills and experience which would allow them to fully understand, be critical and objectively evaluate the issues. To promote objectivity, the Board has appointed independent directors and non-executive directors to the greatest extent possible and ensures that such mix will not impair the collective skills, experience and effectiveness of the committees. Each of these committees maintains appropriate records (e.g., minutes of meeting) of their deliberations and decisions, subject to notation and/or confirmation of the Board. The records document the committees’ fulfillment of their responsibilities and facilitate the assessment of the effective performance of their functions which is regularly and periodically conducted.

The Board has established and delegated responsibilities to seven committees, namely: the Executive Committee, the Corporate Governance Committee, the Risk Management Committee, the Audit Committee, the Trust Committee, the Related Party Transactions Committee, and the IT Steering Committee.

  1. Executive Committee

    The Bank’s Executive Committee has been created as the highest credit approving body of the Bank after the Board. The Committee provides the necessary approvals for applications, deviations and other loan transactions. Resolutions of the Committee may be overruled only by the Board.

    The Executive Committee provides decisions regarding applications for critical loan accounts and deviations that require careful deliberation. Approvals made are in compliance with internal policies and those required under existing laws, rules and regulations. Decisions made are influenced by the latest profitability and delinquency figures of an account or loan product.

    Executive Committee MembersNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
    1. Lance Y. Gokongwei504386.00
    2. Frederick D. Go504386.00
    3. Elfren Antonio S. Sarte504590.00
    4. Robina Y. Gokongwei-Pe5050100.00
  2. Corporate Governance Committee

    In order to proactively assist the Board in its fulfillment of its corporate governance responsibilities and ensure transparency in all of the Bank’s transactions, it created the Corporate Governance Committee. The Committee ensures the Board’s effectiveness and due observance of corporate governance principles, best practices and guidelines which are necessary components of what constitute sound strategic business management. It generates awareness of corporate governance within the Bank.

    In particular, the Committee oversees the development and implementation of corporate governance principles and policies, reviews and evaluates the qualifications of the persons nominated to the Board as well as those nominated for election to other positions requiring appointment by the Board, decides the manner by which the Board’s performance is evaluated and assists the Board in the periodic performance evaluation of the Board and its committees and executive management, and oversees the development and implementation of professional development programs for directors and officers.

    The Committee is composed of five members, three of whom are independent directors including the Chairperson and Vice-Chairperson. The Committee holds regular meetings and may call for special meetings as deemed necessary. To properly evaluate its performance, the Committee meetings are properly and duly minuted.

    Corporate Governance Committee MembersNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
    1. Hermogenes S. Roxas (ID)1212100.00
    2. Angeles Z. Lorayes (ID)1212100.00
    3. Esperanza S. Osmeña (ID)121083.33
    4. Patrick Henry C. Go121083.33
    5. Omar Byron T. Mier1212100.00
  3. Risk Management Committee

    To aid the Board in efficiently carrying out its function on risk management, it created the Risk Management Committee. This committee oversees the development and oversight of the Bank’s risk management program including Trust Group and ensures an acceptable level of risk while minimizing losses. The Committee oversees the system of limits to discretionary authority that the Board delegates to management, supervises the system and ensures its effectiveness, provides and set limits and ensures that these are properly observed and that immediate corrective actions are taken should breaches occur.

    The Board has appointed five members of the Committee who possess a broad-range of expertise as well as adequate knowledge of the Bank’s risk exposures which enables them to develop appropriate strategies for preventing more losses when they occur. The committee members meet regularly and may call for special meetings whenever necessary.

    Risk Management Committee MembersNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
    1. Esperanza S. Osmeña (ID)121083.33
    2. David C. Mercado (ID)1212100.00
    3. Roberto S. Gaerlan (ID)1212100.00
    4. Elfren Antonio Sarte1212100.00
    5. Omar Byron T. Mier121191.67
  4. Audit Committee

    The Board has constituted an Audit Committee to provide oversight over the Bank’s financial reporting policies, practices and control, and internal and external audit functions. In particular, the Committee aids the Board in monitoring and evaluating the adequacy, effectiveness, and efficiency of the Bank’s internal controls system. Further, the Committee assists the Board in fulfilling its oversight responsibilities with regard to the integrity of the Bank’s financial reporting process, the independence and performance of the Bank’s external and internal auditors, the compliance to corporate governance policies and guidelines, and the Bank’s compliance with regulatory requirements.

    To carry-out its mandate, the Committee has explicit authority to investigate any matter within its terms of reference, full access and cooperation by management and full discretion to invite any director or executive officer to attend its meetings, and adequate resources to enable it to effectively discharge its functions.

    As prescribed under existing rules and regulations, the Committee is composed of, to the greatest extent possible, sufficient number of independent and non-executive board members. All members of the Committee, including the Chairperson who is an ID, possess the required qualifications and none of the disqualifications. The Committee holds regular meetings and may call special meetings upon the request of the Chairperson or by at least two of its members, which proceedings are duly minuted.

    Audit Committee MembersNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
    1. Angeles Z. Lorayes (ID)99100.00
    2. Roberto S. Gaerlan (ID)99100.00
    3. David C. Mercado (ID)99100.00
    4. Hermogenes S. Roxas (ID)99100.00
    5. Omar Byron T. Mier (Resource Person)99100.00
  5. Trust Committee

    The Trust Committee provides the overall direction and guidelines in the conduct of the Trust business, reviews plans for new investments, trust products and business development, and conducts assessment of Trust and Investments Group’s performance and operational effectiveness.

    Trust Committee MembersNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
    1. Robina Y. GokongweiPe121192.00
    2. Patrick Henry C. Go121192.00
    3. Lance Y. Gokongwei1212100.00
    4. Esperanza S. Osmeña (ID)121083.00
    5. Elizabeth T. Aquino121192.00
  6. Related Party Transactions Committee

    Pursuant to existing rules and regulations on related party transactions issued by the BSP, the Board created a Related Party Transactions Committee. This stems from the recognition of management that the Bank engages in transactions between and among related parties, which brings a need to exercise appropriate oversight and implement control systems for managing said exposures as these may potentially lead to conflict of interests if not abuses that are disadvantageous to the Bank and its depositors, creditors, and other stakeholders.

    The Committee supports the Board in the exercise of appropriate oversight and implements a control system for managing exposures to related parties. It assists the Board in ensuring that transactions with related parties are handled in a sound and prudent manner and in compliance with applicable laws, rules and regulations to protect the interest of its depositors, creditors, and other stakeholders.

    In particular, the Committee identifies related parties and monitors their transactions, evaluates related party transactions which are classified material and endorse the same to the Board for approval, ensures disclosure and reporting of related party transactions and oversees the implementation of a system to facilitate its functions as well as the development and periodic review of policies and procedures for related party transactions.

    The Committee is composed of four members of the Board who are all independent directors. In case a member has a conflict of interest in a particular transaction, he should refrain from evaluating that particular transaction. The Chief Compliance Officer and Chief Audit Officer and/or their representatives including an executive director sit as resource persons in the said Committee.

    Related Party Transactions Committee MembersNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
    1. Roberto S. Gaerlan (ID)1111100.00
    2. Esperanza S. Osmeña (ID)11982.00
    3. Angeles Z. Lorayes (ID)1111100.00
    4. Hermogenes S. Roxas (ID)1111100.00
  7. IT Steering Committee

    In compliance with BSP Circular 808, the Board has created the Information Technology Steering Committee which oversees a safe, sound, controlled and efficient information technology operating environment that supports the Bank’s goals and objectives. In particular, the Committee, among others: reviews and monitors the performance of all IT projects; reviews the Bank’s current IT infrastructure, system performance, associated risks and other significant issues and events and institutes appropriate actions to achieve the desired results; monitors and evaluates the performance of third party service providers on all information technology initiatives subject of the service contract; and reports to the Board relevant and adequate information regarding IT performance, status of major IT projects and significant issues affecting the Bank’s IT operations.

    The Committee is chaired by a non-executive and independent director, assisted by the Head of IT Group as Vice-Chairperson and executive officers of the Bank. The heads of Audit, Risk and Compliance are also invited in the regular and/or special meetings of the Committee as resource persons.

    IT Steering Committee MembersNumber of Meetings Held During the YearNumber of Meetings AttendedPercentage of Meetings Attended %
    1. Roberto S. Gaerlan (ID)121191.67
    2. Esperanza S. Osmeña (ID)121191.67
    3. Angeles Z. Lorayes (ID)1212100.00
    4. Hermogenes S. Roxas (ID)1212100.00
    4. Hermogenes S. Roxas (ID)121191.67
    4. Hermogenes S. Roxas (ID)121083.33
    4. Hermogenes S. Roxas (ID)1212100.00

    *Resigned February 2018

    Corporate Secretary

    The Bank’s Corporate Secretary, who is a separate individual from its Compliance Officer, assists the Board in its duties and is responsible primarily to the corporation and its shareholders. His duties and responsibilities, among others, include assistance to the Board and the board committees in the conduct of their meetings, including preparing an annual schedule of Board and committee meetings and the annual board calendar, and assisting the chairs of the Board and its committees to set agendas for those meetings; Safe keeps and preserves the integrity of the minutes of the meetings of the Board and its committees, as well other documents such as the corporate seal, stock certificates, stock and transfer books, records, documents and papers of the Bank; Prepare ballots for annual elections and keep a complete and up-dated list of the stockholders and their addresses; Keeps abreast on relevant laws, regulations, all governance issuances, relevant industry developments and operations of the corporation, and advises the Board and the Chairman on all relevant issues as they arise. The Bank also makes sure that the Corporate Secretary annually attends relevant trainings on corporate governance and other related topics.

    Board Training

    In accordance with the Corporate Governance Manual and Subsection X141.3 of the MORB, the Corporate Governance Committee is responsible for making recommendations to the Board on the required trainings and continuing education of the directors. Relative thereto, all members of the Board have attended the required corporate governance seminar for bank directors at BSP-accredited training providers, a pre-requisite for Monetary Board confirmation. These include topics on risk and governance, audit and control, and accountability.

    To remain relevant and abreast with the evolving regulations, all of the directors have attended the Anti-Money Laundering Refresher Course as required by the MORB.

    Board and Committee Performance Evaluation

    The Bank’s Board represents the owner’s interests in its objective to continuously improve its shareholders value and to achieve a successful and long-term business. The Board is actively responsible in ensuring that the Bank is properly managed to attain this result. In addition to fulfilling its obligations for increased shareholder value, it also has the responsibility to other stakeholders which include, among others, customers, employees, suppliers, financiers, government and community in which it operates.

    The Board is primarily responsible for the governance, including business and risk strategy, organization, and financial soundness of the Bank. Corollary to setting the policies for the accomplishment of the corporate objectives, it shall provide an independent check on and effective oversight of Management.

    In order to increase efficiency and allow deeper focus in specific areas, the Board has created committees, which are relative and consistent to the size, complexity of operations, long-term strategies and risk tolerance level of the Bank. The scope, authority and responsibilities of these committees are defined in their respective board-approved charter which is subject to regular review and updated at least annually or whenever there are significant changes

    The Board has appointed the members of the committees taking into account the optimal mix of skills and experience which allow them to fully understand, be critical and objectively evaluate the issues. To promote objectivity, the Board has appointed independent directors and non-executive directors to the greatest extent possible and ensures that such mix will not impair the collective skills, experience and effectiveness of the committees. Each of these committees maintains appropriate records (e.g., minutes of meeting) of their deliberations and decisions, subject to notation and/or confirmation of the Board. The records document the committees’ fulfillment of their responsibilities and facilitate the assessment of the effective performance of their functions which is regularly and periodically being conducted.

    In order to pro-actively assist the Board in its fulfillment of its corporate governance responsibilities and ensure transparency in all of the Bank’s transactions, it created the Corporate Governance Committee. The Committee ensures the Board’s effectiveness and due observance of corporate governance principles, best practices and guidelines which are necessary component of what constitutes sound strategic business management. It creates awareness of corporate governance within the Bank. In particular, the Committee oversees the development and implementation of corporate governance principles and policies, reviews and evaluates the qualifications of the persons nominated to the Board as well as those nominated for election to other positions requiring appointment by the Board, decides the manner by which the Board’s performance is evaluated and assists the Board in the periodic performance evaluation of the Board and its committees and executive management, among others. In this regard, annual performance evaluation of the board and board-committees is being conducted in accordance with the Bank's existing policies.

    President & CEO Evaluation

    The performance of the President and CEO is evaluated as member of the Board and Senior Management where the results are discussed and approved by the Corporate Governance Committee and confirmed by the Board.

    Compliance System

    The BSP issued Circular 747 “Revised Compliance Frameworks for Banks” as amended by Circular 972, in order to actively promote the safety and soundness of the Philippine Banking System through an enabling policy and oversight environment. Such an environment is governed by the high standards and accepted practices of good corporate governance as collectively designed by the BSP and its supervised institutions. Towards this end, a robust, dynamically-responsive and distinctly-appropriate Compliance Risk Management System has been put in place as an integral component of the Bank’s culture and risk governance framework. In this respect, it is the responsibility and shared accountability of all personnel, officers and the board of directors.

    A compliance risk management system is designed to specifically identify and mitigate risks which may erode the franchise value of the Bank. Compliance is everybody’s concern and should form part of the Bank’s day-to-day operations. As a Bank employee, everyone should conduct business activities in adherence to high standards of honesty and integrity and shall abide laws, regulations, rules, standards and codes of conduct and good governance applicable to our banking activities. This may cover observing market rules, managing conflict of interest, proper accounting and recording, applying best practices, compliance with tax laws, developing new products and electronic delivery channels, providing e-banking services and may also include specific areas such as prevention of money laundering and terrorist financing. Failure to comply with regulatory requirements may bring adverse effects on our relationships with our shareholders, customers, co-employees and the market and exposures to significant losses and severe sanctions of regulatory or judicial authorities.

    The Bank’s Board, in an effort to address effectively compliance risks, established the Compliance Group that will identify, measure, monitor and control such risks that the Bank is exposed or may be exposed to. This is also in the exercise of Board’s oversight function of overseeing the implementation of compliance policy, ensuring policies and procedures are followed and corrective actions are taken by the management to address breaches, failures and control deficiencies identified.

    Education and Trainings

    The Bank is committed to continually strengthen its compliance culture through education and training. The Compliance Group in coordination with HRMG Training Department regularly conducts briefings to employees to raise the level of awareness and understanding of the principles, concepts, and elements of good corporate governance and compliance. All new employees of the Bank undergo basic orientation on Compliance System, Anti-Money Laundering (AML), Risk Awareness, and Corporate Governance.

    Governance Policies and Mechanisms

    Corporate Governance Manual

    The Board and its management committed themselves to the principles and best practices on corporate governance. They believe that corporate governance is a necessary component of what constitutes sound business management and therefore undertake every effort necessary to create awareness within the Bank.

    Toward this end, the Board adopted a corporate governance framework or the Corporate Governance Manual (Manual) that embodies the rules, systems and processes in the Bank. The framework governs the performance of the Board and management of their respective duties and responsibilities to stockholders and other stakeholders. The Manual is periodically reviewed with the objective of continually aligning the Bank’s policies with the BSP and SEC circulars or issuances on corporate governance including best practices issued by the Basel Committee on Banking Supervision. This ensures that the interests of stockholders and other stakeholders are always taken into account, the directors, officers, and employees are aware of their responsibilities and the business of the Bank is conducted in a safe and sound manner.

    Board Compensation Policy

    Board of Directors compensation is a fee or per diem in an amount as may be determined by the Board shall be paid to each director for attendance at any meeting of the Board; provided, however, that nothing herein contained shall be construed to preclude any director from serving in any other capacity and receiving compensation therefore, The Board shall fix the compensation and other remuneration of any compensation therefore. The Board shall fix the compensation and other remuneration of any Director or any other officer of the Bank should they be designated to perform executive functions or any special service to the Bank. In no case shall the total yearly compensation of directors, as such directors, exceed ten percent (10%) of the net income before income tax of the corporation during the preceding year.

    Remuneration Policy

    The Robinsons Bank’s employee compensation structure is designed to be at par with the prevailing banking industry rates. Guaranteed compensation consists of 15 months pay, inclusive of 13th month pay, Mid-year and Christmas bonuses. Its policy is pay for performance or meritocracy, highlighted by a competitive salary scale, annual merit increase and employee promotion which are hinged on employee performance and attainment of the Bank’s key indicators. On top of the regular compensation, the Business Center Heads and Sales Officers are provided with the variable compensation scheme based on their achievement of defined categories and their contributions to the Bank’s objectives. Competitive fringe benefit programs such as various types of leave benefits, uniform assistance, financial assistance programs in the form of employee personal loan, car plan, vehicle loan, motorcycle plan and housing loan, are provided to eligible employees aimed to assist them in their time of financial need and to improve their standard of living. The health and well-being of the employees are given importance through the Group Hospitalization Plan or HMO Card, the Group Life Insurance and Personal Accident Insurance, Hazard Pay and the Medicine Assistance.

    Related Party Transactions

    In compliance with BSP Circular 895, as amended, the Bank has created a Related Party Transactions (RPT) Committee that supports the Board in managing exposures to related parties. Under its policy, the Bank defined related parties to include directors, officers, stockholders or related interests (DOSRI) of the Bank and their close family members. It also includes corresponding persons in affiliated companies, subsidiaries and affiliates, any party that the Bank exerts control over or that exerts control over the Bank, and such other entity whose interest may pose potential conflict with the interest of the Bank.

    The Committee evaluates material RPTs to ensure that these are not undertaken on more favorable economic terms (e.g., price, commissions, interest rates, fees, tenor, collateral requirement) to such related parties that similar transactions with non-related parties under similar circumstances and that no corporate or business resources of the Bank are misappropriated or misapplied, and to determine any potential reputational risk issues that may arise as a result of or in connection with the transactions.

    All material RPTs are evaluated and endorsed by the Committee to the Board for approval. Refer to the Notes to Financial Statements for the Bank’s related party transactions.

    Money Laundering and Terrorist Financing Prevention Program

    As approved by the Board and as required by the BSP, the Bank implements a program to combat money laundering and terrorist financing. The Program has been issued and is regularly updated to comply with RA No. 9160, as amended, BSP Circular No. 706 and other policies of the State. The Program is intended to protect the integrity and confidentiality of the accounts of the clients, and ensure that the Bank is not used as money laundering site for the proceeds of any unlawful activities, taking into consideration best practices to combat terrorist financing.

    The Program has been developed to disseminate information which will help the employees understand and prevent money laundering activities, detect and report suspicious transactions, and know better the Bank’s customers; understand the penalties for non-compliance; take the required AML training for responsible officers and personnel of the Bank; satisfy legal and ethical responsibilities with a minimal adverse impact on the Bank’s overall daily business responsibilities and performance goals. Moreover, the Program has been promulgated to protect the Bank as well as its employee’s interests.

    Laws governing secrecy on bank deposits have been strictly complied with by the Bank when implementing procedures related to combating money laundering and terrorist financing. The Program provides guidance in complying with the Anti-Money Laundering Law as well as other applicable regulations without violating relevant laws and without losing legitimate business or clients in the process.

    Internal Control and Audit

    The Bank has implemented its internal control processes which are designed and effected by its 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, supervisory requirements and the Bank’s policies and procedures.

    The Bank put in place an adequate and effective internal control framework for the conduct of its business, taking into account the size, risk profile and complexity of operations. The framework embodies management oversight and control culture, risk recognition and assessment; control activities; information and communication; and monitoring activities and correcting deficiencies.

    The control environment of the Bank consists of: (a) the Board which ensures that the Bank is properly and effectively managed and supervised; (b) Management that actively manages and operates the Bank in a sound and prudent manner; (c) the organizational and procedural controls supported by effective management information and risk management support systems; and (d) an independent audit mechanism to monitor the accuracy and effectiveness of the Bank’s governance, operations and information systems, including the reliability and integrity of financial and operational information, the effectiveness and efficiency of operations, the safeguarding of assets, and compliance with laws, rules, regulations and contracts.

    The Bank has an internal audit system that reasonably assures the Board, Management and stockholders that the Bank’s key organizational and operational controls are faithfully complied with. The Board appointed an Internal Auditor to perform the function, and required the Auditor to report to the Audit Committee, a board-level committee, which allows the internal audit activity to fulfill its mandate. The Internal Auditor is guided by the International Standards on Professional Practice of Internal Auditing and existing laws, rules and regulations. With the Board appointment, the Chief Audit Officer oversees the implementation of the internal audit system.

    Dividend Policy

    Subject to BSP’s approval, dividends may be declared annually or oftener as the Bank’s Board may determine. The Board, however, may only declare dividends out of its surplus profits or unrestricted retained earnings after making due provisions for the necessary reserves (losses and bad debts) in accordance with the Corporation Code, Securities Regulation Code, General Banking Law, MORB, and all regulations and circulars issued by the BSP.

    Whistleblowing

    Employees of the Bank are encouraged to perform the duty of disclosing to their immediate superior the existing or potential violations and wrongdoings that they are or may become aware of. The Bank’s Policy on Timely Reporting of Concerns and Incidents, otherwise known as the Whistle-Blowing Policy, serves as a guide for all employees for reporting matters that breach integrity and the Bank’s Code of Conduct.

    Code of Ethics and Policy on Conflict of Interest

    The Bank’s Code of Conduct for Employees exists to develop or pattern behavior in accordance to the Bank’s standards, to instill professional conduct, and to enforce discipline and order. The Code is implemented by the Human Resources and Management Group. Copies of the Code of Conduct are given to employees upon hiring, while seminars are conducted regularly to further expound on the subject.

    The Bank receives inquiries, requests, feedbacks and complaints from customers regarding its products and services. Various communication channels such as hotline, email, feedback forms, website, social media, etc. are made available to clients so they can easily contact the Bank regarding these concerns.

    The Customer Care Center (C3) was created to manage the issues received from customers through the different channels, coordinate with concerned units, and respond to clients in efficient and professional manner within the committed turn-around-time to ensure customer satisfaction.

    C3 monitors daily inquiries, requests, and complaints received from customers and reports these to the management to provide solutions on the Bank’s products and services to ensure service quality at all times.

    C3 is also tasked to record issues raised by employees regarding concerns within the Bank, and suggestions for improvement. Reports are included in the concerned unit’s performance evaluation.