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SM Investments Corporation’s Board of Directors set the tone from top and uphold the highest standard of excellence and integrity.

Board and Management

Composition

The Board is composed of eight (8) highly qualified directors, four (4) or fifty percent (50%) of whom are independent directors including our Chairman of the Board. In accordance with the Company’s Manual on Corporate Governance, the Board shall always have at least three (3) independent directors. Independent directors are directors who are free from management responsibilities, substantial shareholdings and material relations, which could be perceived to impede the performance of independent judgment. Independent directors are tasked to encourage impartial discussions at board meetings, monitor and provide feedback on Management’s performance, and safeguard the interests of the Company’s various stakeholders.

The Board ensures that it has an appropriate mix of competence and expertise and that its members remain qualified for their positions individually and collectively, which enables its members to fulfill their roles and responsibilities and respond to the needs of the organization based on the evolving business environment and strategic direction of the Company. Please see the  Board Diversity Policy and Board Matrix.

We have achieved our Board Diversity Target as shown in the Skills Matrix table below. The members have a collective working knowledge and experience in retail, property and banking operations, management, finance, marketing, investments, risk management, accounting, treasury, credit, anti-money laundering, data privacy, internal control and sustainability governance.

Skill Set Matrix of the Directors:

Board Performance and Attendance

In accordance with the Manual on Corporate Governance, the Board meets at least six (6) times annually.  Board meetings are scheduled a year in advance to encourage higher participation.  Special board meetings may be called by the Chairman, the President or Corporate Secretary at the request of any two (2) directors.  A director’s absence or non-participation for whatever reason in more than 50% of all meetings, both regular and special, in a year may be a ground for temporary disqualification in the succeeding election.  Furthermore, non-executive directors meet at least once a year, without any executive directors or representatives of Management present. Board papers and other materials used during Board meetings are distributed to the relevant parties at least one (1) week or five (5) business days before the actual meeting.

For the year 2023, there were nine (9) Board meetings held, of which 100% participation was achieved reflected in the table below:

*Mr. Amando M. Tetangco, Jr. was elected as Independent Director and appointed as Chairman on June 16, 2023.

Board Committees

To assist the Board in the execution of its responsibilities, the Board has established several committees. Members of the different committees are appointed by the Board during the annual organizational meeting, taking into account the mix of skills, expertise and experience of the members to address specific tasks and responsibilities. The Board adopted six (6) Board Committees, namely the Executive Committee, the Audit Committee, the Risk Management Committee, the Related Party Transactions Committee, the Corporate Governance Committee, and the Compensation Committee.  Each committee has a Charter which defines its composition, roles and responsibilities based on the provisions found in the Manual on Corporate Governance.  The Charters include administrative provisions on the conduct of meetings and proceedings, reportorial responsibilities and provide the standards for evaluation of the respective committee performance.  The Charters are available through the Company’s website and may be viewed and downloaded.

 

*Mr. Amando M. Tetangco, Jr. was elected as Independent Director and appointed as Chairman on June 16, 2023. He was also elected as member of the Executive Committee on the same date.

The Executive Committee is composed of both executive and non-executive directors and acts on behalf of the Board during the interim periods between Board meetings. The Committee meets at least on a monthly basis to assist the Board in overseeing the implementation of strategies, set and monitor the Company’s performance and foster the sharing and dissemination of best practices in all areas of the business group. The Executive Committee also defines the group-wide policies and actions, relating to sustainable development, including environment, health and safety, internal communications, innovation and research and technology and purchasing. Read about the Executive Committee Charter.

The Corporate Governance Committee is tasked to assist the Board in its corporate governance-related responsibilities such as, but not limited to, climate change, anti-money laundering act, information technology, risk and social impacts in sustainability reporting. The Committee also performs the review and evaluation of the qualifications of all candidates nominated to the Board of Directors, and those nominated to positions that require Board approval under the Company’s By-Laws. Professional search firms and/or external sources are used to find qualified candidates suited to serve on the Company’s Board. In 2016, SMIC engaged the Institute of Corporate Directors (ICD) for this purpose and Ms. Tomasa H. Lipana was subsequently elected as an independent director of SMIC. This is also in line with the Company’s Board Diversity Policy, which states that we “strive to have at least one (1) woman independent director sit in our Board at all times.” The Committee is composed entirely of independent directors.

Through the Corporate Governance Committee, the Board conducts an annual performance evaluation of the collective Board, the Board Committees, individual directors, the Company’s Chairman of the Board, the President, and selected key officers. The evaluation criteria are based on the duties and responsibilities of the Board of Directors, the Board Committees, individual directors, the Chairman of the Board, the President, and the heads of the control functions (Chief Audit Executive, Chief Risk Officer, and Chief Compliance Officer) pursuant to SMIC’s By-Laws, Manual on Corporate Governance and respective Board Committee Charters. Directors are asked to rate the performance of the collective Board, the Board Committees, themselves as directors, the Company’s Chairman of the Board, the President, and key officers. The detailed Board Evaluation Form can be found below. Read about the Corporate Governance Committee Charter.

*Mr. Amando M. Tetangco, Jr. was elected as Independent Director and appointed as Chairman on June 16, 2023. He was also elected as member of the Audit Committee on the same date.

The Audit Committee exercises the Board’s oversight of the Company’s financial reporting, internal controls system, internal and external audit processes and compliance with applicable laws, rules and regulation. The Committee is composed of three (3) non-executive and independent directors, including the Chairperson. The Committee members each possess relevant background, knowledge, skills and/or experience in areas of accounting, auditing and finance. The Chairperson of the Audit Committee, Ms. Tomasa H. Lipana, is a certified public accountant and does not serve as the chairperson of any of the other board committee. Learn more through the Audit Committee Charter.

*Mr. Amando M. Tetangco, Jr. was elected as Independent Director and appointed as Chairman on June 16, 2023. He was also elected as member of the Compensation Committee on the same date.

The Compensation Committee is tasked with the oversight of policies on salaries and benefits, as well as promotions and other forms of career advancement. The Committee is composed of three (3) directors with a majority of independent directors.

The Compensation Committee establishes a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of corporate officers and directors, and provides oversight over remuneration of senior management and other key personnel, ensuring that compensation is consistent with the Company’s culture, strategy and control environment. The remuneration structure of SMIC is composed of fixed remuneration, benefits, performance bonus and long term incentives. The variable component of the remuneration increases as one gets higher in the corporate ladder, which applies to all employees, including the executive directors. SMIC disallows any director to decide his/her own remuneration. Learn more through the Compensation Committee Charter.

*Mr. Amando M. Tetangco, Jr. was elected as Independent Director and appointed as Chairman on June 16, 2023. He was also elected as member of the Risk Management Committee on the same date.

The Risk Management Committee is responsible for the oversight of the Company’s Enterprise Risk Management (ERM) system. The Committee is composed of three (3) independent directors, including the Chairman. Per the Committee’s charter, at least one (1) of its members must have relevant knowledge and experience on risk and risk management. The Committee Chairman, Mr. Robert G. Vergara does not serve as the chairman of any of the other board committees. Learn more through the Risk Management Committee Charter.

*Mr. Amando M. Tetangco, Jr. was elected as Independent Director and appointed as Chairman on June 16, 2023. He was also elected as member of the Related Party Transactions Committee on the same date.

The Related Party Transactions Committee reviews all material related party transactions of the Company and ensures that said transactions are conducted fairly and at arms’ length. The Committee is composed entirely of non-executive and independent directors, including the Chairman. Learn more through the Related Party Transactions Committee Charter.

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