The board of directors of Lopez Holdings is composed of seven (7) members, three (3) members or 43% of whom are independent directors. Directors are subject to re-election every year during the annual stockholders meeting. Independent directors are independent of management and major shareholders.
The board of directors’ meetings are scheduled at the beginning of the year and are mostly held during the first Thursday of the month. In general, materials for board meetings are ready to be disseminated to the board five business days before board meetings.
Orientation Program for New Directors
Lopez Holdings has an orientation program for new directors. The orientation program includes a meeting with members of the management team where a presentation is made to the new director with information on the organization and the Lopez Group, the company’s business operations and financial condition, and those of subsidiaries. Management answers any questions which the new director may have. A new director is also given a copy of the latest financial statements, annual report, and minutes of the most recent board meetings, among others.
Review of Mission and Vision
The board is responsible for the corporation’s mission and vision statements, and reviews the same at least every five years. The last review was done in September 2009.
Adoption of Manual of Corporate Governance
In 2002, the board of directors adopted the company’s Manual of Corporate Governance to institutionalize corporate governance principles. Revisions were made to the manual in 2010, 2011, 2013 and 2014. The board, management, employees, and shareholders believe that good corporate governance is a necessary component of sound strategic business management, and improves the economic and commercial prosperity of the corporation and its stockholders.
Policy on Confidentiality and Use of Material Inside Information
Under Section 13 of the Manual of Corporate Governance, directors and officers of Lopez Holdings are required to observe confidentiality of material, inside, non-public information acquired by reason of their office, and are not permitted to use and/or disclose any information to any other person without the authority of the Board.
Policy on Conflict of Interest
The directors and officers of Lopez Holdings are mandated by the Manual of Corporate Governance (Section 14) to always put the interest of the company above personal interest. Except for salaries and other employment benefits, directors and officers are prohibited from deriving any personal profits or advantage by reason of their positions in the corporation. They are required to fully disclose an actual or potential conflict of interest. In such a situation, a conflicted director is not allowed to participate in the decision-making process.
In the event that a director of Lopez Holdings, by virtue of his office, acquires for himself a business opportunity which should belong to the company, thereby obtaining profits to the prejudice of the company, the director must account to the latter for all such profits, unless his act has been ratified by a vote of the stockholders representing two-thirds (2/3) of the outstanding capital stock of the company.
When a director or officer attempts to acquire or acquires, in violation of his duty, any interest adverse to the company in respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for the company and must account for the profits which otherwise would have accrued to the company.
The board of directors of Lopez Holdings is assisted by the corporate secretary and the assistant corporate secretary who have the following duties and responsibilities:
a. Assist the board in the preparation of the agenda of meetings and the management in the preparation and gathering of materials to be presented to the board or the shareholders;
b. Implement such methods adopted by the board to efficiently and timely inform and brief the board members prior to board meetings; and
c. Attend board meetings and take down the minutes of special and regular meetings of the board and shareholders.
Among others, the Manual of Corporate Governance provides that the corporate secretary should:
a. Work fairly and objectively with the board, management and stockholders;
b. Ensure that all board procedures, rules and regulations are strictly followed by the directors; and
c. Inform the members of the board, in accordance with the by-laws, of the agenda of their meetings and ensure that the members have before them accurate information that will enable them to arrive at intelligent decisions on matters that require their approval; and
d. Issue a certification every January 30th of the year on the attendance of directors in meetings of the board of directors, countersigned by the chairman of the board.
The directors accomplish the following assessment questionnaires on an annual basis:
LPZ Shares Held by Directors
|Name of Beneficial Owner||No. of Shares as at January 1, 2014||No. of Shares as at December 31, 2014||No. of Shares Acquired/Sold in 2014|
|Manuel M. Lopez||25,288,897||25,617,897||329,000|
|Oscar M. Lopez||11,632,408||11,632,408||0|
|Eugenio Lopez III||3,640,909||3,724,365||83,456|
|Washington Z. Sycip||1||1||0|
|Cesar E.A. Virata||1||1||0|
|Monico V. Jacob||1||1||0|
|Salvador G. Tirona||1||204,724||204,723|