The Board of Directors, officers and staff have committed themselves to the principles and best practices contained in the Manual on Corporate Governance, in the belief that good corporate governance is a necessary component of sound strategic business management.
The Manual establishes the company's compliance system and plan of compliance. It states that compliance with the principles of good corporate governance starts with the Board of Directors. To this end, a director must act in a manner characterized by transparency, accountability and fairness. The Manual further enumerates the general responsibilities and specific duties and functions of the Board, as well as those of the Board Committees, Corporate Secretary, and the external and internal auditors.
The Manual mandates the conduct of communication and training programs on corporate governance. It further provides for the rights of all shareholders and the protection of the interests of minority stockholders. The Manual likewise sets the penalties for non-compliance with its provisions.
In March 2010, SM Prime Holdings, Inc. revised its Manual on Corporate Governance, in accordance with the SEC Revised Code of Corporate Governance. The significant changes to the Manual are summarized as follows:
- The Compliance Officer shall be appointed by the entire Board of Directors and not merely the Chairman of the Board.
- The Board of Directors must at all times have at least two independent directors.
- In addition to its original duties, the Board will formulate and implement policies on related party transactions and establish and maintain a dispute resolution system to settle conflicts involving the company.
- An independent director whose beneficial equity ownership in a company or its subsidiaries and affiliates exceeds 2% of the subscribed capital stock is temporarily disqualified from being a director of the company, until his/her beneficial equity ownership reverts to the 2% limit.
- The Audit Committee shall be chaired by an independent director.
- The stockholders' right to appoint a proxy is expressly provided.