The Board of Directors, Officers, Executives and Employees of the Energy Development Corporation hereby commit themselves to the principles of sound corporate governance provided in this Manual and acknowledge that the same shall serve as a guide in the attainment of the Company’s corporate goals.
This Manual on Corporate Governance is adopted pursuant to SEC Memorandum Circular No. 2, Series of 2002, issued by the Securities and Exchange Commission on April 4, 2002, as revised by SEC Memorandum Circular No. 6, series of 2009.
Funds shall be allocated by the Treasurer of the Company for the purpose of conducting orientation programs or workshops to disseminate and implement the provisions of this manual. A Director should, if he deems it necessary for the purpose of acquiring thorough knowledge of corporate governance, attend seminars on said subject conducted by a duly licensed private or government entities.
INVESTOR RELATIONS FUNCTION
There shall be an Investor Relations Group within the Company which shall be headed by a full-time employee of the Company which shall be tasked with:
- Creation and implementation of an investor relations program that reaches out to all shareholders and fully informs them of corporate activities
- Formulation of a clear policy on communicating or relating relevant information to the company’s stakeholders and to the broader investor community privately, accurately, effectively and sufficiently.
PENALTIES FOR NON-COMPLIANCE WITH THE MANUAL
To strictly encourage observance and implementation of the provisions of this Manual, the following penalties shall be imposed, after notice and hearing, on the Company’s Directors, Officers, Executives and employees in case of violation of any of the provisions of this Manual:
- In case of first violation, the subject person shall be reprimanded.
- In case of second violation, the subject person shall be suspended from holding office; provided that, the duration of such suspension shall depend on the gravity of the violation in each case.
- In case of third violation, the maximum penalty of removal from office shall be imposed.
The willful commission of a third violation of any provision of this Manual by any Director, Officer, Executive or employee shall be a sufficient cause for removal from office of such Director, Officer, Executive or employee.
The Compliance Officer shall be responsible for determining violation(s) after notice and hearing and shall recommend to the Chairman the imposable penalty for such violation, subject to further approval by the Board.
REPORTORIAL OR DISCLOSURE SYSTEM OF COMPANY’S CORPORATE GOVERNANCE POLICIES
The reports or disclosures required under this Manual shall be prepared and submitted to the Commission by the responsible Board Committee or Officer through the Company’s Compliance Officer.
The Compliance Officer shall establish an evaluation system to determine and measure compliance with the provisions of this Manual. The adoption of such performance evaluation system shall be covered by an appropriate Board approval. The establishment of such evaluation system, including the features thereof, shall be disclosed in the Company’s annual report (SEC Form 17-A) or in such other form of report applicable to the Company. Any violation thereof shall subject the responsible Director, Officer or employee to the penalty provided on the previous page under Section 1 of this Manual.
REVISIONS AND PERIODIC REVIEW
The provisions of this Manual and the enforcement thereof shall be subject to quarterly review or such other frequency as may be determined by the Board. This Manual is subject to review and amendment to take into account the Corporation’s changing needs, factual conditions prevailing in the environment and regulatory requirements.
All business processes and practices of the Company that are not consistent with the corporate governance policies set out in this Manual shall be revoked or upgraded to make them compliant with such policies.
The EDC Board of Directors approves the revisions to the policies, while the Compliance Office, in coordination with the concerned units approves the revisions to the procedures. The Administrative Systems Section has the custody over this Manual and is responsible for effecting and attesting to the changes in it. With the proper dissemination of this Manual, it is expected that everyone in the organization should make themselves familiar with the contents of the code and observe not only its letter, but also its spirit.
DISSEMINATION OF MANUAL
The Directors, Officers, Executives and Department/Division heads shall ensure the comprehensive dissemination of this Manual to all employees and related third parties and shall likewise enjoin their compliance with the provisions hereof. An adequate number of printed copies of this Manual shall be reproduced by Administrative Systems under the supervision of the Human Resources/Legal Division of the Company, with a minimum of at least one (1) hard copy thereof furnished to every department/division.
INSPECTION OF MANUAL
This Manual shall be available for inspection by any stockholder or employee of the Company at reasonable hours on business days subject to such express limitations provided by the Corporation Code and other relevant laws, circulars, rules and regulations.
ADOPTION AND EFFECTIVITY
This Manual was originally adopted by the Board of Directors of the Corporation and made effective on November 15, 2006 under Board Resolution No. 133 series of 2006.
Amendments to the Manual have been effected under Board Resolution Nos. 36, ss. 2007; 121, ss. 2007; and 8, ss. 2008, respectively dated April 26, 2007, November 20, 2007 and January 22, 2008.
In 2010, the Manual has been amended in compliance with SEC Memorandum No, 6, series of 2009, under Board Resolution No. 29 series of 2010 dated March 10, 2010 and Board Resolution No. 57, Series of 2010 dated July 29, 2010.
In 2011, the Manual underwent several amendments as follows: amendment pursuant to a Board Resolution in the meeting held March 15, 2011 for the purpose of compliance with the directives of the SEC Corporation Finance Department in furtherance of SEC Memorandum Circular No. 6, Series of 2009, and the revisions in the provisions on the Charters of the Risk Management Committee and CSR Committee, respectively. (Amended pursuant to Board Resolutions passed during the May 9 and July 13, 2011 Board Meetings)
In 2013, amendments to the Manual pertain to the following: (a) Amendments to the charters of the Operations Committee and (b) the CSR Committee on setting the number of meetings of each committee in a year – once every quarter and no less than twice a year, respectively. (Amended pursuant to Board Resolution Nos. 4 and 5, series of 2013, dated January 30, 2013); (c) Amendment to the Audit and Governance Committee Charter (Amended pursuant to Audit and Governance Committee endorsement dated May 7, 2013 and Board Resolution No. 35, ss 2013 dated July 9, 2013);
In 2014, the Board approved another amendment to a Board Committee Charter which also affects, in turn, the mirror provisions of the Manual on Corporate Governance. Board Resolution No. 3, series of 2014 also approves the amendment to the Operations Committee’s jurisdictional limits (Amended pursuant to Board Resolution No. 3, ss of 2014 dated January 21, 2014)
In 2015, the Board approved the creation of a new Board Committee to handle matters on related party transactions, the Related Party Transactions Board Committee, and approved the Committee’s Charter. The Charter of the Audit and Governance Committee and the Company’s Manual on Corporate Governance are likewise amended to reflect the transfer of RPT oversight functions to RPT Board Committee. (Amended pursuant to Board Resolution dated September 9, 2014)
**NOTE: THE LATEST AMENDMENTS TO THIS MANUAL MADE IN SEPTEMBER 9, 2015 HAS BEEN UNDERLINED FOR EMPHASIS.