Corporate Governance

Definitions and Interpretation

The following terms are used in this Manual with the respective meanings ascribed to such terms below, unless the context otherwise requires:

“Corporate Governance” The framework of rules, systems and process in the corporation by which the board of Directors and Management perform their respective duties and responsibilities to the stockholders and where Management aligns its strategy with the board.
“Articles of Incorporation” the Articles of Incorporation of the Company and all amendments thereto;
“Board of Directors” the governing body elected by the stockholders that exercises the corporate powers of a corporation, conducts all business and controls its properties
“Board Committees” One or all of the following Committees composed of Members of the Board of Directors:

  1. Nomination and Compensation Committee
  2. Audit and Governance Committee
  3. Risk Management Committee
  4. Corporate Social Responsibility Committee
  5. Operations Committee
  6. and such other Committees which the Board may constitute from time to time
“BSP” the Bangko Sentral ng Pilipinas;
“By-Laws” the By-Laws of the Company and all amendments thereto;
“President” the President of the Company;
“Chairman” the Chairman of the Board;
“Code” SEC Memorandum Circular No. 6, Series of 2009, otherwise known as the “Revised Code of Corporate Governance”;
“Commission” the Securities and Exchange Commission;
“Company” Energy Development Corporation;
“Corporation Code” Batas Pambansa Blg. 68 otherwise known as the Corporation Code of the Philippines;
“Director” a duly elected member of the Board. Under EDC’s present structure, the following are the classifications of its Directors:

  1. Executive Director - a director who is also the head of a department or unit of the corporation or performs any work related to the Company’s operation as a part of the Company’s executive management team;
  2. Independent Director – a person who, apart from his fees and shareholdings, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director of the Company
  3. Non-Executive Director – a director who is neither the head of a department or unit of the corporation nor performs any work related to its operation. He is neither part of the Company’s executive management team
“Exchange” the Philippine Stock Exchange. It is an organized market place or facility that brings together buyers and sellers, and executes trades of securities and/or commodities;
“Executives” the executives of the Company with the rank of a Manager up to Senior Manager;
“Internal Control” the system established by the Board of Directors and Management for the accomplishment of the Corporation’s objectives, the efficient operation of its business, the reliability of its financial reporting, and faithful compliance with applicable laws, regulations and internal rules;
“Internal Control System” the framework under which internal controls are developed and implemented (alone or in concert with other policies or procedures) to manage and control a particular risk, cost or business activity, or combination of risks or business activities, to which the corporation is exposed;
“Internal Audit” an independent and objective assurance activity designed to add value to, and improve the corporation’s operations, and help it accomplish its objectives by providing a systematic and disciplined approach in the evaluation and improvement of the effectiveness of risk management, control and governance processes;
“Internal Audit Department” a department or unit of the corporation and its consultants, if any, that reports to the Audit and Governance Committee of the Board, provide independent and objective assurance services in order to add value to, and improve the corporation’s operations;
“Internal Auditor” the highest position in the corporation responsible for internal audit activities. If internal audit activities are performed by outside service providers, he is the person responsible for overseeing the service contract, the overall quality of these activities, and follow-up of engagement results.
“Management” the general body given the authority by the Board of Directors to implement the policies it has laid down in the conduct of the business of the corporation.
“Manual” means this Manual on Corporate Governance, as may be amended from time to time;
“Officers” mean the officers of the Company from the rank of Assistant Corporate Secretary up to the Chairman of the Board as defined in the Company’s By-Laws;
“Securities Code” means Republic Act No. 8799 otherwise known as the Securities Regulation Code;
“Senior Management” otherwise known as “Executive Management”, it is generally the team of individuals at the highest level of organizational management who have the day-to-day responsibilities of managing a corporation. They hold specific executive powers conferred onto them with and by authority of the Board of directors and/or the shareholders. These are most often the higher levels of responsibility in the corporation, with a position not lower than Vice-President;
“Year” means a calendar year.

INTERPRETATION:

  1. Unless the context otherwise requires:
    • Words in the singular include the plural, and vice versa; and
    • Words importing any gender include all genders
  2. A reference to a statute or statutory provision shall be construed as a reference to that statute or provision as from time to time amended, modified or re-enacted, any repealed statute or statutory provision which it re-enacts, and any orders, rules or regulations made under the relevant statute or statutory provision.
  3. The headings in this Manual are inserted solely for convenience of reference and shall not limit or affect the interpretation of the provisions hereof.
  4. All doubts or questions that may arise in the interpretation or application of this Code shall be resolved in favor of promoting transparency, accountability and fairness to the stockholders and investors of the corporation.