Board Committees and Membership

The Board has empowered the Executive Committee to act on its behalf as the main approving body for Company exposures particularly approval/confirmation of credit proposals, investments, disposal of acquired assets and other projects or initiatives to enhance the Company’s operating and service delivery capabilities within the authority delegated by the Board.

The Committee met 50 times in 2014 with Ms. Teresita T. Sy attending 41 meetings, Mr. Roberto E. Lapid, 48 meetings, Mr. Nestor V. Tan, 35 meetings, Mr. Walter C. Wassmer, 49 meetings, and Mr. Antonio N. Cotoco, 41 meetings.

Audit Committee

The Audit Committee provides oversight of the internal and external audit functions and ensures both the independence from management of internal audit activities. It recommends the appointment and removal of external auditors, fixation of audit fee and approval of payment of fees for any other services rendered by the auditors. It oversees the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible and ensures compliance with regulations governing financial reporting. It reviews with management the financial statements before submission to the Board. It approves the annual audit plans of the internal and external auditors and reviews their reports of examination including that of wholly owned subsidiaries focusing on significant findings and their resolutions. It reviews and evaluates together with the external and internal auditors the system of internal and financial controls, governance processes and risk management policies as designed and implemented by senior management for adequacy, effectiveness and improvements. It also reviews the report of the Bangko Sentral ng Pilipinas (BSP) and tracks resolution of findings of BSP, External Auditors or Internal Auditors. Likewise, it monitors and reviews non-loan related cases and items in litigations. It also performs yearly assessment of its function to measure its own performance as well as assessment of the functions under its oversight, namely, Internal Audit, External Audit and Compliance. It has authority to investigate any matter within its Terms of Reference.

In performing its oversight responsibilities, the Audit Committee provides to the Board assurance on the existence of an effective internal control environment that ensures the efficiency and effectiveness of operations, reliability of financial and other management information, adequacy of disclosures and compliance with relevant laws and regulations. For the 2014 financial year, the Audit Committee has reviewed the audited financial statements with management and external auditors and based on the opinion of the External Auditors, the financial statements are fairly presented in conformity with the relevant financial reporting standards in all material aspects. It reports that it has evaluated the effectiveness of the internal controls, risk management systems and governance processes of the Company based on information obtained from the External Auditor, the reasonable assurance provided by the Internal Auditor and additional reports and information requested from Senior Management, and found that these are generally adequate across the BDO Leasing and Finance, Inc. and its subsidiary. The Company’s systems are assessed as generally adequate and its operational risk is deemed moderate.

The Committee held 12 meetings in 2014. Jesse H.T. Andres attended 12 meetings. Both Ma. Leonora V. De Jesus and Jesus G. Tirona attended 11 meetings.

Corporate Governance Committee

The Corporate Governance Committee assists the Board in formulating the policies and overseeing the implementation of the corporate governance practices of the Company and its subsidiaries and affiliates. Annually, it conducts the performance of self-evaluation of the Board of Directors, its committees, executive management and peer evaluation of directors to assess the overall effectiveness of the Board. It also oversees the implementation of the Directors Orientation and Continuing Education Program.

In 2014, it undertook the updating and revisions of the Corporate Governance Manual to align with the requirements of SEC and the ASEAN Corporate Governance Scorecard (ACGS), published the Company’s compliance with OECD principles on Corporate Governance and conducted again the annual performance review of the Board, committees, directors and executive management. On continuing education, 3 separate sessions of the Exclusive Corporate Governance Seminar were conducted by accredited training providers of the SEC attended by members of the Board of Directors and Senior Management of the Company.

The Independent Directors and Non-Executive Directors, chaired by Lead Director Jesus G. Tirona met during the year without the presence of senior management to discuss various matters/issues outside of the regular meetings of the Audit and Risk Management Committees. The results of these sessions were discussed with the Chairperson, the President and concerned senior officers.

The Committee also initiated the enhancements of corporate governance policies of the Company with the implementation of the Related Party Transactions Policy, establishment of the Related Party Transactions Committee, adoption of a formal Dividend Policy and revisions of the Term Limit of Independent Directors, Whistle Blower Policy and Code of Conduct and Business Ethics.

To ensure full disclosure and transparency, the Committee undertook the submission of Annual Corporate Governance Report to the SEC and updated the corporate website.

The Corporate Governance Committee met four (4) times in 2014 with Messrs. Jesus G. Tirona, Jesse H.T. Andres and Ma. Leonora V. De Jesus attending all meetings. Antonio N. Cotoco attended 1 of 1 meeting.
*End of term on April 23, 2014

Nomination Committee

The Nominations Committee leads the process of identifying and recommending candidates for appointment as Directors and for other key positions taking into account the experience, expertise, knowledge and skills of the candidates giving full consideration to succession planning and the leadership needs of the Company. It recommends the composition and chairmanship of the various committees. It reviews the structure, size and composition of the Board, including the balance of skills, knowledge and experience and the independence of the nonexecutive Directors, and recommends changes if necessary. It also reviews all nominations for the appointment, re-appointment, election or re-election of Directors of the Company and members of the various committees considering their performance, commitment and ability to contribute to the Board and makes recommendations to the Board on appointment of new Directors, when necessary.

In 2014, the Committee approved the nominations of the regular directors of the Company and conducted a search and nominated a regular director to replace a resigned director. It also revised its Terms of Reference specifically the process of identifying candidates for appointment as Directors.

The Committee met once in 2014. Messrs. Jesse H.T. Andres and Antonio N. Cotoco and Ms. Ma. Leonora V. De Jesus attended the said lone meeting.

Risk Management Committee

The Risk Management Committee is responsible for the development of the Company’s risk policies, defines the appropriate strategies for identifying, quantifying, managing and controlling risk exposures including preventing and/or minimizing the impact of losses when they occur. It supports the Board in performing its risk oversight functions and reviews the overall risk management philosophy, risk strategy and risk tolerance levels, oversees the implementation and review of the risk management plan on an integrated enterprisewide basis, system of limits of management of discretionary authority delegated by the Board and takes immediate corrective actions when breached. It is also responsible for reassessing the continued relevance, comprehensiveness and effectiveness of the risk management plan, and revises it when needed. The Committee also reviews risk reports that control and monitor risk exposures and limits.

In 2014, the Committee conducted regular discussions on Company’s risk exposures and mitigation of these risks, approved the renewal of risk management policies and limits and newly developed risk management models
and reviewed the performance of the existing risk management models. It also reviewed and updated the Committee’s Terms of Reference in compliance with BSP Circular 749.

The Committee met 4 times in 2014 with Messrs. Nestor V. Tan and Antonio N. Cotoco attending all meetings while Jesse H.T. Andres attended 3 meetings and Roberto E. Lapid attended 1 meeting.

* Appointed April 23, 2014
** End of term April 23, 2014

Related Party Transactions Committee