Board Committees and Memberships

Board Committees

The Board has established nine (9) committees to help in discharging its duties and responsibilities. These committees derive their authority from and report directly to the Board. Their mandates and scope of responsibilities are set forth in their respective charters which are subject to review and update annually or when there are significant changes therein. The number and membership composition of committees could be increased or decreased by the Board as it deems appropriate and consistent with applicable laws or regulations specifically on the majority membership and chairmanship of independent directors in various committees.

The standing committees of the Board are as follows:

Executive Committee

Chairperson: Teresita T. Sy (Non-Executive Director)

Members: Jesus A. Jacinto, Jr. (Executive Director); Nestor V. Tan (Executive Director); Josefina N. Tan (Non-Executive Director); Antonio N. Cotoco; Guia C. Lim; Edmundo S. Soriano

The Executive Committee acts on behalf of the Board as the main approving body for Bank exposures particularly approval/confirmation of credit proposals, investments, and disposal of acquired assets. The Executive Committee shall be composed of at least (3) directors and at least two (2) members of senior management who shall be appointed/designated by the Board of Directors.

Board Audit Committee

Chairman: Jose F. Buenaventura (Independent Director)

Members: Jones M. Castro, Jr. (Independent Director); Vicente S. Perez, Jr. (Independent Director)

Advisor: Corazon S. de la Paz- Bernardo;  Christopher A. Bell-Knight; Jesus A. Jacinto Jr.

The Audit Committee ensures the integrity of financial reporting and provides oversight of the internal and external audit functions. It is vested by the Board with the following authority:

1. Review and approve the audit scope and frequency, and the annual internal audit plan.
2. Provide oversight on the Internal Audit Department and appointment of the Chief Internal Auditor as well as the Bank’s independent external auditor, the terms and conditions of its engagement and removal of which only the independent and nonexecutive directors should decide.
3. Monitor and evaluate the adequacy and effectiveness of the Bank’s internal control system, including financial, operational and compliance controls and risk management annually.
4. Receive and review reports of internal and external auditors, the Chief Compliance Officer, and regulatory agencies, where applicable, and shall address all issues and concerns from auditors expeditiously and effectively by ensuring that management is taking appropriate corrective actions in a timely manner and take appropriate corrective actions in addressing control and compliance issues with regulatory agencies.
5. Review the Bank’s quarterly, semi-annual, and annual financial statements before submission to the Board and ensure that no revisions to the Bank’s financial statements are implemented for reasons other than mandated changes in accounting practices.
6. Review and update the Audit Committee Charter at least annually, investigate any matter within its term of reference and provide mechanisms for reporting of improprieties and malpractices, independent investigation, follow-up action and subsequent resolution of complaints.
7. Ensure that the internal auditors shall have free and full access to all the company’s records, properties and personnel relevant to the internal audit activity. The internal audit activity shall be free from interference in determining the scope of internal auditing examinations, performing work, and communicating results.

Compensation Committee

Chairperson: Gilberto C. Teodoro, Jr. (Independent Director)

Members: Dioscoro I. Ramos (Independent Director); Teresita T. Sy (Non-Executive Director)

The Compensation Committee provides oversight on directors’ compensation and remuneration of senior management and other key personnel, ensuring that compensation scheme is consistent with the Bank’s culture and strategy, effectively aligned with prudent risk taking and commensurate with corporate and individual performance. It also ensures consistency of the compensation policies and practices across the Group.
 
The Compensation Committee shall be composed of at least four (4) members of the Board of Directors, one (1) of whom should be an independent director. The Chairman of the Committee shall be the Independent Director.

Corporate Governance Committee

Chairman: Gilberto C. Teodoro, Jr. (Independent Director)

Members: Jones M. Castro, Jr. (Independent Director); Vicente S. Perez, Jr. (Independent Director)

The Corporate Governance Committee is primarily tasked to assist the Board in formulating the policies and overseeing the implementation of the corporate governance practices of the Bank as well as its subsidiaries and affiliates. Annually, it also conducts the performance self-evaluation of the Board of Directors, its committees, executive management and also peer evaluation of directors using the Revised Board of Directors and Peer Evaluation Survey forms. It also oversees the implementation of the Directors Orientation and Continuing Education Policy.
 
The Committee shall be composed of at least three (3) Directors, all of whom shall be independent directors. The Committee Members shall serve for a term of one (1) year from date of appointment or re-appointment unless sooner resigned or replaced. The Chairman of the Committee shall be one of the independent directors not concurrently the Chairman of either the Audit Committee or Risk Management Committee.

Nominations Committee

Chairman: Vicente S. Perez, Jr. (Independent Director)

Members: Jose F. Buenaventura (Independent Director); and Gilberto C. Teodoro, Jr. (Independent Director)

The Nomination Committee leads the process for identifying and makes recommendations to the Board on, candidates for appointment as Directors of the bank as well as those other positions requiring appointment by the Board of Directors, giving full consideration to succession planning and the leadership needs of the Group. In particular, this process includes the profiling of the skills and competencies of the currently serving directors, the gaps in skills and competencies identified and the search for candidates who are aligned with the Bank’s directions to fill the gaps. It also makes recommendations to the Board on the composition and chairmanship of the various committees. It keeps under review the structure, size and composition of the Board, including the balance of skills, knowledge and experience and the independence of the non-executive Directors, and makes recommendations to the Board with regard to any changes.

The Nominations Committee shall be composed of at least three (3) members, all of whom shall be independent directors. The Chairman shall be one (1) of the Independent Directors.

Risk Management Committee

Chairman: Jones M. Castro Jr. (Independent Director)

Members: Nestor V. Tan (Executive Director); Dioscoro I. Ramos (Independent Director)

Advisor: Christopher A. Bell-Knight

The Risk Management Committee is responsible for the development of the Bank’s risk policies, sets the risk appetite and 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 oversees the implementation and review of the risk management plan on an integrated enterprise-wide basis, system of limits of management’s discretionary authority delegated by the Board and takes immediate corrective actions when breached. It is also responsible to reassess the continued relevance, comprehensiveness and effectiveness of the risk management plan and revise it when needed. It works with the Audit Committee in certifying in the Annual Report the adequacy of the Bank’s internal control and risk management systems.

The Risk Management Committee shall be composed of at least three (3) members of the Board of Directors, the majority of whom should be independent directors, including the Chairperson. The Chairperson should not be the Chairperson of the Board or of any other committee. The members of the Risk Management Committee shall possess a range of expertise, as well as, adequate knowledge on risk management issues and practices to be able to develop appropriate strategies for preventing losses and minimizing the impact of losses when they occur. It shall have access to independent experts to assist it in discharging its responsibilities.

Trust Committee

Chairperson: Dioscoro I. Ramos (Independent Director)

Members: Christopher A. Bell-Knight (Non-Executive Director); Josefina N. Tan (Non-Executive Director); Nestor V. Tan (Executive Director); Rafael G. Ayuste, Jr.

The Trust Committee reviews and approves transactions between trust and/or fiduciary accounts, to accept and close trust and other fiduciary accounts, and to approve the investment, reinvestment and disposition of funds or property. It evaluates trust and other fiduciary accounts at least once a year. In addition, it also reviews the Trust and Investment Group’s overall performance, profile of funds and accountabilities under its management, industry position, and the risk management reports. It also approves offering of new products and services, establishment and renewal of lines and limits with financial institutions, and investment outlets and counterparties.
 
The Trust Committee shall consist of at least five (5) members including the (1) President or any Senior Officer of the Bank and (2) Trust Officer. The remaining committee members, including the Chairperson, may be any of the following: (1) Non-executive directors or independent directors who are both not part of the Audit Committee; or (2) those considered as qualified “independent professionals”, provided further, that, in case of more than five (5) Trust Committee membership, majority shall be composed of qualified non-executive members.

Information Technology Steering Committee

Chairman: George T. Barcelon (Independent Director)

Members: Nestor V. Tan (Executive Director); and Frederic Mark S. Gomez

The IT Steering Committee provides oversight and governance over the Bank’s IT functions, including approvals of information technology-related policies and practices of the Bank and applicable guidelines. It informs the Board of both internal and external IT-related developments and activities, potential challenges and risks, progress vs. strategic objectives. It approves and endorses to the Board IT-related best practices, strategic plans, policies and procedures.
 
The ITSC, as a minimum, will have as members a non-executive Board director who oversees the institution’s IT function, the head of the IT Group, and the President. The head of control groups should participate in ITSC meetings in advisory capacity only.

Related Party Transactions Committee

Chairman: Gilberto C. Teodoro, Jr. (Independent Director)

Members: Jones M. Castro, Jr. (Independent Director); Jose F. Buenaventura (Independent Director)

Advisor: Jesus A. Jacinto, Jr.

The Related Party Transactions Committee (RPTC) assists the Board in its oversight of the conduct of all Related Party Transactions (RPTs) to protect the interests of the Bank and its stakeholders. It ensures proper disclosure of all approved RPTs in accordance with applicable legal and regulatory requirements and confirmation by majority vote on the Annual Stockholders’ meeting the Bank’s significant transactions with related parties.

The Committee shall be composed of at least three (3) members who are all Independent Directors and an Adviser. The Chairman of the committee is one (1) of the Independent Directors.

Terms of Reference