Board Committees

Security Bank Corporation is committed to the practice of transparency and good corporate governance principles. The Group is in full compliance with the provisions of the Board-approved Code of Corporate Governance and ensures that the bank consistently conducts its affairs with a high degree of integrity.

The Board of Directors

The Board is responsible for the long-term success of the Bank and its sustained competitiveness and profitability. Compliance with the principles of good governance starts with the Board of Directors. The right strategy, executed well, translates to the enhancement of long term shareholder value. The Board oversees management in the development and implementation of strategies.

Board Charter 2017

The Board Committees

To oversee the implementation and execution of the bank’s strategies, Security Bank Corporation has 10 Board committees.

  • Executive Committee
  • Audit Committee
  • Risk Oversight Committee
  • Corporate Governance Committee
  • Restructuring Committee
  • Trust Committee
  • Finance Committee
  • Related Party Transactions Committee
  • Nominations and Remuneration Committee
  • Transformation Committee

The Board of Directors, in its meeting held on April 24, 2018 approved the organization and appointment of the Board Committee Members.

Executive Committee

– Highest credit decision-making body in the Unibank; reviews proposals and transactions related to credit and the sale of ROPA; works closely with Risk Oversight Committee in managing the overall credit risk of the Unibank.

Composition
Chairman: Rafael F. Simpao Jr.
Vice Chairman Alfonso L. Salcedo, Jr.
Members: Philip T. Ang (non-voting)
Cirilo P. Noel
Alberto S. Villarosa
Alternate: Anastasia Y. Dy
Full Year 2017 Attendance
No. of Meetings Attended %
Chairman Rafael F. Simpao, Jr. 47 90%
Vice Chairman Alfonso L. Salcedo, Jr. 51 98%
Members Philip T. Ang 34 65%
Paul Y. Ung 22 42%
Alberto S. Villarosa 38 73%
Anastasia Y. Dy 6 100%
Number of meetings in 2017: 52
Audit Committee

– Responsible for review of systems of internal control and management of risks, financial reporting process, internal and external audit process, and compliance with laws and regulations.

Chairman James JK Hung (Independent)
Vice Chairman Joseph R. Higdon (Independent)
Member Cirilo P. Noel
2017 Composition and Attendance
No. of Meetings Attended %
Chairman James JK Hung 5 86%
Members Joseph R. Higdon 7 100%
Rafael F. Simpao Jr. 5 100%
Paul Y. Ung*
*Appointed as member effective September 2017 vice Mr. RF Simpao.
Number of Meetings in 2017: 7
Risk Oversight Committee

– Responsible for the development and oversight of the Unibank’s risk management program.

Composition
Chairman Napoleon L. Nazareno (Independent)
Vice Chairman Cirilo P. Noel
Members James JK Hung (Independent)
Ramon R, Jimenez(Independent)
Jikyeong Kang (Independent)
Rafael F. Simpao, Jr.
Takahiro Onishi
2017 Composition and Attendance
No. of Meetings Attended %
Chairman Napoleon L. Nazareno* 5 100%
Vice Chairman Paul Y. Ung 11 85%
Members Philip T. Ang* 5 85%
Ramon R. Jimenez, Jr.* 5 100%
James JK Hung 13 100%
Takahiro Onishi 12 92%
Rafael F. Simpao, Jr. 12 92%
Alfonso L. Salcedo, Jr.** 8 100%
Anastasia Y. Dy** 8 100%
Alberto S. Villarosa** 8 100%
* Appointed as member on September 2017
** Replaced as member on September 2017
Number of meetings in 2017: 13
Corporate Governance Committee

– Responsible for oversight over the Compliance function.

Composition
Chairman: Jikyeong Kang (Independent)
Vice Chairman: Napoleon L. Nazareno (Independent)
Members: Joseph R. Higdon (Independent)
Atsushi Murakami
Anastasia Y. Dy
2017 Composition and Attendance
No. of Meetings Attended %
Chairperson Jikyeong Kang* 4 100%
Vice Chairman Napoleon L. Nazareno* 4 100%
Members Atsushi Murakami 3 75%
Joseph R. Higdon 11 100%
Alberto S. Villarosa 11 100%
Philip T. Ang** 7 100%
Takahiro Onishi** 7 100%
Paul Y. Ung** 5 71%
*Appointed as member on September 2017
**Replaced as member on September 2017
Number of meetings in 2017: 11
Restructuring Committee

– Approves remedial and/or recovery strategies of the Bank for identified problem loan accounts.

Composition
Chairman Rafael F. Simpao Jr.
Members Alfonso L. Salcedo Jr.
Alberto S. Villarosa
2017 Composition and Attendance
No. of Meetings Attended %
Chairman Rafael F. Simpao, Jr 2 100%
Members Alfonso L. Salcedo, Jr. 1 50%
Alberto S. Villarosa 2 100%
Number of meetings in 2017: 2
Trust Committee

– Ensures that funds and properties held in trust or in any fiduciary capacity shall be administered with the skill, care, prudence and diligence necessary under the circumstances then prevailing that a prudent man, acting in like capacity and familiar matters, would exercise in the conduct of an enterprise of like character and with similar aims.

Composition
Chairman Diana P. Aguilar
Vice Chairman Ramon R. Jimenez, Jr. (Independent)
Members Alfonso L. Salcedo, Jr.
Alberto S. Villarosa
Maricar R. Lopez (OIC-Trust Officer)
2017 Composition and Attendance
No. of Meetings Attended %
Chairman Diana P. Aguilar * 1 100%
Members Jikyeong Kang* 1 100%
Ramon R. Jimenez, Jr.* 1 100%
Alfonso L. Salcedo, Jr. 5 100%
Alberto S. Villarosa** 4 100%
Paul Y. Ung** 2 50%
Philip T. Ang** 3 75%
Ma. Concepcion P. Cruz 5 100%
*Appointed as member on September 2017
**Replaced as member on September 2017
Number of Meetings in 2017: 5
Related Party Transaction Committee
Composition
Chairman Ramon R. Jimenez (Independent)
Vice Chairman Philip T. Ang (Independent)
Member Diana P. Aguilar
2017 Composition and Attendance
No. of Meetings Attended %
Chairman Ramon R. Jimenez, Jr.* 4 100%
Members Diana P. Aguilar* 3 75%
Jikyeong Kang* 4 100%
James JK Hung** 7 100%
Philip T. Ang** 7 100%
Alberto S. Villarosa** 7 100%
*Appointed as member on September 2017
**Replaced as member on September 2017
Number of meetings in 2017: 11
Finance Committee

– Responsible in the oversight of the financial management of the group, including capital and liquidity management, reviewing financial performance ensuring that it is compliance with regulatory requirements.

Composition
Chairman Joselito E. Mape
Members Anastasia Y. Dy
Raul Martin A. Pedro
Alfonso L. Salcedo Jr.
Alberto S. Villarosa
2017 Composition and Attendance
No. of Meetings Attended %
Joselito E. Mape 8 100%
Anastasia Y. Dy 4 50%
Alfonso L. Salcedo Jr. 7 88%
Alberto S. Villarosa 8 100%
Raul Martin A. Pedro 6 75%
Number of meetings in 2017: 8
Nominations and Renumerations Committee

– Oversight over Board nominees and other appointments requiring Board approval, as well as their remuneration commensurate with corporate and individual performance.

Composition
Chairman: Philip T. Ang (Independent)
Vice Chairman: James JK Hung (Independent)
Members: Joseph R. Higdon (Independent)
Anastasia Y. Dy
Alberto S. Villarosa
2017 Composition and Attendance
Chairman James JK Hung 10 91%
Members Philip T. Ang 11 100%
Joseph R. Higdon 11 100%
Paul Y. Ung 6 55%
Alberto S. Villarosa 11 100%
Number of meetings in 2017 : 11

Please click here to download Security Bank’s Nominations and Voting Process.

Transformation Committee
Composition
Chairman Anastasia Y. Dy
Members Jikyeong Kang
Alberto S. Villarosa
Cirilo P. Noel
Tina M. Stockdale (Chief Transformation Officer)

Further details on Security Bank’s Corporate Governance please look below for some of our relevant documentation.

Board Committee Charters

Audit Committee Charter
  1. PURPOSE
    The Audit Committee (Committee) is appointed by the Board of Directors (Board) of Security Bank Corporation for the following purpose:

    1. To monitor and evaluate the adequacy, effectiveness and efficiency of the following:
    2. Integrity of the Bank’s financial statements;
    3. Bank’s internal control system including financial reporting process, information technology, governance and management of risks;
    4. The Bank’s process in monitoring compliance with applicable laws, rules and regulations, internal policies and its own code of business conduct; and
    5. Conduct of operations and safeguarding and effective use of assets.
    6. Perform oversight function over the following:
      1. Internal audit function and independence of auditors;
      2. Internal audit service provider (if any) and its independence; and
      3. External audit function and external auditor’s qualifications, independence and performance.
    7. Fulfilment of other responsibilities included in this document (Charter).
  2. MEMBERSHIP
    1. The Committee shall be composed of at least three (3) members of the Board who are non-executive directors, two (2) of whom shall be independent directors, including the Chairman, preferably with accounting, auditing and finance expertise or experience.
    2. The Chief Executive Officer, Chief Financial Officer, and/or Treasurer, or officers holding equivalent positions shall not be appointed as members of the Committee.
    3. All members including the Chairman shall be appointed by the Board from among its members for one (1) year term and can also be replaced or removed by the Board anytime.
    4. The Chairman should not be the chairman of the Board or of any other committees.
    5. Each Committee member should have an understanding of the detailed responsibilities of committee membership.
    6. The Secretary of the Committee shall be the Chief Audit Executive or any person appointed by the Committee. The Secretary shall be responsible in managing the activities of the Committee particularly in coordinating the Committee meetings, preparing the minutes of meetings and safekeeping of records of the Committee.
  3. STRUCTURE
    1. Regular Audit Committee Meeting
      1. The Committee shall hold meetings of not less than four (4) times a year. Special meetings may be convened as required. The CAE or external auditor may initiate a separate meeting or executive sessions with the Committee.
      2. The meetings can be held at such date, time and place the Committee considers appropriate.
      3. A quorum for any meeting will be two (2) members.
      4. Resolutions at a meeting of the Committee shall be passed by a majority of votes of the members participating in such meetings.
      5. The Committee may invite members of management, auditors or others to attend meetings and provide pertinent information as necessary.
      6. The meeting can be held in person, or via tele or video conferencing.
      7. Meeting agendas will be prepared by the Chief Audit Executive or the appointed Committee Secretary and provided in advance to all members, along with appropriate briefing materials.
      8. Minutes of meeting will be prepared.
    2. Non-Executive Directors (NED) Meeting with the Audit Committee
      1. The Audit Committee meets with the Board at least every quarter without the presence of the Chief Executive Officer (CEO) or other senior management.
      2. The non-executive Directors (NED), should have separate periodic meetings with the external auditor and head of the internal audit, compliance and risk functions, without any executive directors present to ensure that proper checks and balances are in place within the bank. The meeting should be chaired by the lead independent director.
    3. Authority
      The Committee has explicit authority to conduct or authorize investigations within its terms of reference. It is empowered by the Board to:

      1. Have resources and authority appropriate to discharge its responsibilities as defined in this Charter, including the authority to engage external auditors for special audits, reviews and other procedures and to obtain advice from special council and other experts or consultants to assist in any investigations without the need for Board approval;
      2. Have full access to properties, records and information of the Bank;
      3. Have full discretion to invite any director, executive officer, employees or external parties/counsel to attend its meetings and seek any information it requires;
      4. Receive regularly from Management on information on risk exposure and risk management activities;
      5. Pre-approve all auditing and permitted non-audit services to be performed by external auditing firms;
      6. Resolve any disagreements between management and the internal and external auditors regarding audit issues and/or financial reporting;
      7. Delegate authority to the CAE and other sub-committees;
      8. Enter into service level agreements with the Audit Committees of the Bank’s subsidiaries and affiliates with regards to the shared services of the Internal Audit function and other dependencies on the activities of the Audit Committee of the Bank; and
      9. Commission an assessment team outside of the organization to conduct an independent quality assurance review of the internal audit function at least every five (5) years.
  4. OPERATIONS
    The Committee shall have the following duties and responsibilities:

    1. General Procedures
      1. Review and reassess the adequacy of the Committee charter at least annually and request for re-approval of the Board the revised Charter, if any. Ensure appropriate disclosures as may be required by law or regulations arising from such revisions
      2. Perform an annual self-evaluation assessing the performance of the Committee, its Chairman and members, in relation to its/his purposes and duties and responsibilities set forth in this Charter.
      3. Timely escalate to the Board any Committee recommendations or decisions requiring ratification or approval by the Board as stated in this Charter.
      4. Submit an annual report to the Board with regards to the overall assessment of the Bank’s internal control system.
    2. Financial Statements
      1. Review and approve for endorsement the interim and annual audited financial statements and reports prior to submission to the Board, with particular focus on the following matters:
        1. Significant accounting and reporting issues;
        2. Any change/s in accounting policies and practices;
        3. Major judgemental areas;
        4. Significant adjustments resulting from the audit;
        5. Going concern assumptions;
        6. Compliance with accounting standards/financial reporting regulation;
        7. with tax, legal and regulatory requirements; and
        8. Unusual or complex transactions including all related party transactions.
      2. Discuss the external auditor’s attestation and report on management’s internal control with regards to the following:
        1. All critical accounting principles and practices;
        2. All alternative treatments of financial information within generally accepted accounting principles (GAAP) and the International Accounting Standards (IAS) that have been discussed with the management and its implications; and
        3. Other material written communications between the external auditor and management including, but not limited to, the management letter, audit adjustments and other schedules.
    3. Internal Control
      1. Review and monitor the adequacy and effectiveness of the internal control system, including information technology, security and control.
      2. Ensure that there is an annual review of the effectiveness of the Bank’s internal controls, including financial, operational and compliance controls, and risk management, through the review of reports of the external and internal audit.
      3. Through reports received from the Internal Audit function, ensure that management is taking necessary corrective actions in a timely manner to address the weaknesses, non-compliance with policies, laws and regulations including reporting of significant matters to the Board.
    4. Internal Audit and Internal Audit Service Provider
      1. Periodically review and approve the Internal Audit Charter.
      2. Review and concur in the appointment, re-appointment, replacement, or dismissal of CAE and key internal auditors. For purposes of this Charter, key internal auditors refer to the Department Heads.
      3. The CAE reports functionally to the Audit Committee and administratively to the Executive Director.
      4. Report to the Board the annual performance appraisal of the CAE and recommend for approval of the Board the annual remuneration of the CAE and key internal auditors.
      5. Ensure that the internal auditors has sufficient knowledge, skills, experience and professional certifications to effectively discharge their functions.
      6. Review and ensure that budget, resources, plan and activities and organizational structure will support the internal audit function.
      7. Select and oversee the performance of the internal audit service provider.
      8. Ensure that the internal audit service provider (if any) has adequate manpower resources with sufficient qualifications and skills necessary to accomplish the internal audit activities.
      9. Ensure that the internal and external auditors are independent and that both auditors are given unrestricted access to all records, properties and personnel to enable them to perform their respective audit functions.
      10. Monitor and review the effectiveness of performance of internal audit function and internal audit service provider, if any, including its independence and reporting relationships.
      11. Ensure the independence of the internal audit service provider by clearly establishing and identifying reporting line of the internal auditor and to enable him to properly fulfil his duties and responsibilities and that he is free from interference by outside parties.
      12. Review the effectiveness of the internal audit function, including compliance with the standards such as Internal Auditor’s International Standards for the Professional Practice of Internal Auditing (ISPPIA), Bank’s Code of Ethics, best practices and other supplemental standards issued by the regulatory authorities/government agencies, as well as with relevant Code of Ethics.
      13. Review and approve the annual internal audit risk assessment and plan to ensure its conformity with the objectives of the Bank. The plan which is based on robust risk assessment shall include the audit scope, frequency, resources and budget necessary to implement it. Any significant change to the audit plan shall be likewise approved by the Committee.
      14. Review periodically the implementation and accomplishment of the approved audit plan.
      15. Review final audit reports and ensure that management is taking necessary corrective actions in a timely manner to address the weaknesses, non-compliance with policies, laws and regulations and other issues identified by the auditors.
      16. Ensure that internal auditors have free and full access to all the Bank’s records, properties and personnel relevant to their audit including any interference in establishing the audit scope, conducting the audit work and communicating the audit results.
      17. Review discoveries of fraud and violations of laws and regulations as raised by the internal audit function.
    5. External Audit
      1. Review the appointment, re-appointment or discharge of auditors, as well as audit fees, prior to endorsement to BOD for approval.
      2. Select and oversee the performance of external auditor. Ensure that they have free and full access to all Bank’s records, properties and personnel to enable them to fulfil their audit function.
      3. Oversee the resolution of disagreements, if any, between management and the external auditors.
      4. Review the performance of the external auditors at least annually including technical competence, integrity, independence, objectivity and overall effectiveness of the external audit process.
      5. Discuss with the external auditors the nature, proposed audit scope, approach and expenses of the audit, including coordination of audit effort with internal audit.
      6. Ensure the rotation of the lead audit partner every five (5) years.
      7. Evaluate and determine the non-audit work, if any, of the External Auditor, and periodically reviews the non-audit fees paid to the External Auditor in relation to the total fees paid to him and to the bank’s overall consultancy expenses. The committee should disallow any non-audit work that will conflict with his duties as an External Auditor or may pose threat to his independence. The non-audit work, if allowed, should be disclosed in the bank’s Annual Report and Annual Corporate Governance Report.
    6. Other Responsibilities
      1. Institute and oversee special investigations as needed.
      2. Establish and maintain mechanisms by which officers and staff shall, in confidence, raise concerns about possible improprieties or malpractices in matters of financial reporting, internal control, auditing or other issues to persons or entities that have the power to take corrective action. It shall ensure that arrangements are in place for the independent investigation, appropriate follow-up action, and subsequent resolution of complaints.
      3. Perform other oversight functions as requested by the Board.
  5. REPORTING PROCESS
    1. Report to the Board about committee activities and issues in relation to the quality or integrity of the Bank’s financial statements as reported by the internal and external auditors and engagement of independent external auditors.
    2. Report to the board of directors the status of accomplishments of the outsourced internal audit activities (if any) including significant findings noted during the conduct of the internal audit.
    3. The Committee shall also provide an avenue of communication between the management, the external and internal auditors and the Board.
Corporate Governance Committee Charter
  1. Purpose
    The Corporate Governance Committee shall assist the Board of Directors in fulfilling its corporate governance responsibilities. The Committee shall be responsible for ensuring the Board’s effectiveness and due observance of corporate governance principles and guidelines.
  2. Committee Members
    The Corporate Governance Committee shall be composed of at least three (3) members of the board of directors who shall all be non-executive directors, majority of whom shall be independent directors, including the chairperson.The members of the Committee shall be appointed and replaced by the Board. The Board shall designate the Chairman of the Committee, who shall be an independent director.
  3. Procedures
    The Corporate Governance Committee shall meet at least 4 times on an annual basis. The Committee may invite Executive Directors or management to participate in meetings from time to time.A quorum shall comprise a majority of members.An agenda shall be prepared for each meeting and distributed in advance of the meeting. Minutes of the meeting shall be prepared and circulated to all directors after each meeting. The Committee shall provide a summary of the actions taken at each Committee meeting, which shall be presented to the Board at the next Board meeting.The Bank’s Corporate Secretary will provide assistance to the Committee in the preparation of the Agenda and Minutes of Meeting.
  4. Authority and Responsibilities
    The Corporate Governance Committee shall:

    1. Be responsible for ensuring the Board’s effectiveness and due observance of corporate governance principles and guidelines
    2. Oversee the periodic performance evaluation of the Board and its committees.
    3. Decide on the manner by which the Board’s performance may be evaluated, with the objective performance criteria approved by the Board. Performance indicators shall address how the Board has enhanced long-term shareholders’ value.
    4. Oversee the management of the Bank’s compliance function, ensuring that the Bank complies to all applicable laws, regulations, codes of conduct and standards of good practice
    5. Recommend continuing education program for directors
    6. Adopt internal guidelines that may be required in the exercise of its functions, including guidelines that address the competing time commitments for directors with multiple board seats.
  5. Annual Performance Evaluation and Charter Review
    The Corporate Governance Committee shall evaluate its performance as a Committee on an annual basis.The Committee shall likewise review and re-assess, at least annually, the adequacy of this Charter and recommend to the Board of Directors for approval any amendments to this Charter.
Executive Committee Charter
  1. Purpose
    The Executive Committee is the highest credit decision-making body in the Unibank. As mandated by the Board of Directors, its main purpose is to review and approve proposals and transactions related to credit and to work closely with the Risk Management Committee (RMC) in managing the overall credit risk of the Unibank through its membership in the RMC.
  2. Authority
    In the interim period between meetings of the Board of Directors, the Executive Committee shall have, and may exercise, the authority of the Board of Directors as permitted by law.
  3. Membership
    The Executive Committee will be composed of 5 directors. An independent director may be designated as a member of the Executive Committee, provided he shall have no voting right. The Board of Directors shall designate from among themselves such alternate members as may be necessary to insure a quorum of the Executive Committee at all times. (amended May 2013).The members of the Executive Committee will be nominated and appointed by the Board for one-year terms. The Board will designate one member of the Committee to serve as Chairperson. The members of the Executive Committee will serve until their resignation, retirement or removal by the Board or until successors or replacements shall have been appointed. The composition and functions of the Executive Committee will be reviewed by the Board on an annual basis.
  4. Quorum
    A majority shall constitute a quorum, but an affirmative vote of a majority of the whole committee shall be necessary in every case.An alternate may be allowed to attend Executive Committee meetings but shall have no voting right, except when attending as a regular member of the Committee. For this purpose,alternate members sitting as regular committee members are entitled to one vote, and the independent director shall not be entitled to vote (amended May 2013).
  5. Meetings
    The Executive Committee will meet in person every Tuesday except for the last Tuesday of the month, or as often as it determines. The Chairperson or a majority of the members of the Executive Committee may call a special meeting of the Executive Committee.
  6. Procedures
    The Executive Committee will establish its own rules of procedure consistent with the mandate given to it by the Board. Written minutes of meetings will be maintained in the records of the Unibank.
  7. Responsibilities
    The Executive Committee is responsible for the following actions:

    • Approving or rejecting, recommending or ratifying credit proposals for new facilities and credit renewals; and
    • Approving the sale of ROPOA as recommended by the Acquired Assets Committee.
Nomination and Remuneration Committee Charter
  1. Purpose
    The Nominations and Remuneration Committee shall review and evaluate the qualifications of all persons nominated to the Board and other appointments that require Board approval. It shall assess the effectiveness of the Board’s processes and procedures in the election and replacement of directors.It shall likewise establish a formal and transparent procedure for developing policy on remuneration of directors and officers to ensure that compensation is consistent with the Bank’s culture, strategy and the business environment on which the Bank operates.
  2. Committee Members
    The Nominations and Remuneration Committee shall be composed of at least three (3) members of the board of directors who shall all be non-executive directors, majority of whom shall be independent directors, including the chairperson.The members of the Committee shall be appointed and replaced by the Board. The Board shall designate the Chairman of the Committee, who shall be an independent director.
  3. Procedures
    The Nominations and Remuneration Committee shall meet at least 4 times on an annual basis. The Committee may invite Executive Directors or management to participate in meetings from time to time.A quorum shall comprise a majority of members.An agenda shall be prepared for each meeting and distributed in advance of the meeting. Minutes of the meeting shall be prepared and circulated to all directors after each meeting. The Committee shall provide a summary of the actions taken at each Committee meeting, which shall be presented to the Board at the next Board meeting.The Bank’s Corporate Secretary will provide assistance to the Committee in the preparation of the Agenda and Minutes of Meeting.
  4. Authority and Responsibilities
    The Nominations and Remuneration Committee shall be responsible for:

    1. Defining the general profile of the Board members that the Bank may need, ensuring that the nominees have the appropriate knowledge, competencies and expertise that will complement the existing skills of the Board. Moreover, it shall endeavor that board diversity is maintained such that difference in board’s background, age, ethnicity, gender and other qualities are part of the criteria in the selection of board members.
    2. Determining the nomination, election and replacement process for the Bank’s directors;
    3. Review and evaluation of the qualifications of all persons nominated to the Board, as well as those nominated to other positions requiring appointment by the Board of Directors,
    4. Oversee the periodic performance evaluation of Board members and executive management, deciding whether or not a director is able to and has been adequately carrying out his/her duties as director based on its own assessment or the assessment of external facilitators, bearing in mind the director’s contribution and performance (e.g., competence, candor, attendance, preparedness and participation);
    5. Recommend assignment to Board committees, succession plan for Board members and senior officers,
    6. Recommend a formal and transparent procedure for developing a policy on remuneration of directors and officers that is consistent with the Corporation’s culture, strategy, the business environment on which it operates, and commensurate with corporate and individual performance. And shall work closely with the Bank’s Risk Oversight Committee in evaluating the incentives created by the remuneration system.
    7. Oversee the management of the Personnel Committee.
  5. Annual Performance Evaluation and Charter Review
    The Corporate Governance Committee shall evaluate its performance as a Committee on an annual basis.The Committee shall likewise review and re-assess, at least annually, the adequacy of this Charter and recommend to the Board of Directors for approval any amendments to this Charter.
Restructuring Committee Charter
  1. Authority
    The Board of Directors created the Restructuring Committee on April 4, 1989. It delegated to the Restructuring Committee the authority to approve remedial and/or recovery strategies of the Bank for identified problem loan accounts.
  2. Membership
    The Restructuring Committee shall be composed of 3 members, all appointed by the Board. The Board will designate one member of the Committee to serve as Chairperson. The members shall serve until their resignation, retirement, or removal by the Board or until their successors have been appointed. The composition of the Restructuring Committee shall be viewed by the Board on an annual basis.
  3. Meetings
    The Restructuring Committee will meet every Tuesday unless there are no proposals or items to be acted upon or unless it is deemed that a special meeting will have to be convened. The Chairperson or a majority of the members of the Restructuring Committee may call a special meeting. Two members will make up a quorum.
  4. Procedures
    The Restructuring Committee will establish its own rules of procedure, which will be consistent with the By-Laws of the Unibank and its charter.Before elevation to the Restructuring Committee, all remedial/recovery proposals should have already been deliberated and approved by the Credit Committee or the designated individual approving authority. These should be forwarded to the Credit Division, which will act as the secretariat for the Restructuring Committee. The proposals will then be distributed to all of the Restructuring Committee members prior to the scheduled meeting. The secretariat will prepare the minutes of each meeting for the members’ approval and maintain these as part of the records of the Unibank.All approvals of the Restructuring Committee will then be elevated to the Board for notation and confirmation, except for proposals which under existing rules and regulations require Board approval.
  5. Responsibilities
    The Restructuring Committee’s major functions shall be following:

    1. Approval of remedial management recovery strategies such as but not limited to restructuring and dacion-en-pago proposals for identified problem loan accounts, within its authority as established by the Board of Directors;
    2. Ensuring that approved action plans represent the best interest of the Unibank;
    3. Other functions consistent with its charter as well as the Unibank’s Articles of Incorporation and By-Laws.
Risk Oversight Committee Charter
  1. Purpose
    The Risk Oversight Committee (ROC) shall be responsible for the development and oversight of the risk management program of the Bank and its Subsidiaries.
  2. Committee Membership
    The Risk Oversight Committee shall be composed of members consisting of:

    1. At least three (3) members, majority of whom should be independent directors, including the chairman;
    2. The Chairman who should not be the Chairman of the Board or of any other committee;
    3. At least one member of the committee who must have relevant knowledge and experience on risk and risk management;

    The Committee members will be designated by the Board of Directors.
    Rules

    • The Risk Oversight Committee shall meet quarterly, with authority to convene additional meetings as circumstances require, and to invite members of management of the Bank and its Subsidiaries to participate from time to time.
    • The majority of the members of the Committee shall constitute a quorum.
    • An agenda will be prepared for each meeting and distributed in advance of the meeting along with appropriate briefing materials
    • Minutes of the meeting shall be prepared and circulated to all members after each meeting
    • The Risk Oversight Committee will report to the Board the matters discussed at each of its meeting, including all actions taken at the meeting.
    • Risk Management Group will be responsible for preparing and disseminating the agenda and minutes of the meeting.
  3. Authority and Responsibilities
    For the risk oversight function, the Risk Oversight Committee shall:

    1. Develop a formal enterprise risk management plan which contains the following elements:
      1. Common language or register of risks
      2. Well-defined risk management goals, objectives and oversight
      3. Uniform processes of assessing risks and developing strategies to manage prioritized risks
      4. Designing and implementing risk management strategies
      5. Continuing assessments to improve risk strategies, processes and measures
    2. Oversee the implementation of the enterprise risk management plan through a Risk Oversight Committee. The ROC conducts regular discussions on the Bank and its Subsidiaries’ prioritized and residual risk exposures based on regular risk management reports and assesses how the concerned units or offices are addressing and managing these risks
    3. Evaluate the risk management plan to ensure its continued relevance, comprehensiveness and effectiveness. The ROC revisits defined risk management strategies, looks for emerging or changing material exposures and stays abreast of significant developments that seriously impact the likelihood of harm or loss.
    4. Advise the Board on its risk appetite levels and risk tolerance limits
    5. Review at least annually the Bank and its Subsidiaries’ risk appetite levels and risk tolerance limits based on changes and developments in the business, the regulatory framework, the external economic and business environment, and when major events occur that are considered to have major impacts on the Bank and its Subsidiaries.
    6. Assess the probability of each identified risk becoming a reality and estimate its possible significant financial impact and likelihood of occurrence. Priority areas of concern are those risks that are the most likely to occur and to impact the performance and stability of the Bank and its Subsidiaries and its stakeholders.
    7. Provide oversight over management’s activities in managing credit, market, liquidity, operational, legal and other risk exposures of the Bank and its Subsidiaries. This function includes regularly receiving information on risk exposures and risk management activities from management.
    8. Report to the Board on a regular basis, or as deemed necessary, the Bank and its Subsidiaries’ material risk exposures, the actions taken to reduce the risks and recommend further action or plans as necessary.
    9. Review and when necessary, refine its Charter annually to ensure relevance and adequacy.

    For Capital Management matters, the Risk Oversight Committee shall:

    • Approve the recovery plan and the annual internal capital target levels as documented in the ICAAP;
    • Approve policies and where applicable, implementing guidelines as recommended for capital oversight purposes;
    • Ensure the proper and consistent implementation of any Board approved Capital plan.
    • Report to the Board of Directors of the Bank and its Subsidiaries, the overall capital levels of the Bank and its Subsidiaries, and endorse recommendations of any plans and actions to improve the capital structure of the Bank and its Subsidiaries.

    For Outsourcing matters, the Risk Oversight Committee shall:

    • Oversee the Outsourcing Committee in its role of managing and reviewing outsourcing contracts with third party providers;
    • Approve policies recommended by the Outsourcing Committee1 to ensure effective management of risks arising from outsourced activities.
    • Report to the Board of Directors of the Bank its Subsidiaries, the overall impact of outsourcing activities of the Bank and its Subsidiaries, and endorse recommendations of any plans and actions to improve the outsourcing process of the Bank and its Subsidiaries.

1The Outsourcing Committee, composed of the Legal and Regulatory Affairs Group Head and its designated bank officers1, meets on a monthly basis to review potential and existing service providers of the Bank and its Subsidiaries.

Trust Committee Charter

The Trust Committee (TrustCom) is a special committee which reports directly to the BOD and is primarily responsible for overseeing the trust, IMA and other fiduciary activities of SBC TAMG.

  1. Duties and Responsibilities
    In discharging its function, it shall:

    1. Ensure that fiduciary activities are conducted in accordance with applicable laws, rules and regulations, and prudent practices;
    2. Ensure that policies and procedures that translate the BOD’s objectives and risk tolerance into prudent operating standards are in place and continue to be relevant, comprehensive and effective;
    3. Oversee the implementation of the risk management framework and ensure that internal controls are in place relative to the fiduciary activities;
    4. Adopt an appropriate organizational structure/staffing pattern and operating budgets that shall enable SBC TAMG to effectively carry out its functions;
    5. Oversee and evaluate performance of the Trust Officer;
    6. Conduct regular meetings at least once every quarter, or more frequently as necessary, depending on the size and complexity of the fiduciary business; and
    7. Report regularly to the BOD on matter arising from SBC TAMG’ activities.
  2. Composition
    1. Members. The TrustCom shall be composed of at least five (5) members to include:
      1. The President or any Senior Officer of the Bank;
      2. The Trust Officer; and
      3. The remaining Committee members, including the Chairperson, shall be:
        1. Non-Executive Directors or Independent Directors, as defined under Subsection X141.1 and X141.2 of the BSP MoRB, who are both not part of the Audit Committee; or
        2. Those considered as qualified “Independent Professionals”.
          A qualified “Independent Professional” shall refer to a person who:

          1. Is not a Director/Officer/Employee of the Bank during the last twelve (12) months counted from the date of committee membership;
          2. Is not a relative within the fourth degree of consanguinity or affinity, legitimate or common-law of any Executive Director or those involved in the day to day management of Institution’s operations of officer of the Bank;
          3. Is not engaged or does not engage in any transactions with the Bank whether by himself or with other persons or through a firm of which he is a partner, other than transactions which are conducted at arm’s length and could not materially interfere with or influence the exercise of his judgement.
    2. Chairman. The TrustCom Chairman shall be appointed by the BOD and shall remain Chairman until such time the BOD shall appoint another Director to chair the TrustCom.
    3. Qualifications. Members of the TrustCom shall, in addition to meeting the qualification standards prescribed for directors, committee members and officers of financial institutions, possess the necessary technical expertise and relevant experience in trust and fiduciary business which may be indicated by any of the following:
      1. At least one (1) year of actual experience in trust, other fiduciary business, or investment management activities;
      2. At least three (3) years of professional experience in relevant field such as banking, finance, economics, law and risk management;
      3. Completion of at least ninety (90) training hours on trust, other fiduciary business, or investment management activities acceptable to the BSP; or
      4. Completion of a relevant global or local professional certification program.
    4. A TrustCom member should be familiar with Philippine Laws, Rules and Regulations on trust business, as well as uphold at all times ethical and good governance standards
  3. Restrictions on Membership
    1. Except for the President, a Director who is also an officer of the Bank shall not be qualified to be a member of the TrustCom.
    2. In case however, that the TrustCom shall be composed of more than five (5) members, majority shall be composed of qualified non-executive members.
    3. No member of the Bank’s Audit Committee shall be concurrently designated as a member of the TrustCom.
  4. Meetings
    1. The TrustCom shall meet at least every quarter, or more frequently as circumstances may warrant. Members may participate via teleconference or videoconference.
    2. The Committee Secretary shall develop and prepare the agenda for each meeting and notice will be sent out at least three (3) days before the meeting date.
    3. A simple majority shall constitute a quorum for the TrustCom, provided the Chairman, or his designated alternate, shall always be present. Every decision of at least a simple majority of the members, provided that the Chairman and the Trust Officer have signified their approval, shall be valid as the act of the TrustCom.
    4. Committee Secretary. An officer of the Trust Group, other than the Trust Officer, shall act as Secretary of the TrustCom and shall record the minutes of the meetings.

    The Committee Secretary shall prepare the Minutes of the meetings and shall secure the approval of the TrustCom prior to notation/approval of the Board. The minutes of the TrustCom meetings shall subsequently be summarized and presented for approval/notation by the Board of Directors.

    The Committee Secretary shall ensure that copies of the Minutes of the TrustCom as well as all recommendations/proposals approved by the TrustCom are duly filed and kept within the premises of the office and shall be made available at any time upon request by any one of the TrustCom members, the Bank’s Compliance Office, Audit Division or by any regulatory agency.

RPT Committee Charter
  1. Purpose
    The Related Party Transaction Committee (RPTC) Charter sets out the authority, composition, meetings, duties and responsibilities of the RPTC of Security Bank Group.
  2. Authority
    The RPTC shall assist the Board of Directors (“Board”) in fulfilling its oversight responsibilities in ensuring that transactions with related parties are handled in a sound and prudent manner, with integrity, and in compliance with applicable laws and regulations to protect the interest of depositors, creditors and stakeholders. This shall include, among others:

    1. Adoption and proper implementation of a group-wide RPT policy, encompassing all entities within the SBC Group, which shall:
      • Take into account their size, structure, risk profile and complexity of operations;
      • Identify, prevent or manage potential or actual conflicts of interest, which may arise;
      • Set materiality threshold and excluded transactions;
      • Set internal limits for individual and aggregate exposures;
      • Implement effective whistleblowing mechanisms as provided in the Bank’s Code of Discipline for Employees and Board;
      • Include measures to restitute losses and other remedies for abusive RPTs
    2. Formulation and appropriate implementation of clear guidelines in ensuring that RPTs are conducted in the regular course of business and not undertaken on more favourable economic terms to such related parties than similar transactions with non-related parties under similar circumstances
    3. Establishment of an effective system to:
      • Determine, identify and monitor related parties and RPTs;
      • Continuously review and evaluate existing relationships between and among businesses and counterparties;
      • Identify, measure, monitor and control risks arising from RPTs

    The Committee shall also provide an avenue of communication between related parties, management, Compliance Office, the external and internal auditors and the Board.

  3. Composition
    1. The RPTC shall be composed of at least three (3) members of the Board, two of whom shall be independent directors, including the chairperson, and one non-executive director. Each Committee member should have an understanding of the detailed responsibilities of committee membership.
    2. The Chairperson and members of the Committee shall be appointed and replaced by the Board.
    3. The Compliance Officer or Internal Auditor may sit as resource persons in the Committee.
    4. The Secretary of the Committee shall be the designated officer under the Office of the Corporate Secretary. He shall ensure that the notice and agenda of the meeting, with relevant supporting papers, are furnished to the RPTC members prior to each meeting.
    5. The Corporate Governance Officer shall ensure completeness and propriety of the agenda for the regular or special RPTC meeting.
  4. Meetings
    1. The Committee shall meet monthly. Special meetings may be convened as required.
    2. A quorum for any meeting will be a majority of the RPTC. In case a member has conflict of interest in a particular RPT, he shall not participate in the evaluation and abstain from voting for approval of the transaction.
    3. The Committee may invite members of management, auditors or others to meetings and provide pertinent information as necessary.
    4. The meeting can be held in person, or via tele or video conferencing.
    5. Meeting agendas will be prepared and provided in advance to all members, along with appropriate briefing materials.
    6. Minutes of meeting shall be submitted to the Board for approval or notation.
  5. Duties and Responsibilities
    The Committee shall have the following duties and responsibilities:

    1. Evaluate on an on-going basis existing relations between and among businesses and counterparties to ensure that all related parties are continuously identified, RPTs are monitored and subsequent changes in relationships with counterparties (from non-related to related and vice versa) are captured; Related parties, RPTs and changes in relationships should be reflected in the relevant reports to the Board and regulators/ supervisors;
    2. Evaluate all material RPTs to ensure that these are not undertaken on more favorable economic terms (e.g., price, commissions, interest rates, fees, tenor, collateral requirement) to such related parties than similar transactions with non- related parties under similar circumstances and that no corporate or business resources of the company are misappropriated or misapplied, and to determine any potential reputational risk issues that may arise as a result of or in connection with the transactions. In evaluating RPTs, the Committee takes into account, among others, the following:
      • The related party’s relationship to the company and interest in the transaction;
      • The material facts of the proposed RPT, including the proposed aggregate value of such transaction;
      • The benefits to the corporation of the proposed RPT;
      • The availability of other sources of comparable products or services; and
      • An assessment of whether the proposed RPT is on terms and conditions that are comparable to the terms generally available to an unrelated party under similar circumstances. The company should have an effective price discovery system in place and exercise due diligence in determining a fair price for RPTs;
    3. Ensures that appropriate disclosure is made, and/or information is provided to regulating and supervising authorities relating to the company’s RPT exposures, and policies on conflicts of interest or potential conflicts of interest. The disclosure should include information on the approach to managing material conflicts of interest that are inconsistent with such policies, and conflicts that could arise as a result of the company’s affiliation or transactions with other related parties;
    4. Report to the Board of Directors on a regular basis, the status and aggregate exposures to each related party as well as the total amount of exposures to all related parties;
    5. Ensure that RPTs, including write-off exposures, are subject to periodic independent review and audit process;
    6. Oversee implementation of RPT management system, including the periodic review of RPT policies and procedures
    7. Perform other oversight functions as requested by the Board.
  6. Annual Performance Evaluation and Charter Review
    The Corporate Governance Committee shall evaluate its performance as a Committee on an annual basis.The Committee shall likewise review and reassess, at least annually, the adequacy of this Charter and recommend to the Board of Directors for approval any amendments to this Charter.
Finance Committee Charter
  1. Membership
    The Finance Committee (“the Committee”) is composed of the following:

    1. Chief Finance Officer
    2. Executive Director
    3. Chairman
    4. Chief Executive Officer
    5. Treasurer
  2. The responsibilities of the Committee are as follows:
    • Oversight of the financial management of Security Bank Corporation (“the Bank”) and its subsidiaries (collectively referred to as “the Group”), including capital planning and compliance with the regulatory limits with respect to capital, liquidity ratios and other measures as may be required by the relevant regulatory agencies
    • Provide financial strategic direction to achieve the Group’s objectives regarding investments, derivative activities, balance sheet hedging activities, interest rate and foreign exchange rate risk management
    • Oversight of the liquidity management of the Group
    • Provide strategic direction with regard to the Group’s liquidity position, including issuance of short and long-term debt, as well generation of short and long-term financial assets
    • Oversight of the capital management of the Group
    • Provide strategic direction with respect to Bank’s allocation of capital vis-à-vis the capital requirements of the different business segments
    • Developing processes for assessing the Bank’s capital adequacy relative to its risk profile and understanding capital requirements as scenarios vary or become stressed
    • Leading discussions in senior management meetings on the adequacy of capital, and recommended action plans to manage and maintain the level of capital
    • Developing contingency capital measures to address scenarios when additional capital will be required
    • Recommending changes to regular dividends policy, if warranted • Ensuring that capital is raised on a timely basis
    • Informing the BOD on the impact of the Bank’s activities on capital
  3. Meeting
    The Committee meetings will be held quarterly or as needed. The Secretariat functions will be handled by the Head of Corporate Planning.
Transformation Committee Charter
  1. Membership
    The Committee shall be composed of 3 members of the Board of Directors and the Chief Transformation Officer. Membership will be reviewed when the Board of Directors composition changes. The Secretariat is responsible for documenting the meeting via minutes.
  2. Charter Review
    The Charter will be reviewed on an annual basis or when the Membership changes.
  3. Meetings
    The Committee will meet quarterly or as needed to review progress and prioritization of initiatives.
  4. Mission
    The Transformation Committee shall be responsible and accountable for driving the transformation and innovation initiatives.

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