STI Disclosure and Transparency Policy PDF

BM2001 DISCLOSURE AND TRANSPARENCY Company Disclosure Policies and Procedures The Company should establish corporate disclosure policies and procedures that are...

BM2001 DISCLOSURE AND TRANSPARENCY Company Disclosure Policies and Procedures The Company should establish corporate disclosure policies and procedures that are practical and following best practices and regulatory expectations. Recommendations for Enhancing Company Disclosure Policies and Procedures (Securities and Exchange Commission, 2016) The Corporate Governance framework should ensure that timely and accurate disclosure is made on all material matters regarding the corporation, including the financial situation, performance, ownership, and governance of the Company. Ensuring the integrity of the corporation’s accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, a system for risk management, financial and operational control, and compliance with the law and relevant standards. 1. The Board should establish corporate disclosure policies and procedures to ensure a comprehensive, accurate, reliable, and timely report to shareholders and other stakeholders that gives a fair and complete picture of a Company’s financial condition, results, and business operations. 2. The Company should have a policy requiring all directors and officers to disclose/report any dealings in the Company’s shares within three (3) business days. 3. The Board should fully disclose all relevant and material information on individual board members and key executives to evaluate their experience and qualifications, and assess any potential conflicts of interest that might affect their judgment 4. The Company should provide clear disclosure of its policies and procedure for setting Board and executive remuneration, as well as the level and mix of the same in the Annual Corporate Governance Report. Also, companies should disclose the remuneration on an individual basis, including termination and retirement provisions. 5. The Company should disclose its policies governing Related Party Transactions (RPTs) and other unusual or infrequently occurring transactions in their Manual on Corporate Governance. The material or significant RPTs reviewed and approved during the year should be disclosed in its Annual Corporate Governance Report. 6. The Company should make a full, fair, accurate, and timely disclosure to the public of every material fact or event that occurs, particularly on the acquisition or disposal of significant assets, which could adversely affect the viability or the interest of its shareholders and other stakeholders. 7. The Company’s corporate governance policies, programs, and procedures should be contained in its Manual on Corporate Governance, which should be submitted to the regulators and posted on the Company’s website. For Corporate Governance for Publicly listed Companies – Meaning those companies whose shares of stocks are listed and traded at the Philippine Stock Exchange; the following disclosure and transparency principles required are as follows: 1. The Company should establish corporate disclosure policies and procedures that are practical and following the best practices and regulatory expectations. 2. The Company should establish standards for the appropriate selection of an external audit and exercise effective oversight of the same to strengthen the external auditor’s independence and 02 Handout 1 *Property of STI  [email protected] Page 1 of 3  BM2001 enhance audit quality. 3. The Company should ensure that material and reportable financial and non-financial and sustainability issues are disclosed. 4. The Company should maintain a comprehensive and efficient communication channel for disseminating relevant information. This channel is crucial for informed decision making by investors stakeholders and other interested users. Transparency is one of the core principles of corporate governance. To ensure the better protection of shareholders and stakeholders’ rights, full disclosure of the Company’s corporate governance policies, programs, and procedures is imperative. This is better done if the said policies, programs, and procedures are contained in one reference document, which is the Manual on Corporate Governance. The submission of the Manual to regulators and posting it in companies’ websites ensure easier access by any interested party. The following are the common submission as compliance with various regulatory bodies: 1. Bureau of Internal Revenue (BIR) - for accurate taxes payment and documentary compliance 2. Securities and Exchange Commission (SEC) - yearly submission of Audited Financial Statements, minutes of meetings, and updates of General Information Sheet. 3. Department of Labor and Employment (DOLE) - compliance with minimum requirements in the workplace. 4. Other requirements for the renewals of Local and Business licenses and permits. External Auditor’s Independence The Company should establish standards for the appropriate selection of an external auditor, and exercise effective oversight of the same to strengthen the external auditor’s independence and enhance audit quality. Recommendations in Strengthening the External Auditors Independence and Improving the Quality of Audit (Securities and Exchange Commission, 2016) 1. The Audit Committee should have a robust process for approving and recommending the appointment, reappointment, removal, and fees of the external auditor. 2. The Audit Committee Charter should include the Audit Committee’s responsibility for assessing the integrity and independence of external auditors and exercising effective oversight to review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant Philippine professional and regulatory requirements. 3. The Company should disclose the nature of non-audit services performed by its external auditor in the Annual Report to deal with the potential conflict of interest. The Audit Committee should be alert for any potential conflict of interest situations, given the guidelines or policies on non-audit services, which could be viewed as impairing the external auditor's objectivity. Non-financial and Sustainability Reporting The Company should ensure that the material and reportable non-financial and sustainability issues are disclosed. The Code recommends that the Board should have a clear and focused policy on the disclosure of non-financial information, with emphasis on the management of economic, environmental, social, and governance (EESG) issues of its business, which underpin sustainability. Companies should adopt a globally recognized standard/framework for reporting sustainability and non-financial issues. 02 Handout 1 *Property of STI  [email protected] Page 2 of 3  BM2001 As external pressures including resource scarcity, globalization, and access to information continue to increase, the way corporations respond to sustainability challenges, in addition to financial difficulties, determines their long-term viability and competitiveness. One way to respond to sustainability challenges is disclosure to all shareholders and other stakeholders of the Company’s strategic (long-term goals) and operational objectives (short-term goals), as well as the impact of a wide range of sustainability issues (Securities and Exchange Commission, 2016). Reference Securities and Exchange Commission. (2016). Code of corporate governance for publicly-listed companies. Retrieved March 17, 2020, from https://www.sec.gov.ph/wp-content/uploads/2016/12/2016_memo_circular_no.19.pdf 02 Handout 1 *Property of STI  [email protected] Page 3 of 3