Corporate governance

Question 1

Composition of BOD

Answer 1

At least 5 but not more than 15

All companies covered by this code must have at least 2 independent directors or such number that constitutes 20% of the members of the board but in no cases shall be less than 2

Membership of board may be executive pr non executive

Non-executive should possess such qualification and stature taht would enable them to perfectly participate in the deliberations

Question 2

Grounds for permanent disqualification of directors

Answer 2

1. Any Crime related to: purchase/sale of securities, conduct of being a broker, underwriter, etc., fiduciary relationship with a bank, quasi bank, trust company, etc.
2. A person by reason of misconduct, after hearing, is permanently enjoined by a final judgment or order of the commission or any court or administrative body of competent jurisdiction from acting as underwriter, broker, etc. or acting as director of a bank, quasi bank, etc.
3. Willfully violating the laws that govern securities and banking activities.
4. Convicted by final judgement- moral turpitude, fraud, embezzlement, theft, counterfeiting, misappropriation, forgery, bribery, false affirmation, perjury or other fraudulent act
5. Willfully violated or willfully aided, induced or procured the violation of any provision of corporation code
6. Earlier elected as independent director who becomes an officer
7. Person judicially declared as insolvent
8. Conviction of an offense punishable by imprisonment for more than 6 years
   Or violation of the Corporation code committed within 5 years prior to the of appointment

Question 3

Grounds for temporary disqualification of directors

Answer 3

1. Refusal to comply with the disclosure requirements of the SRC
2. Absence in more than 50% of all regular and special meetings of the board of directors or any 12 month period during the said incumbency
3. Dismissal or termination for cause as director of any corporation. The disqualification shall be in effect until he has cleared himself from any involvement in the case that gave rise to his dismissal
4. If the beneficial equity ownership of an independent director exceeds 2% of its subscribed capital stock. The disqualification shall be lifted if the limit is later complied with
5. If any of the judgments or orders cited in the ground for permanent disqualification is not yet become final
6. A temporarily Disqualified director shall within 60 business days from disqualification take the appropriate action to remedy or correct the disqualification

Question 4

Assist the board In the performance of its oversight responsibility for the financial reporting process, system of internal control, audit process, and monitoring of compliance

Answer 4

Audit Committee