2014 2015 asean corporate governance scorecard self …

2014 – 2015 ASEAN CORPORATE GOVERNANCE SCORECARD

SELF-ASSESSMENT

PART A: RIGHTS OF SHAREHOLDERS

May 2015

PART A: RIGHTS OF SHAREHOLDERS 2

THE PHILIPPINE STOCK EXCHANGE, INC 2014 – 2015 ASEAN CORPORATE GOVERNANCE SCORECARD

PART A: RIGHTS OF SHARHOLDERS

A.1 Basic Shareholder Rights

ACGS QUESTION COMPANY RESPONSE

A.1.1. Does the company pay (interim and

final/annual) dividends in an equitable and

timely manner; that is, all shareholders are

treated equally and paid within 30 days after

being (i) declared for interim dividends and (ii)

approved by shareholders at general meetings

for final dividends?

Declaration Date, Record Date and Payment Date of 2015 Cash Dividends: http://www.pse.com.ph/resource/staticcontent/17-C%20%2826%20February%202015%29%20-

%20PSE%20Declaration%20of%20Cash%20Dividend.pdf

“The Board of Directors of the Company, in its regular meeting held (February 25, 2015), declared

cash dividend equivalent to a total of P9.00 per share broken down as follows: P5.50 regular cash

dividend and P3.50 special cash dividend to stockholders of record as of 25 March 2015 payable

on 16 April2015.”

http://www.pse.com.ph/resource/staticcontent/17-C%20%2826%20February%202015%29%20-%20PSE%20Declaration%20of%20Cash%20Dividend.pdf

http://www.pse.com.ph/resource/staticcontent/17-C%20%2826%20February%202015%29%20-%20PSE%20Declaration%20of%20Cash%20Dividend.pdf



A.2 Right to participate in decisions concerning fundamental corporate changes.


Do shareholders have the right to participate in:

A.2.1 Amendments to the company's

constitution?

YES. Shareholders have the right to participate in the amendments of the company’s constitution.

Updated Manual on Corporate Governance (p. 26): http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28June2014%29.pdf

“Stockholders shall have the right to elect, remove and replace directors and vote on certain corporate

acts in accordance with the Corporation Code.”

Consolidated Changes in the ACGR for 2014 – As of December 31, 2014 (p.92): http://www.pse.com.ph/resource/staticcontent/2014%20ACGR%20-%20PSE%20%28April%202015%29.pdf

“As stated in the Articles of Incorporation and By-laws of the Company, prior approval of the stockholders representing 2/3 of the outstanding capital stock is required in order to amend the Company's Constitution, to authorize additional shares, and to transfer all or substantially all assets of the company.”

http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28June2014%29.pdf


http://www.pse.com.ph/resource/staticcontent/2014%20ACGR%20-%20PSE%20%28April%202015%29.pdf





A.2.2 The authorisation of additional shares? YES. Shareholders have the right to participate in the authorization of additional shares.

Updated Manual on Corporate Governance (p. 26): http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28June2014%29.pdf “Stockholders shall have the right to elect, remove and replace directors and vote on certain corporate



“As stated in the Articles of Incorporation and By-laws of the Company, prior approval of the

stockholders representing 2/3 of the outstanding capital stock is required in order to amend the

Company's Constitution, to authorize additional shares, and to transfer all or substantially all assets of

the company.”








A.2.3 The transfer of all or substantially all

assets, which in effect results in the sale of the

company?

YES. Shareholders have the right to transfer all or substantially all assets of the company.

Updated Manual on Corporate Governance (p. 26): http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28June2014%29.pdf “Stockholders shall have the right to elect, remove and replace directors and vote on certain corporate



“As stated in the Articles of Incorporation and By-laws of the Company, prior approval of the

stockholders representing 2/3 of the outstanding capital stock is required in order to amend the

Company's Constitution, to authorize additional shares, and to transfer all or substantially all assets of

the company.”






A.3 Right to participate effectively in and vote in general shareholder meetings and should be informed of the rules, including voting

procedures, that govern general shareholder meetings.


A.3.1 Do shareholders have the opportunity,

evidenced by an agenda item, to approve

remuneration (fees, allowances, benefit-in-

kind and other emoluments) or any increases

in remuneration for the non-executive

directors/commissioners?

The function to set and review the compensation structure of the entire organization of the Exchange,

including the Board of Directors, is vested on the Governance Committee of the Board as provided for in

PSE's Revised Manual on Corporate Governance (ARTICLE II, 2.2, 2.2.3) and re-stated in its 2015

Information Statement. The same is stated in the company's Annual Corporate Governance Report

(ACGR), part D. REMUNERATION MATTERS.

Updated Manual on Corporate Governance (p. 18-19): http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28June2014%29.pdf Definitive Information Statement filed March 30, 2015 (p. 28):

http://www.pse.com.ph/resource/staticcontent/2015%20Definitive%20Information%20Statement.p

df

Consolidated Changes in the ACGR for 2014 – As of December 31, 2014 (Section D.

Remuneration Matters): http://www.pse.com.ph/resource/staticcontent/2014%20ACGR%20-%20PSE%20%28April%202015%29.pdf

A.3.2 Does the company provide non-

controlling shareholders a right to nominate

candidates for board of

directors/commissioners?

YES. All stockholders, including minority interests, may nominate and elect directors.

Updated Manual on Corporate Governance (p. 26): http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28June2014%29.pdf “Stockholders shall have the right to elect, remove and replace directors and vote on certain

corporate acts in accordance with the Corporation Code.”


“All stockholders, including minority interests, may nominate and elect directors”



http://www.pse.com.ph/resource/staticcontent/2015%20Definitive%20Information%20Statement.pdf











A.3.3 Does the company allow shareholders to

elect directors/commissioners individually?

YES. The company allows shareholders to elect directors/commissioners individually. Updated Manual on Corporate Governance (p. 26): http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28June2014%29.pdf “Stockholders shall have the right to elect, remove and replace directors and vote on certain

corporate acts in accordance with the Corporation Code… Cumulative voting shall be used in the

election of directors”


“All stockholders, including minority interests, may nominate and elect directors”

A.3.4 Does the company disclose the voting

and vote tabulation procedures used,

declaring both before the meeting proceeds?

YES. The company discloses these information through the Definitive Information Statement.

Definitive Information Statement filed March 30, 2015 (p. 39)

(Under “Manner by which Votes will be Counted”):


df

“In all matters for ratification/approval by the stockholders, including the election of directors, voting

shall be by viva voce or by secret ballot using the electronic voting system to be provided by Mega Data

Corporation. The Board of Directors shall constitute and appoint members of the Board of Canvassers,

composed of the external auditor, SGV & Co. and external legal counsel of the Company, Zamora Poblador

Vasquez & Bretaña Law Offices, which shall canvass the vote of the stockholders.

In all items for approval except election of directors, each share of stock entitles its registered owner to

one vote. Each stockholder has cumulative voting rights with respect to the election of directors. Only

stockholders of the Company or their representatives authorized by duly executed proxies and

authorized personnel of the Company shall be allowed inside the meeting area.”











A.3.5 Do the minutes of the most recent AGM

record that there was an opportunity allowing

for shareholders to ask questions or raise

issues?

YES. The 2015 ASM minutes explicitly provided that “the Chairman opened the floor for questions from

the shareholders.”

Minutes of the 2015 ASM (Subject to Approval By Stockholders (XI. Other Matters):

http://www.pse.com.ph/resource/staticcontent/2015%20ASM%20Minutes%20%28Subject%20to%

20Approval%20By%20Stockholders%29.pdf

"The Chairman opened the floor for questions from the shareholders."

A.3.6 Do the minutes of the most recent AGM record questions and answers?

YES. The questions and answers during the 2015 ASM is reflected under Section “XI. Other Matters”.

Minutes of the 2015 ASM (Subject to Approval By Stockholders (XI. Other Matters):



A.3.7 Does the disclosure of the outcome of

the most recent AGM include resolution(s)?

YES. The minutes of the meeting reflects the resolutions voted on during the 2015 ASM.

Minutes of the 2015 ASM:



Results of the 2015 ASM:

http://www.pse.com.ph/resource/staticcontent/17-C%20%2802%20May%202015%29%20-

%20Result%20of%20Annual%20Stockholders%20Meeting%20and%20Organizational%20Meeting.pdf

http://www.pse.com.ph/resource/staticcontent/2015%20ASM%20Minutes%20%28Subject%20to%20Approval%20By%20Stockholders%29.pdf






http://www.pse.com.ph/resource/staticcontent/17-C%20%2802%20May%202015%29%20-%20Result%20of%20Annual%20Stockholders%20Meeting%20and%20Organizational%20Meeting.pdf







A.3.8 Does the company disclose the voting

results including approving, dissenting, and

abstaining votes for each agenda item for the

most recent AGM?

YES. The company disclosed the voting result of the 2014 ASM including the approving, dissenting, and

abstaining votes for each agenda item as reflected in the Consolidated Changes in the ACGR for 2014.

Consolidated Changes in the ACGR for 2014 – As of December 31, 2014 (page 94): http://www.pse.com.ph/resource/staticcontent/2014%20ACGR%20-%20PSE%20%28April%202015%29.pdf

A.3.9 Does the company disclose the list of

board members who attended the most

recent AGM?

YES. The minutes of the most recent AGM disclosed the list of board members who attended the most

recent AGM.

Minutes of the 2015 ASM (Under “Directors Present”):



A.3.10 Did the chairman of the board of

directors/commissioners attend the most

recent AGM?

YES. The Chairman of the Board of Directors attended the most recent AGM.




A.3.11 Did the CEO/Managing

Director/President attend the most recent

AGM?

YES. The President & CEO attended the most recent AGM.
















A.3.12 Did the chairman of the Audit

Committee attend the most recent AGM?

YES. Atty. Cornelio Peralta, Chairman of the Audit Committee attended the most recent AGM.

Minutes of the 2015 ASM (Under “VII. Appointment of External Auditor”):



“The Audit Committee is chaired by Atty. Cornelio T. Peralta, an independent director, who was also

present during the meeting.”

A.3.13 Did the company organise their most recent AGM in an easy to reach location?

YES. The Company organizes its annual stockholders' meetings in Metro Manila with prior notice to all stockholders as evidenced by the minutes of the annual stockholders' meeting and the notice thereof.

Minutes of the 2015 ASM (Page 1):





df









A.3.14 Does the company allow for voting in

absentia?

YES. The PSE allows for voting in absentia through stockholders' authorized proxies. As a policy, the

Company’s Revised Manual on Corporate Governance (p.28) provides that:

http://www.pse.com.ph/resource/staticcontent/PSE%20Updated%20Manual%20on%20CG%20%28

June2014%29.pdf

"The Board should be transparent and fair in the conduct of the annual and special

stockholders' meetings of the Exchange. The stockholders should be encouraged

to personally attend such meetings. If they cannot attend, they should be appraised

ahead of time of their right to appoint a proxy. Subject to the requirements of the

bylaws, the exercise of that right shall not be unduly restricted and any doubt

about the validity of a proxy should be resolved in the stockholder’s favour."

The voting by proxy is explicitly stated in Rule 14 of the 2015 Nomination and Election Committee

(NOMELEC) Rules (page 8-9):

http://pse.com.ph/resource/staticcontent/2015%20Nomelec%20Rules.pdf

“Rule 14: Brokers/ Trading Participants who are holding PSE shares for the

account of clients must issue a proxy (if the broker is a corporation, a secretary’s

certificate) authorizing the client to attend and vote his shares during the annual

stockholders’ meeting. Such proxy must be submitted to the Corporate Secretary

on or before 20 April 2015, Monday at 5:00 p.m.”

The proxy voting was thereafter implemented during the 2015 Annual Stockholders’ Meeting as

reflected in its minutes: and in the Revised Manual on Corporate Governance (ARTICLE VI, 6.2).

Minutes of the 2015 ASM (Page 1):





http://pse.com.ph/resource/staticcontent/2015%20Nomelec%20Rules.pdf








“The Corporate Secretary further certified that at least 74.30% of the aggregate number of 73,380,390

shares issued, outstanding and entitled to vote, or at least 54,524,609 shares, were present in

person or by proxy and therefore, a quorum existed for the stockholders to transact business.”






A.3.15 Did the company vote by poll (as

opposed to by show of hands) for all

resolutions at the most recent AGM?

No. During the 2015 ASM, the company did not vote by poll.

Minutes of the 2015 ASM (p.5):



A.3.16 Does the company disclose that it has

appointed an independent party

(scrutinizers/inspectors) to count and/or

validate the votes at the AGM?

YES. The Company disclosed its appointment of an independent party to count and/or validate the

votes at the annual stockholders' meeting. This provision is included in the notices of annual stockholders' meeting under "Manner by which Votes will be Counted".


(Under “Manner by which Votes will be Counted”):


df

“In all matters for ratification/approval by the stockholders, including the election of directors, voting

shall be by viva voce or by secret ballot using the electronic voting system to be provided by Mega Data

Corporation. The Board of Directors shall constitute and appoint members of the Board of Canvassers,

composed of the external auditor, SGV & Co. and external legal counsel of the Company, Zamora Poblador

Vasquez & Bretaña Law Offices, which shall canvass the vote of the stockholders.”

A.3.17 Does the company make publicly available by the next working day the result of

the votes taken during the most recent AGM

for all resolutions?

YES. The company made released the results of the ASM and the Organizational Meeting the first

business day after the ASM.

17-C (02 May 2015) - Result of Annual Stockholders' Meeting and Organizational Meeting:

http://www.pse.com.ph/resource/staticcontent/17-C%20%2802%20May%202015%29%20-

%20Result%20of%20Annual%20Stockholders%20Meeting%20and%20Organizational%20Meeting.p

df













A.3.18 Do companies provide at least 21

days’ notice for all resolutions?

YES. The Company’s Definitive Information Statement was published through the Exchange’s

disclosure website (PSE Edge) on March 31, 2015, which is 32 days prior the Annual Shareholder

Meeting last May 2, 2015.

PSE EDGE Website (Information Statement - March 31, 2015):

http://edge.pse.com.ph/companyDisclosures/form.do?cmpy_id=478

Definitive Information Statement (SEC filed March 30, 2015):


df

http://edge.pse.com.ph/companyDisclosures/form.do?cmpy_id=478





A.3.19 Does the company provide the

rationale and explanation for each agenda

item which require shareholders’ approval in

the notice of AGM/circulars and/or the

accompanying statement?

YES. The Company’s Definitive Information Statement’s “III. Other Matters” section contains information

relative to these agenda items (see pages 37-39).

Definitive Information Statement (SEC filed March 30, 2015, see pages 37-39):


df

In addition, the Company posted a document expounding on the rationale and explanation for each

agenda item on its website prior the shareholder meeting.

2015 ASM Explanation of Agenda Items (Under Announcements, Type: ASM; Year: 2015):

http://www.pse.com.ph/stockMarket/announcements.html



http://www.pse.com.ph/stockMarket/announcements.html



A. 4 Markets for corporate control should be allowed to function in an efficient and transparent manner.


A.4.1 In cases of mergers, acquisitions

and/or takeovers requiring shareholders’

approval, does the board of

directors/commissioners of the offeree

company appoint an independent party to

evaluate the fairness of the transaction

price?

Not applicable. While the Board of Directors was guided by JP Morgan as the financial advisor of the

Company for the pending transaction on the proposed increase in shareholdings in PDS Holdings, Corp.,

the Board of Directors of the Company did not appoint a third party to evaluate the fairness of the

transaction price.

Consolidated Changes in the ACGR for 2014 – As of December 31, 2014 (See p. 103): http://www.pse.com.ph/resource/staticcontent/2014%20ACGR%20-%20PSE%20%28April%202015%29.pdf




A.5 The exercise of ownership rights by all shareholders, including institutional investors, should be facilitated.


A.5.1 Does the Company publicly disclose

policy/practice to encourage

shareholders including institutional

shareholders to attend the general

meetings or engagement with the

Company?

YES. These are provided under Consolidated Changes in the ACGR for 2014 – As of December 31, 2014

(See p. 92). Among others:

A section dedicated to the Annual Shareholder Meeting is provided the PSE Corporate Website.

The company also makes use of its social media channels and market education programs to

announce details of the company’s Annual Shareholder Meetings.

Announcements related to the ASM are also flashed through the PSE Ayala Electronic Trading Board.

The Corporate Secretary and the Board Secretariat send Annual Shareholder Meeting Materials

through email and/or through registered mail.

Throughout the year, the President, the Chief Operating Officer, the Investor Relations Officer,

and/or the Treasurer meet with different shareholders, fund managers, and analysts in order to

discuss the financial standing, performance, and strategic direction of the company. The President

also attends one-on-one meetings and calls to address the different concerns of the investors.

Through the Investor Relations Office hotline, the Philippine Stock Exchange also receives and

responds to the queries of its stockholders and the investing public. A question and answer portion

is scheduled for every item discussed in the annual stockholder’s meeting.

Consolidated Changes in the ACGR for 2014 – As of December 31, 2014 (See p. 92): http://www.pse.com.ph/resource/staticcontent/2014%20ACGR%20-%20PSE%20%28April%202015%29.pdf


2014 2015 asean corporate governance scorecard self …

Documents