05
Corporate
Governance
“Do what is right… do it with honesty and vigor.” — Mr. John
Corporate Governance
Universal Robina Corporation (“The Company”) acknowledges that good corporate governance is essential to build an environment of trust, transparency and accountability necessary for fostering long-term performance, financial stability, business integrity and sustainability of the company for the protection of the interests of shareholders and other stakeholders.
Corporate governance is the framework of rules, systems and processes of the corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to the stakeholders. The Revised Corporate Governance Manual was adopted to institutionalize corporate governance principles as a guide for the daily conduct of business.
The Company continuously strives to strengthen and improve its corporate governance practices by adopting best practices that includes building a competent board, aligning strategies with goals, managing risk effectively, adhering to high standards of ethics and integrity, and promoting accountability by defining roles and responsibilities.
The Company believes that sound and effective corporate practices are fundamental to the smooth, effective and transparent operation of the company, its ability to attract investment and enhance shareholder value. This includes the Company’s commitment to ensure fair and equitable treatment of all shareholders, including the minority, and the protection of their rights that include:
The Company is transparent and fair in the conduct of the annual and special Shareholders’ meetings. To foster active shareholder participation, the Board sends the Notice of Annual and Special Shareholders’ Meeting with sufficient and relevant information at least fifteen (15) business days before the meeting, compliant with the Securities Regulation Code. The Shareholders are encouraged to personally attend such meetings and those who are unable to attend are apprised ahead of time of their right to appoint a proxy. Subject to the requirements of law, rules and regulations and the By-Laws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy shall be resolved in the favor of the shareholder.
Guided by the principles of fairness, accountability and transparency to the shareholding public, the Company ensures that the result of the votes taken during the most recent Annual or Special Shareholders’ Meeting are made available the next working day. In addition, the Minutes of the Annual and Special Shareholders’ Meeting may be accessed through the Company Website within five (5) business days from the end of the meeting.
Duty to Other Stakeholders
The Company recognizes and places importance on the interdependence between business and society, and promotes a mutually beneficial
relationship that encourages the Company’s sustainable growth, while contributing to the advancement of the society where it operates. The Company employs value chain processes that take into consideration Economic, Environmental and Social Governance (EESG) issues and concerns.
Customers' Welfare
The Company adopts customer relations policies and procedures to protect customer’s welfare. This includes providing and making available the customer relations contact information who is empowered to address and attend to customer questions and concerns.
Supplier/ Contractor Selection
The Company follows the Supplier Accreditation Policy to ensure that the Company’s suppliers and contractors are qualified to meet its commitments. Apart from the accreditation process, suppliers and contractors also undergo orientation on Company policies and ethical practices.
Employees
The Board also establishes policies, programs and procedures that encourage employees to actively participate in the realization of the Company’s goals and its governance including but not limited to:
Performance-enhancing mechanisms for employee participation
The Company abides by the standards and policies set by the Department of Labor and Employment. Likewise, the Company has Security antd Safety Manuals that are implemented, reviewed and regularly updated to ensure the security, safety, health, and welfare of the employees in the workplace.
The Company continuously provides learning and development opportunities for its employees through the John Gokongwei Institute for Leadership and Enterprise Development (JG-ILED), the leadership platform for systematic and sustained development programs across the conglomerate. Its mission is to enable a high performing organization that will facilitate the learning process and develop the intellectual and personal growth of all employees through targeted and customized training and development programs.
Further, the corporate culture and employee know-how are honed at the URC University, an online platform engaging URLearning content via interactive modules that make learning fun, engaging and accessible anytime, anywhere. This platform provides a personalized training experience, a venue to share knowledge and learn from others and a reward system for top performing learners. The URC’s brand of people development “inspires personal mastery, encourages servant leadership and collaboration, and ensures operational excellence.”
Anti-corruption programs and procedures
The Company is committed to promoting transparency and fairness to all stakeholders. The Board sets the tone and makes a stand against corrupt practices by adopting anti-corruption policies and programs. Some of the Company’s Anti-Corruption programs are embodied in the Code of Business Conduct and Ethics, Conflict of Interest, Offenses Subject to Disciplinary Action (OSDA), among others. The same are disseminated to all employees across the Company through training to embed them in the Company’s culture. New employees are oriented regarding policies and procedures related to Business Conduct and Ethics and similar policies. All employees are given periodic reminders. Further, all concerned employees of the Conglomerate are required to comply with the Self-Disclosure Activity on Conflict of Interest and Declaration of Gifts Received on an annual basis.
The Company also has an established suitable framework for whistleblowing and ensures its enforcement to allow employees and other stakeholders to freely communicate their concerns about illegal or unethical practices, without fear of retaliation and to have direct access to an independent member of the Board or a unit created to handle whistleblowing concerns.
The anti-corruption programs and procedures of the Company are summarized below:
| Business Conduct & Ethics | Policy Statement |
|---|---|
|
Conflict of Interest |
The Company’s Code of Business Conduct and Conflict of Interest Policy require employees to make a conscious effort to avoid conflict of interest situations; that his judgment and discretion are not influenced by considerations of personal gain or benefit. A conflict of interest may also occur because of the actions, employment, or investments of an immediate family member of an employee. |
|
Conduct of Business
and Fair Dealings |
The Company’s employees who recommend, endorse, or approve the procurement or sale of goods and services should make a conscious effort to avoid any conflict of interest |
|
Receipt of Gifts
from Third Parties
|
The Company discourages the acceptance of gifts. However, gifts like advertising novelties |
|
Compliance with Laws
and Regulations |
The Company ensures that all transactions comply with relevant laws and regulations. Any deficiencies are immediately rectified. |
|
Respect for Trade
Secrets/Use of Non-public
Information |
The Company has policies that ensure proper and authorized disclosure of confidential |
|
Use of Company Funds,
Assets and Information |
Employees are required to safeguard Company resources and assets with honesty and |
| Business Conduct & Ethics | Policy Statement |
|---|---|
|
Employment and Labor
Laws and Policies |
The Company ensures the observance, strict implementation and compliance with employment and labor laws and policies with regards to recruitment, employment, retention and benefits of the employees. |
|
Disciplinary Action |
Violation of any provision of the Code of Business Conduct may result in disciplinary action, including dismissal and reimbursement for any loss to the Company that resulted from the employee’s actions. If appropriate, a violation may result in legal action against the employee or referral to the appropriate government authorities. |
|
Whistleblowing |
The stakeholders may discuss or disclose in writing any concern on potential violation of CICOM The complaint shall be filed using the Complaint/ Disclosure Form (CDF) available in the All information received in connection with the reports or disclosures shall be strictly |
|
Conflict Resolution |
The Conflicts of Interest Committee submits recommendations on courses of action to be |
The anti-corruption policies and programs are made available online for easy access of the rest of the employees in the organization for their reference and guidance. Through the facilitation of the HR team, URC will also roll-out an eModule of the Code of Business Conduct where all of the Company employees shall be asked to watch and take the exam to gauge their comprehension and retention of the Company policies and guidelines.
On May 2020, the Parent company have launched iSpeak, an initiative in line with the Company’s Whistleblowing Policy. iSpeak is a digital platform where employees can freely and securely share feedback, complaints and reports on non adherence to Company values including policies on Anti-Corruption.
The Company ensures that Employees reporting via iSpeak are protected from harassment, retaliation or punishment. The implementation of iSpeak is extended to several URC Business Units (BUs).
Consistent with the Revised Corporate Governance Manual and pursuant to the recommendations provided in the Code of Corporate Governance for Publicly Listed Companies (PLCs), the Company strengthened its policies on Board Diversity, Board Nomination and Election, Succession Planning and Remuneration, Material Related Party Transactions, Insider Trading, and Whistleblowing to reinforce the governance framework of the Company. These policies may be accessed in the Company’s website, in the Governance section, https://www.urc.com.ph/corporate-governance/company-policies/
The Company submitted the Integrated Corporate Governance Report (I-ACGR) to the Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE) on June 24, 2020. The I-ACGR is a reportorial requirement under SEC Memorandum Circular No. 15 series of 2017 to all PLCs to disclose the Company’s compliance/non-compliance with the recommendations provided under the Corporate Governance Code for PLCs. With the “comply or explain” approach, voluntary compliance to recommended CG best practices is combined with mandatory disclosure. The Company also submitted an amendment to the Revised Corporate Governance Manual and the Material Related Party Transactions (MRPT) Policy to SEC on December 22, 2020.
The Company’s I-ACGR may be accessed through the Company website by clicking this link, https://www.urc.com.ph/corporate-governance/I-ACGR
The Board of Directors
The Board of Directors (“The Board”) is primarily responsible for the governance of the Company and provides an independent check on management. It has the duty to foster the long-term success of the Company and to ensure that the Company’s competitiveness and profitability will be sustained in a manner consistent with its corporate objectives for the best interest of the company and its stakeholders.
The Board formulates the Company’s vision, mission, strategic objectives, policies and procedures that guide its activities, including the means to effectively monitor Management’s performance. It provides direction and approval in relation to matters concerning the Company’s business strategies, policies and plans, while the day-to-day business operations are delegated to the Executive Committee.
The Board exercises care, skill and judgment and observes good faith and loyalty in the conduct and
management of the business and affairs of the Company. It ensures that all its actions are within the scope of power and authority as prescribed in the Articles of Incorporation, By-Laws, and existing laws, rules and regulations. To uphold high standards for the Company, its Shareholders and other Stakeholders, the Board conducts itself with honesty and integrity in the performance of its duties and responsibilities.
Board Duties and Responsibilities
The Company’s Corporate Governance Manual specifies the roles, duties and responsibilities of the Board of Directors in compliance with relevant laws, rules and regulations. In adherence to the principles of corporate governance, the Board is tasked to perform the following:
General Responsibilities
It is the Board’s responsibility to foster the long-term success of the Corporation, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and in the best interest of the Corporation, its Shareholders and Stakeholders, as a whole.
Duties and Functions
To ensure high standard for the Corporation, its Shareholders and other Stakeholders, the Board shall conduct itself with honesty and integrity in the performance of, among others, the following duties and responsibilities:
• Act on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the Company and all Stakeholders;
• Oversee the development of and approve the Company’s business objectives and strategy, and monitor their implementation, in order to sustain the Company’s long-term viability and strength. The Board shall review and guide corporate strategy, major plans of action, risk management policies and procedures, annual budgets and business plans; set performance objectives; monitor implementation and corporate performance; and oversee major capital expenditures, acquisitions and divestitures;
• Oversee the adoption of an effective succession planning program and remuneration policies;
• Adopt policies on board nomination and election that will ensure diversity in board composition in
terms of knowledge, expertise and experience;
• Oversee the implementation of a policy and system on RPTs which shall include the review and approval of material or significant RPTs and ensure fairness and transparency of the transactions;
• Oversee the adoption of policies on the selection of Management and Key Officers and the assessment of their performance;
• Oversee the establishment of an internal control system to monitor and manage potential conflicts of interest and an ERM framework to identify, monitor, assess and manage key business risks;
• Annually review, together with Management, the Company’s vision and mission;
• Ensure the Corporation’s faithful compliance with all applicable laws and regulations, and best business practices;
• Establish and maintain an Investor Relations Program that will keep the Shareholders informed of important developments in the Corporation. The Corporation’s CEO shall exercise oversight responsibility over this program;
• Identify the Corporation’s Stakeholders in the community in which it operates or are directly affected by its operations and formulate a clear policy of accurate, timely, and effective communication with them;
• Adopt a system of check and balance within the Board. A regular review of the effectiveness of such system should be conducted to ensure the integrity of the decision-making and reporting processes at all times;
• Ensure that the Corporation has an independent audit mechanism for the proper audit and review of the Corporation’s financial statements by independent auditors;
• Ensure that the Corporation establishes appropriate Corporate Governance policies and procedures pursuant to this Manual and the Governance Code, including but not limited to, policies on conflict of interest, and oversee the effective implementation thereof; and
• Consider the implementation of an alternative dispute resolution system for the amicable settlement of conflicts or differences between the Corporation and its Shareholders, if applicable.
Balanced board composition
The Company recognizes the benefits of having a diverse Board and its value in maintaining sound corporate governance while achieving strategic objectives and sustainable growth. The Board Member’s biographical details are set out in the succeeding section and may also be found in the Information Statement. The Board is diverse in terms of expertise and professional experience. Furthermore, the posts of Chairman and Chief Executive Officer of the Company are separate to ensure a clear distinction between the Chairman’s responsibility to manage the Board and the Chief Executive Officer’s responsibility to manage the Company’s business. The division of responsibilities between the Chairman and the Chief Executive Officer is clearly established and set out in the Revised Corporate Governance Manual.
Board Independence
The Board has four independent directors that possess all the necessary qualifications and none of the disqualifications to hold the position. The Company reinforce proper mechanisms for disclosure, protection of the rights of shareholders, equitable treatment of shareholders, and the accountability of the Board and Management are in
place. In cases of conflicts of interest, Directors with a material interest in any transaction with the Company abstain from participating in the deliberation of the same.
Board Training and Orientation
The Company ensures that directors are able to perform their functions effectively in this rapidly changing environment to cope with heightened regulatory policies, foreign and local demands, and the growing complexity of business. Orientation programs are conducted for first-time directors to ensure that new members are appropriately apprised of their duties and responsibilities. This includes overview of the Company’s operations, Code of Conduct, Corporate Governance framework and other relevant topics essential in the performance of their functions. As a matter of continuous professional education, the Company facilitates the training opportunities provided for the Directors and Key Officers.
Board Meetings
The Board schedules meetings at the beginning of the year, holds regular meetings in accordance with its By-Laws and convenes special meetings when required by business exigencies. The notice and
agenda of the meeting and other relevant meeting materials are furnished to the Directors at least five (5) business days prior to each meeting. Meetings are duty minutes. The Independent Directors shall always attend Board meetings. Unless otherwise provided in the By-Laws, their absence shall not affect the quorum requirement. However, the Board may, to promote transparency, require the presence of at least one (1) Independent Director in all its meetings.
To monitor the Directors’ compliance with the attendance requirements, the Company submits to the Commission a letter of advisement on the Directors’ record of attendance in Board meetings.
Attendance of Directors
January 1, 2020 to December 31, 2020
| Board | Name | Date of Election |
No. of Meetings Held during the year |
No. of Meetings attended | % |
|---|---|---|---|---|---|
|
Chairman |
Lance Y. Gokongwei |
May 14, 2020 |
4 |
4 |
100% |
|
Member |
James L. Go |
May 14, 2020 |
4 |
4 |
100% |
|
Member |
Irwin C. Lee |
May 14, 2020 |
4 |
4 |
100% |
|
Member |
Patrick Henry C. Go |
May 14, 2020 |
4 |
4 |
100% |
|
Member |
Johnson Robert G. Go, Jr. |
May 14, 2020 |
4 |
4 |
100% |
|
Independent
Director |
Wilfrido E. Sanchez |
May 14, 2020 |
4 |
4 |
100% |
|
Independent
Director |
Cesar V. Purisima |
May 14, 2020 |
4 |
4 |
100% |
|
Independent
Director |
*Christine Marie B. Angco |
August 13, 2020 |
2 |
2 |
100% |
|
Independent
Director |
*Rizalina G. Mantaring |
August 13, 2020 |
2 |
2 |
100% |
*Elected on August 13, 2020
The Board Committees
To enable better and more focused attention on the affairs of the Company and aid in the optimal performance of its roles and responsibilities, the Board delegates particular matters to the Board Committees set up for the purpose mainly (a) Audit Committee, (b) Corporate Governance Committee (c) Board Risk Oversight Committee (BROC) and (d) Related Party Transaction Committee.
A. Audit Committee
The Audit Committee provides oversight over the Company’s financial reporting, Internal Control System, Internal and External Audit processes, and monitors compliance with applicable laws and regulations. It ensures that systems and processes are put in place to provide assurance in areas including reporting, monitoring compliance with laws, regulations and internal policies, efficiency and effectiveness of business operations, and proper safeguarding and use of the Company’s resources and assets.
| Position | Director |
|---|---|
|
Chairman |
Cesar V. Purisima (ID) |
|
Members |
Wilfrido E. Sanchez (ID)
Rizalina G. Mantaring (ID) James L. Go – Advisory Member |
B. Corporate Governance Committee
The Corporate Governance Committee oversees the development and implementation of Corporate Governance principles and policies and recommends a formal framework on the nomination, remuneration and evaluation of the performance of the Directors and key Management Officers consistent with the Company’s culture, strategies and the business environment.
| Position | Director |
|---|---|
|
Chairman |
Wilfrido E. Sanchez (ID) |
|
Members |
Cesar V. Purisima (ID) Christine M.B. Angco (ID) |
C. Board Risk Oversight Committee
The Board Risk Oversight Committee oversees the establishment of ERM framework that effectively identify, monitor, assess and manage key business risks and assess the effectiveness of risk management strategies. The BROC is responsible for defining the Company’s level of risk tolerance and providing oversight over its risk management policies and procedures to anticipate, minimize, control or manage risks or possible threats to its operational and financial viability.
| Position | Director |
|---|---|
|
Chairman |
Rizalina G. Mantaring (ID) |
|
Members |
Cesar V. Purisima (ID) Christine M.B. Angco (ID) Irwin C. Lee (ED) |
D. Related Party Transaction Committee
The Related Party Transactions (RPT) Committee ensures that there is group-wide policy and system governing Material Related Party Transactions (MRPTs), particularly those that breach the materiality threshold. The policy shall include the appropriate review and approval of MRPTs, which guarantee fairness and transparency of the transactions.
| Position | Director |
|---|---|
|
Chairman |
Christine M.B. Angco (ID) |
|
Members |
Rizalina G. Mantaring (ID) Wilfrido E. Sanchez (ID) |
The Corporate Secretary
The Corporate Secretary assists the Board and the Board Committees in the conduct of their meetings, including preparation of the annual schedule of Board and Committee meetings and the annual Board calendar. She also assists the Board Chairs and its Committees in setting agendas for the meetings, safekeeps and preserves the integrity of the minutes of the meeting of the Board and its Committees, as well as other official records of the Company.
The Corporate Secretary keeps herself abreast of relevant laws, regulations, all governance issuances, relevant industry developments and operations of the Company, and advises the Board and the Chairman on all relevant issues as they arise. She works fairly and objectively with the Board, Management and Shareholders and contributes to the flow of information between the Board and Management, the Board and its Committees, and the Board and its Stakeholders, including Shareholders.
Atty. Maria Celia H. Fernandez-Estavillo is the Senior Vice President and General Counsel of JG Summit Holdings, Inc. (JGSHI) and Corporate Secretary of URC. Prior to her appointment in JGSHI, Atty.
Fernandez-Estavillo was the head of the Legal and Regulatory Affairs Group, Corporate Secretary and member of the Board of Directors of Rizal Commercial Banking Corporation. She was Assistant Vice President of Global Business Development of ABS-CBN. She also held positions in government as Head of the Presidential Management Staff, Assistant Secretary at the Department of Agriculture and Chief of Staff of Senator Edgardo J. Angara. She began her legal career in ACCRA. She graduated from the University of the Philippines with a Bachelor of Science degree in Business Economics (Summa Cum Laude) and a Bachelor of Laws degree (Cum Laude). She completed her Master of Laws (LLM) in Corporate Law (Cum Laude) from New York University School of Law. She received the highest score in the Philippine Bar examinations of 1997.
The Compliance Officer
The Compliance Officer monitors, reviews, evaluates and ensures the compliance by the Company; its Officers and Directors with the provisions and requirements of the Corporate Governance Manual and the relevant laws, the Corporate Governance Code, rules and regulations and all governance issuances of regulatory agencies. He also ensures the integrity and
accuracy of all documentary submissions to the regulators; identifies possible areas of compliance issues and works towards the resolution of the same. He assists the Board and the Corporate Governance Committee in the performance of their governance functions, including their duties to oversee the formulation or review and implementation of the Corporate Governance structure and policies of the Company.
Francisco M. Del Mundo, is the Senior Vice President, Chief Financial Officer (CFO) and Compliance Officer of JG Summit Holdings Inc. (JGSHI). He is also concurrently the CFO of Universal Robina Corporation (URC) and Aspen Business Solutions, Inc. (ABSI). He is also the appointed Compliance Officer of Universal Robina Corporation.
In 2013, he joined JGSHI as Vice President for JG Summit and Affiliates Shared Services. He was appointed as CFO of URC International the same year, concurrent with his Shared Services role. In 2016, he was appointed CFO of URC, Head of JG Summit Enterprise Risk Management Group, and CFO of ABSI. He was appointed as CFO of JGSHI in 2017 and given the rank of SVP in 2018 across all 3 business entities. He was appointed JGSHI Compliance Officer in October 2020.
He brings with him 27 years of experience in all aspects of the finance career. He has built his career from 17 years of rigorous training in Procter & Gamble (P&G) and 3 years in Coca-Cola prior to joining the JG Summit Group. He has worked in three different markets: Manila, Thailand and Singapore, and has held numerous CFO and Regional Finance Head positions, namely: CFO for ASEAN, Head of Accounting Shared Services for Central and Eastern Europe, Middle East and Africa, and Asia Hub Manager for Internal Controls for P&G. During his stint with Coca-Cola, he was the CFO for Coca-Cola Bottlers Philippines, Inc. and concurrently the CEO of Coca-Cola Bottlers Business Services, the company’s global shared service handling Philippines, Singapore and Malaysia.
He graduated cum laude from the University of the Philippines Diliman with a Bachelor of Science in Business Administration degree. He was recognized as the Most Distinguished Alumnus of the University’s College of Business Administration in 2008. He is also a Certified Internal Auditor and has done several external talks on shared service and finance transformation in Manila, Malaysia and Dubai.
Enterprise Risk Management, Accountability, and Audit
The Company recognizes the increasing importance of sound risk management practices to drive business growth and sustainability. The Company implemented systems and processes to facilitate proper risk identification, monitoring and control, which are key to effective corporate governance. Timely and accurate management and financial reporting systems, internal controls, and audits are also employed to protect and maximize stakeholders’ value.
The Board oversees Management’s adoption and implementation of a sound risk management framework for identifying, monitoring and managing key risk areas. The BOD reviews Management reports with due diligence to enable the company to anticipate, minimize, control and manage risks or possible threats to its operational and financial viability.
Enterprise Risk Management
Through a sound Enterprise Risk Management (ERM) framework, the Company effectively identifies, monitors, assesses and manages key business risks. The framework guides the Board in identifying units/business lines and enterprise level
risk exposures, as well as the effectiveness of risk management strategies.
The ERM framework revolves around the following eight interrelated risk management approaches:
1. Internal Environmental Scanning – it involves the review of the overall prevailing risk profile of the Business Unit (BU) to determine how risks are
viewed and addressed by the management. This is presented during the strategic planning, annual budgeting and mid-year performance reviews of the BU.
2. Objective Setting – the Company’s BOD mandates Management to set the overall annual targets through strategic planning activities, in order to ensure that management has a process in place to set objectives that are aligned with the Company’s goals.
3. Event Identification – it identifies both internal and external events affecting the Group’s set targets, distinguishing between risks and
opportunities.
4. Risk Assessment – the identified risks are analyzed relative to the probability and severity of potential loss that serves as a basis for determining how the risks will be managed. The risks are further
assessed as to which risks are controllable and uncontrollable, risks that require management’s action or monitoring, and risks that may materially weaken the Company’s earnings and capital.
5. Risk Response – the Company’s BOD, through the oversight role of the Internal Control Group ensures action plan is executed to mitigate risks, either to avoid, self-insure, reduce, transfer or share risk.
6. Control Activities – policies and procedures are established and approved by the Company’s BOD
and implemented to ensure that the risk responses are effectively carried out enterprise-wide.
7. Information and Communication – relevant risk management information is identified, captured and communicated in form and substance that enable all personnel to perform their risk management roles.
8. Monitoring – the Internal Control Group of the respective Company and BUs and Corporate Internal Audit constantly monitor the management of risks through audit reviews, compliance checks, revalidation of risk strategies and performance reviews.
Risk Assessment Tool
To help Business Units in the Risk Assessment Process, the Risk Assessment Tool, which is a database driven web application, was developed for departments and units to facilitate the assessment, monitoring and management of risks.
The Risk Assessment Tool documents the following activities:
Through a sound Enterprise Risk Management (ERM) framework, the Company effectively identifies, monitors, assesses and manages key business risks. The framework guides the Board in identifying units/business lines and enterprise level risk exposures, as well as the effectiveness of risk management strategies.
1. Risk Identification – is the critical step of the risk management process. The objective of risk identification is the early identification of events that may have a negative impact on the Company’s ability to achieve its goals and objectives.
1.1 Risk Indicator – is a potential event or
action that may prevent the continuity of
operation or business
1.2 Risk Driver – is an event or action that
triggers the risk to materialize
1.3 Value Creation Opportunities – is the
positive benefit of addressing or managing the risk
2. Identification of Existing Control Measures – activities, actions or measures already in place to control, prevent or manage the risk.
3. Risk Rating/Score – is the quantification of the likelihood and impact to the Company if the risk materializes. The rating has two (2) components:
3.1 Probability – the likelihood of occurrence of risk
3.2 Severity – the magnitude of the consequence of risk
4. Risk Management Strategy – is the structured and coherent approach to managing the identified risk.
5. Risk Mitigation Action Plan – is the overall approach to reduce the risk impact severity and/or probability of occurrence.
Internal Controls
With the leadership of the Company’s Chief Financial Officer (CFO), internal control is embedded in the operations of the company and in each BU thus increasing their accountability and ownership in the execution of the BU’s internal control framework. To accomplish the established goals and objectives, BUs implement robust and efficient process controls to ensure:
Compliance with policies,
procedures, laws and regulations
Economic and efficient use of resources
Check and balance and
proper segregation of duties
Identification and remediation control weaknesses
Reliability and integrity of information
Proper safeguarding of company
resources and protection of
company assets through early
detection and prevention of fraud.
Adequate and Timely Information
To enable the Directors to properly fulfill their duties and responsibilities, Management provides the Directors with complete, adequate, and timely information about the matters to be taken up in their meetings. Information may include the background or explanation on matters brought before the Board, disclosures, budgets, forecasts, and internal financial documents. If the information provided by Management is not sufficient, further inquiries may be made by a Director to enable him to properly perform his duties and responsibilities. The Directors have independent access to Management and to the Corporate Secretary.
The Directors, either individually or as a Board, and in the performance of their duties and responsibilities, may seek access to independent professional advice within the guidelines set by the Board.
Accountability and Audit
The Board ensures that its Shareholders are provided with a balanced and comprehensible assessment of the Company’s performance, position and prospects on a quarterly basis. Interim and other reports that could adversely affect
its business are also made available in the Company website including its submissions and disclosures to the SEC and Philippine Stock Exchange (PSE). Management formulates the rules and procedures on financial reporting and internal control for presentation to the Audit Committee in accordance with the following guidelines:
1. The extent of its responsibility in the preparation of the financial statements of the Company, with the corresponding delineation of the responsibilities that pertain to the External Auditor, should be clearly defined;
2. An effective system of internal control that will ensure the integrity of the financial reports and protection of the assets of the Company for the benefit of all Shareholders and other Stakeholders;
3. On the basis of the approved Internal Audit Plan, Internal Audit examinations should cover, at the minimum, the evaluation of the adequacy and effectiveness of controls that cover the Company’s governance, operations and information systems, including the reliability and integrity of financial and operation information, effectiveness and efficiency of operations, protection of assets, and compliance with contracts, laws, rules, and regulations;
4. The Company consistently complies with the financial reporting requirements of the SEC;
5. The External Auditor shall be rotated or changed every five (5) years or earlier, or the signing partner of the External Auditing firm assigned to the Company, should be changed with the same frequency. The Corporate IA Head should submit to the Audit Committeeand Management an annual report on the Internal Audit department’s activities, responsibilities, and performance relative to the Internal Audit Plan as approved by the Audit and Risk Committee. The annual report should include significant risk exposures, control issues, and such other matters as may be needed or requested by the Board and Management. The Internal Audit Head should certify that he conducts his activities in accordance with the International Standards on the Professional Practice of Internal Auditing. If he does not, the Internal Audit Head shall disclose to the Board and Management the reasons why he has not fully complied with the said documents; and
6. The Board, after consultations with the Audit Committee shall recommend to the Shareholders an External Auditor duly accredited by the SEC who shall undertake an independent audit of the Company, and shall provide an objective assurance on the matter by which the financial statements shall be prepared and presented to the
Shareholders.
Internal Audit
The Corporate Internal Audit is focused on delivering its mandate of determining whether the governance, risk management and control processes, as designed and represented by management, are adequate and functioning in a manner that provides reasonable level of confidence that:
1.Employees’ actions are compliant with policies, standards, procedures, and applicable laws and regulations;
2. Quality and continuous improvement are
fostered in the control processes;
3. Programs, plans, and objectives are achieved;
4. Resources are acquired economically, used efficiently, and protected adequately;
5.Significant financial, managerial, and operating information is accurate, reliable, and timely;
6. Significant key risks are appropriately identified and managed.
7. Significant legislative or regulatory issues
impacting the Company are recognized and
properly addressed.
Opportunities for improving management control, profitability and the Company’s reputation may be identified during audits.
Other Matters
Audit and Audit-Related Fees
| Name of Auditor | Audit Fee | Non-Audit Fee |
|---|---|---|
|
SyCip, Gorres,
Velayo & Co. |
Php12,255,397 |
-0- |
Ownership structure
Holding 5% shareholding or more
(as of December 31, 2020)
| Shareholder | Number of Shares | Percent | Beneficial Owner |
|---|---|---|---|
|
JG Summit
Holdings, Inc. |
1,215,223,061 |
55.13% |
Same as
record owner |
|
PCD Nominee
Corporation
(Non-Filipino) |
618,979,971 |
28.08% |
PCD
Participants &
their clients |
|
PCD Nominee
Corporation
(Filipino) |
335,237,208 |
15.21% |
PCD
Participants &
their clients |
Dealing in securities (changes in shareholdings of directors and key officers)
A. Elected Directors for the calendar year 2020
| Name of Director | Number of Direct Shares | % of Total Outstanding Shares |
|---|---|---|
|
James L. Go |
1 |
0% |
|
Lance Y. Gokongwei |
500,001 |
0.02% |
|
Patrick Henry C. Go |
45,540 |
0% |
|
Johnson Robert G. Go, Jr |
1 |
0% |
|
Irwin C. Lee |
200,001 |
0.01% |
|
Wilfrido E. Sanchez |
1 |
0% |
|
Cesar V. Purisima |
1 |
0% |
|
Rizalina G. Mantaring |
7,401 |
0%
|
|
Christine Marie B. Angco |
1 |
0%
|
B. Elected Officers for the calendar year 2020
| Name of Officer | Position/Designation | Number of Direct Shares | % of Total Outstanding Shares |
|---|---|---|---|
|
James L. Go (same shareholdings as above) |
Chairman Emeritus |
|
|
|
Lance Y. Gokongwei (same shareholdings as above) |
Chairman |
|
|
|
Irwin C. Lee (same shareholdings as above) |
President & Chief Executive Officer |
|
|
|
Patrick Henry C. Go (same shareholdings as above) |
Executive Vice President |
|
|
|
Anna Milagros D. David |
Chief Marketing Officer |
49,630 |
0% |
|
Maria Celia H. Fernandez-Estavillo |
Chief Legal Counsel & Corporate Secretary |
0 |
0% |
|
David J. Lim, Jr. |
Senior Vice President |
0 |
0% |
|
Francisco M. Del Mundo |
Chief Financial Officer & Compliance Officer |
0 |
0% |
|
Michael P. Liwanag |
Senior Vice President & Investor Relations Officer |
25,000 |
0% |
|
Elisa O. Abalajon |
Vice President, Human Resources |
0 |
0% |
|
Adriano M. Diaz de Rivera |
Vice President, Supply Chain Planning & Logistics |
0 |
0% |
|
Anne Patricia C. Go |
Vice President, Marketing Services |
8,855 |
0% |
|
Krishna Mohan Suri |
Vice President, Global Innovation, Research & Development |
0 |
0% |
|
Rebecca E. Yap |
Vice President, Procurement |
0 |
0% |
|
Socorro M.L. Banting |
Vice President |
0 |
0% |
|
Charles Bernard A. Tañega |
Treasurer |
0 |
0% |
|
Eunice Anne C. Ignacio |
Assistant Corporate Secretary |
0 |
0% |
|
Karen Therese C. Salgado |
Chief Information Officer |
0 |
0% |
Dividends
The Board of Directors of Universal Robina Corporation (“URC”) approved on March 10, 2020 the declaration of the following cash dividends from the unrestricted retained earnings of URC as of December 31, 2019:
a) Regular Cash Dividend of One Peso and Fifty Centavos (P1.50) per share and paid on April 21, 2020 and
b) Special Cash Dividend of One Peso and Sixty-Five Centavos (P1.65) per share and paid on June 26,2020.
Company Website
The Company updates the public with operating and financial results through timely disclosures filed with SEC and PSE. These are available on the company’s website: https://www.urc.com.ph/
