Adherence to the highest standards of Corporate Governance is an integral part of the way we do business at NLEX Corporation (the “Company”). Corporate governance is a method of regulating the Company’s affairs through the adoption of rules and regulations designed to ensure that business is conducted with the highest standards of ethics and integrity.
The Company recognizes the importance of corporate governance in building and sustaining its long-term growth and profitability as well as enhancing stakeholders’ interests in the Company. The Company believes that the practice of corporate governance beyond mere compliance with rules and legislation, through a process of developing the proper competencies in order to establish an ethical corporate culture of principled business within the framework of its governance principles of accountability, integrity, fairness, and transparency.
As strong advocates of fairness, accountability, transparency, and integrity in all aspects of the business, the Board of Directors, Management, Officers, and Employees of the Company commit themselves to the principles and best practices of governance in the attainment of its corporate goals.
CORPORATE GOVERNANCE FRAMEWORK
KEY MANDATES
Guided by the principles of fairness, integrity, transparency, and accountability, our governance framework plays a critical role in championing ethical and sustainable practices.
The BOARD OF DIRECTORS is mandated to enhance stockholder value by fostering the long-term success of the Company and sustaining its competitiveness and profitability, in alignment with the Company’s vision, mission, and corporate objectives.
The CHAIRMAN OF THE BOARD represents the interests of all shareholders and stakeholders and oversees the performance of the Board and its Directors. He champions exemplary ethical governance principles for Directors, Officers, and Employees to uphold and emulate.
The MANAGEMENT, headed by the PRESIDENT AND CEO, is responsible for the successful implementation of the Company’s strategy and direction, as approved by the Board. Management exercises control over the Company’s operations and ensures the effective execution of strategies aligned with the business environment and organizational culture.
The CORPORATE SECRETARY, under the guidance of the Chairman, ensures the smooth flow of information within the Board, its Committees, and between Management and the Non-Executive Directors.
The COMPLIANCE OFFICER assists the Board by monitoring, reviewing, and evaluating compliance with relevant laws, rules, and regulations, as well as corporate governance issuances from regulatory bodies. The Compliance Officer reports violations to the Board and recommends appropriate disciplinary action.
The CORPORATE GOVERNANCE OFFICE (CGO) reflects the Company’s commitment to excellence in governance. The CGO supports the Board and Management in the formulation, implementation, and monitoring of governance plans, programs, and initiatives, helping to uphold the highest standards of competence and ethical culture across all levels of the organization.
The INTERNAL AUDIT function, headed by the CHIEF AUDIT EXECUTIVE, reports directly to the Audit Committee. Its role is to provide independent and objective assurance and consulting services to Management, adding value and improving operations. Internal Audit also ensures the adequacy of the Company’s risk management, control, and governance processes.
The EXTERNAL AUDIT is appointed by the Audit Committee, which reviews its qualifications, performance, and independence. To ensure objectivity, the external auditor is subject to mandatory rotation every five years, restrictions on employment by the Company, and prior approval by the Audit Committee for both audit and non-audit services. Approval of non-audit work is evaluated to avoid conflicts of interest and ensure that such engagements do not compromise the auditor’s independence.
To help ensure compliance with the principles of good corporate governance, the Board has established the Audit Committee, Governance and Risk Committee, Nomination Committee, and Compensation and Remuneration Committee.
The Governance and Risk Committee supports the Board in establishing the Company’s governance, risk management, and sustainability frameworks. It ensures these policies align with international best practices and are consistently applied across the Company.
Key responsibilities include the annual review and implementation of the Revised Manual on Corporate Governance, execution of risk management strategies, monitoring regulatory and ethical compliance, and overseeing sustainability programs and reports for the Board’s approval.
Governance and Risk Committee Charter
Members:
Lisset Laus-Velasco (Chairman, ID)
Arlyn Sicangco-Villanueva (ID)
Emmanuel G. Herbosa (ID)
Frederic C. DyBuncio (NED)
Luis S. Reñon (ED)
The Audit Committee oversees the Company’s financial reporting processes and internal controls. It approves the Internal Audit function, including its mandate and scope of work. The Committee is also responsible for recommending the appointment of the external auditor and ensuring that any non-audit services do not compromise the auditor’s independence.
Members:
Arlyn Sicangco-Villanueva (Chairman, ID)
Emmanuel G. Herbosa (ID)
Lisset Laus-Velasco (ID)
Jose Ma. K. Lim (ED)
Jose T. Sio (NED)
The Nomination Committee is responsible for vetting and recommending candidates for the Board of Directors and its Committees. It may engage external search firms or consultants, as authorized by its Charter, to support its search and evaluation process.
Members:
Jose Ma. K. Lim (Chairman, ED)
Luis S. Reñon (ED)
Lisset Laus-Velasco (ID)
The Compensation and Remuneration Committee oversees the compensation and bonuses of senior executives, as well as the overall compensation framework for all employees. It ensures that bonus targets are challenging and aligned with long-term performance goals to drive management motivation.
Compensation and Remuneration Committee Charter
Members:
Manuel V. Pangilinan (Chairman, NED)
Jose Ma. K. Lim (ED)
Arlyn Sicangco-Villanueva (ID)
KEY STAKEHOLDERS
We recognize the importance of our stakeholders as essential partners in good corporate governance and in building a sustainable, mutually beneficial future.
SHAREHOLDERS – The Company is committed to protecting shareholders’ rights by creating value and driving sustainable business growth. We uphold their right to timely and regular access to relevant information. Financial performance is regularly disclosed through press releases and postings on the Company website.
BOARD OF DIRECTORS – The Board of Directors is primarily responsible for the Company’s governance. In addition to setting policies and corporate objectives, the Board provides independent oversight of Management.
COMPLIANCE OFFICER – To ensure adherence to corporate governance principles and best practices, the Board appoints a Compliance Officer tasked with monitoring compliance with the Company’s Manual on Corporate Governance and the rules and regulations of relevant regulatory agencies.
CUSTOMERS – The Company strives to meet and exceed customer expectations through continuous engagement and various service touchpoints. We aim to understand our customers’ needs, address concerns promptly, and enhance the overall customer experience.
EMPLOYEES – The Company is committed to employee welfare and development. We provide career growth opportunities through learning and development programs, skills training, and performance management. Employees are fairly compensated based on qualifications and performance, regardless of gender, and are provided with competitive benefits, healthcare, and a safe work environment.
We are further committed to maintaining high employee engagement. Guided by periodic engagement surveys, we implement focused initiatives to improve motivation and satisfaction. Open communication is encouraged, keeping employees informed and empowering them to contribute feedback for continuous improvement.
SUPPLIERS – The Company maintains mutually beneficial relationships with suppliers who share our values of fairness, accountability, integrity, and transparency. Suppliers undergo an accreditation process based on financial and technical capability, legal compliance, and adherence to environmental, health, safety, and labor standards. Procurement is generally conducted through competitive bidding among accredited suppliers, in accordance with our Supplier/Contractor Relations Policy.
COMMUNITIES AND ENVIRONMENT – The Company engages with communities, including those directly impacted by our operations, through CSR programs focused on education, livelihood, health, disaster preparedness, and environmental protection.
We are committed to environmental sustainability, complying with applicable laws and regulations. Initiatives to reduce waste and our carbon footprint are implemented, and sustainability data is regularly monitored. Sustainability principles are integrated into our business strategies and operations.
CREDITORS – In line with the Code of Corporate Governance, we protect creditor rights by disclosing material information such as earnings results and risk exposures relating to loan covenants.
These policies were based on best Corporate Governance practices and adapted to the Company’s business environment:
(Click the title to download the PDF)
MANUAL ON CORPORATE GOVERNANCE is the foundation of the Company’s governance policies, which states the responsibilities of the Board, Management and the Company to stockholders and all other stakeholders. It complies with the SEC Code of Corporate Governance under SEC Memorandum Circulars No. 2 Series of 2002, No. 6 Series of 2009. The Corporate Governance Manual was amended and approved by the Board on May 2, 2022. All relevant Company policies and committee charters are annexed to the MOCG.
CODE OF BUSINESS CONDUCT AND ETHICS establishes the commitment of everyone in the Company to do business according to the highest standards of ethics. The Code decrees the principles and values which shall guide and govern all decisions and actions of the Company’s Directors, Officers, and Employees when performing their respective duties and responsibilities, and all of the Company’s business relationships. This was adopted by the Company on July 30, 2019.
CONFLICT OF INTEREST POLICY sets the requirements for all Directors, Officers and Employees to observe the highest degree of transparency, selflessness and integrity in the performance of their duties, free from any form of conflict with personal interest. This was adopted by the Company on July 30, 2019.
Conflict of Interest – Implementing Policy and Procedure
POLICY ON GIFTS, ENTERTAINMENT AND SPONSORED TRAVEL regulates the acceptance of gifts offered and given by third parties to prevent all directors, officers and employees from putting themselves in situations that could affect the fair, objective and effective performance of their duties. This was adopted by the Company on July 30, 2019.
Gifts, Entertainment, and Sponsored Travel – Implementing Policy and Procedure
POLICY ON GIFT GIVING ACTIVITIES provides guidance and procedural safeguards with respect to giving gifts to government officers/officials and business partners for or on behalf of the Company in accordance with applicable laws and Company policies. Directors, officers, employees and consultants are enjoined to strictly comply with this Policy. This was adopted by the Company on July 30, 2019.
POLICY ON HANDLING OF EMPLOYEE WHISTLEBLOWING provides guidelines on handling employee disclosures or complaints of violation of rules pertaining to the aforestated matters, protects whistleblowers from retaliation, and ensures confidentiality and fairness in the handling of a disclosure or complaint. This was adopted by the Company on July 30, 2019.
Handling of Employee Whistleblowing – Implementing Policy and Procedure
Employees’ conduct can reinforce an ethical atmosphere and positively influence the conduct of fellow colleagues. Any suspected misconduct or awareness of irregularities may be reported to the appropriate level of management or to the CG office through the following channels:
All text messages, calls, detailed notes and/or emails received will be dealt with confidentially.
SUPPLIER-CONTRACTOR RELATIONS POLICY seeks to ensure that the Company upholds the highest professional standards in business practices and ethics in its dealings with suppliers and contractors in the procurement of goods and services. The policy also seeks to maintain the Company’s reputation for equal opportunity and honest treatment of suppliers in all business transactions. It establishes clear rules for arm’s length transactions and fair treatment of prospective and existing suppliers with the objectives of always obtaining the best value for the company. The policy specifically adopts the processes of vendor accreditation and competitive bidding as the general rule and establish practices to ensure the contracts are awarded only to qualified and duly-accredited suppliers and vendors who offer the best value for money for the Company’s requirements. This was adopted by the Company on July 30, 2019.
INSIDER TRADING POLICY regulates trading of shares by Company executives, officers, and employees with direct access to unpublished information relating to the Company’s financial and operating results, in the interest of CG and transparency. This was adopted by the Company on July 30, 2019.
RELATED PARTY TRANSACTIONS POLICY ensures that the transaction of the Company with its related parties are conducted in fair and at arms’ length terms. This was amended and approved by the Board on May 2, 2022
The Company aims to establish the right culture and promote the right behavior. These are integral aspects of corporate governance in the company. Doing this requires the proper structures, policies and processes which are all made relevant to company personnel through education and communication initiatives.