CORPORATE GOVERNANCE


Question

CIAC Compliance

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I. STAKEHOLDER RELATIONSHIP

1. Policy disclosure

Does the GOCC disclose a policy that:

1.a. Stipulates the existence and scope of its efforts to address customer’s welfare?

The existence and scope of the efforts of CIAC to address customer welfare are evidenced by the following:

  • Procedure for addressing Customer Feedback;
  • Passenger Survey Feedback Mechanism Procedure; and
  • CRK Passenger Survey

Policies - Customer Welfare

1.b. Elaborates its efforts to interact with the communities in which they operate?

CIAC’s posting of its Corporate Social Responsibility (CSR) statement in its website is a clear and manifest disclosure of its efforts to interact with its communities and other stakeholders. In addition thereto, the CSR Statement is also reflected in the CIAC Manual on Corporate Governance.

Furthermore, CIAC has a dedicated department called the Community Relations Department which, as a matter of policy, is mandated to plan, implement and monitor holistic programs for specific groups and communities affected by operating the Clark International Airport.

CSR Statement

CIAC Manual on Corporate Governance (Page 25)

1.c. Ensure that its value chain is environmentally friendly or is consistent with promoting sustainable development?

CIAC has an approved Environmental Policy.

There is also a provision in the CIAC Manual on Corporate Governance which states:

Environment — CIAC should consider that there are inevitable environmental impacts associated with daily operations. It shall be the goal of CIAC to minimize harmful effects and consider the development and implementation of environmental standards to achieve this to be of great importance. As such, CIAC should strongly encourage 3 R’s: “Reduce”, “Re- use”, and “Recycle”.

In the course of the operations of CIAC, it should identify opportunities to reduce consumption of energy, water and other natural resources. CIAC should also strive to re-use and recycle where possible and dispose of non- recyclable items responsibly, thereby minimizing our impact on the environment. In doing so, by adopting simple, environmentally friendly initiatives, CIAC shall raise awareness among the members of the communities it affects.

Environmental Policy

CIAC Manual on Corporate Governance (Page 29)

2. Activities implementing abovementioned policies

Does the GOCC disclose the activities it has undertaken to implement the abovementioned policies?

2.a. Customer health and safety

CIAC has Health and Safety Policy.

Also, in the Management Audit for 2015, it was stated that “the Top Management has provided the necessary resources (e.g. fire trucks, terminal facilities and equipment) for CRK’s operation” to maintain the Quality Management System and to enhance customer satisfaction.

Furthermore, in our desire to give CRK passengers convenience and passenger satisfaction, we further upgraded the airport facilities and equipment. These upgrades may be found in Page 15 of the 2015 Annual Report.

Activities - Customer Health and Safety

2.b. Interaction with the communities

The Community Relations Department yearly submits to the Corporate Planning Department its scorecard, which summarizes the programs, activities and projects that have been carried out. These documented accomplishments are integrated into the CIAC Annual Report

Moreover, CSR Programs which are gender-mainstreamed are submitted to CIAC’s mother agency, the Department of Transportation, and the Philippine Commission on Women (PCW) which are mandated by the national government to do appropriate review and endorsement. Believing that CIAC’s initiatives can be a good example to other organizations, PCW invited last 1 December 2015 the CIAC and its representative to act as a guest speaker in the National Forum entitled ““Promoting Safe Communities: A Forum with Male Advocates Against Violence Everywhere." Accordingly, the letter of invitation specifies its request to “share CIAC’s Gender and Development (GAD) projects and activities, particularly the creation of safe environment to address the social costs of feminization of migration.”

Activities - Communities

2.c. Environmentally-friendly value chain

CIAC undertakes the following activities in compliance with its Environmental Policy:

  • Monitoring of Air, Noise, Smoke Emission of Generator Sets and Drinking Water Quality;
  • Entering into a Memorandum of Agreement for the creation of a Multi-Partite Monitoring Team; and
  • Self Monitoring Report being submitted to the Department of Environment and Natural Resources (DENR) - Environmental Management Bureau (EMB).

Activities - Environment

3. Corporate Social Responsibility

Does the GOCC have a separate corporate social responsibility (CSR) report/section or sustainability report/section?

The Corporate Governance website of CIAC has a specific section entitled Corporate Social Responsibility.

CSR Statement

4. Stakeholders' effective redress for violation of rights

Where stakeholder interests are protected by law, stakeholders should have the opportunity to obtain effective redress for violation of their rights. Does the GOCC provide contact details via the company's website or Annual Report which stakeholders (e.g. customers, suppliers, general public etc.) can use to voice their concerns and/or complaints for possible violation of their rights?

CIAC has Feedback and Redress Mechanisms as embodied in its Citizen Charter.

Citizens Charter

5. Performance-enhancing mechanisms for employee participation

Performance-enhancing mechanisms for employee participation should be permitted to develop.

5.a. Does the GOCC explicitly mention the health, safety and welfare policy for its employees?

CIAC has Board-approved Health and Safety Policy, as well as Employee Welfare Policy. The same is cascaded to the employees in the form of Inter-Office Memorandum.

Employee Health, Safety and Welfare Policy

5.b. Does the GOCC publish data relating to health, safety and welfare of its employees?

CIAC published in its website the Health and Wellness Programs for 2015. In addition, precautionary memoranda are being issued of monitored parameters failed to meet the standards.

Employee Health, Safety and Welfare Activities

5.c. Does the GOCC have training and development programmes for its employees?

CIAC-Human Resources Department (HRD) has a Training Calendar for 2015.

CIAC 2015 training calendar for HRD

5.d. Does the GOCC publish data on training and development programs for its employees?

CIAC-HRD submitted the 2015 Training Status Report.

2015 Training Status Report

6. Whistleblowing Policy

Stakeholders including individual employee and their representative bodies, should be able to freely communicate their concerns about illegal or unethical practices to the board and their rights should not be compromised for doing this.

6.a. Does the GOCC have procedures for complaints by employees concerning illegal (including corruption) and unethical behavior?

CIAC has a Whistleblowing Policy approved by the Board of Directors.

CIAC Whistleblowing Policy

6.b. Does the GOCC have procedures to protect an employee/person who reveals illegal/unethical behavior from retaliation?

The procedures to protect an employee/person who reveals illegal/unethical behaviour from retaliation are stipulated in the CIAC Whistleblowing Policy.

CIAC Whistleblowing Policy

Question

CIAC Compliance

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II. DISCLOSURE AND TRANSPARENCY

7. Quality of Annual Report

Does the GOCC's annual report disclose the following items:

7.a. Corporate objectives

Pages 34-37 of the CIAC 2015 Annual Report discuss in detail the CIAC Strategic Objectives based on the five (5) perspectives.

Annual Report 2015 (Pages 34-37)

7.b. Financial performance indicators

Pages 5 and 42-60 of the CIAC 2015 Annual Report contain the financial highlights and financial statements of the company.

Annual Report 2015 (Page 5 and 42-60)

7.c. Non-financial performance indicators

Pages 6-7 of the CIAC 2015 Annual Report contain the non-financial performance indicators of the company.

Annual Report 2015 (Pages 6-7)

7.d. Details of whistle-blowing policy

CIAC Whistleblowing Policy is uploaded in the CIAC website.

CIAC Whistleblowing Policy

7.e. Biographical details (at least age, qualifications, date of first appointment, relevant experience, and any other directorships of listed companies) of directors/commissioners

CIAC BOD Profiles are uploaded both in the Transparency Seal and in the Corporate Governance sections of the CIAC website.

BOD Profiles

8. Downloadable Annual Reports

Are the annual reports downloadable from the GOCC's website?

CIAC Annual Reports are available at the CIAC website.

Annual Report

9. Corporate Governance Confirmation Statement

Does the Annual Report contain a statement confirming the company's full compliance with the code of corporate governance and where there is non-compliance, identify and explain reasons for each such issue?

The CIAC compliance officer issued a Statement confirming CIAC’s full compliance with the Code of Corporate Governance

Statement Confirming CIAC’s full compliance with the Code of Corporate Governance

10. Timely filing/release of annual/financial reports

10.a. Are the audited annual financial report/statement released within 60 days upon receipt from COA?

Audited AFS 2015

Receipt from COA – 29 June 2016

Date of publication in CIAC website – 08 July 2016

Audited AFS 2015

10.b. Is the annual report released within 90 days from release of audited financial report?

The Audited AFS 2015 was received on 29 June 2016 while the Annual Report was released on July 29, 2016.

Date of publication in CIAC Website: July 18, 2016

Annual Report 2015

10.c. Is the true and fairness/fair representation of the annual financial statement/reports affirmed by the board of directors/commissioners and/or the relevant officers of the company?

The CIAC Board issued a Statement Confirming the Truth and Fairness of the CY 2015 Financial Statement of CIAC.

Statement confirming the Truth and fairness of the CY 2015 FS

Question

CIAC Compliance

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III. RESPONSIBILITIES OF THE BOARD

11. Corporate Vision/Mission

11.a. Has the Board of Directors reviewed the vision and mission/strategy in the last financial year?

The Clark International Airport Corporation (CIAC) conducted its Strategic Planning Workshop on 04-05 June 2015 at the Widus Hotel to formulate the Performance Scorecard which were presented during Performance Agreement Negotiation pursuant to GCG Memorandum Circular No. 2013-02 entitled “Performance Evaluation System (PES) for the GOCC Sector.” During the workshop, the CIAC Performance Scorecard along with the vision, mission and strategic directives, were presented and reviewed by the CIAC Board of Directors. Ms. Marissa Marie R. Redondo, Strategic Management and Organizational Development expert, facilitated the review of the foundations of CIAC - its vision, mission, mandate, and core values - as to its relevance. After discussion, the participants regarded the items still suitable and relevant. During its 8th Special Board meeting held on 13 August 2015, the CIAC Board of Directors approved the 2016 Performance Scorecard of CIAC, which contains the vision, mission and targets. The same were submitted to the GCG on 01 December 2015 and formed part of the Performance Agreement.

CIAC Strategic Planning Workshop 2015

11.b. Has the Board of Directors monitor/oversee the implementation of the corporate strategy?

Section 3.5.c of the CIAC Manual on Corporate Governance states the following as one of the specific functions of the Board: “Monitor and evaluate on a regular basis the implementation of corporate strategies and policies, business plans and operating budgets, as well as Management’s over-all performance to ensure optimum results”

CIAC Manual on Corporate Governance (Page 8)

12. Performance Evaluation System

Did the GOCC achieve 90% in the PES?

CIAC achieves a PES rating of 90.54% for 2015.

CIAC 2015 Interim Performance Scorecard

13. Code of Ethics/Conduct

13.a. Are the details of the code of ethics or conduct disclosed?

Standards of conduct are embodied in the CIAC Table of Offenses and Corrective Actions.

Table of Offenses

13.b. Does the GOCC disclose that all Directors/Commissioners, senior management and employees are required to comply with the code?

Section 10.1 of the CIAC Manual on Corporate Governance provides that the CIAC Board of Directors, the senior management officers and employees shall stricly observe and adhere to the CIAC Employee's Conduct and Discipline and the Table of Offenses and Corrective Actions.

CIAC Manual on Corporate Governance (Page 31)

13.c. Does the company disclose how it implements and monitors compliance with the code of ethics or conduct?

Administration and enforcement of employee discipline, the procedures in imposing disciplinary action and the application of disciplinary/corrective action may be found at the CIAC Table of Offenses.

Table of Offenses

Nomination and Compensation/Remuneration Committee

14. Does the Board appoint a Nomination Compensation / Remuneration Committee?

Section 4.2.1 of the CIAC Manual on Corporate Governance states that “The Executive Committee shall also function as the Governance Committee, Nomination and Remunerations Committee and Risk Management Committee.”

In 2016, the Board created a separate Nomination and Remunerations Committee

CIAC Manual on Corporate Governance (Page 15)

List of Committees as of 6 December 2016

Charter of Nomination and Remunerations Committee

15. Did the Nomination and Compensation / Remuneration Committee meet at least twice during the year?

No Executive Committee Meetings were held in 2015.

16. If yes, is the report of the Nomination and Compensation / Remuneration Committee publicly disclosed?

No Executive Committee Meetings were held in 2015.

Audit Committee

17. Does the Board appoint an Audit Committee?

The Board appointed an Audit Committee. The members of the Audit Committee are as follows:

  • Ramil M. Guiao (Chairman)
  • Jose Ma. J. Fernandez (Member)
  • Alipio F. Fernandez, Jr. (Member)

Board Committees and their Composition

18. If yes, is the report of the Audit Committee publicly disclosed?

The Audit Committee activities for 2015 are likewise uploaded in the Transparency Seal.

Audit Committee Report 2015

19. Does at least one member of the Audit Committee have an audit, accounting or finance background (qualification or experience)?

Dir. Jose Ma. J. Fernandez is a graduate of AB Economics, BS Business Administration, and Master in Business Management, and he worked in some banking institutions.

Dir Fernandez-CV

20. Did the Audit Committee meet at least four (4) times during the year?

The Audit Committee had six (6) meetings in 2015.

Attendance Ledger of Audit Com Meetings CY 2015

Risk Management Committee

21. Does the Board appoint a Risk Management Committee?

Section 4.2.1 of the CIAC Manual on Corporate Governance states that “The Executive Committee shall also function as the Governance Committee, Nomination and Remunerations Committee and Risk Management Committee.”

CIAC Manual on Corporate Governance (Page 15)

22. If yes, is the report on Risk Management Committee publicly disclosed?

No Risk Management Committee meetings were held in 2015.

23. Does at least one (1) member of the Risk Management Committee have a background in finance and investments?

Dir. Jose Ma. J. Fernandez has finance and investments background.

He is a graduate of AB Economics, BS Business Administration, and Master in Business Management, and he worked in some banking institutions.

CV - Dir. Jose Ma. J. Fernandez

24. Board meetings and attendance

24.a. Are the Board of Directors meetings scheduled at the beginning of the year? (end of Q1)

Article IV Section 6 of the Amended By-Laws of CIAC states that “the regular meetings of the Board of Directors shall be held once a month, preferably on the first week of every month.”

CIAC Amended by-laws 19 March 2015 (Page 7 of 16)

24.b. Does the Board of Directors meet at least monthly?

For 2015, a total of 13 Board meetings were held, but no meeting was conducted in November due to conflict in the schedule of the directors.

Attendance Ledger - Board Meetings CY 2015

24.c. Did the Board of Directors meet on at least 75% on their scheduled meetings?

Article IV Section 6 of the Amended By-Laws of CIAC states that “the regular meetings of the Board of Directors shall be held once a month, preferably on the first week of every month.”

For 2015, the Board of Directors was not able to meet the scheduled board meeting in November due to the conflict of schedules of the Directors.

CIAC Amended by-laws 19 March 2015 (Page 7 of 16)

24.d. Has each of the directors/commissioners attended at least 90% of all the board meetings held during the year?

10 out of 12 Directors attended 100% of all the Board meetings in 2015 while the other two directors scored 89.28% and 68% respectively.

Summary of Attendance - Board and Committee Meetings CY 2015

24.e. Did the Board of Directors meet separately at least once during the year without the President and CEO present?

For 2015, the Board of Directors did not meet separately without the President and CEO.

25. Access to information

25.a. Does the GOCC have a policy that stipulates board papers for Board of Directors/ Commissioners meetings be provided to the Board at least three (3) working days in advance of the board meeting?

The said policy is stipulated under Sec. 3.13.3 of the Manual on Corporate Governance

CIAC Manual on Corporate Governance (Page 13)

25.b. Is the Board Secretary trained in legal, accountancy or company secretarial practices?

Atty. Misheena Joyce Tiatco-Donina, the Acting Corporate Secretary is a Juris Doctor graduate and an Attorney-at-law.

Profile - Atty. Misheena Joyce Tiatco-Donina

26. Internal Audit

26.a. Does the company have a separate internal audit function?

CIAC has a separate internal audit function as evidenced in its Organizational Chart.

Organizational Chart

26.b. Does the appointment and removal of the internal auditor require the approval of the Audit Committee?

One of the functions of the Audit Committee include the approval of the appointment and removal of the internal auditors of the Internal Audit Department.

Audit Committee Charter (Page 1)

27. Risk Oversight

27.a. Does the company disclose the internal control procedures/risk management systems it has in place?

CIAC has a procedure in addressing observation and opportunities for improvement.

QMS-P-005

27.b. Does the annual report disclose that the Board of Directors/Commissioners has overseen a review of the company’s material controls (including operational, financial and compliance controls) and risk management systems?

No

27.c. Does the company disclose how key risks are managed?

CIAC has a procedure in addressing observation and opportunities for improvement.

QMS-P-005

27.d. Does the Annual Report contain a statement from the Board of Directors or Audit Committee commenting on the adequacy of the GOCC's internal controls/risk management systems?

No

28. Board Chairman

Do different persons assume the roles of Chairman and CEO?

Per Executive Order No. 64, the Secretary of the Department of Transportation (DOTr) is the Chairman of CIAC. For 2015, the CIAC Chairman is Atty. Joseph Emilio A. Abaya. His designated alternate is Undersecretary Jose Perpetuo M. Lotilla, who was later on replaced by Undersecretary Rene K. Limcaoco in view of the former’s resignation. The President and CEO, on the other hand, is Atty. Emigdio P. Tanjuatco III.

Board Chairman

For 2016, CIAC Chairman is Atty. Arthur P. Tugate. His designated alternate is Atty. Roberto C.O. Lim. The Acting President and CEO / Officer-in-charge, on the other hand, is Alexander S. Cauguiran.

29. Board of Directors Development

29.a. Does the GOCC have orientation program for new Directors?

CIAC has an Orientation Program for newly-appointed directors.

CIAC Directors' Orientation Program

29.b. Does the GOCC have a policy that encourages Directors/Commissioners to attend on-going or continuous professional education programs?

Sec. 3.11 and Sec 3.12 of the CIAC Manual on Corporate Governance provides the policy on director's attendance to on-going or continuous professional education programs.

CIAC Manual on Corporate Governance Page 12.

29.c. Did all Appointive Directors attend at least one (1) training for the calendar year?

Two (2) directors attended trainings in 2015, namely: Dir. Felipe Gerardo Mallari and Dir. Ramil M. Guiao. Both directors attended the training on “How to Really Read Financial Statements” held on 18-19 June 2015, and Dir. Guiao completed the Annual Training Program for Corporate Governance on 15 April 2015.

Training Certificates of Appointive Directors

30. Board Appraisal

30.a. Is an annual performance assessment conducted of the Board of Directors?

Section 4.6 of the CIAC Manual on Corporate Governance states the provision on the Annual Performance Assessment conducted of the Board of Directors.

CIAC Manual on Corporate Governance (Page 17)

30.b. Does the GOCC disclose the process followed in conducting the Board assessment?

Per Section 4.6 of the CIAC Manual on Corporate Governance, the CIAC Board adheres to the GCG Memorandum Circular No. 2014-03 entitled “Performance Evaluation for Directors in the GOCC Sector” and subsequent amendments thereto, if any.

CIAC Manual on Corporate Governance (Page 17)

30.c. Does the GOCC disclose the criteria used in the Board assessment?

For 2015, CIAC referred to GCG Memorandum Circular No. 2014-03 (3rd Issue) for the criteria in the Board assessment.

GCG Memo Cir. No. 2014-03 (3rd Issue) - Performance Evaluation for Directors

31. Committee Appraisal

Is an annual performance assessment conducted of the Board of Directors Committees?

Secion 4.7 of the CIAC Manual on Corporate Governance stipulates the provision on Annual Committee Appraisal.

CIAC Manual on Corporate Governance (Page 17)

Question

CIAC Compliance

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IV. STAKEHOLDER RELATIONSHIPS AND DISCLOSURE & TRANSPARENCY

1. Stakeholder Relationships

Does the GOCC practice Global Reporting Index (GRI) on its annual reports?

For 2015, CIAC did not practice Global Reporting Index (GRI) on its annual reports.

2. Disclosure and Transparency

Quality of Annual Report: Are the audited annual financial report/statement released within 30 days upon the receipt from COA?

For the 2015 Audited AFS:

Receipt from COA – 29 June 2016

Date of publication in CIAC website – 08 July 2016

Question

CIAC Compliance

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V. RESPONSIBILITIES OF THE BOARD

1. Are there members of the Board of Directors who hold more than five (5) positions in GOCCs and PLCs?

No member of the CIAC Board of Directors is holding more than five (5) positions in GOCCs and PLCs.

2. Is there non-compliance with Good Governance Conditions?

CIAC is compliant with all GCG Good Governance Conditions resulting to a rating of 90.54% in the PES.