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, on 4 October 2016, CIAC was issued on Aerodrome Certificate by the Civil Aviation Authority of the Philippines (CAAP). The Aerodrome Certification is vital to the operations of the CRK, indicating it has passed the international standards set by International Civil Aviation Organization (ICAO) and the CAAP. The Aerodrome Certification has set serveral aerodrome procedures covering safety management system, aerodrome reporting, access to the movement area, aerodrome emergency plan, rescue and fire figting service, aerodrome inspection, and visual aids that include electrical systems, and aerodrome lighting (page 30 of the CIAC Annual Report 2016)

Further, on 17 August, CIAC conducted the CRK Full Scale Emergency Exercise in a bid to enhance the inter-operability of the CRK in disaster preparedness. The simulated drills were aimed at ensuring the efficiency and responsiveness of the emergency response teams not only in Clark but also of other partnet agencies in Angles City, Mabalacat City, and those representing other government agencies (page 31 of CIAC Annual Report for 2016).

Health and Safety Policy

CIAC Annual Report for CY 2016

2.b. Interaction with the communities

Through the scorecard that the Comrel Department submits every year to Corplan, the programs, activities and projects that have been carried out are specified. The accomplishments are documented and submited. Subsequently, the accomplishments are integrated into the CIAC Annual Reports prepared by Corplan.

Moreover, the CSR programs which are gendered — mainstreamed are submitted to CIAC's mother agency, the Department of Transportation. As a matter of fact, the year 2016 was welcomed with much joy, aspiration and gratitude as the Clark International Airport Corporation (CIAC) received from the Department of Transportation on 21 January 2016 during the 117th Anniversary of CIAC's mother agency the Gender and Development (GAD) Award of Recognition of CIAC's continuous determination, contribution and sincerity towards the attainment of gender-responsive air transport system through the inclusion of gender perspective in relevant activities and strategies in its corporate social responsibility (CSR) which play a dynamic role in achiveing acceptable work conditions to ther employees and help a better quality of life for the community. It is worthy to note that CIAC was the sole awardee for the year's awarding event.

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;
  • 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 2016. In addition, precautionary memoranda are being issued of monitored parameters failed to meet the standards.

Further, on 25 October 2016, CIAC conducted the first phase of random drug testing where a total of one hundred fifty (150) were required to undergo the drug test (page 45 of the CIAC Annual Report for CY 2016)

Health and Wellness Program for 2016 Activities

CIAC Annual Report for CY 2016

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

CIAC-Human Resources Department (HRD) has a Training Calendar for 2016.

CIAC 2016 training calendar for HRD

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

In 2016, the Human Resource Department of CIAC facilitated five (5) in-house trainings. A total of 120 employees attended the said trainings. Also, a total of twenty three (23) external trainings were attended by thirty (30) organic employees (page 42 of the CIAC Annual Report 2016 for 2016)

2016 Training Status Report

CIAC Annual Report for CY 2016

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 18-25 of the CIAC 2016 Annual Report discuss in detail the CIAC Strategic Objectives based on the five (5) perspectives.

Annual Report 2016 (Pages 18-25)

7.b. Financial performance indicators

Pages 4 and 56-71 of the CIAC 2015 Annual Report contain the financial highlights and financial statements of the company.

Annual Report 2016 (Page 4 and 56-71)

7.c. Non-financial performance indicators

Pages 8-11 of the CIAC 2016 Annual Report contain the non-financial performance indicators of the company.

Annual Report 2016 (Pages 8-11)

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 2016

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 2016 FS

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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 composed of two session:

The first session was conducted last 07 to 09 June 2016, that with the following accomplishments: CIAC/CRK’s Stakeholders Analysis; updated SWOT Analysis in reference to Airport Cooperative Research Program (ACRP)'s recommended Matrix; recommended Strategies for the organization applying the TOWS Strategic Alternative Matrix; identification and assessment of the Risk Factors for CIAC and CRK based on ISO 3100:2009 Risk Management; and review of the relevance of the organization’s Vision, Mission and Core Values.

The second session was held on 01 to 02 October 2016 at the CRK Domestic Pre-Departure Area. This session concentrated on the formulation of the CIAC Strategic Plan Manual for CY 2017. Members of the Board of Directors (which includes Representative from Department of Transportation, Manila International Airport Authority, Department of Tourism, and Civil Aviation Authority of the Philippines) attended the event and shared their inputs to the body.

After consolidating the processed outputs from the planning activity, the CIAC Strategic Plan Manual for CY 2017 was distributed to the CIAC employees. The plan serves as a blueprint for the department and offices, specifically employees, as it captures the organization’s vision, mission, Core Values, Strategic Objectives, and strategic initiatives. It defines their roles and commitments toward the attainment of the organization’s vision.

CIAC Strategic Plan Manual for CY 2017

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 94.00% for 2016.

CIAC 2016 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?

Yes, The Executive Committee met Three (3) times and Nomination and Remuneration Committee met once for CY 2016

Attendance Ledger for Executive Committee Meeting 2016

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

No

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 eight (8) meetings in 2016.

Attendance Ledger of Audit Com Meetings CY 2016

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)

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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

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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.