PUBLIC SAFETY SAVINGS AND LOAN ASSOCIATION, INC. (PSSLAI)
I. Introduction and Purpose
This board charter (“Board Charter”) is a charter of the Board of Trustees (“the Board”) of Public Safety Savings and Loan Association Inc. (“PSSLAI”, the “Association”).
The Board is accountable to members and other stakeholders for the proper corporate governance and performance of the Association and is committed to strengthen the Association’s sustainability and organizational effectiveness.
This Board Charter is established to promote high standards of corporate governance and is designed to provide guidance and clarity for the Board and management regarding the role of the Board and its committees. This Board Charter shall form an integral part of each Board member’s duties, authority, and responsibilities.
This charter may be amended from time to time as required, subject to approval by the Board.
A. BOARD OF TRUSTEES
The Board of Trustees is the overall responsible for the management of the Association’s business and shall determine its strategies, policies, and guidelines and for monitoring compliance with such policies. The Board shall also ensure that the objectives of PSSLAI are furthered in accordance with the Association’s Articles of Incorporation and By-Laws.
- Composition of the Board
1.1. The Board shall be composed of nine elected (9) regular members of the Association and two (2) independent trustees, who are elected during the regular members’ meeting and shall serve until their successors have been duly elected and qualified in accordance with the Association’s By-Laws.
1.2. The role of the Chairman and the President shall in principle be separate, to ensure an appropriate balance of power, increased accountability, and greater capacity of the Board for independent decision-making.
1.3. The Board shall be headed by a competent and qualified Chairperson. The Board shall also be composed of members with collective working knowledge, personal and professional capabilities including business experience and the specific expertise that is relevant to the operation of a non-stock savings and loan association. It shall always ensure that it has an appropriate mix of competence and expertise to enable them to remain qualified for their positions individually and collectively and to fulfill its roles and responsibilities to respond to the needs of the organization.
2. Qualifications for or Disqualifications from Trusteeship
2.1. Qualifications of a Trustee
- Must be a Member in good standing with the Association for at least five (5) years.
- Must have relevant knowledge and experience, skills, and capabilities necessary for the position of a trustee of the Association. He must be able to devote sufficient time to carry out his responsibilities and, considering his fiduciary duties, he must be a person of integrity and credibility.
- Must have completed the Professional Directors Program or its equivalent.
- Independent trustees preferably should have background and relevant experience in finance, information technology, audit, and/or risk management.
- Such other qualifications as may be prescribed by pertinent laws and regulations for trustees of non-stock savings and loan associations.
2.2. Permanent Disqualifications of a Trustee
Any of the following shall be a ground for the permanent disqualification of a Trustee:
- Conviction by final judgment of an offense punishable by imprisonment for a period exceeding six (6) years, for violating the Revised Corporation Code, for violating Republic Act No. 8799, otherwise known as “The Securities Regulation Code”;
- Final determination of administrative liability for any offense involving fraudulent acts;
- Conviction by final judgment or order of a competent judicial body of any crime or offenses involving moral turpitude, dishonesty or breach of trust such as but not limited to fraud, embezzlement, extortion, malversation, robbery, theft, estafa, counterfeiting, falsification, misappropriation, forgery, bribery, false oath, perjury or other fraudulent acts or transgressions, violation of B.P. Blg. 22, violation of the Anti-Graft and Corrupt Practices Act and prohibited acts and transactions under Section 7 of R.A. No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees);
- Conviction by a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct similar to those enumerated in (a) and (b) hereof;
- Conviction by final judgment of the court for violation of banking/quasi-banking/NSSLA laws, rules and regulations;
- Those judicially declared insolvent, spendthrift or incapacitated to contract;
- person who has committed acts inimical to the interest, good name and financial stability of the Association as determined by the Board of Trustees; and
- Such other disqualifications as may be found in pertinent laws and regulations relative to trustees of non-stock savings and loan associations.
2.3. Temporary Disqualification and Removal of a Trustee
- Any Trustee who has been absent or who has not participated for whatever reasons in more than fifty (50%) percent of all meetings cumulatively during a given period, both regular and special, of the board and of the committee/s of which he is a member shall be removed for cause and disqualified for reappointment in the succeeding election, except that if the Chairperson certifies that said member was given the agenda for the meeting and their comments/discussions thereon were taken up during the meeting, said member shall be considered present in the meeting. This disqualification applies only for purposes of the immediately succeeding election.
- Such other grounds for temporary disqualification and removal as prescribed by pertinent laws and regulations.
3. Duties and Responsibilities of the Board of Trustees
- Act on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the Association and all members in a manner characterized by transparency, accountability, and fairness. The Board shall exercise leadership, prudence, and integrity in directing the Association towards its goals.
- Foster the long-term success of the Association and sustain its competitiveness and profitability in a manner consistent with its corporate objectives, for the best interest of the Association, its members and other stakeholders.
- Formulate, review, oversee, approve, and monitor the implementation of PSSLAI’s vision, mission, strategic objectives, policies and procedures that shall guide its activities in order to sustain the Association’s long- term viability and strength.
- Keep board authority within the powers of the institution as prescribed in the Articles of Incorporation, By-Laws and existing laws, rules, and regulations.
- Establish board committees that focus on specific board functions to aid in the optimal performance of its roles and responsibilities while considering the optimal mix of skills and experience to allow the committee members to fully understand, be critical of and objectively evaluate the issues.
- Adopt a Code of Business Conduct and Ethics which provides standards for professional and ethical behavior, as well as articulate acceptable and unacceptable conduct and practices in internal and external dealings of the Association and ensure proper and efficient implementation and monitoring thereof.
- Oversee the implementation of risk governance framework, the system of checks and balances, and the establishment of a sound corporate governance framework.
- Oversee the adoption of a sound Enterprise Risk Management (ERM) framework to effectively identify, monitor, assess and manage key business risks associated with PSSLAI’s objectives and implements appropriate strategies, systems and programs to manage these risks.
- Adopt and effectively implement an appropriate anti-money laundering and counter terrorism financing (AML/CTF) risk management system through its Money Laundering and Terrorism Financing Prevention Program (MTPP) in compliance with the AML/CTF obligations under the law, regulatory directives as well as the Association’s commitment to prevent any transactions that facilitates criminal and unlawful activities.
- Ensure and maintain an independent audit mechanism to monitor the adequacy and effectiveness of the Association’s governance, operations, and information systems, including reliability and integrity of financial and operational information, the effectiveness and efficiency of operations, the safeguarding of assets, and compliance with laws, rules, and regulations and contracts.
- Approve the selection and assess the performance of the Management and heads of the control functions including the Chief Risk Officer, Chief Compliance Officer and Chief Audit Officer. Further, the Board shall establish an effective performance management framework that will ensure that the Management, including the President and other key personnel’s performance is at par with the standards set by the Board.
- Exercise oversight over management acts and transactions to ensure that the finances of the Association are properly managed and the business is running smoothly; there is accurate and compliant financial reporting; sales performance is optimized through an effective sales planning and strategies implementation; the Association continues to look after the members’ welfare, and able to recruit new members and keep existing ones; loan activities and operations are properly managed and controlled; a high performance culture is maintained through the recruitment and development of a competent workforce and people empowerment; the Association has an efficient loans monitoring system in place and revenues are properly and timely collected; and complex risks and benefits and the potential financial consequences thereof are evaluated and assessed and that thresholds set up by the Board will keep the Association sustainable and profitable.
- Ensure and oversee the implementation of a group-wide policy and system governing Related Party transactions (RPTs) and other unusual or infrequently occurring transactions. The policy shall include, among others, the appropriate review and approval of material or significant RPTs which guarantee fairness and transparency of the transactions and considering the size, structure, risk profile and complexity of operations.
- Oversee the adoption of an effective succession planning and professional development program which includes a policy on retirement to ensure growth and a continued increase in the members’ value.
- Formulate and adopt a remuneration policy specifying the relationship between remuneration and performance of employees and Management that consider, among others, the level of remuneration commensurate to the responsibilities of the role. The Board shall ensure that no trustee shall participate in discussions or deliberations involving his own remuneration.
- Encourage environmental concern, sustainability and social responsibility among members, stakeholders and employees. The corporate governance proactive culture begins at the Board level.
- Assess at least annually the Board performance and effectiveness as a body, as well as its various committees, the performance and effectiveness of the President, the individual trustees, and the Association itself; regularly review the composition of the board in view of having a balanced membership.
- Establishes and maintain a transparent corporate disclosure policies and procedures to ensure that members and other stakeholders are keep informed of important developments of the Association’s financial condition, results, and business operation.
- Establish and maintain an alternative dispute resolution system in the Association that can amicably settle conflicts or differences between the Association and its members, and the Association and third parties, which may involve the submission of such conflict to mediation pursuant to the Alternative Dispute Resolution Act of the Philippines and to arbitration in accordance with the Philippine Arbitration Law.
B. CORPORATE SECRETARY
1.1. The Corporate Secretary, shall be a Filipino citizen and a resident of the Philippines, is an officer of the Association appointed by the Board. The Corporate Secretary shall be a separate individual from the Compliance Offer, not a member of the Board of Trustees and shall annually attend training/s on corporate governance.
1.2. The Corporate Secretary must possess appropriate administrative and interpersonal skills, and if he/she is not the general counsel, must have some legal skills. He/she must also have a working knowledge of the operations of the Association and be aware of the laws, rules, and regulations necessary in the performance of his duties and responsibilities.
- Duties and Responsibilities of the Corporate Secretary:
2.1. He shall keep and maintain accurate records of all meetings of the members and of the Board, including the minutes and electronic recording of teleconference or videoconference for a minimum period of five (5) years or as may be prescribed by pertinent laws and regulations, and shall attend to the giving of all notices required by the By-Laws.
2.2. He shall be custodian of the corporate seal, have charge of corporate books except books of accounts, keep records, documents, and papers of the Association; prepare ballots for the annual election.
2.3. He shall perform such other duties as may be assigned to him from time to time by the Board and such other duties incidental to his office.
2.4. He shall sign with the President all contracts, deeds, licenses, and other instruments when so ordered by the President, or the Board.
2.5. He shall also prepare such reports and statements as required by the Board and/or the President.
2.6. Review the By-Laws as required or upon order of the Board to ensure their continued adequacy and relevance and provide recommendations to the Board and Committee on necessary revisions.
2.7. Attend all Board meetings, except when justifiable causes, such as illness, death in the immediate family and serious accidents, prevent him from doing so.
2.8. Ensure that all Board procedures, rules, and regulations are strictly followed by the members.
2.9. Provide proper assistance to the Members of the Board during board and committee meetings.
2.10. Assists the trustees in attending seminars, training or development programs.
2.11. Carry out any other appropriate duties and responsibilities as may be assigned by the Board, Board Chair, Committee, Committee Chair or the President.
During the absence or inability of the Corporate Secretary, the Board shall select the person to act in his stead.
C. COMPLIANCE OFFICER
1.1. To ensure adherence to corporate principles and best practices, there shall be a designated Compliance Officer who shall have adequate stature and authority in the Association.
1.2. The Chief Compliance Officer’s qualifications shall be subject to the applicable provisions of the BSP, particularly considering fit and proper criteria such as integrity/probity, competence, education, diligence and experience and training.
1.3. The Compliance Officer shall not be a member of the Board of Trustees and shall annually attend training/s on corporate governance.
2. Duties and Responsibilities of the Compliance Officer:
2.1. Implement corporate compliance program and independently and objectively review and evaluate compliance issues/concerns within the PSSLAI organization.
2.2. Provide guidance to the Board on matters relating to the Association’s compliance and report results of the compliance efforts of the company.
2.3. Monitor, review, evaluate and ensure compliance by the Association, its officers, and Trustees with the provisions and requirements of the relevant laws, rules and regulations and all governance issuances of regulatory agencies.
2.4. Ensure the integrity and accuracy of all documentary submissions to the regulators.
2.5. Report to the Board if any violations are found and recommend the adoption of measures to prevent a repetition of the violation.
2.6. Identify possible areas of compliance issues and work towards the resolution of the same.
2.7. Ensure the attendance of the Board and key officers to relevant trainings.
2.8. Assist the Board 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 Association, and to assist in the conduct of self-assessment of the performance and effectiveness of the Board, the Board Committees and individual Board members in carrying out their functions as set out in this Charter and the respective charters of the Board Committees, as may be applicable.
2.9. Carry out any other appropriate duties and responsibilities as may be assigned by the Board, Board Chair, Committee, Committee Chair, or the President and as may be provided by the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP).
D. CHAIRMAN OF THE BOARD
- The Board shall be headed by a competent and qualified Chairman. The Chairman of the Board shall preside at all meetings of the Board. He must provide leadership and ensure effective functioning of the Board, including maintaining a relationship of trust with Board members.
- In the absence, inability, or incapacity of the Chairman, the Vice-Chairman shall preside. In the absence, inability, or incapacity of both the Chairman and Vice-Chairman, any other officer who will be delegated by the Board will preside.
- Responsibilities of the Chairman of the Board of Trustees, include, among others the following:
3.1. To call, convene and preside over all meetings of the Board of Trustees.
3.2. Supervise the preparation of the agenda of the meeting in coordination with the Corporate Secretary, taking into consideration the suggestions of the other trustees and Management.
3.3. To ensure that the board takes an informed decision. The Chairman of the board shall ensure a sound decision-making process and should encourage and promote critical discussions and ensure that dissenting views can be expressed and discussed within the decision-making process.
3.4. Maintain quality and timely lines of communication and information between the Board and Management;
3.5. Assist in ensuring compliance with the Association’s guidelines on corporate governance; and
3.6. Perform such other functions as are assigned to him by law or by the members and/or by the Board of Trustees.
E. BOARD NOMINATION AND ELECTION POLICY
- The Corporate Governance, Nomination and Remuneration Committee (CGNRC) shall oversee the nomination process for trustees, including the process for submission of applications for candidacy and supporting documents.
- The Committee shall determine whether candidates possess all the qualifications and none of the disqualifications for the position applied, based on the membership list, the By-laws, and the laws and regulations providing for qualifications of trustees. The final list of the candidates for trustee/s, including independent trustees, shall be presented by the Committee to the Board of Trustees prior to a members’ meeting. Only nominees whose names appear on the final list shall be recommended to be eligible for election.
- As prescribed in the Association’s By-laws, the annual meeting of members shall be held on the 3rd Saturday of January of each year. A set of trustees shall be elected every three (3) years by the members during its annual meeting to fill up the required seats in the Board. Only regular members are entitled to vote, and each regular member is entitled to only one (1) vote. Members may vote in person or by proxy.
Replacement of Trustees in case of Vacancy
- Any vacancy occurring in the Board of Trustees other than the removal by the members or by expiration of term, may be filled by the vote of at least a majority of the remaining trustees, if still constituting a quorum, otherwise, the vacancy must be filled by the members at a regular or at any special meeting of members called for the purpose. A trustee so elected to fill a vacancy shall be elected only for the unexpired term of his predecessor in office.
- The vacancy resulting from the removal of a trustee by the members in the manner provided by law and the by-laws may be filled by election at the same meeting of members without further notice, or at any regular or special meetings of members called for the purpose, after giving notice as prescribed in the Association’s by-laws. The elected trustee/s shall take the place of the trustee/s so removed to serve the unexpired term of his predecessor.
A. Establishment of Board Committees
The Board shall establish board committees that focus on specific board functions to aid in the optimal performance of its roles and responsibilities, in accordance with the By-Laws of the Association and to aid in good governance.
All established committees shall have committee charters stating in plain terms their respective purposes, authority, membership composition, qualifications, meetings and reporting processes, duties and responsibilities, resources and other relevant information. The charters shall provide the standards for evaluating the performance of the committees. It shall also be fully disclosed in the Association’s website.
Each Committee shall function in accordance with their respective charters. The Committees shall meet once a month at least one week before the regular board meeting but may hold one (1) special meeting per month as may be necessary.
B. Audit Committee (Audit Com)
- The Audit Committee shall be established as a committee of the Association’s board of trustees to enhance its oversight capability over the Association’s financial reporting, internal control system, internal and external audit processes, compliance with applicable laws and regulations and review all material related party transactions of the Association.
- With respect to Related Party Transactions (RPT), the Committee shall evaluate, on an ongoing basis, existing relations between and among businesses and counterparties to ensure that all Related Parties are continuously identified, RPTs are monitored, and subsequent changes in relationships with counterparties (from non-related to related and vice versa) are captured. Related parties, RPTs and changes in relationships should be reflected in the relevant reports to the Board and regulators/supervisors.
- The Audit Committee shall be composed of at least three (3) members of the Board. Majority of the members, including the Chairperson, shall be independent trustees. Any Trustee who is independent of management and free from any business or other relationship which could or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a trustee can be a Chairperson of the Committee.
- The Chairman of the Committee must not be the Chairman of the Board or of any other board-level committee.
- All members of the Committee shall have sufficient understanding of generally accepted accounting principles and financial statements, internal controls and procedures for financial reporting, and audit functions.
C. Corporate Governance, Nominations, & Remuneration Committee (Corp Gov)
- The Corporate Governance, Nomination & Remuneration Committee shall be established as a committee of the Association’s Board of Trustees tasked to assist the Board in fulfilling its corporate governance responsibilities as well as its duties in relation to the nomination, election, or replacement, and remuneration of trustees and other positions requiring appointment by the Board. The Committee shall also be responsible for overseeing the establishment of an effective Board Assessment parameters and guidelines for the Board and the different board committees and monitoring its implementation.
- The Committee shall comprise of at least three (3) members of the Board of Trustees, majority of whom should be independent trustees including the Chairperson. Any Trustee who is independent of management and free from any business or other relationship which could or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a trustee can be a Chairperson of the Committee.
- The members of the Committee must have adequate knowledge of corporate governance principles and practices and possess integrity and credibility to fairly execute the responsibilities of the Committee.
D. Board Risk Oversight Committee (BROC)
- The Risk Oversight Committee (BROC) shall be established as a committee of the Association’s Board of Trustees tasked to assist the Board in the development and oversight of the risk management program. It shall oversee the establishment of an ERM framework that will effectively identify, monitor, assess and manage key business risks. The risk management framework shall guide the Board in identifying unit/business lines and enterprise-level risk exposures, as well as the effectiveness of risk management strategies. The ROC shall be responsible for defining the Association'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.
- The Risk Oversight Committee shall be composed of at least three (3) members, the majority of whom should be independent trustees, including the Chairperson. Any Trustee who is independent of management and free from any business or other relationship which could or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a trustee can be a Chairperson of the Committee.
- The Chairman of the ROC shall not be the Chairman of the Board or any of another board-level committee.
- The members of the committee must have adequate knowledge of risk management framework and practices.
E. Membership Committee (Membership Com)
- The Membership Committee shall be established as a committee of the Board of Trustees for the purpose of promoting membership growth, addressing members’ welfare, and encouraging the retention of existing members.
- The Committee shall be composed of at least three (3) members of the Board of Trustees. The Chairperson shall be an independent trustee. Any Trustee who is independent of management and free from any business or other relationship which could or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a trustee can be a Chairperson of the Committee.
F. Executive Committee (EXECOM)
- The Executive Committee (EXECOM) shall be established as a committee of the Board of Trustees authorized to act on all matters within the competence of the Board, except with respect to: 1) approval of any action for which members’ approval is also required; 2) filling of vacancies in the Board; 3) amendment or repeal of by-laws or the adoption of new by-laws; 4) the amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable; and 5) distribution of dividends to members.
- Among others, the Committee shall develop and recommend to the Board the vision and strategies of the Association consistent with its mandate and business objectives and shall review all acts and transactions of management and approve or disapprove the same in view of the said objectives, the Association’s performance standards, corporate culture and values.
- The Committee shall be composed of at least three (3) members of the Board of Trustees.
G. Information Technology Committee (ITC)
- The IT Committee (ITC) shall oversee the Association’s IT function and will focus its efforts in ensuring consistent and deliberate progress towards a mature IT governance. It shall regularly provide adequate information to the Board regarding IT performance, status of major IT projects or other significant issues, to enable the Board to make well-informed decisions regarding the Association’s IT operations.
- The Committee shall be composed of at least three (3) members of the Board of Trustees and the Chairperson shall be a non-executive member of the Board.
H. Special Concerns Committee (SCC)
- The Special Concerns Committee (SCC) shall primarily be a recommendatory body to the Board of Trustees on policies, specific strategies, priorities, standards, and initiatives regarding existing and arising issues and concerns affecting PSSLAI considered as special concern. A special concern pertains to any internal and external issue that is not directly actionable by other existing Board Committees such that it is highly uncommon or has unique requirements but will highly impact the Association’s mission and vision. The SCC shall likewise conduct research needs in communication and address shifts in the attitude of PSSLAI’s internal and external stakeholders. It shall regularly provide adequate information regarding peculiar significant issues that will enable the BOT to make well informed decisions.
- It shall consist of at least three (3) members from the Board of Trustees.
III. Board Meetings and Quorum Requirements
1.1. The Board of Trustees shall hold a regular meeting once a month on such date and such time and place, as may be fixed by resolution of the Board, without further notice in accordance with the By-Laws.
1.2. A special meeting of the Board may be called at any time by the Chairman or by a written request of any three (3) trustees and shall be held at the head office of the Association or such place and time as may be agreed upon by the majority of the Trustees.
2. Notice of the Meeting
2.1. Notice need not be given for regular meetings of the Board. Notice for any special meeting shall be in writing or by any electronic media and shall state the date, time and place thereof, and the purpose for which it is called for. Such notice shall be sent or delivered to the Trustees at least two (2) days before the date of the meeting. When the urgency of the meeting so requires, the Chairman may authorize the Secretary to give the Trustees notice by telephone, telegram or other expeditious means, and such notice shall in all respect be as effective as notice in writing.
2.2. The agenda of the meeting and other relevant meeting materials shall also be furnished to the Trustees prior to each meeting for the trustee to review meeting materials.
3.1. A quorum at any meeting of the Board of Trustees shall consist of the majority of the Trustees and majority of such quorum shall decide any question or matter submitted to the Board for resolution.
4. Conduct of the Meeting
4.1. The members of the Board should attend its regular and special meetings in person or through teleconferencing or video conferencing or other alternative modes of communication if the trustee who is taking part in said meetings can actively participate in the deliberations on matters taken up therein. During the Board and Committee meetings, the trustee shall ask the necessary questions or seek clarifications and explanations.
4.2. Remote communications shall only be allowed if the trustee cannot physically attend the meeting due to illness, physical impossibility to attend in person, restrictions as to movement by virtue of government rules and regulations, and other similar circumstances.
4.3. For security purposes, the Board shall limit the kind of applications and/or platforms to be used in remote communication.
4.4. Meetings of the Board of Trustees shall be presided over by the Chairman of the Board, or in his absence, the Vice-Chairman or by any other trustee appointed by the Board.
4.5. The Corporate Secretary shall act as secretary of every meeting. If not present, the Chairman of the meeting shall appoint a secretary of the meeting.
IV. BOARD INDEPENDENCE
A. Independent Trustee (IT)
1.1. At least twenty percent (20%) of the total number of the members of the Board shall be independent trustees.
2. Term Limit
2.1. The independent trustees shall only serve for a maximum cumulative term of nine (9) years;
2.2. An IT who served the maximum period shall be perpetually barred from any re-election as an independent trustee;
2.3. In the instance that the Board decides to retain the independent trustee in the same capacity who had already served his/her maximum term limit, the Board shall submit to the BSP a formal written justification and seek members’ approval during the annual members’ meeting.
- In accordance with the Association By-Laws, the President, in partnership with the Board, is responsible for developing the vision and strategy for the Association. He creates short-term and long-term plans, establish budgets, and communicate the vision and strategy to all employees through its Senior Management Team. He supervises the Senior Management in the company to motivate and retain key talent and ensure a succession plan is in place for critical positions. He also oversees the financial and marketing management of the Association.
- The President shall present to the Board of Trustees at any regular or special meeting or at such other time as the Board may require, and to the members during the annual general membership meeting, a report on the state of business of the Association.
- Exercise general care, management, and administration of the business operations of the Association. The President shall ensure that: (a) the business and affairs are managed in a sound and prudent manner; and (b) operational, financial and internal controls are adequate and effective to ensure reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets and compliance with laws, rules, regulations and contracts.
- He shall provide leadership for management in determining, developing and implementing business strategies, plans and budgets to the extent approved by the Board. He shall provide the Board with a balanced and understandable account of the Association’s performance, financial condition, results of operations and prospects on a regular basis.
- He shall execute on behalf of the Association all contracts, agreements and other instruments affecting the interests of the Association which require the approval of the Board of Trustees.
- He shall perform such other duties as are incident to his office or are entrusted to him by the Board of Trustees.
V. BOARD PERFORMANCE ASSESSMENT
- The Board shall conduct an annual performance assessment of the board members and key officers. Each Trustee shall conduct an assessment on the collective performance of the board and board committees and evaluate the performance of the President and the management heads based on the attainment of the strategic objectives and targets set by the Board. The key officers refer to the Executive Vice-President, the Vice-Presidents, Chief Risk Officer, Chief Audit Executive, Chief Compliance Officer, the Corporate Secretary, and the heads of departments.
- The Corporate Governance Committee shall prepare and periodically review the assessment form regarding compliance with best governance practices and principles.
- Every three (3) years, the conduct of the Board performance assessment shall be supported by an external facilitator. The external facilitator can be any independent third party such as, but not limited to, a consulting firm, academic institution or professional organization.
- The Chairman of the Board shall act on the results of the performance evaluation by recognizing the strengths and addressing the weaknesses of each trustee. He may propose appointment of new members to the Board or seek the resignation of trustees.
- The Board shall ensure that a system that provides, at the minimum, criteria, and process to determine the performance of the Board, individual trustees and committees and allows for a feedback mechanism from the members of the Board is in place.
VI. GOVERNANCE POLICIES & PRINCIPLES
- Policy on Board Diversity
1.1. PSSLAI is committed to a diverse, inclusive, and equitable environment where all Board members, management and employees feel respected and valued regardless of gender, age, race, ethnicity, nationality, sexual orientation or identity, disability, education, political stand, and religious or cultural background.
1.2. The Board shall ensure that no trustee or candidate for trusteeship who is highly qualified and possesses the necessary experience and technical expertise, shall be discriminated against, and that it will make good use of these differences.
1.3. All Board appointments shall be done on merit, considering the skills required for business operations, management, and expertise that reflect the Association's strategic intent in order to achieve sustainable and balanced growth.
2. Policy on Training
2.1. The Board shall be kept informed of the Association’s internal policies and procedures as appropriate, and all Trustees, including management, shall receive adequate training and annual continuous professional development to be able to assess, manage, and comply with relevant developments in the business and regulatory environments, including corporate governance matters, and to facilitate knowledge and understanding of such laws and regulations.
2.2. The Board, with the assistance of Management, ensures there is an orientation program for new Trustees and a development program for existing Trustees. The orientation program for the first time Trustees is aimed at increasing the new trustee’s familiarity with the Association and ensure that incoming Trustees are appropriately apprised of their duties and responsibilities.
2.3. The training and orientation program shall include topics on corporate governance conducted by a training provider accredited by the BSP and an introduction to the Association’s business, Articles of Incorporation, and Code of Business Conduct and Ethics. Likewise, management officers shall receive appropriate orientation on his duties as a management executive and how to discharge these duties when he is first appointed to the Association. This will ensure that incoming senior officers are familiar with the Association’s business and governance processes. The Board shall ensure that there is an allocation of funds for these purposes.
2.4. The Board of Trustees shall assess their training and development needs and advise the Chairman of the Board if they would benefit from specific skills training or education respecting matters falling within the responsibility of the Board or relating to the business and operations of the Association.
2.5. The Board Secretariat shall keep records of attendance and participation of each Trustee and key officer at the required training programs, seminars, and/or workshops, as well as the details thereof.
3. Policy on Succession Planning
3.1. The Board shall ensure an effective succession planning for key officers and management. This is to ensure the continuity of support in operation and service.
3.2. The Board may prescribe a retirement age for trustees, taking into consideration local, regional and industry practices, stature, and strong qualifications of a trustee, considering factors such as board diversity, mental capacity, wisdom, competence, contribution to sustainability and innovation, among others. Meanwhile, the retirement age for the Management shall follow the compulsory retirement age prescribed under the approved Retirement Plan of the Association.
3.3. In the event of vacancy of the President position, the CGNRC will initiate the process of selection of nominees for the position from among the regular members of the Board for the Board’s approval.
3.4. The CGNRC shall review and modify the policy as deemed necessary and shall present any actions and decision to the Board.
4. Policy on Board Remuneration
4.1. In accordance with the PSSLAI’s By-Laws, the Board shall receive salaries, allowances and other compensations as may be allowed by law, for services rendered to the Association, including travel and other expenses in attending to their functions and duties, and per diems for attendance during meetings.
4.2. Levels of remuneration shall be sufficient to attract and retain the quality of trustees to run the Association successfully.
4.3. Trustees shall not participate in discussions or deliberations involving his/her own remuneration.
4.4. The compensation of the President and other Officers shall be subject to review and approval by the Board. Long-term incentive plans for Officers which the CGNRC may recommend shall be subject to review and approval by the Board and, as may be applicable, members’ confirmation.
4.5. The Board shall regularly review the existing Employee Handbook to strengthen provisions on conflict of interest, salaries, and benefit policies, promotion and career advancement and compliance of the personnel concerned with all statutory requirements that must be periodically met in their respective posts.
- Policy on Related Party Transactions (RPT)
5.1. The Board shall adopt a policy on related party transactions which shall be incorporated in various manuals and policies of the Association such as the Procurement and Vendor Management, Code of Conduct/Ethics, Whistleblowing Policy, TOSRI Rules and Outsourcing Policy and, whenever applicable and necessary, in such other policies and procedures which may be approved by the Board.
5.2. PSSLAI shall institutionalize a policy on related party transactions to ensure that such transactions are undertaken only on an arm’s length basis and subjected to appropriate oversight of the Board and Audit Committee to protect the Association from conflicts of interest which may arise from its transactions with its Related Parties. The RPT policy adopts the definitions and coverage of BSP guidelines on RPTs and other pertinent regulatory bodies.
- Policy on Conflict of Interest
6.1. The personal interest of trustees and officers should never prevail over the interest of the Association. They are required to be loyal to the organization so much so that they may not directly or indirectly derive any personal profit or advantage by reason of their position in the Association. They must promote the common interest of all members, including other stakeholders, and the Association without regard to their own personal and selfish interests.
6.2. A conflict of interest exists when a trustee or an officer of the Association:
- Supplies or is attempting or applying to supply goods or services to the Association.
- Supplies or is attempting to supply goods, services or information to an entity in competition with the Association.
- By virtue of his office, acquires or is attempting to acquire for himself a business opportunity which should belong to the Association.
- Is offered or receives consideration for delivering the Association’s business to a third party.
- Is engaged or is attempting to engage in a business or activity which competes with or works contrary to the best interests of the Association.
If an actual or potential conflict of interest should arise on the part of trustees, it should be fully disclosed, and the concerned trustee should not participate in the decision making. A trustee who has a continuing conflict of interest of a material nature should either resign or, if the Board deems appropriate, be removed from the Board in the manner prescribed in the by-laws.
6.3. A Trustee or Officer shall not disclose, reveal, or share, by whatever means or method, to any person or entity, any information especially all vital and/or confidential information it has learned, obtained, or acquired in any manner by reason of, and while performing the whole or any portion of his obligation and duties as Trustee or Officer of the Association without the prior written consent of the Association.
- Policy on Multiple Board Seats
7.1. The Board shall consider guidelines on the number of trusteeships for its members. Such guidelines should be subject to exceptions in a few cases. The optimum number should take into consideration the capacity of a trustee to perform his duties and responsibilities diligently and efficiently.
- Non-executive trustees may concurrently serve as trustees to a maximum of five (5) BSP-Regulated Entities and publicly listed or non-listed companies to ensure that they have sufficient time to fully prepare for meetings, challenge Management’s proposals/views, and oversee the long-term strategy of the Association.
- The President and other executive trustees shall submit themselves to a low indicative limit of three (3) memberships in other corporate boards. The same low limit shall apply to independent trustees who serve as full-time executives in other Associations.
- Notification of Trusteeship
Trustees shall notify the Association’s board where he/she is an incumbent trustee before accepting a trusteeship in another Association.
- Code of Business Conduct and Ethics
9.1. The Board shall develop, adopt and maintain a Code of Business Conduct and Ethics (referred here the “Code”), which provides standards for professional and ethical behavior, as well as articulate acceptable and unacceptable conduct and practices in internal and external dealings of the Association.
9.2. The Board shall ensure that the Code is properly disseminated to the Board, senior management and employees. A copy of the Code shall be disclosed and made available to the public through the Association website.
9.3. The Board ensures the proper and efficient implementation and monitoring of compliance with the Code and internal policies.
- Duties to Stakeholders
10.1. The Board shall identify the Association’s various stakeholders and promote cooperation between them and the Association in creating wealth, growth and sustainability. The stakeholders shall include, among others, members agents, employees, suppliers, the community the Association operates in and regulators.
10.2. The Board shall constantly endeavor to provide all the members the opportunity to enjoy comprehensive financial and social benefits by offering member-centric products and services built on relationships and, with their expertise and effective governance, help the Association become its members’ first choice in all their financial needs.
10.3. It is the duty of the trustees to promote member’s rights, remove impediments to the exercise of members’ rights and allow possibilities to seek redress for violation of their rights. They shall encourage the exercise of members’ rights, voting rights and the solution of collective action problems through appropriate mechanisms as well as awareness of the same to all members and stakeholders.
10.4. The Board shall adopt a transparent framework and process that allows members to communicate with the Association and to obtain redress for the violation of their rights. Stakeholders may communicate with the Association through the various Stakeholders touch points such as the Office of the Corporate Secretary, and the Association’s Website.
- Anti- Bribery & Corruption Policy
The Board shall set the tone and make a stand against corrupt practices by adopting an anti-corruption policy and program in its Code of Conduct. The same shall be disseminated to all employees across the Association through training to embed them in the Association’s culture.
- Whistle Blowing Policy
The Board shall establish a suitable framework for whistleblowing and ensure its enforcement to allow employees to freely communicate their concerns about illegal or unethicaI practices, without fear of retaliation and to have direct access to a unit created to handle whistleblowing concerns.
13. Adoption and Effectivity
This Charter shall take effect immediately after Board approval. Amendments to comply with regulatory issuances of the BSP shall be deemed adopted and effective upon the effectivity of the regulatory issuance.