1. Title Philippine’s New Paradigm on Public Corporate Governance 15 March 2012

2. 2 Slide Title Presentation Outline A.Brief History of Public Corp. Governance Reform in the Philippines B.Organic Documents for the GOCC Sector Ownership and Operations Manual Code of Corporate Governance Fit and Proper Rule C.Closing

3. 3 Slide Title A.O. No. 59, s. 1988 a)Laid down the principles and standards to be followed in the creation, management, administration, supervision and liquidation of GOCCs; b)Defined the guidelines in determining the areas or activities of government in which the corporate form shall be utilized; and c)Set down policy measures to improve the organizational and functional capabilities of government corporations.

4. 4 Slide Title A.O. No. 55, 1993 a)Laid down the principles relating to the attainment of prudential level of government expenditures in the GOCC Sector b)Provided as well for the rationalization of the sector and the move towards privatization c)Reconstituted the Government Corporate Monitoring and Coordinating Committee (GCMCC) originally constituted by President Marcos in 1984

5. 5 Slide Title GCG Charter Statement Mission The GCG is an efficient and effective central advisory, oversight, and monitoring body with authority to formulate and implement policies in the active exercise of the State’s ownership rights over GOCCs, thereby ensuring their financial viability and fiscal discipline, through adherence to the highest standards of corporate governance Vision By 2020, the GCG shall have transformed the GOCC Sector into a significant tool of the State in the attainment of inclusive economic growth and development. Core Values Integrity Professionalism Independence Love of Country

6. 6 Slide Title Problems addressed a.Weak regulatory framework b.Lack of a clear entity that exercises the State’s ownership functions c.Poor oversight mechanisms d.Need for institutional rationalization and fiscal discipline to stop the drain on government finances e.Absence of a central monitoring and policy coordinating body

7. 7 Slide Title Thrusts of the New Paradigm 1.Directors and Officers of GOCCs as fiduciaries of the State 2.Standard of Extraordinary Diligence 3.One (1) Year Term 4.Clear accountability of the CEO/Management to the Governing Board 5.Uniform Compensation System for all GOCCs 6.Power to Restructure the GOCC Sector

8. 8 Slide Title Organic Documents A.Ownership and Operations Manual for GOCCs B.Code of Corporate Governance for GOCCs C.The Fit and Proper Rule.

9. 9 Slide Title Organic Documents A.Ownership and Operations Manual for GOCCs a)Provides for the Governing Principles and Objectives of the State as an “Active Owner” of the GOCCs; b)Defines the Role and Relationship of the State, its agencies and instrumentalities, vis-à-vis the GOCCs as “significant tools for national development”; c)Provides for the roles and responsibilities of GOCCs and the Primacy of the Boards of Directors/Trustees in the governance of the GOCCs; d)Provides Guidelines the in the Monitoring and Evaluation of the GOCCs and their Governing Boards; e)Provides for the Policy Framework for Tasking GOCCs to Undertake Non-Commercial Activities.

10. 10 Slide Title Organic Documents B. Code of Corporate Governance for GOCCs a)The Role and Responsibilities of the Governing Boards, and the Individual Directors; b)Disclosure and transparency requirements; c)Code of Ethics of Directors and Officers; d)Creation of Board committees and similar oversight bodies; e)Providing for an Integrated Corporate Reporting System; and f)CSR Statement and the Role of Stakeholders.

11. Organization To formulate and support a strategy-based budgeting system. G OOD G OVERNANCE Internal Process Finance Stakeholder D EVELOPMENT O RIENTATION Social Impact Build and sustain a record for integrity, independence and competence Achieve balance between/among varied interests of GCG’ stakeholders. Develop an integrated corporate reporting (ICRS), and HR database systems GOCCs have charter statements, strategy maps and performance scorecards. Develop / implement a human resource strategy Model employer & an effective corporate governance regulator Develop & implement all mandated organic documents. To tap non-traditional funding sources. Prepare/submit timely and comprehensive reports with concrete recommendations. Involved in social transformation and poverty alleviation. Transformed GOCC sector leading in inclusive and sustainable economic growth

12. 12 Slide Title Thank you Room 479, Mabini Hall, Malacañang Compound, Manila, Philippines 1005 Tel No. (632) 784 4286 loc 4940/4970 Fax No. (632) 784 4286 loc 4719