15, Series of 2017, we hereby submit the 2020 Integrated Annual Corporate Governance Report (I-ACGR) of Far Eastern University, Incorporated. Qualifications and disqualifications of the Board of Trustees as set out in the amended FEU Regulations.
The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the company’s articles and by-laws, and other legal pronouncements and guidelines should be clearly made known to all directors as well as to stockholders and other stakeholders
This is stated in the Audit Committee's Report to the Board of Directors for the fiscal year ended May 31, 2020. See the Profile of the Corporate Governance Committee Members in the 2020 Final Disclosure Statement (SEC Form 20 IS), pages 6- 8 in the link below.
To show full commitment to the company, the directors should devote the time and attention necessary to properly and effectively perform their duties and responsibilities, including sufficient time to be familiar with the corporation’s business
Non-executive directors serve concurrently in a maximum of five publicly listed companies to ensure that they have sufficient time to fully prepare for minutes, challenge Management's proposals/viewpoints and oversee the long-term strategy of the company. Please see the directorships and/or trusteeships of the FEU trustees in both listed and unlisted companies in the 2020 Definitive Information Statement (SEC Form 20 IS), pages 5-8 in the link below. Sufficient Each member of the FEU Board of Trustee must notify the Chairman of the Board when he/she is invited to join the board of another company.
Company has no executive directors serving on more than two boards of listed companies outside the group. Compliant FEU has no executive trustee serving on more than two boards of listed companies outside the FEU group. Comply The regular meeting of the Board of Trustees is held every third (3rd) Tuesday of each month.
Complies with amended bylaws in Section XXI that, "A majority of Trustees shall be required at all meetings to form a quorum for the transaction of a company." However, attendance at Board meetings shows that 2/3 of the directors attended all Board meetings.
The board should endeavor to exercise an objective and independent judgment on all corporate affairs Recommendation 5.1
See Board Meeting Attendance for Fiscal Year 2020-2021 at the link below. The company has no shareholder agreements, bylaws or other regulations that limit the directors' ability to vote independently. In accordance, FEU has no shareholder agreement, bylaws or other regulations that limit the ability of the directors to vote independently.
Section VI (Meetings and Voting) of the Amended By-Laws provides that “Voting upon all questions at all meetings of the
Members of the Board are duty-bound to apply high ethical standards, taking into account the interests of all stakeholders
- Whistle Blowing Policy
- Conflict of Interest Policy
The Board adopts a Code of Business Conduct and Ethics, which provides standards for professional and ethical conduct, as well as articulates acceptable and unacceptable conduct and practices in internal and external actions of the company. The Board of Trustees legally performs functions on behalf of the school, and without exemption each Trustee is expected to adhere to the Code of Business Conduct and Ethics. Adequate FEU's Code of Business Conduct and Ethics is made available at all times to all Trustees, the Senior Management Faculty and employees through the University's website.
Accordingly, the Code of Business Conduct and Ethics includes a directive prohibiting the giving and receiving of advantages in business transactions. Compliant Upon implementation of the Code of Business Conduct and Ethics, employees and professors were informed of the policy details and responsibilities of each employee and professor. FEU's Code of Business Conduct and Ethics states that the Code "applies to all trustees, officers and employees of Far Eastern University."
A reorientation to the Code of Business Conduct and Ethics and related policies was carried out, and all employees and faculty had to sign their commitment to comply with the code and all policies.
The company should establish corporate disclosure policies and procedures that are practical and in accordance with best practices and regulatory expectations
Trustees' stock holdings in SEC Form 23 A/B (Statement of Beneficial Ownership), available at the link below. Compliant Please see the Trustee's profile in the 2020 Definitive Information Statement (SEC Form 20 IS), pages 5-8 in the link below. Compliant Please see the Key Officer's profile in the 2020 Definitive Information Statement (SEC Form 20 IS), pages 5-11 in the link below.
However, the remuneration of trustees and executives as a group is disclosed in the 2020 annual report and definitive information statement. Collectively, the trustees' remuneration is disclosed in the 2020 annual report and definitive information statement. Compliant. The board of directors has a risk management committee that deals with the areas of risk management in the operation of the university.
Accordingly, the Information was originally presented on Risk Management Objectives and Policies, page 14, of the SEC's Form 17-A.
The company should establish standards for the appropriate selection of an external auditor, and exercise effective oversight of the same to strengthen the external auditor’s independence and enhance audit quality
The audit committee's charter includes the committee's responsibility to review and monitor the suitability and effectiveness of the external auditor on an annual basis. The AuditCom Charter includes the committee's authority and responsibility to appoint the external auditor and monitor its performance. The Audit Committee ensures that the external auditor is credible, competent and has the ability to understand complex related party transactions, its counterparties and valuations of such transactions.
Company discloses the nature of non-audit services performed by its external auditor in the annual report to deal with the potential conflict of interest. Audit Committee remains vigilant for any potential conflict of interest situations, given the guidelines or policies on non-audit services, which could be considered as impairing the external auditor's objectivity. The Committee will reject any non-audit work that conflicts with the duties or independence of the external auditor.
The company's external auditor agreed to submit to the SEC's Oversight Assurance Review (SOAR) Inspection Program conducted by the SEC's Office of the Accountant General (OGA).
The company should ensure that the material and reportable non-financial and sustainability issues are disclosed
Compliant FEU's external auditors, Punongbayan & Araullo (P&A Grant Thornton), are covered by the SEC Oversight Assurance Review (SOAR) Inspection Program, pursuant to SEC Memorandum Circular No. Relief Operations for Taal Volcano Eruption 2020 Environmental Protection and Conservation https:/ /feuvso.weebly.com/projects.html. The company has media and analyst briefings as communication channels to ensure timely and.
A compliant FEU uses its official website (https://www.feu.edu.ph) as its main communication channel to ensure timely and accurate. Quarterly and annual financial statements are published on the FEU website after disclosure to the PSE and SEC. View the amended statutes and the amended FEU statutes at the links below.
To ensure the integrity, transparency and proper governance in the conduct of its affairs, the company should have a strong and effective internal control system and enterprise risk management framework
The company has an adequate and effective enterprise risk management framework in the conduct of its business. FEU's Risk Management Policy was approved by the Board in September 2019, which outlines the overall framework, principles and process of risk management. Consequently, all risk exposures are reported by the CRO during the joint meeting of the Audit Committee and the Risk Management Committee – and the risk exposures discussed at this meeting are ultimately reported to the Board of Directors.
IT risk exposures and mitigation plans are discussed in audit and risk management working group meetings led by the Chief Risk Officer (CRO). The CRO then reports IT-related risk exposures (together with University-wide risk exposures) to a joint meeting of the Audit Committee and the Risk Management Committee. In addition, the University has a Chief Risk Officer who reports directly to the Risk Management Committee.
In managing the company's risk management system, the company has a Chief Risk Officer (CRO), the ultimate champion of Enterprise Risk Management (ERM).
The company should treat all shareholders fairly and equitably, and also recognize, protect and facilitate the exercise of their rights
Accordingly the Board ensures that shareholders know their rights and are regularly updated on FEU's businesses. SEC Form 17A 2020 Annual Report of FEU, Part II - Operating and Financial Information, Item 5, page 24 at the link below. Accordingly, the Notice and agenda of the Annual Meeting of Shareholders were first disclosed on the PSE on September 14, 2020, or 33 days prior to the meeting on October 17, 2020.
The convening notice and agenda were again contained in the Information Statement, provisional to the SEC on September 14, 2020 and the final reporting to PSE and SEC on September 22, 2020. This includes, among other things, the Participation via Telecommunication and Voting in Absence Guide, also available as an appendix B , page 43, in the 2020 Definitive Information Statement (SEC Form 20 IS). Auditors seeking appointment/reappointment Complies See 2020 Definitive Information Statement (SEC Form 20 IS), Annex A – Item 8, page 38 in link below.
Compliant The minutes of the Annual Shareholders' Meeting of October 17, 2020 (a Saturday) were posted on the FEU website on October 21, 2020, or within five (5) business days after the end of the meeting.
If there is one in the future, the board will not approve or allow it. The company has policies and practices to encourage shareholders to deal with the company outside of the annual shareholder meeting. Compliant Refer to the Corporate Governance Manual, Section VI and VII, pages 7-8 in the link below.
Please also see the Code of Business Conduct and Ethics for Dealing with Business Partners and Third Parties, pages 9-10 in the link below. The Board adopts a transparent framework and process that enables interested parties to communicate with the company and obtain compensation for the violation of their rights. If an exception is requested, the company discloses the reason for such action, as well as presents the specific steps being taken to ultimately comply.
Compliant The Company did not seek and is not seeking any exemption from the application of any law, rule or regulation, particularly as it relates to a matter of corporate governance.
A mechanism for employee participation should be developed to create a symbiotic environment, realize the company’s goals and participate in its corporate governance processes
As part of the new performance management system, individual development plans will be documented, on which learning and development plans for the coming financial year will be based. The Board sets the tone and resists corruption by adopting an anti-corruption policy and program in its Code of Conduct. The corresponding Anti-Corruption Policy is contained in the Code of Business Conduct and Ethics.
Adequate Policies and programs approved by the board are distributed to the relevant units in coordination with the Human Resources department. Company has clear and strict policies and procedures to limit and penalize employees' involvement in offering, paying and receiving bribes. The Board establishes an appropriate framework for whistleblowers that enables employees to freely communicate their concerns about illegal or unethical practices, without fear of retaliation.
Sufficient whistle-blowing incidents are reported to the Board, and the Board is periodically updated on the developments of the said incidents.
The company should be socially responsible in all its dealings with the communities where it operates. It should ensure that its interactions serve its environment and stakeholders in a positive and progressive manner that is fully supportive of its comprehensive and balanced development
It must ensure that its interactions serve the environment and stakeholders in a positive and progressive manner that is fully supportive of its comprehensive and balanced development. The company ensures that its value chain is environmentally friendly or is in line with the promotion of sustainable development.
Compliant 1. Compliant with DENR Requirements such as the following
- Part of FEU Operation
In line with the current administration's goal of revitalizing environmentalism, whose goals are clean, safety, beautiful surroundings, this meeting proposed to be organized in relation to the university's advocacy on "Environmental Protection and Conservation Program".