7-Eleven Philippines

Board Committees

For the year 2017, eleven (11) qualified members, including three (3) independent directors, were elected by the stockholders during the Annual Stockholders’ Meeting (ASM) to serve for a period of one (1) year from election.

Mr. Antonio Jose U. Periquet, Jr. Mr. Michael B. Zalamea and Mr. Jose T.Pardo were elected as the independent directors in 2017. They possess all the qualifications and none of the disqualifications found in Section 17.2 of the Securities Regulations Code (SRC), and other relevant laws, rules and regulations as well as those outlined in the CG Manual. None of the independent directors owns more than 2% of the outstanding capital stock as shown in the table on Shareholding of Directors and Key Officers.

Board Processes

Board Meetings and attendance

The Board of Directors is expected to attend board meetings held by the Corporation which is scheduled before the start of the financial year. The Chairman, the President & CEO, majority of the directors, and independent directors of PSC attended these meetings. Absence of a director in more than 50% of all the regular and special meetings during his incumbency or any 12 month period during such incumbency is a ground for his temporary disqualification in the succeeding election unless the absence is due to serious illness, death in the immediate family or serious accident. All directors complied with attendance requirement of at least 50% of all board meetings for the year.

Attendance of the Board of Directors for 2017

attendance-2017

Board Charter

Board Quorum

As provided in Section 16 of PSC’s Amended By-laws, a quorum at any meeting of the Board of Directors shall consist of a majority of the Directors as fixed in the Articles of Incorporation and every decision of such quorum duly assembled as a board shall be valid as a corporate act.

Board Committees

PSC has Four (4) Board Committees:

1) Executive Committee;

2) Audit & Risk Committee;

3) Compensation Committee and the

4) Nomination and Governance Committee.

 

Executive Committee

The Executive Committee exercises during intervals between Board meetings, all the powers and functions vested in the  board as well as act on specific matters as may be delegated to it by the Board, except with respect to (1) approval of any action for which shareholders’ approval is also required; (2) the filing of vacancies in the Board; (3) the amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable. All matters passed and acted upon by the Executive Committee in the exercise of its powers and functions as provided herein, have the same force and effect for all intents and purposes as if passed by the Board itself.

 

Audit &  Risk Committee

The Audit & Risk Committee assists the Board in the performance of its oversight responsibility for the financial reporting process, system of internal control, audit process and monitoring of compliance with applicable rules and regulations. It also provides oversight over management’s activities in managing credit, market, liquidity, operational, legal and other risks of the Corporation; and performs oversight functions over the Corporation’s internal and external auditors.

PSC complies with the SEC Memorandum Circular No. 4 Series of 2012, which requires the adoption of an Audit Committee Charter and an evaluation process to assess the Committee’s performance. In Sept. 30, 2012, PSC Adopted its Audit Committee Charter that sets the purpose, roles, responsibilities and authority of the Committee including the rules and procedures that shall guide the function of the Committee. In accordance with the Charter, the Audit Committee shall conduct an assessment of its performance at least annually and shall use as reference the self-assessment worksheet  and parameters as provided by SEC. The assessment for 2017 was done last March 2018 through accomplishment of the Self Assessment Worksheet for AudCom Performance.

The Audit Charter, Self Assessment Worksheet for AudCom Performance and the internal audit charter can be found in the following links:

Audit & Risk Committee Charter

Internal Audit Charter

Self Assessment Worksheet for AudCom Performance

 

Compensation Committee

The Compensation Committee shall establish formal and transparent procedures for developing a policy on remuneration of directors and officers to ensure that their compensation is consistent with the Corporation’s culture, strategy and the business environment in which it operates.

Compensation Committee Charter

Corporate Governance Committee

The Committee shall review and evaluate the qualifications of all persons nominated to the Board that require the Board approval and to assess the effectiveness of the Board’s processes and procedures in the election or replacement of directors. It also oversees the development and implementation of corporate governance principles and policies as part of its governance functions.

The Nomination & Governance Charter can be found in the following link: CG Com Charter

Board Committee Charters:

Audit & Risk Committee Charter

Internal Audit Charter

CG Com Charter

Compensation Committee Charter

Board Quorum

As provided in Section 16 of PSC’s Amended By-laws, a quorum at any meeting of the Board of Directors shall consist of a majority of the Directors as fixed in the Articles of Incorporation and every decision of such quorum duly assembled as a board shall be valid as a corporate act.

Access to information

Board papers for Board of Directors are generally provided 3-5 days prior to meeting in advance of the board meetings.

The Office of the Corporate Secretary

The functions of the Corporate Secretary include ensuring the Board and Management’s adherence to the internal and external rules and regulations. She also facilitates the communication of the Board with Management. The Corporate Secretary also promotes compliance of the good corporate governance practices and policies and keep the Board and the Management updated on developments involving CG. She oversees and keeps the Board abreast of all legal information’s and serves as an adviser to the responsibilities and obligations of directors.  She  assists the Board in making excellent business judgments.

Board Appointments and Re-Election

Election of directors are held annually during the stockholders meeting and conducted in a manner provided by the Corporation Code.  Each director will hold office until the annual meeting held next after his election and until his successor shall have been duly chosen and qualified, or until he has resigned.

Remuneration Matters
The Company has certain standard arrangements with respect to compensation and profit sharing. Per diems of P 15,000.00 (as may be fixed by the Board from time to time) are given to each of the members of the board of directors,  members of board committees, designated corporate/executive officers, members of advisory committee or adviser/consultant for every regular or special meeting of the Board, Executive Committee and Board Committees actually attended.

The Compensation Committee approved the policy on Directors Fee and Gratuity for the office of the Chairman of the Board effective February 01, 2015. A monthly director’s fee shall be provided for the position of Chairman of the Board as determined by the Compensation Committee, from time to time, as concurred by the Board and/or the Executive Committee. Additional directors’ fee (gratuity) shall be given upon the occurrence of any of the following: a) End of term of office and not accepting reappointment (except due to removal); b) Incapacity; c) Resignation due to any of the above; d) Death, which shall be equivalent to 1 month of the Chairman’s prevailing monthly directors’ fee for every year or term in office.

The company established a policy effective January 01, 2012 to provide guidelines for director’s fee to be provided to Independent Directors. As a director and member of the Board, the Independent Director shall be entitled to an annual director’s fee of P 100,000.00. If he is a Chairman of any Board Committees, the Independent Director shall be entitled to an annual director’s fee of P 150, 000.00, and if a member of any Board Committees, the Independent Director shall be entitled to an annual director’s fee of P 50,000.00.

Board Chairman

To ensure Board independence, the Chairman and Chief Executive Officer should, as much as practicable be separate.  This is to foster the principle of a balanced power and better capacity in terms of decision-making.  In a proviso of unified positions, proper check and balances are laid down to ensure that the Board obtains the benefit of independent views and perspectives.

Promoting the balancing of powers, Mr. Jose T. Pardo serves as the Chairman of the Board and independent Director and Mr. Jose Victor P. Paterno as PSC President and Chief Executive Officer.

Board Diversity Policy

PSC embraces board diversity in terms of age, gender, culture, religion, ethnicity and political beliefs. As a matter of practice, there are 2 female directors and the directors of PSC have diversified business experiences in retail, finance, accounting, investment, banking, property, IT & Communications.  The Board’s current composition is set out in the following chart:

Board Performance

Directors’ Development

All Board members are encouraged to undertake continuous professional educational program such as Corporate Governance trainings to update them with new information’s of corporate governance. PSC likewise established an orientation program that includes business overview and updates in retail industry to better equip them in fulfilling their respective roles, duties and responsibilities for the betterment of the Company.  Aside from the continuous educational program, PSC’s officers are active member of Good Governance Advocates and Practitioners of the Philippines (GGAPP) to further promote good governance.

E.5.2 Board Performance

Board Assessment

PSC’s Board conducts and accomplishes self-rating surveys yearly to assess their efficiency and effectiveness in their individual performance and as a collegial body, as well as to identify areas of improvements. The results of assessment are compiled by the Compliance Officer and are reported during the Nomination and Governance Committee meeting.

The Board’s performance is measured through a rating of 1- Not Performing to 5- Outstanding Performance. They are asked to evaluate the Board’s meeting procedures, preparation for meetings, monitoring of company performance and key issues/trends affecting the company among others. Meanwhile, Directors also assess their individual performance through answering a self- assessment survey with 31 questions. Rating is either SA – Strongly Agree, A – Agree, N – Neither Agree Nor Disagree, D – Disagree and SD – Strongly Disagree.

The Board conducted performance assessment last March 2018.

Board Committee Assessment

A self-assessment worksheet in accordance with the Audit Committee Charter is accomplished every January of each year by its members to evaluate their performance and collated by the Corporate Secretary.  Basis of evaluation are provided under the Code which provides their assessment based on their respective responsibility such as: 1) setting of committee structure, 2) oversight on financial reporting and disclosures which provides for the responsibility for financial reporting process, system of internal control, audit process and monitoring of compliance with applicable laws; 3) oversight on risk management and internal controls which provides for managing credit, market liquidity, operational, legal and other risks exposure; 4) oversight on management and internal audit which provides a review for annual audit plan in conformity with the objectives of the company; and 4) oversight on external audit which provides to ensure proper coordination if more than one audit firm is involved in the activity to secure proper coverage and minimize duplication of efforts.