The Board of Directors

As defined in Section 1, Article III of the Company’s By-Laws, “The Board of Directors shall consist of nine (9) members.  Immediately after their election, they shall meet and shall elect a Chairman and a Vice Chairman of the Board of Directors, a President and a Treasurer from among themselves, and shall also elect, not necessarily from among themselves, a Secretary and such other officers as may be needed to run the affairs of the Corporation.”  Relative to this, Section 2 of the same Article states, “The Chairman and the Vice Chairman of the Board of Directors, the President and such other officers as the Board may appoint are officers of the Corporation.”

 

1.  Board Authority

The Board shall exercise its powers and authorities in accordance with the provisions of the Company’s By-Laws, in addition to those assigned by the Corporate Law.

 

2.  Highlights of Mission and General Responsibility of the Board

This section of the Code highlights and sets the parameters in respect of some of the Board’s duties, as contained in the Company’s By-Laws, and in conformity with IC Circular Letter No. 13-2002.

On corporate philosophy, mission, and strategic and business plans.

The Board recognizes that it represents the owners’ interest in having a successful business, including optimal long-term financial returns on their investments; thus, increased shareholders’ wealth shall lie at the core of the Company’s philosophy and mission.

The Board is equally aware of its obligations to its stockholders, customers, employees and other stakeholders.  The diversified interests of these stakeholders shall be given due weights in approving the Company’s philosophy and mission.

The Board establishes the general policies and guidelines which will enable Management to render an effective management of the Company, and as part of which undertakes to:

• formulate the Company’s vision and mission;
• approve and confirm management’s corporate strategies, major plan of actions, risk policy, annual budget and business plan, as recommended by Management;
• monitor the implementation of approved strategies and the Company’s performance vis-à-vis targets and goals;
• adopt a succession plan, including the compensation, appointment and training of senior officers;
• review annually the Company’s compliance with its Code of Corporate Governance;
• approve corporate policies on major areas of operations, including underwriting, investments, reinsurance claims management and risk management;
• ensure the adequacy and effectiveness of the Company’s internal control and management information systems; and
• review and report to the Stockholders its own effectiveness in fulfilling its responsibilities.

 

3.  Board Committees

As stipulated in Section 7 of Article III of the Company’s By-Laws, the Board shall constitute special and other standing committees, as it may deem proper and necessary to attend to the major activities of the Company.  In view thereof and to substantially comply with the IC Circular, the Board shall create and maintain the following committees:  Audit Committee and Underwriting Committee.

•    Audit Committee

The Audit Committee shall be composed of at least three (3) members of the Board and made up mainly of independent directors.  Each member shall endeavor to have adequate understanding at least or competence at most of the Company’s financial management systems and environment.  The Committee shall have the following duties and responsibilities:

• review all financial reports, particularly, Balance Sheets, Income Statements and Cash Flow Statements;
• pre approve all audit plans;
• consult with external auditors, when necessary;
• check compliance with the required international accounting standards;
• recommend to the Board the appointment, resignation or removal of external auditors and the audit fee;
• check and review the effectiveness of internal control system to promote transparency and accountability;
• monitor the system of internal controls and corporate compliance with laws, regulations and code of ethics, thereby promote transparency and accountability.

•    Independent Director

Independent Director – refers to a person other than an officer or employee of the corporation, its parent or subsidiaries, or any other individual having any relationship with the corporation, which would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director.

The application of the IC definition to the circumstances of each Director shall be the responsibility of the Board, which shall disclose in each annual report who among the Directors qualified as independent.

If an independent Director becomes an officer or employee of the Company, he shall be automatically disqualified from being an independent Director.

 

4.  Board Meetings

The Board shall meet as frequently as needed in order for Directors to discharge their responsibilities properly as provided for under the By-Laws.

Directors shall have the duty of preparing and actively participating in board meetings.

 

5.  Board and Officers’ Remuneration

Level of Remuneration

The Board shall set compensation levels adequate to attract and retain qualified Directors.

Compensation for Directors shall be competitive and take into account the duties and other commitments imposed upon them.

The Board shall establish a formal and transparent procedure for developing a policy on executive remuneration packages of Company officers and Directors, and provide oversight over remuneration of senior management and other key personnel ensuring the compensation is consistent with the Company’s culture, strategy and control environment.

 

6. Specific Duties and Responsibilities of a Director

A Director of the Company shall have the following duties and responsibilities;

• To conduct fair business transactions with the Corporation and to ensure that personal interest does not prejudice Board decisions;
• To devote time and attention necessary to properly discharge his duties and responsibilities;
• To act judiciously;
• To exercise independent judgment;
• To have a working knowledge of the statutory and regulatory requirements affecting the Corporation, including the contents of its Articles of Incorporation and By-Laws, the requirements of the Commission, and where applicable, the requirements of other regulatory agencies;
• To observe confidentiality;
• To ensure the continuing soundness, effectiveness and adequacy of the Company’s internal control system.

 

7.  Composition and Board Size

The Board shall be composed of nine members elected by shareholders or as many as provided in the Company’s Amended Articles of Incorporation.

 

8. Qualifications

Directors sitting on the Board shall possess the necessary skills, competence and experience, in terms of management capabilities, and preferably in the field of insurance or insurance-related disciplines.  In view of the fiduciary nature of insurance obligations, Directors shall also be persons of integrity and credibility.

 

9.  Chairman and CEO

The roles of the Chairman and Chief Executive Officer shall not be combined to ensure a balance of power and authority such that no one person has unfettered decision-making powers.

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