Corporate Governance Policy (Philippines)
CORPORATE GOVERNANCE POLICY
Revised Corporation Code (RA 11232, 2019) | Securities Regulation Code (RA 8799, 2000) | SEC Memorandum Circular No. 19, Series of 2016
Adopted by the Board of Directors of [Corporation Name] ("Corporation"), SEC Registration No. [SEC Registration Number], with principal office at [Principal Office], on [Adoption Date].
Corporation Type: [Corporation Type]
1. BOARD OF DIRECTORS
1.1 Composition. The Board of Directors of the Corporation shall consist of [Board Size] directors, including [Independent Director Count] independent directors who meet the independence criteria under SEC Memorandum Circular No. 19, Series of 2016 (for PLCs) or Section 38 of the Revised Corporation Code (RA 11232, 2019) (for corporations vested with public interest).
1.2 Fiduciary Duties. Directors shall at all times observe the following duties under the Revised Corporation Code (RA 11232, 2019): (a) Duty of Obedience — act in accordance with the Corporation's charter, by-laws, and stockholder resolutions; (b) Duty of Diligence — exercise the degree of care, skill, and diligence that a reasonably prudent director would exercise; and (c) Duty of Loyalty — act in the best interests of the Corporation and avoid conflicts of interest, consistent with Section 31 of RA 11232.
1.3 Director Liability. Directors who wilfully vote for or assent to patently unlawful acts, act in bad faith or with gross negligence, or acquire personal pecuniary interests in conflict with their duty shall be personally liable for damages under Section 30 of RA 11232.
2. BOARD COMMITTEES
2.1 The Board shall establish the following committees to assist it in discharging its governance responsibilities:
(a) Audit Committee — oversees the integrity of financial reporting, the external audit process, internal controls, and compliance with legal and regulatory requirements, consistent with SEC MC No. 19-2016.
(b) Risk Oversight Committee — oversees the Corporation's enterprise risk management framework and ensures that material risks are identified, assessed, and managed.
(c) Corporate Governance and Nominations Committee — oversees compliance with this Policy and the SEC Code of Corporate Governance, and administers the nomination and election of directors.
(d) Related Party Transactions (RPT) Committee — reviews all material related-party transactions under Section 31 of RA 11232 and SEC MC No. 19-2016.
3. OFFICERS AND COMPLIANCE
3.1 The Compliance Officer, [Compliance Officer Name], is responsible for monitoring compliance with this Policy, the SEC Code of Corporate Governance, and all applicable regulatory requirements. The Compliance Officer shall report directly to the Board and submit an annual compliance report to the SEC as required by SEC MC No. 19-2016.
3.2 The Corporate Secretary shall be a Filipino citizen and resident of the Philippines under Section 24 of RA 11232, and shall be responsible for keeping board minutes, maintaining the stock and transfer book, and ensuring timely SEC filings.
4. RELATED-PARTY TRANSACTIONS
4.1 All material related-party transactions shall be reviewed by the RPT Committee, approved by the Board with interested directors recused, and disclosed in the Corporation's Annual Report and ACGR filed with the SEC, consistent with Section 31 of RA 11232 and SEC MC No. 19-2016.
4.2 Related parties include directors, officers, significant stockholders (10%+), their immediate families, and entities under common control as defined in SEC MC No. 19-2016.
5. DISCLOSURE AND TRANSPARENCY
5.1 The Corporation commits to timely, accurate, and complete disclosure to the SEC, the Philippine Stock Exchange (PSE) (for listed companies), and the investing public under the Securities Regulation Code (RA 8799) and applicable disclosure rules.
5.2 The Corporation shall submit an Annual Corporate Governance Report (ACGR) to the SEC within the prescribed deadline and post it on the Corporation's official website, as required by SEC MC No. 19-2016.
6. AMENDMENTS AND REVIEW
6.1 This Policy shall be reviewed annually by the Corporate Governance and Nominations Committee and amended as necessary to reflect changes in Philippine law, SEC regulations, and best governance practices. Amendments shall be approved by the Board and filed with the SEC as required.
Chairperson of the Board
________________
Signature
Corporate Secretary
________________
Signature
What Is a Corporate Governance Policy (Philippines)?
A Corporate Governance Policy in the Philippines lays down the policy the organisation applies, giving staff or users clear guidance on their responsibilities.
Under the Revised Corporation Code (RA 11232), the board of directors is the governing body of a Philippine corporation and bears ultimate responsibility for the corporation's affairs. Section 22 of RA 11232 establishes the fiduciary duties of directors — the duty of obedience, duty of diligence, and duty of loyalty — while Section 30 imposes personal liability on directors, trustees, and officers who act in bad faith, gross negligence, or with fraud. The Corporate Governance Policy operationalizes these statutory duties by setting out specific behavioral standards and internal control mechanisms.
For publicly listed companies (PLCs), the SEC Code of Corporate Governance (MC No. 19-2016) is mandatory, while for other public companies and registered issuers, SEC MC No. 16-2020 applies. Both codes require PLCs to submit an Annual Corporate Governance Report (ACGR) to the SEC and to post it on their websites. The Philippine Stock Exchange (PSE) also imposes corporate governance listing rules on its listed companies through the PSE Revised Disclosure Rules (PDR).
The Bangko Sentral ng Pilipinas (BSP) enforces separate corporate governance requirements for banks and quasi-banks through BSP Circular No. 1074 (2020) on corporate governance for BSP-supervised financial institutions (BSFIs), which aligns Philippine bank governance with the Basel Committee's Principles for Enhancing Corporate Governance. The Insurance Commission (IC) regulates corporate governance for insurance companies under IC Circular Letter No. 2020-77.
The legal framework governing the Corporate Governance Policy (Philippines) in Philippines draws on several key statutes and regulatory bodies. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Parties executing a Corporate Governance Policy (Philippines) in Philippines should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Revised Corporation Code (RA 11232, 2019) sets the foundational requirements.
When Do You Need a Corporate Governance Policy (Philippines)?
A Corporate Governance Policy is required or strongly recommended for Philippine corporations in several circumstances.
All publicly listed companies on the Philippine Stock Exchange (PSE) must adopt and comply with the SEC Code of Corporate Governance for Publicly Listed Companies (SEC MC No. 19, Series of 2016) and submit an Annual Corporate Governance Report (ACGR) to the SEC, making a formal Corporate Governance Policy mandatory for every PSE-listed entity.
Public companies — defined under Section 17.2 of the Securities Regulation Code (RA 8799) as corporations with assets of at least PHP 50,000,000 and having 200 or more shareholders each holding at least 100 shares — must comply with SEC MC No. 16, Series of 2020 (Code of Corporate Governance for Public Companies and Registered Issuers) and adopt a corporate governance manual.
Banks, thrift banks, rural banks, and quasi-banks supervised by the Bangko Sentral ng Pilipinas (BSP) must adopt a corporate governance framework compliant with BSP Circular No. 1074 (2020), including the establishment of a Board Risk Oversight Committee (BROC) and a Related Party Transactions (RPT) Committee.
Insurance companies, HMOs, and pre-need companies regulated by the Insurance Commission (IC) must adopt corporate governance policies under IC Circular Letter No. 2020-77 and relevant IC issuances.
Large private corporations — particularly those with foreign equity partners, multinational subsidiaries, or that are preparing for an initial public offering (IPO) on the PSE — adopt Corporate Governance Policies as part of investor due diligence requirements and to satisfy international governance standards expected by foreign investors and financing institutions such as the International Finance Corporation (IFC) and Asian Development Bank (ADB).
Parties in Philippines should prepare a Corporate Governance Policy (Philippines) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Corporate Governance Policy (Philippines)
A thorough Philippine Corporate Governance Policy must include the following essential elements.
Board Composition and Qualifications: Number and composition of the board of directors, including the required proportion of independent directors under SEC MC No. 19-2016 (minimum 2 independent directors or 20% of board membership, whichever is higher for PLCs). Director qualifications, disqualifications, and the independence standards under SEC MC No. 19-2016.
Board Responsibilities and Fiduciary Duties: Statement of the board's duties of obedience, diligence, and loyalty under Sections 22 and 30 of the Revised Corporation Code (RA 11232, 2019), including the business judgment rule and standards for self-dealing and conflict of interest transactions under Section 31 of RA 11232.
Board Committees: Establishment and terms of reference for mandatory and recommended committees, including the Audit Committee, Risk Oversight Committee, Related Party Transactions (RPT) Committee, Corporate Governance Committee, and Nominations Committee, as required under SEC MC No. 19-2016.
Officer Roles and Succession: Roles, powers, and responsibilities of the CEO, CFO, Compliance Officer, and Corporate Secretary — the latter being required under Section 24 of RA 11232 to be a Philippine resident and citizen.
Related-Party Transactions: Policy on identifying, approving, and disclosing related-party transactions under SEC MC No. 19-2016 and PSE disclosure rules, including the RPT threshold requiring board and shareholder approval.
Disclosure and Transparency: Commitment to timely, accurate, and complete disclosure to the SEC, PSE (for listed companies), and the investing public under the Securities Regulation Code (RA 8799) and the PSE Revised Disclosure Rules.
Internal Controls and Audit: Framework for internal controls, internal audit function, and external audit independence under Philippine Standards on Auditing (PSA) issued by the Auditing and Assurance Standards Council (AASC) of the Philippine Institute of Certified Public Accountants (PICPA).
Compliance and Enforcement: Role of the Compliance Officer required under SEC MC No. 19-2016, annual self-assessment process, and consequences for governance violations.
Additional compliance elements for a Corporate Governance Policy (Philippines) used in Philippines include: Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Forms-legal.com provides this template as a starting point for Philippines-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Corporate Governance Policy (Philippines) (Philippines) [Legal document template]. Forms Legal. https://forms-legal.com/philippines/business/corporate/corporate-governance-policy-philippines
"Corporate Governance Policy (Philippines) (Philippines)." Forms Legal, 2026, https://forms-legal.com/philippines/business/corporate/corporate-governance-policy-philippines.
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year = {2026},
howpublished = {\url{https://forms-legal.com/philippines/business/corporate/corporate-governance-policy-philippines}},
note = {Free legal document template. Based on Revised Corporation Code (RA 11232, 2019)}
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Frequently Asked Questions
Philippine publicly listed companies (PLCs) are subject to the most comprehensive corporate governance requirements under Philippine law. The primary governance code is the SEC Code of Corporate Governance for Publicly Listed Companies (SEC Memorandum Circular No. 19, Series of 2016), which covers board composition, director qualifications and training, board committees, executive compensation disclosure, related-party transactions, and sustainability reporting. PLCs must submit an Annual Corporate Governance Report (ACGR) to the SEC and post it publicly on their websites. The Philippine Stock Exchange (PSE) Revised Disclosure Rules (PDR) impose additional real-time disclosure obligations on listed companies, including immediate disclosure of material facts under PSE Rule 10.1. The Revised Corporation Code (RA 11232, 2019) strengthens director accountability through Section 30, which imposes personal liability for damages on directors who act in bad faith, gross negligence, or fraud. SEC Memorandum Circular No. 6, Series of 2009 on the Revised Code of Corporate Governance (superseded by MC No. 19-2016) established the foundational Philippine governance framework. PLCs must have a minimum of two independent directors or 20% of board membership (whichever is higher) who meet the independence criteria under SEC MC No. 19-2016, and must disclose executive compensation in their definitive information statements (DEF 14A equivalent) filed with the SEC.
Under the Revised Corporation Code (Republic Act 11232, 2019), directors of Philippine corporations owe three primary fiduciary duties to the corporation and its stockholders. The duty of obedience requires directors to act in accordance with the corporation's charter, by-laws, and the resolutions of stockholders, ensuring the corporation operates within the bounds of its stated purposes and the Revised Corporation Code. The duty of diligence requires directors to exercise the degree of care, skill, and diligence that a reasonably prudent person would exercise in the same circumstances — applying the business judgment rule when making decisions in good faith, with reasonable care, and in a manner the director reasonably believes to be in the best interests of the corporation. The duty of loyalty requires directors to act in the best interests of the corporation and its stockholders, avoiding conflicts of interest and self-dealing transactions without proper disclosure and approval. Section 31 of RA 11232 specifically addresses contracts between a director and the corporation, requiring board approval by a majority of non-conflicted directors and in some cases stockholder approval at a minimum two-thirds vote. Section 30 of RA 11232 imposes personal liability on directors, trustees, and officers who wilfully and knowingly vote for or assent to patently unlawful acts, act in bad faith or with gross negligence, or acquire any personal or pecuniary interest in conflict with their duty.
An independent director under Philippine corporate governance rules is a person who, apart from his or her fees and shareholdings, is independent of management and free from any business or other relationship which could materially interfere with the exercise of independent judgment in carrying out the responsibilities as a director. SEC Memorandum Circular No. 19, Series of 2016 (Code of Corporate Governance for Publicly Listed Companies) provides the detailed independence criteria for PLCs: an independent director must not have been an executive officer or employee of the corporation or any of its related companies within the last 5 years; must not own more than 2% of any class of equity securities of the corporation; must not be a supplier, customer, or service provider with a material relationship to the corporation; must not be related within the fourth degree of consanguinity or affinity to any director or executive officer of the corporation; and must not have served as an independent director of the same corporation for more than 9 years (after which a 2-year cooling-off period applies under the SEC's amendments to MC No. 19-2016). Under Section 38 of the Revised Corporation Code (RA 11232), corporations vested with public interest — including banks, quasi-banks, trust companies, insurance companies, pre-need companies, and publicly listed companies — must have independent directors constituting at least 20% of the board. The SEC maintains a database of independent directors at sec.gov.ph and has authority to disqualify persons from serving as independent directors.
A Corporate Governance Policy (Philippines) does not legally require a lawyer in Philippines, and individuals and businesses may draft and execute the document independently. The Revised Corporation Code (RA 11232, 2019) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Philippines lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Supreme Court of the Philippines has jurisdiction over disputes arising from this type of document, and Securities and Exchange Commission (SEC Philippines) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
A Corporate Governance Policy (Philippines) does not legally require a lawyer in the Philippines, though legal advice is recommended. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contracts. The Securities and Exchange Commission (SEC) regulates corporate documents. The Department of Labor and Employment (DOLE) oversees employment agreements. The Data Privacy Act of 2012 (Republic Act No. 10173) and National Privacy Commission (NPC) impose data protection obligations. The Bureau of Internal Revenue (BIR) requires tax compliance. Forms-legal.com provides this template as a starting point — always review with a qualified Philippine attorney for significant transactions. Under Philippines law, Revised Corporation Code (RA 11232, 2019), parties should seek independent legal advice from a qualified lawyer to confirm compliance with all applicable requirements. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. Forms-legal.com provides this template as a starting point for Philippines-compliant documentation.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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