p k ' OWER SECTOR y fi ASSETS & LIABILITIES MANAGEMENT ORPPRATION POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION MANUAL ON CORPORATE GOVERNANCE Table of Contents 1. Objectives ........................................................................................................................... 3 2. Definitions and Interpretation ....................................................................................... 3 3. The Board of Directors ..................................................................................................... 7 3. 1. Responsibilities of the Board of Directors ........................................................... 7 3. 2. Charter of Expectations .............................................................................................. 10 3. 3. List of Disclosures .......................................................................................................... 10 3. 4. Responsibility on the Financial Statements .......................................................... 10 3. 5. Head of Agency ........................................................................................................ 11 3. 6. Composition .............................................................................................................. 11 3. 7. Ex- Officio Alternates .............................................................................................. 11 3. 8. Board Meetings and Quorum Requirements ..................................................... 11 3. 9. Board Committees ................................................................................................... 12 3. 9. 1. Board Review Committee .............................................................................. 12 3. 9. 1. 1 Functions of the Board Review Committee ................................................. 12 3. 9. 2. Board Audit Committee .................................................. 13 3. 9. 2. 1 Functions of Board Audit Committee ............................................................ 13 3. 10. Board Officers ........................................................... 13 3. 10. 1. The Chairman ................................................................................................... 14 3. 10. 2. The Vice- Chairman .......................................................................................... 14 3. 10. 3. The Corporate Secretary ............................................................................... 14 3. 10. 4. The Compliance Officer ................................................................................. 16 3. 11. Annual Performance Evaluation of the Board ............................................... 17 4. PSALM Management ........................................................................................................ 17 4. 1. Management Responsibility ................................................................................... 17 4. 2. Primary Accountability of Management to the Board .................................... 18 4. 3. The President ft CEO and PSALM Management ................................................ 18 4. 3. 1. Powers of the President £ t CEO .................................................................... 18 5. Internal Audit ................................................................................................................... 20 PSALM Manual of Corporate Governance Page 1 of 40
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pk '
OWER SECTORy fi
ASSETS & LIABILITIESMANAGEMENT ORPPRATION
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION
11. 3. Due Process Requirement .................................................................................31
APPENDICES
Annex A: Format Charter of Expectations of Each Director .................... 34
Annex B: Statement of Directors' Responsibility .................................................39
PSALM Monual of Corporate GovernancePage 2 of 40
POWER SECTt RASSETS & LIABILITIESMANAGEMENT CORPORATIbN
POWER SECTOR ASSETS t LIABILITIES MANAGEMENT CORPORATION
MANUAL ON' CORPORATE GOVERNANCE
This Manual on Corporate Governance was approved and adopted by the Boardof Directors of the Power Sector Assets t Liabilities Management Corporation
PSALM") on 27 December 2013. The Board of Directors, Management,
Officers and employees of PSALM hereby commit themselves to the principlesof best practices contained in this Manual, and acknowled e that the same
shall guide the attainment of their corporate goals.
1. Objectives
This Manual shall institutionalize the principles of good corporate governance
in the entire Corporation.
2. Definitions and Interpretation
The following terms are used in this Manual with the respective meaningsascribed to such terms below, unless the context otherwise requires:
Act refers to Republic Act No. 10149, and officially
named the " GOCC Governance Act of 2011."
BAC refers to the Board Audit Committee.
Board means the Board of Directors of the Corporation
as constituted from time to time; or the collegiat
body that exercises the corporate powers,
conducts all business and controls or holds all
properties of PSALM.
BRC refers to the Board Review Committee.
Per GCG' s recommendation, the Code is renamed as " PSALM Manual on Corporate
Governonce" instead of " PSALM Manual of Corporote Governance".
PSALM Manual of Corporate GovernancePage 3 of 40
CEO means the Chief Executive Officer of the
Corporation.
COA refers to the Commission on Audit.
Code refers to the Code of Corporate Governance for
GOCCs as set forth under GCG Memorandum
Circular No. 2012- 07.
Commission/ GCG refers to the Governance Commission for GOCCs.
Confidential refers to all non- public information entrusted to
Information or obtained by a member of the Board or Officerby reason of his/ her position as such with
PSALM. It includes, but is not limited to, non-
public information that might be of use to
competitors or harmful to the Corporation or its
customers/ stakeholders if disclosed, such as: ( 1)
non- public information about the PSALM's
financial condition, prospects or plans, its
marketing and sales programs and research anddevelopment information, as well as information
relating to mergers, acquisitions, divestitures,
stock splits and similar transactions; ( 2) non-
public information concerning possible
transactions or ventures with other companies,
or information about suppliers, joint venture
partners, or any information that PSALM is underobligation to keep confidential; and ( 3) non-
pubtic information about internal discussions,
deliberations and decisions, between and amongDirectors and Officers.
Corporation refers to the Power Sector Assets Liabilities
Management Corporation.
DBM refers to the Department of Budget and
Management.
DOE refers to the Department of Energy.
PSALM Manual of Corporate GovernancePage 4 of 40
DOF refers to the Department of Finance.
DOJ refers to the Department of Justice.
DTI refers to the Department of Trade and Industry.
Employees refers to those plantilla personnel of the
Corporation who do not belong to Management.
Ex- Officio Member refers to any individual who sits or acts as amember of the Board of Directors by virtue ofone's title to another office, and without further
warrant or appointment.
GOCC means a government-owned or - controlled
corporation; or any agency organized as a stockor non- stock corporation, vested with functions
relating to public needs, whether governmentalor proprietary in nature and owned by theGovernment of the Republic of the Philippines,
directly or through its instrumentalities, either
wholly or, where appticable, as in the case of
stock corporations, to the extent of at least a
majority of its outstanding capital stock. The
term includes Government Instrumentalities with
Corporate Powers (" GICP"), Government
Corporate Entities (" GCE") and Government
Financial Institutions (" GFI"). The term also
inctudes a Subsidiary of a GOCC.
IAD refers to the Internal Audit Department of the
Corporation.
Management refers to the body given the authority to
implement the policies determined by the Boardin directing the course and business activities ofPSALM. It also pertains to personnel with a rank
of supervisor or higher.
PSALM Manual of Corporate GovernancePage 5 of 40
Manual refers to this Manual of Corporate Governance as
adopted by the Corporation.
Material means any information about or involving theInformation Corporation' s affairs, events and conditions that
has a significant impact on the Corporation' s
operations which, when brought to the attention
of the public, is reasonably expected to induceor otherwise materially affect the decisions ofstakeholders.
NEDA refers to the National Economic and
Development Authority.
Stakeholders refers to any individual or entity for whosebenefit the Corporation has been constituted, or
whose life, occupation, business or well- being isdirectly affected, whether favorably or
adversely, by the regular transactions,
operations or pursuit of business or social
enterprise for which the Corporation has been
constituted, and which would include a
stockholder or investor in the Corporation,
management, employees, supply creditors, or
the community in which the Corporation
operates.
PSALM Manual of Corporate 6overnancePage 6 of 40
3. The Board of Directors
The Corporation shall be administered, and its powers and functions are
vested in and exercised by the Board of Directors. In the pursuit of the
Corporation' s objectives and its mandate, the Board shall have the followingpowers and functions laid down below.
3. 1. Responsibilities of the Board of Directors
The Board shall perform the following responsibilities:
a. ensure that they elect and/ or employ only Officers who arefit and proper to hold such offices with due regard to their
qualifications, competence, experience and integrity. The
Board is therefore obliged to provide an independent check
on Management.
b. provide policy directions, as well as monitor and oversee
Management as articulated in its Charter and other relevant
legislation, rules and regulations.
c. provide the corporate leadership of the Corporation subjectto the rule of law, and the objectives set by the NationalGovernment through the proper supervising agencies and theCommission;
d. establish, or update as may be necessary, the Corporation' s
vision and mission, strategic objectives, policies and
procedures, as well as defining or redefining the
Corporation' s values and standards through:
Mission Statements;
Road Maps; and
Other control mechanism mandated by bestbusiness practices;
PSALM Manual of Corporate GovernancePage 7 of 40
e. determine important policies that bear on the character of
the Corporation to foster its lon- term success, ensure its
long- term viability and strength, and secure its sustained
competitiveness;
f. determine the organizational structure of the Corporation,
define the duties and responsibilities of its Officers and
employees and adopt a compensation and benefit scheme
that is consistent with the GOCC Compensation and Position
Classification System ( CPCS) developed by the Commissionand formally approved by the President of the Philippines;
g. ensure that personnel selection and promotion shall be on the
basis of inerit and fitness, and that all personnel action shall
be in pursuit of the applicable laws, rules and regulations;
h. provide sound written policies and strategic guidelines on the
Corporation' s operating budget and major capital
expenditures, and prepare the annual and supplemental
budgets of the Corporation;
i. comply with all reportorial requirements, as required byapplicable laws, rules and regulations;
j. formally adopt and conduct annually the mandated
Performance Evaluation System ( PES) and the Performance
Scorecard and timely and accurately report the results to theCommission; and
k. ensure the fair and equitable treatment of alt Stakeholders
and enhance the Corporation' s relations with its Stakeholders.
meet regularly, ideally at least once every month, to
properly discharge its responsibilities, with independent
views expressed during such meetings being given due
consideration, and that all such meetings shall be properlydocumented or minuted;
m. determine the Corporation' s purpose and value, as well as
adopt strategies and policies, including risk management
PSALM Manual of Corporate GovernancePage 8 of 40
policies and programs, in order to ensure that the
Corporation survives and thrives despite financial crises and
that its assets and reputation are adequately protected;
n. monitor and evaluate on a regular basis the implementation
of corporate strategies and policies, business plans and
operating budgets, as well as Management's over-all
performance to ensure optimum results;
o. adopt a competitive selection and promotion process, a
professional development program, as well as a succession
plan' to ensure that the Officers of the Corporation have the
necessary motivation, integrity, competence and
professionalism;
p. monitor and manage potentiat conflicts of interest of
Directors, Mana ement, and stakeholders, includin misuse of
corporate assets and abuse in related party transactions;
q. adopt a system of internal checks and balances, which may
be applied in the first instance to the Board; and ensure that
such systems are reviewed and updated on a regular basis;
r. ensure the integrity of the Corporation' s accounting andfinancial reporting systems, including independent audit, andthat appropriate systems of control are in place, in
particular, systems for risk mana ement, financial and
operational control, and compliance with the law and
relevant standards;
s. identify and monitor, and provide appropriate technology andsystems for the identification and monitoring of key risks andperformance areas;
t. adopt, implement and oversee the process of disclosure and
communications;
u. constitute a Review Committee, an Audit Committee and
such other specialized committees as may be necessary, orrequired by applicable regulations, to assist the Board in
discharging its functions; and
PSALM Manual of Corporate GovernancePage 9 of 40
v. conduct and maintain the affairs of the Corporation within
the scope of its authority, as prescribed by applicable laws, rules and regulations.
3. 2 Charter of Expectations2
The Board recognizes its duties and adopts a formal Charter of
Expectations as a general statement of its expectations as to how it will
discharge its duties. Copy of the Formal Charter of Expectations isattached to this Manual as Annex " A ". The Charter will also serve as a
tool in assessin the Board' s performance and that of individual
directors.
3. 3 List of Disclosures to be made bvDirectors3
1) Extent of business interest with PSALM and stakeholders;
2) Compensation package, including travel, representation,
transportation and any allowance and form of expenses;
3) Attendance record of each Board member in Board and
Committee meetings; and
4) Other disclosures required by existin laws, rules and
regulations.
3. 4 Responsibilitv on the Financial Statements4
The Board of Directors shall issue a statement confirming the truth andfairness of the Corporation' s financial statements and/ or annuat
reports upon completion of audit and issuance of the corresponding
Z In accordance with Section 42 of GCG Memorandum Circular No. 2012- 07, PSALM' s CorporateGovernance Manual should include the Formal Charter of Expectations that each Director shall
si n. In line with this, PSALM adopted and copied verbatim the provision on Formal Charter of
Expectations from another GOCC' s Manual on Corporate Governance, specifically those ofPNOC EC' s and NEA' s.
GCG Code of Corporate Governance, Section 42 ( c)
41bid., Section 42 ( d)
PSALM Manual of Corporate GovernancePage 10 of 40
financial reports by COA. Copy of the Statement of Directors'
responsibility is attached to this Manual as Annex " 8".
3. 5 Head of Agency
For legat purposes, the Chairman of the Board of Directors5 shall be
considered as the 'Head of A ency" of the Corporation.
3. 6 Composition
The Board of Directors shall be composed of the following: ( a) the
Secretary of the DOF as Chairman, and ( b) the Secretary of the DOE, ( c)
the Secretary of the DBM, ( d) the Director-General of the NEDA, ( e) the
Secretary of the DOJ, and ( f) the Secretary of the DTI, as ex-officio
members and ( g) the President of the Corporation as an appointive
member thereofb.
3. 7 Ex- Officio Alternates
Ex- Officio Directors may designate their respective alternates, who
ideally should be the officials' next- in- rank, and whose acts shall be
considered the acts of their principals.
3. 8 Board Meetings and Quorum Requirements
5 Per GCG' s evaluation, the Choirmon of the Board of Directors should be considered as theHead of the Agency" and not the Boord of Directors, as earlier worded.
6
According to GCG' s comment contained in its letter to PSALM dated 14 March 2014, viz.:
The statement in the Section 3. 3 ( now Section 3. 6) that' ( g) the President of theCorporation' as being part of the ` ex-officio members' of the PSALM Board is nowinconsistent with the governance reforms introduced in R. A. No. 10149, in that
Sec. 3( i) thereof defines an ' Ex Officio Board Member' to ' any individual who sitsor acts member of the Board of DirectorslTrustees by virtue of one' s title toanother office, and without further warrant or appointment,' in relation to
Section 18, which provides that the CEO provided in the charter of a GOCC ` shallbe e( ected annua( ly by the members of the Board from among its ranks.'
In other words, notwithstanding any provision in PSALM' s Charter to the contrary, R. A. 10149 now provides that the nominated-President must first be appointed to
the PSALM Board by the President of the Philippines pursuant to a short( istprovided by the GCG ( Section 15, R. A. 10149), and once qualified as an Appointive
Director, he shall then be nominated and elected by the Board as the CEO... "
PSALM Manual of Corporate GovernancePage I1 of 40
The Board of Directors shall meet regularly and as frequently as may benecessary to enable it to discharge its functions and responsibilities. The presence at a meetin of four ( 4) members shall constitute a
quorum, and the decision of at least three ( 3) members present at a
meeting where there is quorum shatl be the decision of the Board ofDirectors. All meetings shall be properly documented and minuted.
3. 9 Board Committees
There shall be two ( 2) Board Committees which shall directly report tothe Board, namely a Board Review Committee and a Board AuditCommittee.
3. 9. 1 Board Review Committee
The Board Review Committee (" BRC") shall be composed of the
respective Representatives or alternates of the members of the
Board.
3. 9. 1. 1 Functions of the BRC
The BRC shall perform the following functions:
a. It shall have the primary function of prior review of allsubmissions of PSALM Management to the Board.
b. It shall perform the functions of a risk- management
committee by developing and overseeing the
Corporation' s Risk Management Program.
c. It shall oversee the system of limits to discretionaryauthority that the Board delegates to PSALM
Management.
d. It shalt ensure that the system remains effective, that
the limits are observed and that immediate corrective
actions are taken whenever limits are breached.
PSALM Manual of Corporate GovernancePage 12 of 40
e. It shall assume the functions of a selection committee
such that all recommendations for the selection,
appointment and removal of any of PSALM' s VicePresidents and the personnel in the Office of the
Corporate Secretary shall be passed upon by the BRC.
3. 9. 2 Board Audit Committee
The Board Audit Committee shall be composed of the respective
Representatives or alternates of the members of the Board.
3. 9. 2. 1 Functions of the Board Audit Committee
The Board Audit Committee shall perform the followingfunctions:
a. advise the Board on all matters relating to
management controls and operational audits;
b. establish internal controls within the Corporation in
relation to management and operations performance
on the Corporation' s functions, programs, projects,
activities with outputs;
c. review and appraise systems and
procedures/ processes, organizational structures,
assets management practices, financial and
management records, reports, and performance
standards of the PSALM functional groups, departments
and divisions; and
d. analyze and evaluate management deficiencies and
assist top management by realistic courses of actionfor existin and potential control gaps/ deficiencies.
3. 10 Board Officers
The Board Officers of the Corporation are the Chairman, the Vice-
Chairman, the Corporate Secretary and the Compliance Officer, who
must all be Filipino citizens.
PSALM Manual of Corporate GovernancePage 13 of 40
3. 10. 1 The Chairman
The Chairman shall, when present, preside at alt meetings of the
Board. The Chairman' s responsibilities may include:
a. calling meetings to enable the Board to perform itsduties and responsibilities;
b. approving meeting agenda in consultation with thePresident t CEO and the Corporate Secretary;
c. exercising control over quality, quantity and timelinessof the flow of information between Management and
the Board; and
d. assisting in ensuring compliance with the GOCC' s
guidelines on corporate governance.
The responsibilities set out above may pertain only to theChairman' s role in respect to the Board proceedings, and shall
not be taken as a comprehensive list of all the duties and
responsibilities of a Chairman.
3. 10. 2 The Vice- Chairman
In the absence of the Chairman of the Board, the Vice- Chairmanshall preside at the meetings of the Board.
3. 10. 3 The Corporate Secretary
The Corporate Secretary need not be a member of the Board. Ideally, the Corporate Secretary must possess organizational andinterpersonal skills.
The Corporate Secretary shall have the following functions:
a. serve as an adviser to the Board Members on their
responsibilities and obligations;
PSALM Manual of Corporate GovernancePage 14 of 40
b. keep the minutes of ineetings of the Board and theother Board Committees in a book or books kept for
that purpose, and furnish copies thereof to the
Chairman, the President &t CEO and other members of
the Board as appropriate;
c. maintain and keep in safe custody the seal of theCorporation and ensure that the seal or a facsimile
thereof is affixed on all documents the execution of
which, on behalf of the Corporation under its seal, is
duly authorized in accordance with the provisions ofapplicable laws, rules and regulations;
d. attend to the giving and serving of notices of Board;
e. be fully informed and be part of the schedulin process
of other activities of the Board;
f. receive instructions from the Chairman on the
preparation of an annual schedule, the calling of Boardmeetings, the preparation of regular agenda for
meetings, and notifying the Board of such agenda atevery meeting;
g. oversee the adequate flow of information to the Board
prior to meetings;
h. ensure fulfillment of disclosure requirements to
regulatory bodies;
i. authenticate the validity and effectivity of resolutionsas may be requested by external parties, creditor
banks and financing institutions;
j. certify the authenticity of signatures of the corporateofficers and those authorized to transact business on
behalf of the Corporation;
PSALM Manual of Corporate GovernancePage 15 of 40
k. exercise general
personnel of the
and
supervision over the activities and
Office of the Corporate Secretary;
l. act as liaison between the Board and Management and
external offices.
The Corporate Secretary shall have such other responsibilities asmay be inherent to such position and such other duties that theBoard may impose upon him. The Board shall have separate andindependent access to the Corporate Secretary.
3. 10. 4 The Compliance Officer
The Board shall appoint a Compliance Officer who shall report
directly to the Chairman. In the absence of a duly appointedCompliance Officer, the Corporate Secretary, who is preferably alawyer, shall act as Compliance Officer. The Compliance Officer
shall perform the following duties:
a. monitor compliance by the Corporation of the
requirements under the Act, the Code, the rules and
re ulations of the appropriate government agencies
and, if any violations are found, report the matter to
the Board;
b. appear before the Commission when summoned in
relation to compliance with the Code or other
compliance issues; and
c. issue a certification every 30 May of the year on theextent of the Corporation' s compliance with the
government corporate standards governing GOCCs forthe period beginning 01 July of the immediatelypreceding calendar year and, if there are any
deviations, explain the reason for such deviation.
PSALM Manual of Corporate GovernancePage 16 of 40
The appointment of a Compliance Officer shall not relieve the
Board of its primary responsibility vis- a- vis the State, acting
through the Commission, to ensure that the Corporation has
complied with all its reportorial, monitoring and compliance
obligations.
3. 11 Annual Performance Evaluation of the Board
The performance of the members of the PSALM Board shall be
evaluated based on the criteria set forth under the GCG Memorandum
Circular No. 2014- 03 jPerformance Evaluation for Directors ( PED) in the
GOCC Sectorl and subsequent amendments thereto, if any. The resultsof the PED shall serve as bases for the GCG in determininQ the
Appointive Board members' eli ibility for appointment.
4. PSALM Management
The Management of the Corporation stands as the center of decision- makingfor the day- to- day affairs of the Corporation. It shall determine the
Corporation' s activities by putting the targets set by the Board in concreteterms and by implementing basic strategies for achieving those targets.
It shall be composed of a President, who shall serve as the Corporation' s CEO,
and such other subordinate officials as may be appointed by the Board.
4. 1. Management Responsibility
Management is responsible to the Board for implementing the
infrastructure for the Corporation' s success through the following
mechanisms in its organization as set by the Board:
Organizational structures that work effectively and efficiently inattaining the goals of the Corporation;
Useful planning, control, and risk management systems that
assess risks on an integrated cross- functional approach;
Information systems that are defined and aligned with an
information technology strategy and the business goals of theCorporation; and
PSALM Manual of Corporate GovernancePage 17 of 40
A plan of succession that formalizes the process of identifying,
training and selection of successors in key positions in theCorporation.
4. 2. Primary Accountability of Management to the Board
Management is primarily accountabte to the Board for the operations ofthe Corporation. As part of its accountability, Mana ement shall
provide all members of the Board with a balanced and understandabte
account of the Corporation's performance, position and prospects on a
regular basis. This responsibility shall extend to interim and other pricesensitive public reports and reports to regulators.
4. 3. The President t CEO and PSALM Management
The President shall be the Chief Executive Officer (" CEO") of PSALM.
He shall then be nominated and elected annually by the Board as the
CEO'. He shall be the highest executive officer of the Corporation and
is subject to the disciptinary powers of the Board.
4. 3. 1. Powers of the President £ CEO
The PSALM President shall be the Chief Executive Officer of
PSALM and shall have the followin powers and duties:
a. exercise general supervision and authority over the
regular course of business, affairs, and property of theCorporation, and over its employees and officers;
b. see to it that all orders and resolutions of the Board
are carried into effect;
Section 15, R. A. 10149. Previously, the same has been worded as " shall be appointed by thePresident of the Philippines"; however, by virtue of R. A. 10149 the nominated- President mustfirst be appointed to the PSALM Board by the President of the Philippines, and once qualifiedas an Appointive Director, he shatl then be nominated and elected by the Board as the CEO.
PSALM Manual of Corporate GovernancePage 18 of 40
5. Internal Audit
c. report to the Board from time to time all matters
which the interest of the Corporation may require tobe brought to its notice;
d. execute and administer the policies and measures
approved by the Board, and take responsibility for theefficient discharge of management functions;
e. oversee the preparation of the budget of PSALM;
f. direct and supervise the operation and internal
administration of PSALM and for this purpose, may
delegate some or any of his administrative
responsibilities and duties to other officers of PSALM;
subject to guidelines and policies set up by the Board, to appoint and fix the number and compensation of
subordinate officials and emptoyees of PSALM, and to
remove, suspend, or otherwise discipline, for cause,
any subordinate employee of PSALM;
h. submit an annual report to the Board on the activities
and achievements of PSALM at the close of each year
and upon approval thereof, submit a copy to thePresident of the Philippines and to such other agencies
as may be required by law and the rules;
i. represent PSALM in all dealings and transactions with
other offices, agencies and instrumentalities of the
National Government and with all persons and other
entities, private or public, domestic or foreign;
j. sign and execute contracts, agreements, instruments
and other documents the execution of which has been
expressly designated to the President CEO; and
k. exercise such other powers and duties as may bevested in him by the Board from time to time.
PSALM Monual of Corporate GovernancePage 19 of 40
The Corporation shall have in place an internal audit system whereby aninternat audit organization conducts independent and objective internal audit
activities designed to add value to and improve the Company' s operations andto help it accomplish its objectives by providing a systematic and disciplinedapproach in the evaluation and improvement of the effectiveness of risk
management, control and governance processes through which the Board and
Management shall be provided with reasonable assurance that the
Corporation' s key organizational and procedural controls are appropriate, adequate, effective and complied with.
5. 1. Internal Audit Department
The Internal Audit Department shall primarily ensure that the internalaudit system and the activities designed by the Corporation are put inplace within the organization of the Corporation. Furthermore, it shall:
a. advice the Board of Directors, through the Board Audit
Committee, on all matters relating to management controlsand operations audits;
b. conduct management and operations performance audits of
the Corporation' s functions, programs, projects, activities
with outputs, determine their degree of compliance with the
policies, established objectives, systems and
procedures/ processes, contractual obligations as well as
government laws and regulations, and assess whether the
Corporation' s mandate are attained;
c. review and appraise systems and procedures/ processes,
financial and management records, reports, and performance
standards of the PSALM functional groups, departments and
divisions;
d. analyze and evatuate management deficiencies and assist topmana ement in pursuing realistic courses of action for
existing and potential control gaps/ deficiencies; and
e. perform such other related duties and responsibilities as maybe assigned or delegated by the Board through the BoardAudit Committee as may be required by law.
PSALM Manual of Corporate GovernancePage 20 of 40
5. 2. IAD Department Head
The head of the IAD shall be primarily responsible for ensuring that theinternal audit procedures are properly put in place in the Corporation. The head of the IAD shall have the following functions:
a. ensure the efficient and effective operation of the internal
audit function;
b. develop strong professional relationships with the Board andBoard Audit Committee, and other key stakeholders;
c. lead the development of the internal audit strategic plan and
annual work plan that outlines the objectives, priorities and
proposed internal audit coverage; and
d. liaise with other external monitoring and evaluation bodies indeveloping internal audit plans for the review and approval ofthe Board/ BAC.
6. External Audit
6. 1. The Commission on Audit
The 1987 Philippine Constitution mandates that COA shall have the
power, authority, and duty to examine, audit, and settle all accountspertaining to the revenue and receipts of, and expenditures or uses offunds and property, owned or held in trust by, or pertaining to theCorporation, as a government - owned or - controlled corporation.
The COA shall have exclusive authority, subject to the limitations
provided by law, to define the scope of its audit and examination,
establish the techniques and methods required therefor, and
promulgate accounting and auditing rules and regulations, includingthose for the prevention and disallowance of irregular, unnecessary,
excessive, extrava ant, or unconscionable expenditures, or uses of
government funds and properties.
6. 2. Reporting Standards
PSALM Manual of Corporate GovernancePage 21 of 40
6. 2. 1. Audit reports shall be dated, signed manually and shall beissued and distributed in the manner provided byregulations of the Commission.
6. 2. 2. Audit reports shall contain basically the transmittal
statement, scope and objectives of the audit and time
period examined highlights, financial information,
findings, recommendations and conclusions as well as
other data that may provide the management of theaudited agency with the necessary input for the decision- making process. Tables, charts, graphs and other data todetail the conditions and facts shall be used in proper
cases.
6. 2. 3. Audit reports shall meet the following reporting criteria:
a) Factual matter must be accurately, completely and
fairly presented.
b) Findings must be presented objectively and in
language as clear and simple as the subject matter
permits.
c) Findings must be adequately supported by evidence inthe audit working papers.
d) Reports must be concise yet complete enough to be
readily understood by the users.
e) Information on underlying causes of problems must beincluded so as to assist in implementing or devisingcorrective actions.
6. 2. 4. Audit reports shall:
a) put primary emphasis on improvement; critical
comments shall be presented in balanced perspective,
recognizing unusual difficulties or circumstances facedby officials concerned.
PSALM Manual of Corporote GovernancePage 22 of 40
b) identify and explain issues and questions needingfurther study and consideration by the auditor, the
agency or others.
c) include recognition or noteworthy accomplishmentsparticularly when management improvements in onearea or activity may be applied elsewhere.
d) include recognition of the views of responsibte officiats
of the agency audited on the auditors' findings,
conclusions and recommendations. Except where the
possibility of fraud or other compelling reason mayrequire different treatment, the auditor's tentative
findings and conclusions should be reviewed with the
officials. When possible, without undue delay, their
view should be obtained in writing and objectivelyconsidered and presented in the final report.
e) state whether any significant pertinent informationhas been omitted because it is deemed confidential.
The nature of such information should be described
and the law or other basis under which it is withheld
a) state whether the audit was made in accordance with
generally accepted auditing standards, and shall
disclose the omission of any auditing procedure
generally recognized as normal or deemed necessaryby COA under the circumstances of a particular case, as well as the reasons for the omission. Nothing in thissection, however, shall be construed to imply authorityfor the omission of any procedure which auditorswould ordinarily employ in the course of audit.
b) express the auditor's opinion with respect to:
i. whether the financial report have been
presented fairly in accordance with applicablelaws and regulations and the generally acceptedaccounting principles applied on a consistentbasis.
PSALM Manual of Corporate GovernancePage 23 of 40
ii. material changes in accounting principles andpractices and their effect on the financial
reports.
c) identify any matter to which COA takes exception andshall specifically and clearly state its exceptions
together with a statement on the effect thereof, to
the extent practicable, on the related financial report.
d) contain appropriate supplementary explanatoryinformation about the contents of the financial report
as may be necessary for full and informative disclosureabout the financial operations of the agency audited.
e) explain violations of legal or other regulatory
requirements, including instances of non- compliance.
7. Corporate Social Responsibility ( CSR) and Relations with Stakeholders8
Stakeholders Nature Interests
External
1. Government • Comply with the mandate under the EPIRAa. Congress • Comply with applicable rules andb. Oversight Agencies regulations
C. Local government units • Meet reportorial requirements in a timelyd. Regulators and transparent manner, with credibility
and competence
2. Privatization Investors/ Successor • Ensure integrity in the bidding processGenerating Companies/ IPPAs/ TransCo • Foster harmonious and collaborative
Concessionaire partnership
3. Power Customers and UC Collecting • Provide secure and reliable power supplyEntities ( DUs, ECs, Industrial
Customer, Self- Generating Facilities, etc.)
8 Code of Corporate Governance for GOCCs, Chapter VII, Sections 33- 40.
NPC ( Plant operators) Timely payment of feesEarly resolution of disputes
5. General Public/ Media • Timely provide comprehensive but easy tounderstand information on PSALM' s
operations and programs, particularly
those affecting power ratesMinimize universal charge in the power bill
Internal
6. Board Members • Perform the corporate mandate and meet
Board- approved targets and objectives
7. PSALM Employees • Maintain/ sustain a competent, reliable,
healthy and highly motivated humanresource with competitive compensation
package
7. 1. Duty to be Responsive to Stakeholders.
Every Director and Officer accepts the position fully aware that heassumes certain responsibilities not only to PSALM, but also with its
Stakeholders, who have the right to expect that PSALM is being run in aprudent manner and with due regard to the interests of all
Stakeholders.
Consequently, members of the Board and Officers shall deal fairly withPSALM' s employees and other Stakeholders. No member of the Board or
Officer may take unfair advantage of the PSALM' s employees and otherStakeholders through manipulation, concealment, abuse of confidential
or privile ed information, misrepresentation of material facts, or anyother unfair-dealin practice.
7. 2 CSR Principles
As an integral part of the National Government, PSALM shalt be
inherently mandated to be socially responsible, to act and operate asgood corporate citizens. The Board of Directors shall recognize and
perform the obligations the PSALM has towards the National
PSALM Manual of Corporate GovernancePage 25 of 40
Government, its major and other Stakeholders, together with the
management, employees, and the communities in which it operates.
The Directors, Officers and all its employees are required to abide byethical policies as mandated by the GCG. The protection of the
reputation and goodwill of PSALM is of fundamental importance, and
Directors, Officers and employees should be aware of the disciplinaryimplications of breaches of policy.
Every member of PSALM is encouraged to promptly report any
potentially illegal, improper and/ or unethical conduct that theybecome aware of at their workplace or in connection with their work.
PSALM shall have an environment that enables its people to raise
genuine and tegitimate concerns internally. However, in the event thatthe people of PSALM believe their reporting to management may resultin harassment, or undue distress, they may contact the GCG support toreport such matters. The GCG provides for an opportunity for concernsto be investigated and ensures appropriate action is taken to resolve
the matter effectively.
7. 3 Formal Recognition of Stakeholders
PSALM recognizes the followin as its Stakeholders:
7. 3. 1 External
1. Government
a. Congress
b. Oversight Agencies
c. Local government units
d. Regulators
2. Privatization Investors/ Successor Generating Companies/ IPPAs/ TransCo Concessionaire
3. Power Customers and UC Collecting Entities ( DUs, ECs, Industrial Customer, Self-Generating Facilities, etc.)
Remember that the biggest stakeholder is the Government;
Share the vision of the Corporation;
Be accountable to the public;
Listen and learn from his/ her co- employees;
Think and act as a team;
Focus on the customers and strive for customer satisfaction;
Respect others;
Communicate with Stakeholders and customers:
Deliver results and cetebrate success; and
Protect the reputation of the PSALM.
There should be employee development and structured training
programs for continuing personal and professional development foremployees.
7. 5 Customers
Integrity and honesty in dealings with customers is necessary for asuccessful and sustained business relationship. PSALM shall operate a
highly effective and efficient organization, focused on
customer objectives with the aim of providing services whichvalue and consistent quality, reliability and safety in returnprice paid for the same. The Corporation shall operate pc
continuous improvement, of both processes and the skills of t
to take best advantage of advances in all aspect of society inensure that it continues to add value to its customers' business.
meetinggive fair
for the
licies of
e staff,
order to
PSALM shall have clear and strong lines of communication which allowit to respond quickly and efficiently to customer and market
requirements, as welt as the public needs, and for the customers to
PSALM Manual of Corporate GovernancePage 27 of 40
receive consistent service in order to successfully and consistentlydeliver what the Company is mandated to do.
7. 6. Suppliers
As with other relationships with the stakeholders, PSALM shall aim to
develop relationships and improve networking with business partnersand suppliers based on mutual trust. The Corporation shall aim to offer,
through partnership with its supptiers, the best combination of state- of-the-art technology and world- class service, strong customer relationsand deep industry knowledge and experience, together with the
capacity to implement and deliver value- added solutions on time andwithin budget.
7. 7 Health and Safety
PSALM shall aim to ensure a safe and healthy workin environment for
all its employees, outside contractors and visitors. The Authority shallcomply with all relevant local legislation or regulations, and best
practice guidelines recommended by national health and safety
authorities. The staff shall be informed regarding the policies andpractices of PSALM in order to maintain a healthy, safe and enjoyableenvironment.
7. 8 Environment
It shall be the goal of the Corporation to minimize harmful effects andconsider the development and imptementation of environmental
standards to achieve this to be of great importance.
In the course of the operations of PSALM, it shall identify opportunitiesto reduce consumption of energy, water and other natural resources. PSALM shall also strive to re- use and recycle where possible and dispose
of non- recyclable items responsibly, thereby minimizing its impact onthe environment.
PSALM Manual of Corporate GovernancePage 28 of 40
8. Disclosure and Transparency Requirements
The Corporation recognizes that the essence of corporate governance is
transparency such that the more transparent the internat workings of theCorporation are, the more difficult it will be for the Board and/ or
Management to mismanage the Corporation or to misappropriate its assets.
The Corporation hereby agrees to disclose available material information tothe government and the public at all times and in the proper venue, medium
or forum, subject to such limitations as may be prescribed by taw.
8. 1 Board Commitment
The Board commits to cause the disclosure of available material information
and/ or transactions that are required to be disclosed pursuant to relevant
laws, rules and regulations and issuances by the Commission and othersupervising or regulatory agency.
The Board shall cause the filing with the Commission of all written disclosuresor reports on material information and/ or transactions in accordance with
applicable laws.
8. 2 Disclosure Policy
It is a general policy of the Corporation that it, its Directors, Officers and
employees shall not communicate material non- public and confidential
information about and involving the Corporation, including any act,
transaction, development or event unless the Corporation is ready tosimultaneously disclose the material non- public and confidential informationto the Commission or other supervising agencies.
Disclosure may be made, however, on the following instances:
a. Disclosure is made to a person who is bound by a duty to maintain trustand confidence to the Corporation such as but not limited to the
Company' s consultants, auditors, legal counsels, investment bankers,
financial advisers; and
b. The disclosure is made to them upon agreeing in writin to maintain in
strict confidence the disclosed material non- public and confidential
information and will not take advantage of it for his personal gain.
PSALM Manual of Corporate GovernancePage 29 of 40
The Corporation shatl formally adopt its Disclosure Policy within the
Corporation and ensure its full advertisement to its stakeholders and likewise
ensure its strict implementation by a particular set of rules.
9. Monitoring and Implementation
9. 1 Each Board Committee shall report regularly to the Board ofDirectors.
9. 2 The Compliance Officer appointed, or in his absence the
Corporate Secretary, shall have the primary task to ensurecompliance of this Manual. The Compliance Officer or Corporate
Secretary shall establish an evaluation system to determine andmeasure compliance with this Manual. Any violation shall subjectthe responsible officer or employee to appropriate penalties
prescribed in this Manual.
9. 3 The performance evaluation system established must be
approved by the Board and accordingly disclosed in the
Corporation' s annual report.
9. 4 This Manuat shall be subject to review and amendment as may
be prescribed by the Board.
9. 5 All business processes and practices being performed within anydepartment or division of the Corporation that are inconsistent
with any portion of this Manual shall be modified in order to becompliant with this Manual.
10. Communication Process
10. 1 Inspection of Manual
This Manual shall be avaitable for inspection by any of the identifiedstakeholders of
PSALM9
during reasonable hours on business days.
9 GCG' s comment is as follows:
The provisions of Section 9. 1. ( now Section 10. 1) that ` This Manual shall be
available for inspection of any director, officer or employee or the public duringreasonable hours on business days' is rather ( imiting in nature ( i. e. directors,
PSALM Manual of Corporate GovernancePage 30 of 40
10. 2 Dissemination of Manual
This Manual shatt be disseminated to all the Directors, Officers, and
Employees for their information and compliance. It shall be recorded inan adequate number of printed copies under the supervision of theHuman Resource Division and, at least one ( 1) hard copy of this Manualshall be furnished to every department or division of the Corporation.
10. 2. 1 Role of Directors and Officers
All directors, execufives, division and department heads are
tasked to ensure the thorough dissemination of this Manual to allemployees and related third parties, and to enjoin compliance
with its provisions.
10. 3 Communication and Education Programs
The Corporation shall initially implement the appropriate
communication and training program for the Directors, Officers and
Employees to ensure the effective implementation of this Manual.
11. Non-Compliance with the Manual
To enwre strict observance and implementation of the provisions of thisManual, appropriate penalties shall be imposed, after due process and without
prejudice to civil service laws, on the Corporation' s directors, officers, staff, subsidiaries, affiliates and their respecfive directors, officers and staff in case
of violation of any of the provisions of this Manual.
11. 1 Penalties
Any person, except a member of the Board of Directors, found to haveviolated any provision of this Manual shall be subject to the foltowingpenalties:
officers and emptoyees should be given copies of the Manua(), ond requirement of
Section 42 of the Code of Corporote Governance ( GCG Memorandum Circu(nr No. 2013-07) for inspection ot reosonable business hours refers only to Stakeholders. n
any event, Section 43. 4 thereof requires the Manuol to be up(oaded into PSALM' swebsite.
PSALM Manual of Corporate GovemoncePage 31 of4a
a. For the first violation, reprimand;
b. For the second violafion, wspension from office for at least one ( 1)
day up to thirty ( 30) days. The duration of the suspension shall
depend on the gravity of the violation.
c. For the third violation, removal from office.
11. 2 Complaints
The Corporate Secretary shall, motu propio or upon complaint, bring tothe Board' s attention any violation of this Manual.
11. 3 Due Process Requirement
An ad hoc committee comprising of three ( 3) independent members -- a
direct,or, an officer and an employee, shall be created, to hear and
determine whether there was a violation of this Manual. it shall
recommend to the Board the imposable penalty subject to the approvalof the Board.
APPROVED this15th
day of September 2015.
Si ned:
CESAR V. PURISIMA
SecretaryDepartment of Finance
Vy a - 1,.,,
MA. TERESA S. HABITAN
Assistant SecretaryDepartment of Finance
CARLOS JERICHO L. PETILLA
SecretaryDepartment of Energy
JOSE RAYMUND A. ACOL
Assistant SecretaryDepartment of Energy
PSALM Manual of Corporate GovernancePage 32 of40
a. For the first vialation, reprimand;
b. For the second violation, suspension from office for at least one ( 1)
day up to thirty ( 30) days. The duration of the suspension shall
depend on the gravity of the violation.
c. For the third violation, removal from office.
11. 2 Complaints
The Corporate Secretary shall, motu propio or upon complaint, bring tothe Board' s attention any violation of this Manual.
11. 3 Due Process Requirement
An ad hoc committee comprising of three ( 3) independent members -- a
director, an officer and an emptoyee, shall be created, to hear and
determine whether there was a violation of this Manual. It shall
recommend to the Board the imposable penalty subject to the approvalof the Board.
APPROVED this15th
day of September 2015.
Signed:
CESAR V. PURISIMA
SecretaryDepartment of Finance
Ny,,p.c.. a - t..,
MA. TERESA S. HABITAN
Assistant SecretaryDepartment of Finance
CARLOS JERICHO L. PETILLA
SecretaryDepartment of Energy
JOSE Y
Assi i
Depa
PSALM Mon
A. ACOL
Energy
e Governance
Page 32 of40
JOSE F. JUSTINIANO
UndersecretaryDepartment of Justice
HEIDDI VENECIA R. BARROZO
Director
Department of Justice
FLORENCIO B. ABAD
SecretaryDepartment of Budget and
Management
LORENZO C. DRAPETE
Director, Bureau F
Department of Bud et and
Management
ARSENIO M. BALISACAN
Director Generat
National Economic Development
Authority
RUBEN S. REINOSO, JR.
Director General
National Economic Development
Authority
GREGORY L. DOMINGO
SecretaryDepartment of Trade and Industry
RAUL V. ANGELES
Executive Director
Board of Investments, Department of
Trade and Industry
LO RDES g. AL NA
esident &t O
P ALM Corporation
PSALM Manuol of Corporote GovernancePoge 33 of 40
JOSE F. JUSTINIANO
UndersecretaryDepartment of Justice
ARSENIO M. BALISACAN
Director General
National Economic Development
Authority
HEIDDI VENECIA R. BARROZO S. REINO O, JR.
Director irector-Ge ral
Department of Justice National Economic evelopment
Authority
FLORENCIO B. ABAD
SecretaryDepartment of Budget and
Mana ement
LORENZO C. DRAPETE
Director, Bureau F
Department of Budget and
Management
GREGORY L. DOMINGO
SecretaryDepartment of Trade and Industry
RAUL V. ANGELES
Executive Di rector
Board of Investments, Department of
Trade and Industry
LO RDES S. AL NA
P/ esident £t EO
PgALM Corporation
PSALM Manuo! of CorporaYe GovernancePage 33 of40
JOSE F. JUSTINIANO
UndersecretaryDepartment of Justice
HEIDDI VENECIA R. BARROZO
Di rector
Department of Justice
FLORENCIO B. ABAD
SecretaryDepartment of Budget and
Management
LORENZO . DRAPETE
Director, Bureau F
Department of Budget and
Management
ARSENIO M. BALISACANDirector General
National Economic Development
Authority
RUBEN S. REINOSO, JR.
Director General
National Economic Development
Authority
GREGORY L. DOMINGO
SecretaryDepartment of Trade and Industry
RAUL V. ANGELES
Executive Di rector
Board of Investments, Department of
Trade and Industry
LO RDES g. AL NA
re ident t EO
P ALM Corporation
PSALM Manua/ of Corporate GovernancePage 33 of40
U
JOSE . STINIANO
U ecretaryDepa ment of Justice
HEIDD! VENECIA R,
Di rector
Department of
BARROZO
Justice
FLORENCIO B. ABAD
SecretaryDepartment of Budget and
Management
LORENZO C. DRAPETE
Director, Bureau F
Department of Budget and
Management
ARSENIO M. BALISACAN
Director General
National Economic Development
Authority
RUBEN S. REINOSO, JR.
Director General
National Economic Development
Authority
GREGORY L. DOMINGO
SecretaryDepartment of Trade and Industry
RAUL V. ANGELES
Executive Di rector
Board of Investments, Department of
Trade and Industry
LO RDES g. AL NA
resident £t EO
P ALM Corporation
PSALM Manual of Corporate GovernancePage 33 of40
JOSE F. JUSTINIANO
UndersecretaryDepartment of Justice
HEIDD! VENECIA R. BARROZO
Director
Department of Justice
FLORENCIO B. ABAD
SecretaryDepartment of Budget and
Management
LORENZO C. DRAPETE
Director, Bureau F
Department of Budget and
Management
ARSENIO M. BALISACAN
Qirector General
National Economic Development
Authority
RUBEN S. REINOSO, JR.
Director General
National Economic Development
Authority
GREGORY L. DOMINGO
SecretaryDepartment of Trade and Industry
UL V. ANGELES
xecutive Director
Board f Investments, Department of
Trade and Industry
LO RDES AL NA
Prresident t EO
PSALM Corporation
PSALM Manual of Corporote GovernancePage 33 of 40
ANNEX " A"
Formal Charter of Expectations of Each Director
Statement of Principtes
A. PSALM is an active partner of the Government in nationat development.
PSALM acknowled es that its corporate or anization is essential to theperformance of its functions as an active partner of the qov ernment in
national development. Such functions include the sale, privatization or
disposition of NPC assets and IPP contracts and/ or their ener y outputbased on wch terms and conditions that will optimize the value and sale
prices of these assets; liquidation of NPC' s stranded contract costs usin
proceeds from sales and other properties, includin proceeds from the
Universal Char e; restructurin of existin loans of NPC; and collection,
administration and application of the NPC portion of the Universal Char e.
B. Govemin principles of good corporate governance of PSALM.
PSALM's co rate governance framework shall be overned bv the
followin principler
a. PSALM shall promote transparency, accountability and fairness, andits business shall be conducted strictly in accordance with the ruleof law and shall be supportive of the primary goals and objecfives ofthe government.
b. Timely and accurate disclosure shall be made on all materialaspects and development regarding the Corporation, including itsfinancial condifion, perfoRnance, ownership, and governance.
c. The strategic guidance of PSALM shall be in accord with theobjectives set by the government, the effective monitoring ofManagement by the Board, and the Board's accountability to theCorporafion and its stakeholders.
PSALM Monual of Corporate GovemoncePoge 34 of40
d. Activ e cooperafion betvueen the Corporation and its stakeholders in
creating wealth, jobs, and the sustainability of a financially soundenterprise shall be encouraged.
C. Commitment to institutionalize the Principles of Corporate Govemance.
PSALM is committed to institutionalize the principles of ood corporate
overnance in the entire or anization. The PSALM Board of Directors,
to$ether with Mana$ement and Employees, commit to the principles
contained in the Manual of Corporate Governance and acknowled e that
this Manual wilt serve as a guide in the achievement of corporate goals.
D. Promotion of Corporate Governance.
The Board of Directors, together with Mana ement and Employees, betieve
that good corporate ov ernance is an integral component of sound
strategic business management and of transparency and accountability in
public corporate $ overnance, and will therefore undertake every effortnecessary to create awareness within the Corporation.
E. Care, Dili ence and Skill in the Conduct of the Business of the Corporation.
The members of the Board must exercise extraordinary dili ence in theconduct of business and in dealing with the properties of the Corporation. Such de ree of diligence requires usin the utmost ditigence of very
cautious person with due regard for all circumstances.
Expectations of Directors
As members of the PSALM Board of Directors, we assume a position of trust
and confidence and as such we must act in the best interest of PSALM. Our
actions must be characterized by transparency, accountability, faimess andresponsibitity and we must exercise leadership, prudence, and inte rity in
directing PSALM towards sustained rogress over the long term. In this regard, in addition to the duties and responsibilities of the Board, we shall observe
the followin:
1. Remain fit and proper for the position for the duration of our term.
2. Conduct fair business transaction with PSALM and ensure that our
personat interests do not compromise Board decisions. We shall not
PSALM Manuol of Corporate GovernancePage 35 of40
use our position to make profit or acquire benefit or advantage for
ourselves and/ or ou related interest. We should avoid situations
that may compromise our impartiality.
3. Devote time and attention necessary to properly and effectivelyperform our duties and responsibilifies. We should prepare for,
attend and acfively participate in Board meetings. We are expectedto devote substantial time and attention to the affairs of PSALM,
and keep ourselves informed about PSALM' s business.
4. Act honestly and in good faith, in the best interest of PSALM,
including its stakehdders. Before decidin on any matter broughtbefore the Board of Directors, we should evaluate the issues, ask
questions and seek wch clarifications, as we may deem appropriate.
5. Act judiciousty and exercise independent, competent, honest and
courageous judgment. We should decide on each problem/ situation
in utmost good faith, being reasonably informed thereon andrationalty believing the action we take is in the best interest ofPSALM and support plans and ideas which we believe are beneficialto the Corporation.
6. Have working knowledge of the statutory and regulatory
requirements affecting PSALM. This includes a firm knowledge ofthe contents of PSALM' s Articles of Incorporation and By- Laws andthe amendments thereto, and where applicable, the requirements
of other regulatory agencies.
7. Observe confidentiality. We shall observe the confidentiality of non- public information acquired by reason of our position as directors. We shoutd not dixlose any information to any other person withoutthe authority of the Board.
8. Ensure the continuing soundness, effectiveness and adequacy of
PSAUNs control environment. We are responsible for assuring thatactions taken by the Board maintain the adequacy of the controlenvironment within PSAIJN.
9. Prior to assuming office, if possible, or soon thereafter, attend aseminar on corporate governance, which shall be conducted by a
PSALM Monual ofCorporote GovemancePage 36 of40
duly recognized private or government institution. If necessary, funds shall be allocated by PSALM for this pu pose.
Done this day of _ September 2015 at Makati City.
CESAR V. PURISIMA
SecretaryDepartment of Finance
r.. - i¢-'1^- ,
MA. TERESA S. HABITAN
Assistant SecretaryDepartment of Finance
LEILA M. DE LIMA
SecretaryDepartment of Justice
JOSE F. JUSTINIANO
UndersecretaryDepartment of Justice
HEIDDI VENECIA R. BARROZO
Director
Department of Justice
ZENAIDA Y. MONSADA
Officer-in-Char e, SecretaryDepartment of Energy
JOSE RAYMUND A. ACOL
Assistant SecretaryDepartment of Energy
ARSENIO M. BALISACAN
Director General
National Economic Development
Authority
RUBEN S. REINOSO, JR. Director General
National Economic Development
Authority
PSALM Manual of Corporate GovemancePoge 37 of40
L_J
duly recognized private or government institution. if necessary,
funds shall be allocated by PSALM for this purpose.
Done this day of _ September 2015 at Makati City.
CESAR V. PURISIMA
SecretaryDepartment of Finance
A -
MA. TERESA S. HABITAN
Assistant SecretaryDepartment of Finance
LEILA M. DE LIMA
SecretaryDepartment of Justice
JOS p JUSTINIANO
d t-secretaryDe rtment of Justice
HEIDDI VENECIA R. BARROZO
Director
Department of Justice
ZENAIDA Y. MONSADA
Officer-in-Charge, SecretaryDepartment of Energy
JOSE RAYMUND A. ACOL
Assistant SecretaryDepartment of Energy
ARSENIO M. BALISACAN
Director General
National Economic Development
Authority
RUBEN S. REINOSO, JR. Director General
National Economic Devetopment
Authority
PSALM Manuo/ of Corporote GovernoncePage 37 of40
duly recognized private or government institution. If necessary,
funds shall be allocated by PSALM for this purpose.
Done this day of _ September 2015 at Makati City.
CESAR V. PURISIMA
SecretaryDepartment of Finance
l¢-' i", f r
MA. TERESA S. HABITAN
Assistant SecretaryDepartment of Finance
LEILA M. DE LIMA
SecretaryDepartment of Justice
JOSE F. JUSTINIANO
UndersecretaryDepartment of Justice
HEIDDI VENECIA R. BARROZO
Director
Department of Justice
ZENAIDA Y. MONSADA
Officer-in-Charge, SecretaryDepartment of Energy
JOSE RAYMUND A. ACOL
Assistant SecretaryDepartment of Energy
ARSENIO M. BALISACAN
Director General
National Economic Development
Authority
REINO Q, JR. Director Gen al
National Economic vetopment
Authority
PSALM Manual of Corporote GovernoncePoge 37 of40
duly recognized private or government institution. If necessary,
funds shall be allocated by PSALM for this purpose.
Done this day of _ September 2015 at Makati City.
CESAR V. PURISIMA
SecretaryDepartment of Finance
ti.^, A - f. t-
MA. TERESA S. HABITAN
Assistant SecretaryDepartment of Finance
LEILA M. DE LIMA
SecretaryDepartment of Justice
JOSE F. JUSTINIANO
UndersecretaryDepartment of Justice
HEIDDI VENECIA R. BARROZO
Director
Department of Justice
ZENAIDA Y. MONSADA
Officer-in-Charge, SecretaryDepartment of Energy
JOSE MU ID A. ACOLAss s nt Eretary
Energy
ARSENIO M. BALISACAN
Director General
Nationat Economic Development
Authority
RUBEN S. REINOSO, JR.
Director General
National Economic Development
Authority
PSALM Manuol of Corporate GovernancePage 37 of40
FLORENCIO B. ABAD
SecretaryDepartment of Budget and
Management
LORENZO C. RAPETE
Director, Bureau F
Department of Budget and
Management
GREGORY L. DOMINGO
SecretaryDepartment of Trade and Industry
UL V. ANGELES
Executive Director
Board of Investments, Department of
Trade and Industry
LO DES S. ALZO A
P esident Et CEP ALM Corporafion
PSAlM Manual of Corporate GovemancePage 38 of40
ANNEX " B"
STATEMENT OF DIRECTORS' RESPONSIBILITY
The Board of Directors of Power Sector Assets and Liabilities ManagementCorporation ( PSALM) confirms the truth and fairness of the Company'sfinancial statements ending 31 December 2014, including the additionalcomponents attached therein, in accordance with the prescribed financial
reporting framew ork indicated therein. This responsibility includes
confirmation of the truth and faimess in the design and imptementation ofintemal controls relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud
or error, selection and applicafion of appropriate accounting poticies, and
making acrnunting estimates that are reasonable in the circumstances.
APPROVED BY:
CESAR V. PURISIMA
SecretaryDepartment of Finance
MA. TE SA S. HABITAN
Assistant SecretaryDepartment of Finance
LEILA M. DE LIMA
SecretaryDepartment of Justice
ZENAIDA Y. MONSADA
Officer-in-Charge, SecretaryDepartment of Ener y
JOSE RAYMUND A. ACOL
Assistant SecretaryDepartment of Energy
ARSENIO M. BALISACAN
Director General
National Economic Development
Authority
PSALM Manuol ofCorporate GovemancePoge 39 of40
J i
ANNEX " B"
STATEMENT OF DIRECTORS' RESPONSIBILITY
The Board of Directors of Power Sector Assets and Liabilities Management
Corporafion ( PSALM) confirms the truth and fairness of the Company'sfinancial statements ending 31 December 2014, including the additionalcomponents attached therein, in accordance with the prescribed financial
reporting framework indicated therein. This responsibility includes
confirmation of the truth and faimess in the design and imptementation ofinternal controls relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraudor error, selection and application of appropriate accountin policies, and
making accounting estimates that are reasonable in the circumstances.