2006 Annual Report - Lopez Holdings Corporation

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A n n u a l R e p o r t 2 0 0 6
coRpoRAte goVeRnAnce
In 2002, the Board of Directors (Board) of Benpres
adopted the company’s Manual of Corporate Governance
to institutionalize corporate governance principles.
The Board, management, employees and shareholders
believe that good corporate governance is a necessary
component of what constitutes sound strategic business
management, and would improve the economic and
commercial prosperity of the corporation and ultimately,
the stockholders.
A copy of Benpres’s Manual of Corporate Governance
was submitted to the Securities and Exchange
Commission on September 2, 2002. It also now forms
part of the quality management system of Benpres as a
reference and guide (RM-BHC-04-01) for the conduct of
all business.
No amendments to the Manual were adopted in 2006.
board composition
The Board consists of seven members, two of whom are
independent directors, who are elected by stockholders
at the Annual Stockholders’ Meeting. The members of
the Board hold office until the next succeeding annual
meeting and until their respective successors have been
elected and qualified.
The Board is elected by shareholders to oversee
management and to watch over the best interest of the
Company and its stakeholders.
The names and profiles of each member of the Board
are disclosed in the Board of Directors section of this
annual report.
independent directors
As a publicly listed company, Benpres complies with
the SEC requirement to have at least two (2) independent
directors or at least 20% if its board size, whichever is
less. For a Director to be considered an Independent
Director, one should not have any direct or indirect
material relationship with Benpres.
Benpres’ independent directors are Mr. Washington
Sycip and Mr. Vicente Paterno. These independent
directors have at least one (1) share of stock of the
Company each in their respective names, are both college
graduates and possess integrity and assiduousness.
Apart from their fees as directors of the Company, they
are independent of management and free from any
business or other relationship which could, or could
reasonably, be perceived to materially interfere with
their exercise of independent judgment in carrying out
their responsibilities as directors of the Company.
board performance
The Board held nine (9) meetings in 2006 during which
it (1) reviewed and discussed reports by management on
the performance of the company and its subsidiaries,
(2) approved the Company’s plans, budgets and audited
financial statements (3) set policies and guidelines to
aid management to accomplish its goals and objectives;
and (4) deliberated on all other matters requiring board
approval.
board committees
The Board has established the following committees
to assist the Board in discharging its responsibilities:
Audit committee
The Audit Committee checks all financial reports
against its compliance with both the internal financial
management handbook and pertinent accounting
standards, including regulatory requirements. It performs
oversight financial management functions specifically
in the areas of managing credit, market, liquidity,
operational, legal and other risks of the Company, and
crisis management. It consists of three Board members,
one of whom is an independent director.
The Audit Committee held two (2) meetings in 2006 to
oversee the Company’s financial reporting activities, as
well as the activities and independence of the external
auditors.
nominations committee
The Nominations Committee pre-screens and shortlists
all candidates nominated to become a member of the
Board. Two members of the committee are independent
Board directors. The following guidelines are used in
determining the eligibility of nominees: the nature of the
business of the corporations in which he is a director;
age of the director; number of directorships/active
memberships and officerships in other corporations or
organizations; and possible conflict of interest.
During the last stockholders meeting, the number
of directors was decreased to seven (7) from eight
(8). Thus, with the exception of Mr. Steve Psinakis
who resigned in 2006 due to health reasons, the same
set of directors was nominated during the year.
compensation and Remuneration committee
The Compensation and Remuneration Committee
has established a formal and transparent procedure
for developing a policy on executive remuneration
and for fixing the remuneration packages of corporate
officers and directors. It has three (3) members, one
of whom is an independent director.
Consultations and meetings are held on a case-to-
case and on a need basis.
corporate code of conduct
In 2006, the Board approved a Corporate
Code of Conduct (the Code) to govern and guide
the actions of all its representatives in dealing
with its publics: shareholder, customers, joint
venture partners, suppliers and service providers,
government, and creditors. The Code covers all
directors, employees, consultants, product and
service providers and all persons who act for and
in behalf of Benpres.
The Board of Directors of Benpres approved a Corporate Code of Conduct
to govern the actions of all its representatives in dealing with its publics.
A n n u a l R e p o r t 2 0 0 6
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