35
ACGR2014, P, OP-CD-HBCD Page 1 of 35

ACGR2014, P, OP-CD-HBCD Page 1 of 35 - Metrobank Corporate Governance... · ACGR2014, P, OP-CD-HBCD ... Removal Per Sec. 28 of the Corporations Code of the Philippines, ... The following

  • Upload
    vunhan

  • View
    216

  • Download
    2

Embed Size (px)

Citation preview

ACGR2014, P, OP-CD-HBCD Page 1 of 35

ACGR2014, P, OP-CD-HBCD Page 2 of 35

ACGR2014, P, OP-CD-HBCD Page 3 of 35

ACGR Questions

A. BOARD MATTERS 1) Board of Directors

(b) Provide a brief summary of the corporate governance policy that the board of directors has adopted. Please emphasis the policy/ies relative to the treatment of all shareholders, respect for the rights of minority shareholders and of other stakeholders, disclosure duties, and board responsibilities.

The Bank’s Board-approved Corporate Governance Manual (CGM) provides the following: Stockholder’s rights and protection of minority stockholder’s interest 1. The Board grants the stockholders the following rights:

a. Right to vote on all matters that require their consent or approval; b. Right to inspect books and records of the Bank; c. Right to information; d. Right to dividends; and e. Appraisal right

2. The Board shall be transparent and fair in the conduct of the annual and special stockholders’ meetings of the Bank. The Bank shall encourage the stockholders to personally attend such meetings and actively participate by giving comments and raising questions. If they cannot attend, they shall be apprised ahead of time of their right to appoint a proxy. Subject to the requirements of the By-Laws, the exercise of the right shall not be unduly restricted and any doubt about the validity of a proxy should be resolved in the stockholder’s favor.

3. The Board shall promote the rights of the stockholders, remove impediments to the exercise of those rights and provide an adequate avenue for them to seek timely redress for breach of their rights.

4. The Board shall also make available to the stockholders accurate and timely information to enable the latter to make a sound judgment on all matters brought to their attention for consideration or approval.

5. Any stockholder of a corporation shall have the right to dissent and demand payment of the fair value of his shares in case any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence.

General responsibilitiy of the Board

The Board is primarily responsible for approving and overseeing the implementation of the Bank’s strategic objectives, risk strategy, corporate governance and corporate values. Further, the Board is also responsible for monitoring and overseeing the performance of Senior Management as the latter manages the day to day affairs of the Bank.

It is the Board’s responsibility to foster the long-term success of the corporation, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the best interests of its stockholders and other stakeholders.

ACGR2014, P, OP-CD-HBCD Page 4 of 35

1 The Group is composed of the parent, subsidiaries, associates and joint ventures of the company.

Specific Duties and Responsibilities of the Board

1. Approve and monitor the implementation of strategic objectives 2. Approve and oversee the implementation of policies governing major areas of banking operations 3. Approve and oversee the implementation of risk management policies 4. Oversee selection and performance of Senior Management 5. Consistently conduct the affairs of the Bank with a high degree of integrity 6. Define appropriate governance policies and practices for the Bank and for its own work and to establish means to ensure that such are followed and periodically reviewed for

ongoing improvement 7. Constitute committees to increase efficiency and allow deeper focus in specific areas. 8. Effectively utilize the work conducted by the internal audit, risk management and compliance functions and the external auditors 9. Have the overall responsibility for defining an appropriate corporate governance framework that shall contribute to the effective oversight over entities in the group. 10. Identify the corporations’ stakeholders in the community in which it operates or are directly affected by its operations and formulate a clear policy of accurate, timely and effective

communication with them

(c) How often does the Board review and approve the vision and mission?

The Mission and Vision Statement was reviewed in January 2014 by the Board of Directors.

(d) Directorship in Other Companies (i) Directorship in the Company’s Group

1

Identify, as and if applicable, the members of the company’s Board of Directors who hold the office of director in other companies within its Group:

Director’s Name Corporate Name of the

Group Company Type of Directorship (Executive, Non-Executive, Independent).

Indicate if director is also the Chairman.

George S. K. Ty

GT Capital Holdings, Inc. Metrobank Foundation Inc. Manila Tytana Colleges Manila Medical Services, Inc. Global Business Power Corporation Federal Land, Inc.

Chairman Emeritus/NED Chairman Honorary Chairman/Board of Trustee Honorary Chairman Honorary Chairman Honorary Chairman

Arthur Ty

Metropolitan Bank (China) Ltd. GT Capital Holdings Inc. Philippine Savings Bank First Metro Investment Corporation Federal Land, Inc.

Chairman/NED Co-Vice Chairman/NED Vice-Chairman Vice-Chairman Director

ACGR2014, P, OP-CD-HBCD Page 5 of 35

Francisco C. Sebastian

GT Capital Holdings, Inc. First Metro Investment Corporation

First Metro Asset Management, Inc.

Global Business Power Corporation

Cebu Energy Development Corp.

Federal Land, Inc.

Chairman/NED

Chairman/NED

Chairman/NED

Chairman/NED

Chairman Director

Fabian S. Dee Metrobank Card Corp. Metro Remittance Singapore Pte. Ltd. SMBC Metro Investment Corporation FMIC Equities Inc.

Chairman/NED Chairman/NED Chairman Director

Edmund A. Go Metropolitan Bank (China) Ltd.. NED

Jesli A. Lapus Manila Tytana Colleges Honorary Chairman

Vicente R. Cuna Jr.

Philippine Savings Bank First Metro Investment Corporation

President Director

(ii) Directorship in Other Listed Companies

Identify, as and if applicable, the members of the company’s Board of Directors who are also directors of publicly-listed companies outside of its Group:

Director’s Name Name of Listed Company Type of Directorship (Executive, Non-Executive,

Independent). Indicate if director is also the Chairman.

Jesli A. Lapus STI Education Systems Holdings, Inc. Director

Renato C. Valencia Roxas Holdings, Inc. iPeople, Inc. House of Investments, Inc. Vulcan Industrial & Mining Corporation Roxas & Company, Inc. Anglo Philippine Holdings Corporation

President & Chief Executive Officer Chairman & Independent Director Independent Director Independent Director Director Director

(iii) Relationship within the Company and its Group

Provide details, as and if applicable, of any relation among the members of the Board of Directors, which links them to significant shareholders in the company and/or in its group:

ACGR2014, P, OP-CD-HBCD Page 6 of 35

Director’s Name Name of the

Significant Shareholder Description of the relationship

George S. K. Ty Arthur Ty

GT Capital Holdings, Inc.

(owns 25.112% of the Company)

George S.K. Ty and Arthur Ty are father and son, and Group Chairman & Co-Vice Chairman, respectively of GT Capital Holdings, Inc.

(b) Selection/Appointment, Re-election, Disqualification, Removal, Reinstatement and Suspension Describe the procedures for the selection/appointment, re-election, disqualification, removal, reinstatement and suspension of the members of the Board of Directors. Provide details of the

processes adopted (including the frequency of election) and the criteria employed in each procedure:

The majority shareholders nominate the persons who will represent them in the Board. The independent directors are nominated by the minority shareholders. The qualifications of all nominees are then evaluated by the Nominations Committee.

Procedure Process Adopted Criteria

a. Selection/Appointment The majority shareholders nominate the persons who will represent them in the Board. The independent directors are nominated by the minority shareholders. The qualifications of all nominees are then evaluated by the Nominations Committee. Those who meet the qualifications and none of the disqualifications are included in the list of final candidates.

Qualifications/disqualifications based on regulations and as adopted in the Bank’s Corporate Governance Manual (CGM). (i) Executive Directors

(ii) Non-Executive Directors

(iii) Independent Directors

b. Re-appointment

(i) Executive Directors

(ii) Non-Executive Directors

(iii) Independent Directors

f. Re-instatement

(i) Executive Directors

(ii) Non-Executive Directors

(iii) Independent Directors

c. Permanent Disqualification

(i) Executive Directors

(ii) Non-Executive Directors

ACGR2014, P, OP-CD-HBCD Page 7 of 35

(iii) Independent Directors

d. Temporary Disqualification

(i) Executive Directors

(ii) Non-Executive Directors

(iii) Independent Directors

e. Removal Per Sec. 28 of the Corporations Code of the Philippines, removal may be with or without cause, provided that the removal may not be used to deprive minority stockholders of the right of representation.

(i) Executive Directors

(ii) Non-Executive Directors

(iii) Independent Directors

g. Suspension

(i) Executive Directors

(ii) Non-Executive Directors

(iii) Independent Directors

6) Orientation and Education Program

(a) Disclose details of the company’s orientation program for new directors, if any. Orientation for first-time directors begins immediately after they are selected and before their first Board meeting. In compliance with BSP Circular No. 758, the Corporate Governance Manual provides that the Bank shall furnish all the first-time directors with a copy of the general responsibility and specific duties and responsibilities of the board of directors and of a director. The directors shall submit under oath a certification that they have received copies of such general responsibility and specific duties and responsibilities and that they fully understand and accept the same. The Bank shall submit the certification to the appropriate department of the BSP-Supervision and Examination Sector, together with a copy of certificate of attendance in Corporate Governance Seminar.

ACGR2014, P, OP-CD-HBCD Page 8 of 35

(c) Continuing education programs for directors: programs and seminars and roundtables attended during the year.

Name of Director Date of Training

2013-2014 Program

Name of Training Institution

(1) George SK Ty (2) Arthur Ty (3) Francisco C. Sebastian (4) Fabian S. Dee (5) Renato C. Valencia (6) Remedios L. Macalincag (7) Jesli A. Lapus (8) Vicente B. Valdepeñas, Jr. (9) Robin A. King (10) Rex C. Drilon II (11) Edmund Go (12) Antonio V. Viray (13) Francisco F. del Rosario, Jr, (14) Vicente R. Cuna, Jr.

a. AML Risk Rating Seminar and Amendments to BSP Cir. No. 706 and

AMLA Law, RA 10365

b. Risk Management Brief Seminar on Cyber Crime

Prevention Data and Privacy Act

c. - Annual Working Sessions on Corporate Governance and Monthly

Breakfast Roundtable for ICD Fellows

- Distinguished Corporate Governance Speaker Seminar Series

d. Seminar on Corporate Governance-

Creating Advantage Through Governance

e. AML Briefing to Board of Directors and Senior Management

a. Bankers Institute of the

Philippines (BAIPHIL)

b. First Metro Investment Corporation

c. Institute of Corporate Directors

d. SGV & Co.

e. In-house

ACGR2014, P, OP-CD-HBCD Page 9 of 35

B. CODE OF BUSINESS CONDUCT & ETHICS 1) Discuss briefly the company’s policies on the following business conduct or ethics affecting directors, senior management and employees: The following excerpts are included in the Bank’s Policy on Insider Trading, Code of Conduct for Directors, Senior Management and Employees and Compliance Program:

Business Conduct & Ethics Directors Senior Management Employees

Xxx

(e.) Respect for Trade Secrets/Use of Non-public Information

Policy on Insider Trading To ensure that the shareholders are afforded protection and that individuals do not benefit from knowledge which is not generally available to the market, Metrobank has instituted its own Insider Trading Policy. The policy covers the standard of conduct applicable to all directors and employees within the Metrobank Group including their immediate family members residing with them in the same household and corporations, other entities and funds subject to their influence or control to the extent that they are considered insiders having access to material nonpublic information about the securities of companies within the Metrobank Group (“Metrobank Group Securities”) as well as the securities of any of their corporate clients and business partners (“Partner’s Securities”). The policy requires that the disclosure of Material Nonpublic Information about any of the companies within the Metrobank Group or any Partner shall be made on a reasonable need-to-know basis and in furtherance of a legitimate business purpose. It further requires the reporting insiders to confirm their respective beneficial ownership of listed shares of stock in their respective companies, if any, and report any changes thereto on the next trading day from the date of the change pursuant to the requirements of the Securities and Exchange Commission and the Philippine Stock Exchange.

Code of Conduct and Ethics for Bank Directors Every director must observe confidentiality of non-public information acquired by reason of his position as a director. He may not disclose said information without the authority of the board.

Code of Conduct for Employees (Preservation of Confidential Information) The Bank advocates protection of confidential information as a basic principle in maintaining public trust and nurturing business endeavors. In line with this principle, the Bank always complies with Bank Secrecy laws. Employees are expected to adopt every practicable measure to preserve confidential information at all times. Employees should not disclose or provide confidential documents or strategic information to any third party, without expressed written consent of senior authority or the affected client, or unless authorized/required by existing laws. This includes, but is not limited to, information relating to clients, competitors or suppliers of the Bank.

(f) Use of Company Funds, Assets and Information

Code of Conduct and Ethics for Bank Directors Every director must observe confidentiality of non-public information acquired by reason of his position as a director. He may not disclose said information without the authority of the board.

Code of Conduct for Employees (Maintenance and Protection of Bank Property) The Bank believes that proper and appropriate use, maintenance and protection of Bank properties, including its operating systems and facilities, contribute to its overall objective of attaining success in all its varying and changing business endeavors. In line with the Bank’s thrust to maximize its resources, all employees have the primary responsibility of ensuring the effective, efficient and responsible utilization and handling of Bank operating systems and properties including prevention of waste and damage to the same. xxx

Xxx

ACGR2014, P, OP-CD-HBCD Page 10 of 35

C. BOARD MEETINGS & ATTENDANCE

2) Attendance of Directors

Board Name Date of Election No. of Meetings Held during the

year

No. of Meetings Attended

%

Group Chairman George S.K. Ty April 30, 2014 12 12 100

Chairman Arthur Ty April 30, 2014 12 12 100

Vice Chairman Francisco C. Sebastian April 30, 2014 12 10 88

President/Director Fabian S. Dee April 30, 2014 12 12 100

Director Edmund A. Go April 30, 2014 12 12 100

Director Antonio V. Viray April 30, 2014 12 11 94

Independent Renato C. Valencia April 30, 2014 12 10 88

Independent Remedios L. Macalincag April 30, 2014 12 12 100

Independent Jesli A. Lapus April 30, 2014 12 12 100

Independent Robin A. King April 30, 2014 12 12 100

Independent Vicente B. Valdepeñas, Jr. April 30, 2014 12 10 88

Independent Rex C. Drilon II April 30, 2014 12 12 100

Independent Francisco F. Del Rosario Jr. April 30, 2014 12 12 100

Director Vicente R. Cuna, Jr * April 30, 2014 12 9 82

Director Amelia B. Cabal** April 15, 2013 3 3 100 *newly elected

**member until March 2014

3) Do non-executive directors have a separate meeting during the year without the presence of any executive?

Board-level committees composed of non-executive directors (e.g, RPTC, AuditCom, ROC) regularly meets without the presence of any executive. If yes, how many times?

For Related Party Transaction Committee – 13 times For Audit Committee – 12 times For Risk Oversight Committee – 13 times

ACGR2014, P, OP-CD-HBCD Page 11 of 35

2) Access to Information (e) Committee Procedures

Disclose whether there is a procedure that Directors can avail of to enable them to get information necessary to be able to prepare in advance for the meetings of different committees:

Yes X No

Committee Details of the procedures

Information Technology Steering Committee

The Committee Secretary sends notice of meeting at least five (5) days ahead and sends the agenda and copies of the materials at least one (1) day before the meeting.

Anti-Money Laundering Committee

The Committee Secretary sends notice of meeting at least 10 days ahead and sends the agenda and copies of the materials at least 3 days before the meeting.

7) Change/s in existing policies Indicate, if applicable, any change/s introduced by the Board of Directors (during its most recent term) on existing policies that may have an effect on the business of the company and the reason/s for the change:

Existing Policies Changes Reason

Renaming of Risk Management Committee Renaming to Risk Oversight Committee (ROC)

To better reflect the tasks of the committee.

Revised IT Governance Framework Revision of IT Governance Framework To ensure alignment of IT and business strategy.

Potential Future Credit Exposure (PFCE) Factors for: 1. Bond Forwards and Forward Rate

Agreements 2. Interest rate swaps 3. Cross currency swaps 4. FX forwards 5. FX options 6. Fixed income securities 7. Credit default swaps 8. FX spot/forward 9. Bond Forwards

Updating of PFCE factors

To ensure that the pre-settlement exposure to a counterparty in each deal involving derivative products is correctly considered.

ACGR2014, P, OP-CD-HBCD Page 12 of 35

10. Forward Rate Agreements

Pre-Settlement Risk Factors (PSR) for Fixed Income Securities

Updating of PSR factors

To reflect recent movements in bond prices.

Amendment of the Charter of Risk Oversight Committee

Inclusion of the Head of the Commercial Banking Group as one of the resource persons.

To enable the committee to have broader and immediate access to the frontline risk-taking lending units.

Interest Rate on Deposit Products Reduced interest rate on USD and Euro Savings accounts

To align rates with market rates.

Reconstitution of Board-level and Bank-level committees

Change in memberships To reflect changes in Bank organization and leadership

Various policies including but not limited to:

Revised Account Opening and KYC Processes

Closing of Accounts with Suspicious Transactions

Cross-selling of Products of Financial Product Provider (FPP)

Handling of Freeze Orders

Additional Guidelines on Garnishment

Loan Valuation Factors for Deposits/Bonds/Securities/Other Instruments

Policy on Insider Trading

Outsourcing

Amendment to various items To comply with regulatory requirements

Various organizational changes Changes in table of organization To ensure better management and supervision of units

ACGR2014, P, OP-CD-HBCD Page 13 of 35

D. REMUNERATION MATTERS 3) Aggregate Remuneration Complete the following table on the aggregate remuneration accrued during the most recent year:

Remuneration Item* Executive Directors

Non-Executive Directors (other than independent directors)

Independent Directors

(d) Fixed Remuneration Please see below Please see below Please see below

(e) Variable Remuneration

(f) Per diem Allowance

(g) Bonuses

(h) Stock Options and/or other financial instruments

1) Others (Specify)

Total

*Below is the table showing the compensation of directors and officers as a group as presented in the Definitive Information Statement:

in million pesos Year Salary Bonuses

Other Annual Compensation*

Total for all executive officers and directors

2014 (Estimate) 307.59M 76.89M 52.01M

2013 266.09 104.84 48.94

2012 229.57 95.86 61.81

* Inclusive of directors’ per diem amounting to P31.44 million, P30.08 million and P25.22 million as of December 31, 2014, 2013, and 2012, respectively.

Other Benefits*

Executive Directors Non-Executive Director (other than independent directors)

Independent Directors

(i) Advances NA NA NA

(j) Credit granted NA NA NA

(k) Pension Plan/s Contributions 2.205 Million NA NA

(g) Pension Plans, Obligations incurred

NA NA NA

ACGR2014, P, OP-CD-HBCD Page 14 of 35

(h) Life Insurance Premium NA NA NA

(i) Hospitalization Plan 0.52 Million NA NA

(h) Car Plan Bank assigned car NA NA

1) Others (Specify) NA NA NA

Total 2.725 Million

*These benefits are provided as an officer of the Bank (2013). 5)Remuneration of Management

Identify the five (5) members of management who are not at the same time executive directors and indicate the total remuneration received during the financial year:

Name of Officer/Position Total Remuneration

Group Heads 68.082 Million (2013)

E. BOARD COMMITTEES 1) Number of Members, Functions and Responsibilities

Provide details on the number of members of each committee, its functions, key responsibilities and the power/authority delegated to it by the Board:

Committee

No. of Members

Committee Charter (Functions, Key Responsibilities, Power) Executive Director

(ED)

Non-executive Director

(NED)

Independent Director

(ID)

Non-Director Member (NDM)

Corporate Governance (CGCom) (Performs functions of the Remuneration Committee)

1 1 3 None Responsibility Statement: It assists the Board in fulfilling its corporate governance responsibilities and in providing oversight in the implementation of the Bank’s Compliance System. Duties and Responsibilities: The CGCOM shall assist the Board in fulfilling its statutory and fiduciary responsibilities, enhancing shareholder value, and protecting shareholders’ interest through (a) effective oversight on corporate governance practices, (b) ensuring the Statement of Policy effectiveness and observance by the Board of corporate governance principles and guidelines, (c) providing oversight in the implementation of the Bank’s Compliance System, (d) making recommendations to the Board regarding the continuing education of directors, assignment to board committees, succession plan for the senior officers,

ACGR2014, P, OP-CD-HBCD Page 15 of 35

and the remuneration policy linked to the corporate and individual performance.

In addition, the CGCOM shall also aid the Board in the discharge of its overall responsibility for defining an appropriate corporate governance framework that shall contribute to the effective oversight function over entities in the group. Primary Responsibilities:

1. Provide effective oversight on corporate governance practices over the Bank and entities in the group 2. Assist the Board in fulfilling its corporate governance responsibilities 3. Ensure the effectiveness and due observance by the Board of corporate governance principles and guidelines 4. Provide oversight in the implementation of the Bank’s compliance system. It shall ensure that oversight on the

Bank’s compliance management is adequate. 5. Extend assistance to the Board in

a. defining appropriate governance and compliance policies, practices and structure that will enable effective oversight over entities in the group and

b. ensuring consistent adoption of corporate governance and compliance policies and systems across the group

Trust Committee (TrustCom)

1 2 2 1 (Trust

Officer)

Responsibility Statement: It is responsible for the acceptance and closing of trust and other fiduciary accounts. It performs initial review of assets placed under the trustee’s or fiduciary’s custody. It is responsible for the investment, reinvestment and disposition of funds or property. The Trust Com reviews and approves transactions between trust and/or fiduciary accounts. Duties and Responsibilities: Trust Com reviews trust and other fiduciary accounts at least once every three (3) years to determine the advisability of retaining or disposing of the trust or fiduciary assets, and/or whether the account is being managed in accordance with the instrument creating the trust or other fiduciary relationship. The Trust Committee is primarily responsible for overseeing the fiduciary activities of the bank. In discharging its function, it shall:

1. Report regularly to the Board on matters arising from fiduciary activities; 2. Ensures that fiduciary activities are conducted in accordance with applicable laws, rules and regulations, and

prudent practices; 3. Ensure that policies and procedures that translate the Board’s objectives and risk tolerance into prudent

operating standards are in place and continue to be relevant, comprehensive and effective; 4. Confirm the acceptance, termination or closure of all trust and other fiduciary as approved by the trust officer or

duly delegated management committee and shall record such in its minutes; 5. Confirm the initial review of assets placed under the trustee’s or fiduciary’s custody as conducted by trust officer

or duly delegated management committee; 6. Approve the investment, reinvestment and disposition of funds or property as endorsed by the trust officer or

duly delegated management committee;

ACGR2014, P, OP-CD-HBCD Page 16 of 35

7. Review and confirm transactions between trust and/or fiduciary accounts as approved by a the trust officer of duly delegated management committee;

8. Note the review of trust and other fiduciary accounts by a duly delegated management committee performed periodically as required by the regulation to determine the advisability of retaining or disposing of the trust or fiduciary assets, and/or whether the account is being managed in accordance with the instrument creating the trust or other fiduciary relationship.

9. Adopt an appropriate staffing pattern and operating budgets that shall enable the trust department to effectively carry out its functions;

10. Ensure that the officers and staff of the Bank are provided with appropriate training program in the administration and operation of all phases of trust and other fiduciary business;

11. Oversee and evaluate performance of the Trust Banking Group Head/Trust Officer; 12. Oversee the implementation of the Risk Management framework and ensure that internal controls are in place

relative to the fiduciary activities; 13. Take appropriate action on the examination reports of supervisory agencies, internal and/or external auditors

on the Bank’s trust and other fiduciary business and recording such actions thereon in the minutes for confirmation of the Board; and

14. Perform any and all functions that may be deemed necessary or proper in the exercise of its oversight functions over all fiduciary activities.

Domestic Equity Investments (DEIC)

1 1 3 1 (Internal Auditor)

Responsibility Statement: It assesses the results of operations and provides oversight on the domestic equity investments, as well as to review, evaluate and recommend to the Board, policy matters concerning the Bank’s relationship with its domestic subsidiaries/affiliates and selected equity investments proposals. Duties and Responsibilities: Ensure that domestic equity investments goals support the Bank's mission and vision. Assist the Board in reviewing DEI policies, strategies and programs of the Bank and its subsidiaries. Review the procedures which Management utilized in determining the appropriateness of specific investments

proposals in accordance with policies and limits approved by the Committee. Review specific investments proposals and transactions consistent with DEI policy and guidelines and

recommend appropriate Board action. Monitor the quality and performance of major domestic equity investments in the portfolio. Oversee how policies on cross-selling arrangements are implemented between related companies and the Bank. Periodically review cross-selling arrangements and report to the Board Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board

of Directors for approval.

Evaluate the performance of the Committee and its individual members annually.

ACGR2014, P, OP-CD-HBCD Page 17 of 35

Information Technology Steering Committee (ITSC)

2 2 None 1 (ITG Head)

The ITSC provides governance and oversight in the management of the Bank’s IT resources. Its principal function is to ensure that IT strategies are consistent with the overall business objectives. As an extension of the BOD, it shall supervise the IT Risk Management Program of the Bank and the development of policies, controls and specific accountabilities consistent with the Bank’s IT Risk Management Framework. It should regularly provide adequate information to the BOD regarding overall IT performance, status of major projects or other significant issues related to IT risks.

Anti-Money Laundering Committee (AMLACOM)

2 1 2 None Responsibility Statement: A Board level Committee tasked to assist the Board of Directors in fulfilling its oversight responsibility over the Bank’s AML Compliance Management to make sure that the Bank complies with the provisions of the AMLA, as amended, its Revised Implementing Rules and Regulations (RIRR), and BSP regulations.

Authority:

The AMLACOM shall have explicit authority to cause the investigation of any matter within its terms of reference, full access to and cooperation by Senior Management and full discretion to invite any Director or Officer to attend to its meetings, and adequate resources to enable it to effectively discharge its functions.

Duties and Responsibilities: 1. Provide effective oversight over Policy Development and Execution.

a. Policies and procedures established by Senior Management are adequate to ensure compliance with all

applicable laws and regulations, and AML risks are managed.

b. Policies and procedures are kept updated and remain relevant to best react on changing AML regulatory

scenarios and conditions.

2. Endorse to the Board for approval the Bank’s Money Laundering and Terrorist Financing Prevention Program

(MLPP) documenting the policies and procedures of the Bank’s compliance with the core components of AMLA,

as amended.

3. Receive regular reports from the Anti-Money Laundering Compliance Committee (AMLCC) on the effectiveness

of the implementation of the Bank’s MLPP and whether Senior Management is taking appropriate actions on

identified weaknesses in its (MLPP) implementation.

4. Review and monitor the overall effectiveness of Anti-Money Laundering Division (AMLD), particularly its

progress on the implementation of its overall business plan.

5. Perform annual self-assessment.

6. Review annually the AMLACOM Charter to reassess its adequacy, incorporate best practices and propose

necessary changes thereto.

ACGR2014, P, OP-CD-HBCD Page 18 of 35

2) Committee Members

(a) Executive Committee

Office Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman Arthur V. Ty April 30, 2014 52 40 76 11 years

Member (ED) Fabian S. Dee April 30, 2014 52 49 94 5 years

Member (NED) Francisco C. Sebastian (rotating member)

April 30, 2014 52 11 21 4 years

Member (ID) Robin A. King (rotating member)

April 30, 2014 52 20 38 1 year 8 mos.

Member (NED) Vicente R. Cuna (rotating member)

April 30, 2014 52 15 28 8 mos.

Member (NED) Edmund Go* (rotating member)

April 15, 2013 52 5 9 3 years 3 mos.

*member until March 2014

(b) Audit Committee (AC)

Office Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Renato C. Valencia April 30, 2014 12 11 92 16 years and 2 mos.

Vice –Chairman (ID) Remedios L. Macalincag April 30, 2014 12 11 92 7 years 8 mos.

Member (NED) Amy Cabal* April 15, 2013 5 5 100 4 years and 11 mos.

Member (ID) Vicente B. Valdepeñas April 30, 2014 12 12 100 3 years 8 mos.

Member (ID) Francisco F. del Rosario, Jr. April 30, 2014 12 9 75 1 year and 8 mos.

*member until March 2014 Disclose the profile or qualifications of the Audit Committee members.

Qualifications: As specified in the AC Charter; the members are appointed annually by the Board. It shall be composed of at least three (3) board members, majority of which shall be non-executive directors, and at least two (2) of whom shall be independent directors, including the Chairperson, preferably with accounting and financial management experience, and one (1) of whom shall have related audit experience commensurate with the size, complexity of operations and risk profile of the bank.

ACGR2014, P, OP-CD-HBCD Page 19 of 35

Profile:

RC Valencia – President/CEO, Roxas holdings, Inc.; Chairman/Director, iPeople Inc.; Director, Vulcan Industrial & Mining Corporation , Anglo Philippine Holdings Corporation, House of Investments, Inc., and Malayan Insurance Company, Inc.; Vice Chairman, Asia Pacific Network Holdings, Inc.; Chairman, Hypercash Payment Systems Inc.; Former President/CEO, Social Security System; Former Chairman/CEO, Union Bank of the Philippines

RL Macalincag – Chairman/President, Premium Equities, Inc.; Former Director, SMBC Metro, Megalink, and DBP - Daiwa Securities; Former Pres./CEO, Development Bank of the Philippines; Former Chairman/Vice Chairman, LGU Guarantee Corporation, Certified Public Accountant

VB Valdepeñas, Jr. – Consultant, Bangko Sentral ng Pilipinas; Chairman/ Member, Advisory panel to the ASEAN +3; Former Member, Monetary Board; Former Executive Director, South East Asian Central Banks Research and Training Centre at Kuala Lumpur; Former Consultant, Swedish International Development Authority on Bank Supervision; Citibank; Former Director General, National Economic and Development Authority; Deputy Minister, Trade and Industry

FF del Rosario, Jr. – Director, DMCI Homes, Inc. and Mapfre Insular Insurance Corp.; Former President/CEO, Roxas & Co., Inc.; Former Executive Vice President, Dela Salle University; Former Chairman/CEO, Asia Pacific Network; Former Executive Vice President, GSIS; Former President/Director, Cultural Center of the Philippines; Former Undersecretary, Department of National Defense; Former Vice Chairman/President/CEO, Development Bank of the Philippines

Describe the Audit Committee’s responsibility relative to the external auditor. As provided in its charter, one of the duties and responsibilities of the AC is to exercise effective oversight of external audit functions. With respect to the Bank’s independent external auditors, the AC is responsible to: 1) Appoint, re-appoint, and terminate the independent external auditors; 2) Review and approve the annual plan (including scope, audit frequency, and resources) of the external auditors; 3) Discuss with external auditors before the audit commences the nature, scope and expenses of the audit, and ensure coordination where more than one audit firm is involved; 4) Review independent external auditors’ report on the results of the audit of the annual financial statements before these are submitted to the Board for approval, focusing particularly on any change/s in

accounting policies and procedures, major estimates, assumptions and judgmental areas, unusual or complex transactions, significant adjustments, material errors and fraud, going concern assumption, compliance with accounting standards, and compliance with tax, legal and regulatory requirements;

5) Review reports of external auditors and ensure that Management is taking appropriate corrective actions, in a timely manner in addressing control weaknesses and non-compliance with policies, laws and regulations and other issues identified by auditors;

6) Keep the nature and extent of non-audit services provided by the external auditors under review and disallow any non-audit work that will conflict with or pose a threat to the independence of the external auditors;

7) Meet with the lead audit partner and other members of the audit team as necessary, without the presence of management, to discuss issues arising from the audit and any other matters that the external auditors may wish to raise with the AC and vice versa;

8) Conduct regular performance appraisal of external auditors; 9) Ensure that the external auditors shall have free and full access to all the Bank’s records, properties and personnel relevant to the audit activity, and that audit be given latitude in determining the scope of

auditing examinations, performing work, and communicating results and shall be free from interference by outside parties in the performance of work; and 10) Recommend necessary enhancements in the audit processes.

ACGR2014, P, OP-CD-HBCD Page 20 of 35

(c) Nomination Committee

Office Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Renato C. Valencia April 30, 2014 10 8 88 11 years & 10 months

Member (NED) Francisco C. Sebastian April 30, 2014 10 8 88 11 years & 10 months

Member (ID) Robin A. King April 30, 2014 10 10 100 3 years & 7 months

(d) Corporate Governance Committee

(Performs functions of the Remuneration Committee)

Office Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Rex C. Drilon II April 30, 2014 5 5 100 2 years

Vice –Chairman (ID) Remedios L. Macalincag Francisco C. Sebastian*

April 30, 2014 April 15, 2013

5 2

5 2

100 100

7 years and 10 months 7 years and 10 months

Member (ED) Arthur Ty April 30, 2014 5 4 80 2 years and 8 months

Member (NED) Antonio V. Viray April 30, 2014 5 5 100 3 years

Member (ID) Francisco F. del Rosario, Jr. April 30, 2014 5 4 80 1 year and 7 months

*member until March 2014

ACGR2014, P, OP-CD-HBCD Page 21 of 35

(e) Others (Specify) Provide the same information on all other committees constituted by the Board of Directors:

Trust Committee Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Sec. Jesli A. Lapus April 30, 2014 12 12 100 4 years and 4 mos.

Vice Chairman (NED) (NED)

Francisco C. Sebastian* Edmund A. Go**

April 15, 2013 April 30, 2014

3 12

3 12

100 100

11 years and 11 mos. 2 years and 8 mos.

Member (ED) Fabian S. Dee April 30, 2014 12 11 91 2 years and 8 mos.

Member (ID) Rex C. Drilon II April 30, 2014 12 10 83 2 years and 1 mo.

Member (NED) Atty. Antonio V. Viray April 30, 2014 7 7 100 6 months

Member (Trust Officer) Josefina T. Tuplano April 30, 2014 12 12 100 2 years and 8 mos.

* member until March 2014 **assumed as Vice Chairman April 30, 2014

Risk Oversight Committee Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Remedios Macalincag April 30, 2014 13 13 100 9 years & 2 mos.

Vice Chairman (NED) Edmund Go April 30, 2014 13 12 92 7 years & 6 mos.

Member (NED) Amy Cabal* April 15, 2013 3 3 100 2 years & 11 mos.

Member (ID) Vicente Valdepenas April 30, 2014 13 13 100 3 years & 8 mos.

Member (ID) Renato Valencia April 30, 2014 13 12 92 16 years & 2 mos.

Member (ID) Jesli Lapus April 30, 2014 13 12 92 4 years & 4 mos.

*member until March 2014

ACGR2014, P, OP-CD-HBCD Page 22 of 35

Related Party Transaction Committee

Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Renato C. Valencia April 30, 2014 13 12 92 4 years

Vice –Chairman (ID) Vicente B. Valdepeñas April 30, 2014 13 13 100 3 years & 8 mos.

Member (ID) Remedios L. Macalincag April 30, 2014 13 13 100 4 years

Member (ID) Rex C. Drilon II April 30, 2014 13 9 69 2 years & 3 mos.

Member (Internal Auditor)

Maritess B. Antonio April 30, 2014 13 11 85 4 years

Domestic Equity Investments Committee

Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Robin A. King April 30, 2014 6 6 100 3 years 8 mos.

Vice - Chairman (ID) Jeslie A. Lapus April 30, 2014 6 6 100 3 years 10 mos.

Member (NED) Arthur V. Ty April 30, 2014 6 4 67 2 years 8 mos.

Member (NED) Francisco C. Sebastian April 30, 2014 6 4 67 3 years 10 mos.

Member (NED) Amelia B. Cabal* April 15, 2013 2 2 100 1 year & 11mos.

Member (ID) Rex C. Drilon II April 30, 2014 6 6 100 2 years & 2 mos

Member (Head of Internal Audit Group)

Maritess B. Antonio April 30, 2014 6 6 100 3 years 8 mos.

*member until March 2014

Overseas Banking Committee Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ID) Robin A. King April 30, 2014 5 5 100 3 years & 8 mos.

Vice Chairman (NED) Francisco C. Sebastian April 30, 2014 5 3 60 11 years

Member (NED) Amelia B. Cabal* April 15, 2013 2 1 50 3 years & 11 mos.

Member (ED) Arthur V. Ty April 30, 2014 5 5 100 9 years

Member (ED) Fabian S. Dee April 30, 2014 5 5 100 3 years

Member (ID) Francisco F. del Rosario, Jr. April 30, 2014 5 5 100 1 year and 8 mos.

Member (Internal Auditor) Maritess B. Antonio April 30, 2014 5 5 100 4 years

*member until March 2014

ACGR2014, P, OP-CD-HBCD Page 23 of 35

Information Technology Steering Committee

Name Date of

Appointment

No. of Meetings

Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (ED) Arthur Ty April 30, 2014 4 4 100 1 year and 2 mos.

Vice Chairman (ED ) Fabian S. Dee April 30, 2014 4 4 100 1 year and 2 mos.

Member (NED) Edmund A. Go April 30, 2014 4 4 100 1 year and 2 mos.

Member (NED) Vicente R. Cuna, Jr. April 30, 2014 4 3 75 8 mos.

Member (Head, IT Group)

Edwin S. Chow May 21, 2014 4 4 100 7 mos.

Anti-Money Laundering Committee (AMLACOM)

Name Date of

Appointment

No. of Meetings Held (2014)

No. of Meetings Attended

%

Length of Service in the Committee

Chairman (NED) Edmund A. Go January 30, 2014 16 16 100 1 year

Vice Chairman (ED ) Arthur Ty January 30, 2014 16 12 75 1 year

Member (ED) Fabian S. Dee January 30, 2014 16 15 94 1 year

Member (ID) Rex C. Drilon II January 30, 2014 16 14 88 1 year

Member (ID) Robin A. King January 30, 2014 16 16 100 1 year

3) Changes in Committee Members Indicate any changes in committee membership that occurred during the year and the reason for the changes:

Name of Committee

Name Reason

Audit /Risk Oversight/ Domestic Equity Investment/ Overseas Banking

Amelia B. Cabal No longer a Director of Metrobank as of April 2014

Trust Committee Edmund A. Go Atty. Antonio V. Viray

EAGo replaced FCSebastian as Vice Chairman (as announced in the Board Meeting on April 30, 2014) Appointed new member starting June 19, 2014

Information Technology Steering Committee

Raymund O. Vergara Edwin S. Chow Vicente R. Cuna, Jr.

Deceased New Appointed ITG Head Additional Non-Executive Director

ACGR2014, P, OP-CD-HBCD Page 24 of 35

4) Work Done and Issues Addressed Describe the work done by each committee and the significant issues addressed during the year.

Name of Committee Work Done Issues Addressed

Corporate Governance (Performs functions of the Remuneration Committee)

1. Provided effective oversight on corporate governance practices over the Bank and entities in the group

2. Assisted the Board in fulfilling its corporate governance responsibilities

3. Ensured the effectiveness and due observance by the Board of corporate governance principles and guidelines

4. Made recommendations to the Board regarding the continuing education of directors, assignment to board committees, succession plan for the senior officers, and the remuneration policy linked to the corporate and individual performance

5. Provided oversight in the implementation of the Bank’s compliance system and ensured that oversight on the Bank’s compliance management is adequate.

6. Extended assistance to the Board in a. defining appropriate governance

and compliance policies, practices and structure that will enable effective oversight over entities in the group and

b. ensuring consistent adoption of corporate governance and compliance policies and systems across the group

7. Overseen the performance evaluation of the Board, Committees, executive management and interlocking directors or officers and the conduct of annual self-evaluation for its performance.

All significant compliance and governance issues raised during the Committee meetings for the year were addressed accordingly, which include the following: 1. compliance and regulatory

issues; 2. general status of the Bank’s level

of regulatory compliance; 3. approval of the Bank’s

Compliance Program, Corporate Governance Manual; and

4. Corporate Governance Scorecards (ICD/PSE)

ACGR2014, P, OP-CD-HBCD Page 25 of 35

Others

DEIC 1. Assessed the results of operations of all active domestic subsidiaries/some selected affiliates.

2. Made the Board aware of the performance and any risk exposures of these entities in the group as well as the risks these pose to the Bank.

3. Assessed the continuing viability of these investments: Sale of Toyota Financial Services Phils. Corp, that helped the bank comply with BASEL III requirements.

1. Improved the Board’s oversight over domestic investments in subsidiaries/selected affiliates,

2. Raised the Board’s awareness on the results of operations of all active domestic subsidiaries/selected affiliates including any risks exposures.

OBC 1. Exercised oversight on the business activities and financial performance of foreign offices and branches as compared to their budgets and business strategies

2. Exercised oversight over the compliance of the foreign offices and branches to the laws and regulations of the respective host countries as well as to the applicable rules of the BSP.

3. Reviewed, evaluated and endorsed for Board approval the establishment of an Offshore Banking Unit.

4. Reviewed the business plans/strategies for a foreign branch.

5. Noted the closure of a branch of a foreign office.

6. Reviewed and endorsed the 2014 business plans and budgets of foreign offices and branches

7. Reviewed, evaluated and approved the proposed service level agreement for a remittance tie-up.

8. Monitored the examination results of host country regulators and internal audit reports of foreign offices and

All significant issues raised during the Committee meetings for the year were addressed accordingly.

ACGR2014, P, OP-CD-HBCD Page 26 of 35

branches and the implementation of corrective actions.

Trust Committee Oversight of the fiduciary activities of the Bank. All significant issues raised during the Committee meetings for the year were addressed accordingly, such as the following: 1. Compliance with BIR Revenue

Regulation 1-2014 (Submission of Alphabetical List of Employees/Payees of Income Payments), BSP Memorandum No. M-2013-030 (Foreign Account Tax Compliance Act) and BSP Memorandum No. 2014-029 (Withholding of Percentage Tax – Gross Receipt Tax)

2. Implementation of the new Trust Front-end System and the establishment of the UITF Governance Section

3. Resignation from selected Pre-Need and other Institutional Accounts

4. Termination of custodianship arrangements

5. Approval of new products

ITSC 1. Approval of the ITSC Charter 2. Approval of Governance Unit

Responsibilities 3. Review of Delivery Dashboard

Compliance with BSP Circular 808

AMLACom 1. Review and revision of the AMLACOM Charter 2. Review and evaluation of the Bank’s AML Framework 3. Approve for notation the appointment

of the Bank’s AML Compliance Officer 4. Notation of the Minutes of Meetings of

the Anti-Money Laundering Compliance

To perform its core responsibility in assisting the Board of Directors fulfill its oversight function over the Bank’s AML Compliance Management to make sure that the Bank complies

ACGR2014, P, OP-CD-HBCD Page 27 of 35

Committee 5. Confirmation/approval of new AML-

related policies 6. Review of AML-related findings by

regulatory agencies and Internal Audit Reports

7. Attend briefing on AML matters 8. Monitor progress of AML System project

with the provisions of the AMLA, as amended, its Revised Implementing Rules and Regulations (RIRR), and BSP regulations.

5) Committee Program

Provide a list of programs that each committee plans to undertake to address relevant issues in the improvement or enforcement of effective governance for the coming year.

Name of Committee Planned Programs Issues to be Addressed

Trust Committee 1. Review and approve the Manual of Policies and Procedures (MOPP)

2. Monitor the progress of audit exceptions

All significant issues that will be raised during the Committee meetings for the year

DEIC Continuous assessment of the viability of investments in domestic subsidiaries and selected affiliates.

To improve Board’s oversight over the performance and continuing viability of the equity investments in domestic subsidiaries and selected affiliates.

ITSC 1. Full completion of new SAS AML System 2. IT Tactical Plan for 2015 3. Streamline reporting of different units to

ITSC 4. Review of significant Strategic and Large BAU

projects

Other requirements in compliance with BSP Circular 808

AMLACom Full completion of new SAS AML System Full implementation of the new AML System by mid-2015

F. RISK MANAGEMENT SYSTEM 1) Disclose the following:

(a) Overall risk management philosophy of the company; The Bank adheres to good corporate governance practices and implements structures and processes that would ensure that our business is being run well and responsibly. These are translated by the Risk Oversight Committee (ROC), a Board-level committee that is composed primarily of independent members of the Board. The Committee oversees the Bank’s risk infrastructure, operating policies, and exposures.

(b) A statement that the directors have reviewed the effectiveness of the risk management system and commenting on the adequacy thereof;

ACGR2014, P, OP-CD-HBCD Page 28 of 35

The ROC periodically reviewed & evaluated the (a) compliance of the Bank’s risk taking units to the various Board-approved risk exposure limits; as well as the (b) performance of the Chief Risk Officer & his team as the Bank’s second line of defense. These are reflected in ROC meeting minutes & presentations to the Board of Directors.

(c) Period covered by the review;

For the year ended December 31, 2014

(d) How often the risk management system is reviewed and the directors’ criteria for assessing its effectiveness; and Excerpt from RMC Charter

The Board has the ultimate overall authority and responsibility for corporate risk management. By virtue of its approval of the Bank’s strategic plans, the Board effectively approves the ways and means by which the plans are carried out, including the risk stance to be adopted. The ROC reviews and revises the risk management plan as needed, evaluates the plan to ensure its continued relevance, comprehensiveness and effectiveness. It revisits strategies, looks for emerging or changing exposures and stays abreast of developments that affect the likelihood of harm or loss. ROC reports regularly to the Board the Bank’s overall risk exposure, actions taken to reduce the risks and recommends further actions if deemed necessary.

(e) Where no review was conducted during the year, an explanation why not.

Not applicable. A review was conducted in 2014.

G. INTERNAL AUDIT AND CONTROL (d) Resignation, Re-assignment and Reasons Disclose any resignation/s or re-assignment of the internal audit staff (including those employed by the third-party auditing firm) and the reason/s for them.

Name of Audit Staff Reason

Arizala, Charity Factor Domestic Obligations

Baloloy, Henelyn Suzette Balila Performance Issues

Bedia, Vincent Nabo Migration/ Work Abroad

Cabasi, Sheryl Bendo Remuneration

CACHERO, NOEL DACUMOS Cachero, Noel Dacumos Lack of Career Growth

Dalauidao, Herlyn Alcantara Reason not provided

De Leon, Arvin Dale Pagcu Change in Work Interest

Duran, Edward Galicia Change in Work Interest

Francisco, Rida Pama Lack of Career growth

Garcia, Rosemarie Secuya Further Education

ACGR2014, P, OP-CD-HBCD Page 29 of 35

2 “Issues” are compliance matters that arise from adopting different interpretations. 3 “Issues” are compliance matters that arise from adopting different interpretations. 3 “Findings” are those with concrete basis under the company’s policies and rules. 4 “Findings” are those with concrete basis under the company’s policies and rules.

Jarabo, Jobert Arvin Dematera Performance Issues

Litao, Ferdinand Felix Migration/ Work Abroad

Loremia, Ma. Aurora Fe S Change in Work Interest

Pangilinan, Tracy Anne Yumul Work Pressure/ Overload

Salgado, Mark Anthony Hilado To engage in a business

Verzonilla, Rosebelle Devera Transferred to another department

Villacorta, Adrian Sanchez Change in Work Interest

(e) Progress against Plans, Issues, Findings and Examination Trends State the internal audit’s progress against plans, significant issues, significant findings and examination trends.

The relationship among progress, plans, issues and findings should be viewed as an internal control review cycle which involves the following step-by-step activities:

Preparation of an audit plan inclusive of a timeline and milestones;

Conduct of examination based on the plan;

Evaluation of the progress in the implementation of the plan;

Documentation of issues and findings as a result of the examination;

Determination of the pervasive issues and findings (“examination trends”) based on single year result and/or year-to-year results;

Conduct of the foregoing procedures on a regular basis.

Progress Against Plans CY2014 (As of September 2014*): 717 audits exceeding plan of 706 ; 603 investigations.

Issues2 None, since these are resolved prior to adoption of policy.

Findings34

62.64% resolution rate*

Examination Trends

Regular audits based on risk-based audit plan Spot audits Case investigations Project audits Follow-up of outstanding findings

* As reported in the AuditCom meeting/s

ACGR2014, P, OP-CD-HBCD Page 30 of 35

H. ROLE OF STAKEHOLDERS 3) Performance-enhancing mechanisms for employee participation.

(a) What are the company’s policy for its employees’ safety, health, and welfare?

Metrobank actively promotes, as signified in its policy, a safe and healthy work environment that is conducive to the well-being and professional development of its employees, as follows: We institute programs to ensure the safety of its people. We conduct regular branch visitations to prevent occupational hazards in the workplace. We prepare employees for situations that may endanger their lives, including conducting annual fire and earthquake drills, installing smoke and fire alarms at all offices and branches, and establishing and testing evacuation plans for fire, earthquake and other fortuitous events. Lectures on bank security are part of the new hires orientation to equip our personnel on what to do for suspicious events and emergency situations especially in the branches. Call trees are created, updated and tested to be used in emergency events. Fire exits and escape signs are well-established and well-lit, and fire extinguishers are placed in each floor of our offices, and in every branch. In this respect, the Bank fully complies with requirements of the Bureau of Fire Protection (BFP) and the Bangko Sentral ng Pilipinas (BSP). We are also compliant to the latter’s requirements in developing and continually updating and testing a business continuity plan, such that business operations can still continue safely even after an actual disaster. We create health programs that ensure the physical well-being of our employees.Metrobank actively promotes a healthy lifestyle through its Go 4 Health Program, a banner wellness program that starts with a wellness check of employees in our headquarters, the results of which were the basis of choosing relevant health interventions for our workforce, such as Zumba classes and partnerships with gyms and other health institutions where our employees can enroll with a substantial discount. We disseminate bulletins on eating right, exercise, and the importance of preventing diseases. We also partner with our canteen’s commissary to ensure that food items offered by our concessionaires are healthy and safe for consumption. To encourage camaraderie among our employees, we hold regular sports tournaments, and support special interest groups formed by employees that advocate healthy hobbies, such as yoga, basketball, and running. To promote holistic development, we provide avenues for active community involvement and participation in nation-building activities through our corporate social responsibility unit, the Purple Hearts Club, which offers volunteerism activities for community health, education and environment causes every week. Metrobank has in place a Family Welfare Program that advocates the health and welfare of our workforce and their families. We provide comprehensive health insurance not only to our employees, but to their qualified dependents as well. We conduct free physical examinations in partnership with our medical affiliate, the Manila Doctors Hospital, and accredited hospitals of our health maintenance organization partners. We also engage a physician and a registered nurse who give free medical advice and basic medical treatment in an adequate clinic in our headquarters. We provide each branch and field office with first aid kits which are well-stocked with potent medicines and sufficient medical supplies. We comply with government regulations that support the prevention and control of infectious diseases, such as tuberculosis (Dept. Order 73-05 or the Guidelines for the Implementation of Policy and Program on TB Prevention and Control in the Workplace) and HIV (RA 8504 or the Philippine AIDS Prevention and Control Act of 1998) by providing medical support for treatment of those afflicted by them. Also, pursuant to RA 9710 or the Magna Carta of Women, female employees who have undergone surgery caused by gynaecological disorders are entitled to paid leaves in accordance with the law to allow them to fully recover (“Special Leaves for Women”). We are also committed to promote a workplace that is free from drug abuse, and conduct periodic random drug testing among our employees nationwide, compliant with the provisions of RA 9165 (Comprehensive Dangerous Drugs Act of 2002). We advocate a work-life balance that allows for the professional and personal growth of our people, and to keep them motivated and energized. The Bank also gives adequate paid time off to allow them to attend to personal and family matters.

ACGR2014, P, OP-CD-HBCD Page 31 of 35

We strive to protect our employees against harassment of any kind. We strongly enforce corporate discipline among our employees, and make our Code of Conduct known to all of our employees from Day One. We have established and implemented a valid and subsisting Anti-Sexual Harassment Policy compliant with the Anti-Sexual Harassment Act (RA 7877). Any form of harassment, discrimination, abuse, threat and coercion is not tolerated. We have installed an administrative process that deals with such occurrences swiftly, justly and decisively. We also comply with RA 9262 (Anti-Violence against Women and their Children “VAWC”) by providing support to any female employee who may be a victim of violence that falls under this act, and granting them additional leave benefits to attend to related medical and legal concerns. We strive to empower Metrobankers with the right skills, knowledge, work ethics and expertise that are relevant to the stakeholders. We are fully committed to ensuring that all employees perform their work consistently to high standards and achieve their full potential. We recognize that training and development is fundamental to the improvement of the bank’s operational performance and the achievement of the bank’s strategy and goals.

(b) Show data relating to health, safety and welfare of its employees.

As of November 30, 2014, there are no recorded incidents of work related accidents or illnesses.

(c) State the company’s training and development programmes for its employees. Show the data. The Bank is guided by training certification plans per position. The training is grouped according to job-related technical programs, institutional behavioral-leadership programs, institutional behavioral-management programs, institutional-functional programs.

Training take-up as of November 2014 and based on employees due for certification for the year 2014 :

Institutional - Behavorial a) Leadership – 76.41% (149/195) b) Management –

Coaching & Mentoring – 95.1% (618/650) Managing Conflict – 54.9% (303/552) Admin Process – 84.4% (530/628)

Institutional – Functional 100% completion -------------------------- New Employees Orientation (NEO) – 100% (1,684/1,684) Anti-Money Laundering Act (AMLA) - 100% (11,164/11,164) Assertive Communications (COMM) – 100% (396/396) Job-Related Technical 99.6% (1,367/1,373) of the employees due for certification were certified

On a bankwide basis, a total of 11,164 (out of 11,187 population of active employees) were able to attend at least 1 training/seminar. Average training man-days is 5.81 days of training.

ACGR2014, P, OP-CD-HBCD Page 32 of 35

L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Discuss any initiative undertaken or proposed to be undertaken by the company.

The Bank implements its Corporate Social Responsibility through the Purple Hearts Club (PHC), an employee-volunteer organization, which was established in February 2003. The following are PHC’s thematic activities which are programs/projects that define the thrusts of the club and are implemented on a long-term basis as of November 30, 2014 :

Initiative Beneficiary

A. Education 1. Kwentong Bata Beyond Storytelling Program o Launched on August 15, 2009 with PHC’s

1st

ever long-term partner community, Gawad Kalinga (GK) Ligaya-Escopa III, Q.C.

o 34-Saturday program intended for pre-school-aged children of marginalized partner communities

o Encourages values formation and reading and writing skills development through storytelling and related activities

o Uses children’s books by Filipino authors

2. Byaheng ABKD Tutorial Program o Launched in September 2009 with GK

Ligaya-Escopa III o Study skills reinforcement program for

partner communities’ in-school students in Grades 1 to 6 from public schools

o Assists students primarily in Math, English, and Science subjects

3. Library Enrichment Program o Launched in 2010 with GK Ligaya-Escopa

III o Nurtures a culture of reading among

partner communities through the donation of books and reference materials, following a declared theme for

64 children - Gawad Kalinga (GK) Ligaya-Escopa III, QC 61 children - GK Hiyas ng Maynila, Sta. Ana, Manila 131 children - New Faith Family Children's Home, Cainta,

Rizal 10 children - My Father's House, Las Piñas 266 children (Total 2010-2014) 40-50 children - GK Ligaya-Escopa III, QC 220 (est) children/community members - GK Ligaya-Escopa

III, QC 110 (est) children - GK Calbayog, Mandaluyong 10 children - My Father's House, Las Piñas ----------------- 340 children/adults (Total 2010-2014)

ACGR2014, P, OP-CD-HBCD Page 33 of 35

the month o Uses springboard activities to introduce

and create interest for books donated

4. Build-A-Classroom Project o Launched on September 4, 2012 o An employee legacy project being

implemented for 2 years in celebration of the Bank’s 50

th Anniversary

o Fund-raising effort to fund the building of 24 classrooms in 9 DepEd-priority public elementary schools across the country

5. MEADE Immersion Program o Launched on November 10, 2012 o Plants the seed of community involvement

and CSR awareness by having MEADE scholars, college students who are Bank employees’ children, join PHC’s various programs

B. Environment

1. You’re in Green Hands Tree Planting o Launched on July 2, 2011, but with its

roots tracing to the 1st

PHC Volunteerism Day on May 25, 2010 celebrated with coastal clean-ups and tree planting activities

o Reforestation efforts to contribute to environmental preservation, conducted in 13 adopted forests and 1 city beautification site,

C. Others

1. Bloodletting Activity o Launched in Head Office on July 4, 2001 o Became a bi-annual run in 2002 with the

2nd

hosting site located in Downtown

Students in the 9 schools located in Navotas, Tarlac, Batangas, Camarines del Sur, Samar, Davao, North Cotabato (2 schools) and Zamboanga Qualified dependents of Bank employees 14 key cities and provinces across the nation: Luzon: Arroceros, Manila; Sta. Rosa, Laguna; Tanay, Rizal; Cavite; Tuguegarao Visayas: Bacolod, Cebu, Iloilo, Leyte Mindanao: Butuan, Cagayan de Oro, Davao, General Santos, Surigao, Zamboanga. Possibly more than 11,000* Patients requiring blood from the Manila Doctors Hospital and the Philippine National Red Cross

ACGR2014, P, OP-CD-HBCD Page 34 of 35

Center, MM o Became a nationwide effort in September

2006, with 8 sites burgeoning to 18 sites in 2012

2. Meme na Bunso Touch Therapy o Launched on June 28, 2008 o Provides touch therapy incorporated in

child care activities, to abandoned and orphaned babies

(*Based on units of blood collected from 2006-2012only)

Around 90 babies and toddlers in the care of CRIBS Foundation, Marikina City; and 15 babies in the care of Hospicio de San Jose, Manila

M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL

Disclose the process followed and criteria used in assessing the annual performance of the board and its committees, individual director, and the CEO/President.

Process Criteria

Board of Directors

The Board has created an internal self-rating system and procedures to determine and measure compliance with this Manual on Corporate Governance vis-à-vis good corporate governance principles and practices:

Each Director self-rates and collectively rates the Board and the President ;

Corporate Governance, Audit, Risk Oversight and other Board committees respectively rate themselves .

The results of the annual self-assessment are discussed in the CGCom meeting and reported to the Board.

Composition

Performance of the general/specific duties and responsibilities of the Board

Upholding of Stockholders’ rights and protection of minority stockholders’ interest

Performance of the Chairman

Conduct of Meeting

Board Committees Duties and responsibilities per Committee Charter and regulations, if applicable.

Individual Directors General/specific duties and responsibilities per regulations /Corporate Governance Manual.

CEO/President

Duties and responsibilities per regulations/Corporate Governance Manual.

ACGR2014, P, OP-CD-HBCD Page 35 of 35