CG Code for Public Companies and Related Governance Terms

Vocabulary flashcards covering key terms from the CG Code and governance notes.

Board of Directors

The governing body elected by the shareholders/members that exercises the corporate powers of a corporation, conducts all its business and controls its properties. Reference to Board of Directors and/or Directors also includes Board of Trustees and/or Trustees in applicable cases.

Corporate Governance

The system of stewardship and control to guide organizations in fulfilling long-term economic, moral, legal and social obligations toward shareholders/members and other stakeholders, using regulations, performance standards and ethical guidelines to hold the board and senior management accountable and maximize long-term value.

Enterprise Risk Management

A process, effected by the entity's Board of Directors, Management and other personnel, applied in strategy setting and across the enterprise to identify potential events, manage risks within the risk appetite, and provide reasonable assurance regarding achievement of objectives.

Executive Director

A director who has executive responsibility for the day-to-day operations of part or the whole of the corporation.

Independent Director

A person who is independent of Management and the controlling shareholder, free from relationships that could reasonably interfere with independent judgment.

Internal Control

A process designed and effected by the Board, Senior Management, and all levels of personnel to provide reasonable assurance on achieving objectives through efficient operations, reliable and timely information, and compliance with laws, regulations, and policies.

Management

A group of executives given authority by the Board to implement policies in the conduct of the corporation's business.

Members

The members of non-stock corporations.

Non-Executive Director

A director who has no executive responsibility and does not perform any work related to day-to-day operations.

Non-Proprietary Right

An interest or privilege over a specific property allowing use under terms, but not entitling the holder to dividends or liquidation proceeds.

Proprietary Right

An interest that gives the holder the right to use facilities and to receive dividends; upon liquidation, the holder has proportionate ownership rights to assets.

Public Company

A company with assets of at least Php 50,000,000 and 200 or more shareholders holding at least 100 shares each.

Registered Issuer

A company that issues proprietary/non-proprietary shares, issues equity securities to the public not listed on an Exchange, or issues debt securities that must be registered with the SEC.

Related Parties

Directors, officers, substantial shareholders and their spouses/relatives within the fourth civil degree, and other persons with control, joint control, or significant influence over the entity, including connected entities.

Related Party Transactions

Transfers of resources, services or obligations between a reporting entity and a related party, broadly including transactions with related parties and outstanding transactions with unrelated parties that later become related parties.

Significant Influence

The power to participate in financial and operating policy decisions of the company but without control or joint control.

Stakeholders

Any individual, organization, or society that can affect or be affected by the company's strategies and operations, including non-proprietary certificate holders, customers, creditors, employees, suppliers, investors, government, and the community.