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Organization
Governance Philosophy and Architecture
At the core of the PDS Governance philosophy is the belief that sustainability of the corporate enterprise must always be within the context of a well-managed and orderly market, where investor protection occupies a normative and compelling part in the decision-making process. This balance has been maintained through a governance architecture that separates the decision-making spheres of corporate governance and market governance, recognizing the distinct needs of each sphere, as well as the unique function of a market infrastructure that must be equally responsive to the mandates of profit generation and market governance.
This architecture is deeply rooted in the principle that the separation, to be effective, must be reinforced by the presence and prominence of independent directors and governors in the architecture.
Corporate Governance
The PDS Group recognizes the importance of sound corporate governance, balancing the diversified interests of its Board, shareholders, and stakeholders. Subdivided into different corporate entities, the PDS Group is resilient and unified to provide holistic market services, determine corporate direction and performance, constitute sound strategic business management, and sustain the organization’s long-term viability and strength.
- The Shareholders deliberately configured the corporate board architecture. The Board of Directors of each PDS entity is composed of nine (9) members, a majority of whom are non-executive directors. Each Board of Directors includes three (3) independent Directors.
- Compliance with the principles of good corporate governance starts with the Boards of Directors, which foster the long-term success of each entity in the PDS Group and secure its sustained competitiveness in a manner consistent with its fiduciary responsibility. The Boards of Directors exercise their functions in the best interest of the PDS Group, its stockholders, and other stakeholders. Guided by the leadership of their respective Chairmen, the Boards of Directors conduct their activities with utmost honesty and integrity in the discharge of their duties, functions, and responsibilities.
- The Chairman provides leadership in the Board and ensures effective functioning of the Board including maintaining a relationship of trust with board members.
- Each PDS entity’s Chief Executive Officer (CEO) serves as the highest-ranking corporate officer who is responsible for the overall management of the enterprise, its strategic directions, and the attainment of its business goals.
- The Boards of Directors supervise the following Standing Committees: the Risk Oversight Committee (ROC), the Audit Committee, the Nomination and Remuneration Committee/Corporate Governance Committee (NRC/CGC), and the IT Steering Committee, with the Market Policy Committee providing the critical link to the Market Governance Structure, which performs the SRO functions for the fixed income market.
Board Standing Committees
Risk Oversight Committee
The Risk Oversight Committee (ROC) oversees the development, updating, and implementation of the Risk Management Program of the Group. This Program is implemented by the Risk Management unit headed by the Chief Risk Officer (CRO). The CRO provides an overall risk profile report to the ROC and the Board on a regular basis.
Audit Committee
The Audit Committee oversees all material aspects of PDS Group’s reporting, control, and audit functions with particular focus on the qualitative aspects of financial reporting. It elevates the accounting and auditing processes, practices, and methodologies to international standards. Through its supervisory function over the Internal Audit Department and the Compliance Office, it evaluates the organization’s system of internal controls for detecting accounting and reporting financial errors, violations, fraud, noncompliance with regulatory requirements and the policies and procedures of the PDS Group.
Nomination and Remuneration Committee (NRC)/ Corporate Governance Committee (CGC)
- The NRC/CGC ensures the Board’s effectiveness and due observance of corporate governance principles and guidelines.
- The NRC/CGC screens the qualifications of candidates nominated to the Board, and senior management, for appointment by the Board. It likewise oversees the orientation of new directors, continuing education of all directors as well as the performance evaluation process of the Board and its Committees.
- The NRC/CGC establishes a formal and transparent procedure for developing a policy on executive remuneration, ensuring that compensation is in sufficient level to attract and retain executives needed to run the PDS Group successfully, links rewards to corporate and individual performance, and in general is consistent with PDS Group’s culture, strategy and control environment.
IT Steering Committee
The IT Steering Committee oversees the implementation of the IT Strategic Plan that is consistent with the business strategy of PDS Group. It oversees and understands IT risks, such that it is interrelated and works hand in hand with Risk Oversight Committee. It also oversees the IT Group’s compliance with corresponding regulatory requirements.
Investor Protection/ Market Policy Committee
The Investor Protection/ Market Policy Committee develops and enacts such policies, rules, and measures to protect the interests of persons who invest in instruments being traded in the Exchange in accordance with leading global practices, and regularly oversee compliance with such policies, rules, and measures.
Market Governance
While the Corporate Governance domain strives to realize the shareholder vision with a focus on return on capital, the Market Governance domain mobilizes the SRO function. It engages itself in ensuring that the market structure can realize the expectations of all the stakeholders that participate in the marketplace.
Under the Securities Regulation Code (Republic Act No. 8799), an SRO is registered with the Securities and Exchange Commission to enforce compliance with its provisions, rules, and regulations. It is also mandated to make and enforce its own rules. An SRO should enforce fair, ethical, and efficient practices in the securities industry. With this mandate, PDEx has created a comprehensive governance structure that is designed to insulate the market governance function from its corporate governance structure.