Corporate Governance

Keppel Philippines Marine, Inc. (KPMI) is committed to the principles of risk management, fairness, accountability and transparency. It fully embraces and practices sound corporate governance in order to instill trust and confidence to the organization.

In 2002, KPMI adopted a Corporate Governance Manual in compliance with the Code of Governance promulgated by the Securities and Exchange Commission (SEC). Committees have been formed to ensure proper monitoring, reporting, compliance and execution of corporate plans.

Although it is not a financial and banking institution, the Company also prepared and adopted its own Anti-Money Laundering Statements and Policies and Procedures in support of the Anti-Money Laundering Act of 2001.

KPMI subscribes to the tenet that the Board serves a crucial role in corporate leadership by serving as the governance icon and soul of the corporation. The nine members of the Board is a collective mix of executive and non-executive directors who possess appropriate expertise, knowledge and experience to guide and direct the activities of the corporation within the framework of its vision and mission, strategic objectives, policies and procedures.

To ensure sovereignty, majority of the Board are independent of the Chief Executive Officer (CEO) and the Management team. Its members are not involved in commercial dealings with the organization. The powers, roles, responsibilities and accountabilities between the Board, CEO and Management are clearly defined and segregated. There are also two independent directors out of the 9-member Board, chosen and appointed by the shareholders for their integrity, competence and high standards of professionalism. They provide invaluable independent judgment and views in the Board's strategic role of chartering the course of the organization and establishing the risk parameters for all of its corporate actions. All members are provided and have access to relevant and timely information such as financial and operational reports as well as independent professional advice to enable them to properly discharge their duties. The Corporate Secretary provides support to the Chairman and other members of the Board.

KPMI has already complied with the requirement for the creation of Board Committees. In place are the Executive Committee, Audit Committee, Nominations Committee, and the Compensation and Remuneration Committee. All of the committees are functioning in accordance with the Corporation's By-Laws and Manual on Corporate Governance. The duly appointed Compliance Officer ensures that the stipulations of the Corporate Governance Manual are faithfully observed and full disclosures are made to the regulatory bodies.

KPMI believes that good governance is a shared responsibility and will prosper only if all of its members share a strong sense of corporate citizenship. The Company has adopted a Code of Conduct to guide the Management in the ethical and principle-led manner of administering the operations of the organization. Mechanisms are in place to provide guidance in operationalizing the principles of corporate governance. The Company ensures that the Code of Conduct is communicated and understood by everyone in the organization.

A risk management process is in place to ensure that the Company's risks are mitigated. KPMI has initiated a risk-aware culture by conducting in-depth seminars on Enterprise Risk Management. Started in 2002, this business paradigm seeks to understand the causes of risk to enable Management to concentrate on ways to reduce losses and improve shareholder values. Business opportunities are carefully pursued in a risk controlled manner through informed risk and reward decision making by adopting best practices in the business community.

KPMI has laid out internal controls and oversight measures. The independent Internal Auditor and the duly appointed External Auditor ensure that adequate checks and balances are in place and the correct financial state of the Company is reported to the shareholders and to appropriate government agencies.

Being a listed company in the Philippine Stock Exchange (PSE), KPMI ensures that all material information is disclosed to the shareholders. A Corporate Information Officer designated by the Company makes certain that full disclosures are made in a timely fashion especially on matters that impact on the share prices. PSE disclosures are made through the local bourse's On-Line Disclosure System (ODiSy).

In the future, the Company will seek to expand its rules and regulations relating to potential conflict of interest and to include penalties for violation of the Corporation's Manual on Corporate Governance. KPMI will enhance the procedures for developing a policy on fixing and providing oversight on executive remuneration to ensure that the same is in line with the Corporation's culture, strategy and control environment.

KPMI is firm in its resolve to promote the values of good corporate governance in the organization.