As a publicly listed company, SM Development Corporation is committed to observe the highest standards of corporate governance to serve the best interests of its stakeholders. The entire organization believes that sound and effective corporate governance is fundamental to the company’s attainment of its corporate goals.
The company's corporate governance principles and practices are anchored on its Manual on Corporate Governance. The Manual was revised and adopted on December 20, 2007. The Manual identifies the responsibilities of the Board of Directors and management in relation to good corporate governance. It also lays down the company’s audit and compliance system and its policies on disclosure and transparency.
The Manual provides for the rights of all shareholders and the protection of the interests of minority stockholders. It requires the conduct of communication and training programs on corporate governance. It likewise sets the penalties for non-compliance with its provisions.
In March 2010, SM Development Corporation revised its Manual on Corporate Governance, in accordance with the SEC Revised Code of Corporate Governance. The significant changes to the Manual are summarized as follows:
- The Compliance Officer shall be appointed by the entire Board of Directors and not merely the Chairman of the Board.
- The Board of Directors must at all times have at least two independent directors.
- In addition to its original duties, the Board will formulate and implement policies on related party transactions and establish and maintain a dispute resolution system to settle conflicts involving the company.
- An independent director whose beneficial equity ownership in a company or its subsidiaries and affiliates exceeds 2% of the subscribed capital stock is temporarily disqualified from being a director of the company, until his/her beneficial equity ownership reverts to the 2% limit.
- The Audit Committee shall be chaired by an independent director.
- The stockholders' right to appoint a proxy is expressly provided.