The company has a Code of Ethics that serves as a guiding principle for directors, officers and employees in their business transactions with investors, creditors, customers, contractors, suppliers, regulators and the public. The Code provides that the company must strive to render adequate, reliable and efficient customer service at reasonable cost. It protects shareholders' and investors' interests, including their rights to a fair return of investment and accurate and timely information. It also protects the employees' individual and collective rights and encourages free and honest communication within the organization. The Company further aims to provide its employees with adequate benefits as well as a safe workplace and environment.
The Code requires a fair and transparent process for the evaluation and selection of suppliers of goods and services, as well as an effective monitoring and control system to prevent fraud and other malpractices. It prohibits the solicitation or acceptance of gifts by any director, officer or employee of the company from any business partner, except only for gifts of nominal value or those given for the company's charitable projects. It likewise prohibits conflict of interest, insider trading, corruption and other illegal acts.
The Code lays down the company's policy to select, develop and compensate the best people to manage the company. The Code further expresses the company's advocacy to support health, educational, livelihood and other charitable projects.
Revised Code of Ethics
In March 2009, SM Development Corporation revised its Code of Ethics, which serves as a guiding principle for its directors, officers and employees in the performance of their duties and the conduct of their transactions with business partners. The Code reflects the company's mission, vision and values statement. The salient provisions of the Code pertain to compliance and integrity, relationship with business partners, employee welfare, shareholder rights and protection of company information.
Some of the important provisions of the Code are as follows:
All employees are required to immediately report to the management all suspected or actual fraudulent or dishonest acts.
Solicitation or acceptance of gifts in any form from any business partner is prohibited, except for gifts of nominal value.
Any conflict of interest must be promptly disclosed to the management.
All employees are prohibited from disclosing vital business information, unless authorized by the company or required by law.
Insider trading is prohibited.
The company's Human Resources and Corporate Governance departments are responsible for implementing and monitoring compliance with the Code. Violations of the Code are punishable by disciplinary action and/or the filing of appropriate civil and criminal action.
The Company’s whistle blower policy, referred to as the Policy on Accountability, Integrity and Vigilance (PAIV), was adopted to create an environment where concerns and issues, made in good faith, may be raised freely within the organization. Under the policy, any stakeholder may submit an incident report on suspected or actual violations of the Code of Ethics, the Company’s Code of Conduct or any other applicable law or regulation. Upon receipt of an incident report, Management is tasked to conduct an investigation on its merit, subject to due process and applicable penalties and sanctions thereafter.
Guidelines on Acceptance of Gifts
To ensure integrity in procurement practices and the selection of the most appropriate business partner in each instance, SMDC adopted guidelines on the acceptance of gifts by all directors, officers and employees from the company's business partners. Under this policy, all directors, officers and employees are prohibited from soliciting gifts in any form from any business partner. They are further prohibited from accepting gifts in any form, except for corporate give-aways, tokens or promotional items of nominal value.
Insider Trading Policy
To implement the prohibitions on insider trading in the Securities Regulation Code and to comply with best practices on corporate governance, SMDC also adopted a policy on insider trading. The policy prohibits directors, officers and employees of SMDC who know material and confidential information from buying or selling shares of stock of SMDC. All information that is likely to affect the market price of SMDC's shares is deemed to be material. In line with the company's insider trading policy, all directors and senior officers are required to disclose their transactions on the company's shares, in accordance with the provisions of the Securities Regulation Code and other relevant issuances.
Guidelines on Placement of Advertisements
SMDC further issued a policy to prohibit the placement of advertisements in publications that solicit for such ad placement prior to the release of the official results of an awarding process conducted by the publication and where an SM company or executive is one of the nominees vying for the award/s. SMDC may consider placing advertisements in such publications as part of its over-all marketing strategy, but only after the release of the results of the awarding process and where it will not create reasonable doubt that such ad placement influenced in any way an award given to an SM company or executive.
Guidelines on Travel Sponsored by Business Partners
In August 2009, SMDC issued guidelines on travel sponsored by business partners. The guidelines prohibit travel sponsored by business partners, which refer to contractors, suppliers, banks and other entities engaged in business with SMDC. Where a business partner invites SMDC officers or employees to travel for the purpose of attending trade shows or exhibits, or for exposure to new products and innovations, among other similar purposes, officers and employees are prohibited from accepting such sponsored travel. If the SMDC management deems that such travel is necessary for the business and for the development and training of officers and employees, SMDC will pay for the cost of the travel.
The guidelines further prohibit all SMDC officers or employees from accepting any travel sponsored by any current or prospective business partner which is participating in any on-going bidding or selection process for any SM project or transaction.
Anti Money Laundering Law Guidelines
In May 2009, SM issued Anti Money Laundering Law guidelines for its property group (including SMDC. The guidelines lay down rules on acceptance of payment for real property projects and stresses the importance of know-your-client procedures. The guidelines are compliant with the provisions of the Anti Money Laundering Law and its implementing rules and regulations.