FINANCIAL EXECUTIVES INSTITUTE OF THE PHILIPPINES (FINEX)
CORPORATE GOVERNANCE MANUAL
FINEX was organized in 1968 to develop the financial knowledge and skills of its members, provide support via sound financial management to business and government, promote high standards of ethics and encourage fellowship among its members.
This manual of corporate governance seeks to institutionalize the principles of good corporate governance in the entire organization. A copy of this manual will be provided to all Directors, Officers and Committee Chairpersons, as well as made available to all members of FINEX via the website.
FINEX Vision Statement:
To be the leading national organization of finance professionals and practitioners dedicated to the advancement of financial knowledge and expertise.
FINEX Mission Statement:
To promote the progressive and innovative application of financial knowledge and skills in beneficial service to business, government, the academic community and society as a whole, observing the highest standards of competence and ethical behavior at all times.
“I am an executive entrusted with stewardship of my organization’s resources.
In fulfilling my responsibility, I will act always with integrity and truth.
I will be fair in all my dealings with my fellowmen.
I will observe the highest professional, moral and ethical standards.
Above all. I will be true to my faith, to my family and to my country.”
FINEX Code of Ethics and Rules of Conduct
The FINEX Code of Ethics and Conduct serves as a framework to guide its members’ actions so that they may exercise their functions with integrity, dignity, and professionalism and serve as role models in the business community. The Code is based on the fundamental guiding principle that financial executives hold a position of trust and confidence. This fiduciary role should be of paramount consideration in their dealings both within and outside their company or organization. They must act with utmost fairness and according to the highest moral principles, consciously and consistently pursued.
The Code of Ethics and Rules of Conduct pertain primarily to the behavior of FINEX members in the conduct of their profession. In their workday life, FINEX members are also involved in manifold and varied activities that involve interaction with professional colleagues and other members of the community. This includes interpersonal relationships among members as they discharge their roles in the Institute. Observance of civility will go a long way towards fostering wholesome fellowship and enhancing camaraderie and esprit de corps among FINEX members
The complete copy of the FINEX Code of Ethics and Rules of Conduct are found in the FINEX Directory, the Website and also available at the FINEX Office.
I. Governance Principles and Framework
Corporate Governance refers broadly to the rules, processes and laws by which corporations are operated, regulated and controlled. The Board of Directors, in accordance with its oversight responsibilities, is the one charged with the proper governance of the organization. The governance structure and framework is designed to work for the benefit of everyone concerned by ensuring that the organization adheres to accepted ethical standards and best practices as well as formal laws, rules and regulations.
Main Objectives of Governance
Major Groups Involved in Governance
Board of Directors
Formulates policies, approves plans, allocate resources, require compliance and assess performance
Officers and ExCom
Strategically deploy resources
Officers, ExCom, Secretariat
Execute plans, control processes, report progress
Assesses internal controls, risk management and compliance
II. The Board of Directors
The Board of Directors as a body is entrusted with the strategic guidance of the organization; it provides oversight and effective monitoring of the organization’s management and is accountable to the members and all stakeholders.
A. Duties and Responsibilities of the Board Members
1. Act on a fully informed basis, in good faith, with due diligence and in the best interest of the organization and its stakeholders.
2. Treat all members fairly and apply high ethical standards taking into account the interest of various stakeholders.
3. Fulfill the following Key functions of the Board:
a. Formulate, review and guide strategy, policies, plans of action, budgets and business plans, set performance objectives, monitor performance and compliance, and oversee major capital expenditures.
b. Monitor the effectiveness of governance practices and make changes as needed.
c. Ensure a formal and transparent board election process.
d. Monitor and manage potential conflicts of interest’s issues, involving the board members, officers, the secretariat and members of the organization, including matters such as misuse of assets and abuse of related party transactions.
e. Ensure the integrity of the accounting and financial reporting system, including the independent audit of the organization’s financial statements and that appropriate systems of controls are in place covering risk management, financial and operational controls, and compliance with law and relevant standards.
4. Exercise objective and independent judgment on corporate and organizational affairs.
5. Define and disclose the mandate, composition and working procedures of standing and special committees.
In order to discharge their responsibilities, board members should have access to accurate, relevant and timely information.
B. Composition and Eligibility for Service on the Board
The Board’s effectiveness depends in large part on how well its members work together to identify and address issues important to the Institute’s future. Membership on the board gives a person a valuable opportunity to share his or her expertise with the Institute, help the financial community, and advance professionally. Board membership is also an opportunity to contribute to the growth and development of the economy and participate in the formulation of national policies.
When selecting new directors, the members should seek individuals who will exercise independent judgment and who will actively participate in the Board’s decision-making process. The principal qualities of an effective director include strength of character, an inquiring and independent mind, practical wisdom, and sound judgment. Individual qualifications such as technical skills, career specialization, or specific backgrounds may also be considered.
The qualifications and disqualifications, as well as the rules for election of directors are specified in the By-laws and election rules of the organization and are available at the FINEX offices to any member of the organization. The duties and responsibilities of the officers are also set-forth in the By-laws of FINEX.
III. Advisory Council
The Advisory Council is composed of all the Past Presidents of the Institute, with the immediate past president as the Chairman. Its main function is to provide advice to the President and the Board on matters affecting the good name and prestige of the Institute. The Council shall convene within the first quarter of the year to be set by the Chairman, and the presence of at least five (5) members constitutes a quorum.
IV. Permanent Committees and Functions
The FINEX by-laws specify the following permanent committees:
- The Executive Committee
- Standing Committees:
a. Membership Committee
b. Professional Development Committee
c. Elections Committee
d. Ethics Committee
The Executive Committee is composed of the President and certain other officers of the organization (the Executive VP, VP-Internal, Treasurer, Corporate Secretary). The President acts as chairman of the ExCom and its function is to act in-between board meetings on urgent and important matters requiring Board action. The ExCom’s actions and decisions are subject to the confirmation of the board in its next regular meeting.
The Standing Committees have the following responsibilities:
a. Membership Committee. This committee is responsible for recruiting into the Institute quality members and of taking appropriate measures to ensure membership retention, in accordance with the eligibility requirements under the FINEX by-laws and prevailing membership acceptance guidelines. It is also responsible for membership retention, compliance with attendance credit requirements, prompt payment of dues and other financial obligations, as well as making recommendation to the Board any termination of delinquent member or the reinstatement of a former member. It is also responsible for publishing an updated directory of members not later than June 30 of each year. The following sub-committees report to the Membership Committee:
a.1 Acceptance Sub-Committee
a.2 Fellowship Sub-Committee
a.3 Involvement Sub-Committee
a.4 Orientation Sub-Committee
a.5 Recruitment Sub-Committee
a.6 Retention Sub-Committee
b. Professional Development Committee. This committee is responsible for undertaking activities aimed at promoting the professional and personal development of members, including, but not limited to, organizing or sponsoring of seminars, workshops, symposia, dialogues and training programs for members.
c. Election Committee. This Committee which is composed of at least five (5) past presidents of the Institute, and such other members as may be appointed by the President, with the Immediate Past President as the Chairperson, is responsible for preparing for and supervising the yearly conduct of nominations and elections of the members of the board in accordance with the by-lays and other relevant rules and regulations.
d. Ethics Committee. This committee, which is composed of fifteen (15) members, five (5) of whom are appointed yearly for a term of three (3) years, is responsible for seeing to it that the Institute’s Code of Ethics is honored and meticulously followed by the members. The Committee, after due process, recommends to the Board the suspension or termination of membership for any violation of the Code of Ethics and for other offenses under the by-laws of FINEX. The Ethics Committee is also responsible for the Personal Integral Development Sub-Committee.
All the Committees are required to submit to the board their program of
activities and proposed budget for the ensuing year, and also submit periodic
reports on their activities and accomplishments.
V. Special Committees and Functions
Through the years, special committees have been created. Their objectives and functions were specified and these committees have functioned and attracted members interested in the specific purposes or advocacies espoused or adopted by such special committees, these include:
a. Affiliates Committee. This committee recommends to the Board the establishment of Affiliates. It assists in the organization of the affiliates and monitors their compliance with the rules and regulations of the Institute. It also coordinates the activities of the Affiliates with those of the Institute to promote consistency in the pursuit of common objectives.
b. Audit Committee. This committee is responsible for instituting internal control procedures, reviewing and revising the FINEX Operations Manual, assisting the Audit Committee of the Board in implementing internal audit programs and coordinating with external auditors.
c. Capital Markets Development Committee. This committee is in-charge of projects and activities in line with the Institute’s efforts to help develop the capital markets, and support legislative initiatives that enhances the development of the Philippine capital markets; also in-charge of the LGU- Local Government Units Sub-Committee. The LGU Committee aims to help stimulate the market for fund raising activities, such as bond issues, by LGUs and educate LGU executives on the intricacies of the bond offering process.
d. Corporate Finance Committee. This committee is responsible for updates on developments in corporate finance and other relevant issues affecting financial institutions and corporate finance operations through seminars, forums, workshops, training programs, meetings and discussions.
e. Finance Committee. This committee coordinates the budgetary requirements of the various committees and prepares the overall budget of the Institute. It also monitors and evaluates the periodic financial position and health of the Institute. Also responsible for the following sub-committees:
e.1 Special Ways and Means SubCommittee, in-charge of fund raising
projects for the charitable beneficiaries of the Institute and other
e.2 Order of the Golden Phoenix SubCommittee, in-charge of raising
funds to fund the new FINEX offices as well as fit-out costs and
f. FINEX Week Committee. This committee plans, coordinates and implements the programs and other Activities during the FINEX Week, usually held during the month of October.
g. Fellowship Committee. This committee is responsible for promoting camaraderie and fellowship between and among members through social, cultural, educational and similar activities.
h. Corporate Governance Committee. This committee advocates the adoption of good corporate governance principles, enhances knowledge about best practices and updates members on developments in corporate governance though training programs, seminars and forums.
i. Information and Communication Technology Committee. This committee is in-charge or promoting and improving the content and design of the FINEX website, providing assistance and advise to the secretariat on its IT issues, promoting ICT and its beneficial effects, latest trends and best practices to members though seminars and symposia.
j. International Relations Committee. This committee acts as the principal liaison to the International Association of Financial Executives Institute (IAFEI).
k. Junior FINEX Committee. This committee supports the activities of the various Finance organizations or clubs at various schools and universities, provides a speakers bureau to lecture, talk on developments in finance and related fields of study. It is also responsible for the following sub-committees:
k.1 Campus Tour Talks Sub-Committee
k.2 ICFC Sub-Committee
k.3 OJT/Job Placement Sub-Committee
l. Programs and Meetings Committee. This committee organizes and handles the monthly general membership meetings of the Institute, also coordinates with the other committees about their participation during such meetings.
m. Publications Committee. This committee prepares, edits, prints and distributes all the official publications of the Institute, e.g., FINEX News,
other journals, special printed and electronic publications. This committee has the following sub-committees:
m.1 Business Columns Sub-Committee
m.2 Directory sub-Committee
n. National Affairs Committee. This committee studies, analyzes and evaluates issues of public or national concern, assists the Board in responding appropriately to such issues and developing a communications strategy for the benefit of the members. Also coordinates with other Associations or groups and affiliates for possible joint position on certain national issues.
o. Sports and Wellness Committee. This committee promotes physical, emotional and mental health and well being of the members through
sports and recreational activities, wellness seminars, demonstrations and tours, etc. The committee has the following sub-committees:
o.1 Badminton Sub-Committee
o.2 Basketball Sub-Committee
o.3 Billiards Sub-Committee
o.4 Bowling Sub-Committee
o.5 Golf Sub-Committee
o.6 Practical Shooting Sub-Committee
o.7 Tennis Sub-Committee
o.8 Health &Wellness Sub-committee
p. Tax and Legal Committee. This committee updates the members as to the latest tax and legal issues, developments, new interpretations, rules and regulations, represents the Institute in Congress, BIR, DOF, etc. hearings, meetings or discussions covering tax and legal matters that affect the members in general.
(Note: Effective 2010, the Small and Medium Enterprises Committee has been transferred to the FINEX Research and Development Foundation)
VI. Orientation and Training for Board Members, Officers and Committee
Directors, Officers and appointed Committee Chairpersons must have a basic knowledge of the organization and how it operates. Their effectiveness depends on how well they work together to identify, resolve and address the issues important to the success of the Institute. Board membership, election to an officer position and appointment to a committee chairmanship gives a person a valuable opportunity to share his/her expertise, help develop the financial profession, strengthen the institution, assist the business community
and contribute to the improvement of the national economy as well as advance professionally.
All Directors, officers and committee chairpersons should, at a minimum, be oriented on the internal governance processes of the Institute – these are embodied in the Articles of Incorporation and By-laws of FINEX. Insofar as
parliamentary procedures are concerned, FINEX will go by Robert’s Rules of Order, to guide its proceedings, meetings, and discussions. Everyone is expected to have an understanding of what the Institute does in practice and how it puts its purposes into action.
The orientation of new members of the Board of Directors, Officers and Committee Chairpersons should begin as soon as they are elected or appointed by providing them with background information, copies of by-laws, governance and operating manual and other relevant materials that
will help them understand the governance process and framework of the Institute. A formal orientation program should be held annually with the participation of all newly elected or appointed directors, officers and chairpersons, to be facilitated by at least two (2) presidents of the Institute. At this orientation session, the incoming, directors and chairpersons should also review the vision, mission and goals of the Institute to ensure that they are faithful to and consistent with the objectives of the Institute as set-forth in the Articles and By-laws.
The Articles and by-laws of the Institute provide a stable foundation for the long-term viability and governance of the Institute, therefore, any amendment or revisions should not be undertaken lightly or done hastily; any change or amendments should only be made after careful study of its effects and a careful reflection on other available alternatives.
VII. Compensation and Expenses
FINEX is a non-profit organization, service to the Board and committees are not compensated. In fact, directors, officers, chairpersons and other members are expected to arrange and pay for their own transportation, travel and accommodation expenses, unless otherwise approved by the Board or specifically budgeted. Meals during group functions, committee meetings, fellowships and other FINEX affairs are usually covered by the Institute budget.
However, the Board may establish rules covering the reimbursement of reasonable expenses under exceptional circumstances, as may be determined by the Board. Any such policy adopted by the Board should be subject to an annual review and evaluation in conjunction with the preparation of the annual budget of the Institute.
There shall be no fund raising activity that will be undertaken for the exclusive benefit of a few or select members of the Institute; neither shall there be any mandatory assessments of members unless approved in a General Membership Meeting of the Institute, where proper notices and quorum are observed in accordance with the By-laws.