BM2001

SHAREHOLDERS AND STAKEHOLDERS

Shareholders’ Right
The company should treat all shareholders fairly and equitably, and also recognize, protect, and facilitate the
exercise of their rights.
Recommendations in Promoting Shareholder’s Rights (Securities and Exchange Commission, 2016)
1. The Board should ensure that basic shareholder rights are disclosed in the Manual on Corporate
Governance and the company’s website.
Below are shareholders’ rights, among others:
• Pre-emptive rights;
• Dividend policies;
• Right to propose the holding of meetings and to include agenda items ahead of the scheduled
Annual and Special Shareholders’ Meeting;
• Right to nominate candidates to the Board of Directors;
• Nomination process;
• Voting procedures that would govern the Annual and Special Shareholders’ Meeting; and
• Right to Proxy, during Stockholder’s meeting and the election of Board of Directors.
2. The Board should encourage active shareholder participation by sending the Notice of Annual and
Special Shareholders’ Meeting with sufficient and relevant information at least 28 days before the
meeting.
3. The Board should encourage active shareholder participation by making the result of the votes taken
during the most recent Annual or Special Shareholders’ Meeting publicly available the next working
day. Also, the Minutes of the Annual and Special Shareholders’ Meeting should be available on the
company website within five (5) business days from the end of the meeting.
The Minutes of Meeting include the following:
• Description of the voting and the vote tabulation procedures used;
• Record of the questions of shareholders and the answers received;
• Matters discussed and the resolutions reached;
• Record of the voting results for each agenda item;
• List of the directors, officers, and shareholders who attended the meeting; and
• Dissenting opinion on any agenda item that is considered significant in the discussion process.
4. The Board should make available, at the option of a shareholder, an alternative dispute mechanism to
resolve intra-corporate disputes amicably and effectively. This should be included in the company’s
Manual on Corporate Governance.
5. The Board should establish an Investor Relations Office (IRO) to ensure constant engagement with its
shareholders. The IRO should be present at every shareholders’ meeting.
Duties to Stakeholders
Stakeholders in corporate governance include, but are not limited to, customers, employees, suppliers,
shareholders, investors, creditors, the community the company operates in, society, the government,
regulators, competitors, external auditors, etc. In formulating the company’s strategic and operational
decisions affecting its wealth, growth, and sustainability, due consideration is given to those who have an
interest in the company and are directly affected by its operations (Securities and Exchange Commission,

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2016).
The rights of stakeholders established by law, by contractual relations, and through voluntary commitments
must be respected. Where stakeholders’ rights and interests are at stake, stakeholders should have the
opportunity to obtain prompt, effective redress for the violation of their rights.
Recommendations in Respecting Rights of Stakeholders and Effective Redress for Violation of Stakeholder’s
Rights (Securities and Exchange Commission, 2016)
1. The Board should identify the company’s various stakeholders and promote cooperation between
them and the company in creating wealth, growth, and sustainability.
2. The Board should establish clear policies and programs to provide a mechanism on the fair treatment
and protection of stakeholders.
3. The Board should adopt a transparent framework and process that allow stakeholders to
communicate with the company and to obtain redress for the violation of their rights.

Sustainability and Social Responsibility

4.

Sustainability is a comprehensive approach to the management of organizations that is focused on creating

and maximizing long-term economic, social, and environmental value. It is a response to the challenges of the
modern world facing organizations from the public and private sectors. Sustainable development is best
described by the following four (4) keywords (Deloitte Touche Tohmatsu Limited, 2020):
• Impact - Sustainability is responsible for the impact that the organization exerts on its surroundings, in
business, environmental and social terms. Conscious management of the impact translates into lower
costs, improved external relations, and better-managed risks.
• Economics - Sustainability is a skilled positioning of the organization in the economic reality, taking
account of the social and economic challenges, environmental opportunities, and threats. The awareness
that the organization functions within a broader framework, amid complex interrelations with many
stakeholder groups, allows it to get ready and make use of the opportunities linked with sustainability.
• Relations - Sustainability is the awareness that stakeholders surround the entity. Building and cultivating
good relations with stakeholders based on engagement and dialogue is crucial because it not only affects
the possibilities to manage risks but also supports the development and gives the organization a
competitive edge.
• Transformation - Sustainability is the transformation and development of the organization as well as the
creation of its long-term value based on innovation as well as intellectual and relation capital.

Corporate Social Responsibility (CSR) – According to Chen (2020), corporate social responsibility is a self-
regulating business model that helps a company be socially accountable – to itself, its stakeholders, and the
public. By practicing corporate social responsibility, also called corporate citizenship, companies can be
conscious of the kind of impact they are having on all aspects of society, including economic, social, and
environmental.
Four (4) Steps in Launching a Corporate Social Responsibility (Glauser, 2016)

Step 1. Clarify the values of the company – This involves knowing the “why”, the purpose, or the vision of the
company that serves as the foundation of the conduct of their business. Having a clear purpose
naturally leads to a set of related values. This purpose is summarized in its vision statement. A great

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example is the vision statement of TED – a non-profit organization known for its powerful short-talks
and videos. Their vision is as follows:

“We believe passionately in the power of ideas to change attitudes, lives, and ultimately, the world.”

TED exists because they are passionate about the changing power of ideas. That is their core and the
reason why they conduct powerful short talks – to be an avenue or vessel of ideas that will ultimately
change the world. But, it does not end there. After knowing the purpose, company must identify ways
to accomplish it. Simply, the “how” and “what” of the vision or the mission statement. Since TED
believes that ideas can change the world, they continuously spread it through Youtube videos and
seminars. That is why they have a simple two-word, yet very powerful and effective mission
statement: “Spread ideas.” In creating a CSR program, it should be consistent with the purpose and
the values of the company. With this in mind, company will be able to avoid things that are
destructive, unproductive and are not consistent with the company’s purpose and values.

Step 2. Assess organizational skills - After clarifying the values of the company, the next step is to reflect on
the key skills and core competencies.

o What is the company good at?

o What does the company do better than other companies?

o What things can the company contribute that other people or organizations cannot? Then,
looking at this list, which ones are you the most passionate about?

For example, the company may be great at calculating their taxes but not very excited about this skill.
On the other hand, they may be very good at and very enthusiastic about solving technical problems.
The key is to list your core competencies that the company is most passionate about sharing. One way
to identify it is through SWOT Analysis.

Step 3. Find potential projects. As the business grows, many people will approach the organization to support
its initiatives. It is great if the company can help them, but it is better to select potential projects in
advance based on the company's purpose, values, skills, and passion. Otherwise, they will end up with
a mass of projects that are not directly related to their brand or community of customers. Creating a
list of potential projects is easy: Do a Google search on non-profit charities and social organizations in
the business area. Many cities also have a non-profit association that can help identify community
needs, or they can call various government agencies and ask which organizations are working on
certain problems that interest their organization: education, human services, workforce services, or
rehabilitation. To find the best matches, start with a broad list of projects before narrowing down the
options.

Step 4. Select the best matches. After finding potential projects, the company needs now to select one or
more projects to support that are great matches with the overall company brand, including the
mission and vision of the company.

For example, customers in the food business are interested in health, nutrition, and fitness. The
perfect events that company may support under this type of business are running events, fitness fairs,
and athletic teams. Another example is a construction company may enter housing projects for the
local community.

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Reference
Chen, J. (2020). Corporate social responsibility (CSR). Retrieved from
https://www.investopedia.com/terms/c/corp-social-responsibility.asp
Deloitte Touche Tohmatsu Limited. (2020). Sustainability and Corporate Social Responsibility (CSR).
Retrieved from https://www2.deloitte.com/ru/en/pages/risk/solutions/sustainability-and-csr.html
Glauser, M. (2016). 4 steps for launching corporate social responsibility at your business. Retrieved from
https://www.entrepreneur.com/article/274214
Securities and Exchange Commission. (2016). Code of Corporate Governance for Publicly-listed Companies.
Retrieved from https://www.sec.gov.ph/wp-
content/uploads/2016/12/2016_memo_circular_no.19.pdf

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