Corporate Governance

Corporate Governance

SOUTH BANK (A RURAL BANK), INC. believes in the principles of good governance as derived from leading best practices internationally and on a national level.

SBI affirms its commitment to good corporate governance anchored on the philosophy of integrity, accountability and transparency in the conduct of its business; fairness in its dealings with clients, investors, employees, stockholders and the banking public; professionalism in managing the bank and respect for governing laws and regulations; and adheres to the principle of rational checks and balances and a structured approach to its operating processes.

The Board of Directors and Management, Officers and Staff, of the Bank hereby commit to the principles and best practices contained in its Corporate Governance Manual, and acknowledge that it is a necessary component of a sound strategic business management towards attainment of corporate goals.

SOUTH BANK (A RURAL BANK), INC. believes in the principles of good governance as derived from leading best practices internationally and on a national level.

Board Of Directors

Compliance with the principles of good corporate governance shall start with the Board of Directors or the “Board”. It is the Board’s responsibility to foster the long-term success of the Bank, and to sustain its competitiveness and profitability in a manner consistent with its fiduciary responsibility, which it shall exercise in the best interest of the Bank, their shareholders and other stakeholders.

The Board is primarily responsible for approving and overseeing the implementation of the Bank’s strategic objectives and business plans, risk strategy, corporate governance and corporate values. It shall hold regular and special meetings to discuss senior management’s performance vis à vis the Bank’s strategic plan and annual budget, as well as policies and developments in the areas of risk management, corporate governance, compliance, and relevant operational functions.

South Bank is headed by competent and working board that oversees the implementation of the Bank’s strategic objectives, governance framework and corporate values.

Board Composition

The Board is composed of nine members, all of whom, other than the President and CEO, serve as non- executive directors and operate independently of management. Nominated and voted by shareholders every year, each director serves a one-year term until the election of another set of directors.

The Bank recognizes increasing diversity at the Board level as an essential element in maintaining a competitive advantage and achieving long-term growth and profitability. In determining the appropriate Board composition, Board diversity shall consider professional experience, skills, knowledge, background, moral standing in the community and other distinctions between Directors. All Board appointments are made on merit, in the context of integrity and reputation, skills, experience, independence and knowledge, which the Board as a whole requires to be effective.

Through the Board’s Corporate Governance Committee, the Bank ensures that all directors are qualified for election based on their integrity, physical fitness, competence, education, moral standing in the community, and relevant business or banking experience, among others. The Bank does not discriminate against gender, age, nor ethnic, political, religious, or cultural backgrounds.

Independent, Executive and Non-executive Directors

Independent directors are established to reinforce the Board’s independence in order to provide independent and objective judgment on significant corporate matters and ensure that key issues and strategies are objectively reviewed, constructively challenged, thoroughly discussed and rigorously examined. In 2019, two of the nine directors are Independent Directors, which still qualified for the minimum requirement for rural banks.

The President and CEO of the Bank, being an executive director, ensures that orders and resolutions of the Board and BSP circulars, rules and regulations governing rural banks are carried into effect. He shall have direct and immediate supervision over the long-term and daily operations and management of the Bank and shall execute and administer the administrative and operational policies approved by the Board.

The non-executive directors, on the other hand, are not involved in the day-by-day management operations of the Bank to promote independent oversight of management.

Chairman of the Board

The Chairperson is primarily responsible for leading the Board and ensuring its effectiveness. She provides independent leadership to the Board, fosters constructive relationship between Directors, promotes an open environment for critical discussions and constructive debate on key issues and strategic matters, and ensures that the Board of Directors exercises strong oversight over the Bank’s business and performance of senior management. She takes a lead role in ensuring that the Board provides effective governance of the Bank and continues to operate at a very high standard of independence with the full support of the director

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