Corporate Governance
The company’s corporate governance structure  has strengthened the foundation for the growth of  Cebu Property Ventures and Development Corporation  (CPVDC)  and has served to provide accountability and control systems.

Good corporate governance is critical to our ability to realize our strategic goal of creating sustainable long-term value for all our stakeholders.

The company has adopted a Manual of Corporate Governance, the leading practices and principles on good and transparent governance, and full compliance with the same has been made since its adoption.

Board Structure and Process

Key Role and Responsibilities
CPVDC Board of Directors is the highest authority in matters of governance and in managing the business of the company.  The Board establishes the vision, strategic objectives, key policies, and procedures for the management of the Company, as well as the mechanism for monitoring and evaluating Management’s performance. The Board also ensures the presence and adequacy of internal control mechanisms for good governance.

Composition
The Board consists of nine members who are each elected by company’s stockholders entitled to vote at the annual meeting. The Board members hold office for one year and until their successors are elected and qualified in accordance with the By-laws of the Company.

The Board represents a mix of business, legal, and finance competencies, with each director capable of adding value and rendering independent judgment in relation to the formulation of sound corporate policies. Directors are committed to the collective decision-making processes of the Board. Decision-making at the board level adheres to an objective process that does not undermine the independence and integrity of judgment of each individual director.  The names and profiles of each individual director are found in the Board of Directors section of this Annual Report.
None of the members of the Company’s directors and management own two percent or more of the outstanding capital stock of the Company.

Independent Directors
As a publicly listed company in the Philippine Stock Exchange (PSE), CPVDC.,  conforms to the legal requirement to have at least two (2) independent directors or at least twenty percent (20%) of its board size, whichever is less. Of the seven directors, Atty. Anastacio T. Muntuerto, Jr, Atty. Pablo John F. Garcia and Armando O. Samia sit as the independent directors.

The Company defines an independent director as holding no interests or relationships with the Corporation that may hinder his independence from the Corporation or Management or would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.   The company complies with the rules of the Securities and Exchange Commission with regard to the nomination and election of the independent director.

Chairman
The Chairman of the Board is Jaime I. Ayala,  who assumed the position in 2004.   Francis O. Monera holds the position of President .  The existing board structure provides a clear division of responsibilities at the top of the corporation, between the working of the Board and the executive responsibilities for the business. The respective roles of the Chairman of the Board and the President are complimentary and ensures an appropriate balance of power, increased accountability and further provides a greater capacity of the Board for independent decision making. Both the Chairman of the Board and the President attend all Annual General Meetings of the shareholders.

Board Performance
Board meetings are held at least twice a year or as often as necessary to fulfill its role. The Board has separate and independent access to the Corporate Secretary who, among other functions, oversees the adequate flow of information to the Board prior to meetings and serves as an adviser to the directors on their responsibilities and obligations.

Discussions during Board meetings are open and independent views are given due consideration The Board held three meetings in 2007.  Table below shows record of attendance of the Company’s directors during the Board meetings.

Legend:
P – Present
A – Absent

Board Committees
The Board has established committees to assist in exercising its authority including monitoring the performance of the business. Four committees support the Board in the performance of specific functions and to aid in good governance. The committees are the Executive Committee, the Compensation Committee, the Nomination Committee and the Audit Committee.

Executive Committee.  The Executive Committee acts in accordance with the authority granted by the Board or in case of absence of the Board on specific matters within the competence of the Board of Directors as prescribed in the Company’s By-Laws, except with respect to any action for which shareholders’ approval is also required such as distribution of cash dividends; filling of vacancies in the Board or in the Executive Committee; amendment or repeal of By-Laws or the adoption of new By-Laws; amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable; and the exercise of powers delegated by the Board exclusively to other committees.

Compensation Committee.   The Compensation Committee establishes a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of corporate officers and directors. It provides oversight over remuneration of senior management and other key personnel.

Nomination Committee. The Nomination Committee’s main function is to install and maintain a process to ensure that all directors to be nominated for election at the annual stockholders’ meeting have all the qualifications and none of the disqualifications for directors as stated in the By-Laws, the Manual of Corporate Governance of the Company and the pertinent rules of the Securities and Exchange Commission.  Also, the Committee is tasked to review and evaluate the qualifications of all persons nominated to positions in the Company which require appointment by the Board.

In 2007, the Nomination Committee considered and approved the final list of nominees for directors for the year 2007-2008.

Audit Committee:  As reflected in the Audit Committee Charter, the committee provides assistance to the Board of Directors in fulfilling their oversight responsibility to the shareholders relating to:  1) the company’s financial statements and the financial reporting process; 2) the systems of internal and financial reporting controls; 3)the internal audit activity;  4)  the annual independent audit of the Company’s financial statements; and 5) compliance with legal and regulatory matters.

The Audit Committee had two (2) meetings in 2007.  During these meetings, the Audit Committee reviewed and approved the following: 1) internal and external audit plans 2) quarterly unaudited financial statements 3) re-appointment of SGV as the external auditors of the  4) the consolidated audited financial statements as prepared by the external auditors Sycip Gorres Velayo & Co. (SGV) 5) internal audit results 5) the conduct of an external Quality Assessment Review for the Internal Audit department in compliance with the Manual of Corporate Governance.

Committee Members
The members of each Committee are set forth in the matrix below.

C  -   Chairman                            M   Member                             * Independent Director

Director and Senior Executive Compensation
Non-executive directors, are defined as members of the Board of Directors who are neither officers nor consultants of the Company, receive remuneration consisting of a per diem of P20,000.00 for each Board meeting attended and P10,000.00 per Board committee meeting actually attended. The said remuneration of non-executive directors was implemented effective April 28, 2006.

None of the directors, in their personal capacity, has been contracted and compensated by the Company for services other than those provided as a director.

The Company adopts a performance-based compensation scheme for its senior executives as incentive.  

The total compensation paid to non-executive Directors as well as Officers is disclosed annually in the Definitive Information Statement sent to shareholders, together with the Notice of Regular Annual General Meeting 15 business days prior to the Annual General Meeting.  The total annual compensation includes the basic salary and other variable pay (i.e. guaranteed bonus and performance-based incentive)