Governance

Section 15. Board of Directors

The MIC shall be governed by a Board of Directors composed of 9 members:

• 6 members from the founding GFIs, membership seats allocated in proportion to their investments
• 2 Independent Directors
• The secretary of Finance as the official representative from the National Government

The representatives of the founding GFIs shall be their respective Presidents.

Additional representatives, if warranted on the basis of their proportional investments, shall be chosen by the Advisory Body from the senior management of the GFI concerned.

The Independent Members shall be chosen by the Advisory Body from the private sector.

The Advisory Body shall ensure that the selected Members of the Board are with proven probity, competence, expertise and experience in finance , economics, investments, business management, or law, and are highly capable to contribute to the attainment of the objectives and purposes of the 11 NIc and NIF.

The specific roles of the Members of the Board shall be as follows:

• Chairperson and CEO who shall be the representative of the GFI with the biggest fund investment
• 6 Regular Members
• 2 Independent Members

Additional Members may be admitted upon the decision of the Board pursuant to the parameters and voting requirements set under the Investment and Risk Management Guidelines to be issued by the Board.

The specific guidelines on this Section, including the rules on termination of membership in the Board, shall be provided in the implementing rules and regulations (IRR) of this Act.

Section 16. Term Of Office Of the Board

The specific guidelines shall be in the IRR of this Act.

Section 17. Powers and Functions Of the Board Of Directors

The specific functions are:

a) To direct the management and operations, and administration of the MIF b) To approve and implement the Investment and Risk Management Guidelines and such other investment policies, guidelines, and parameters to effectively carry out the purposes of this Act;10 c) To set minimum criteria and targets for investments; d) To oversee the investment processes which may include asset allocation, portfolio construction, monitoring, and risk management; e) To approve the issuance of debt and debt-like instruments; I) To develop strategies (short-, medium-, and long-term) appropriate for investments g) To regularly meet and consult with the Advisory Body h) To engage and/or appoint an lnternational Advisory Consultant/Council whose main responsibility is to advise the Board of Directors on its development strategy and investment business, equip executives and management with insights on geopolitical and macro-economic issues, international financial market conditions, and global investment trends i) To engage external fund managers and investment advisors, as may be necessary, to manage the MIF j) To exclusively determine the organizational structure, staffing pattern, and number of personnel of the MIC, define their duties and responsibilities, and fix their compensation and other emoluments, including bonuses and the performance bonus authorized under Section 22 of this Act, notwithstanding any provisions of law, rules and regulations, issuances, to the contrary; k) To exclusively prescribe a system for performance standards and evaluation for officials and employees of MIC l) To exclusively set the criteria and procedures for termination of employment of officials and employees for:

i. Gross violation of the provisions in this Act or investment policies and guidelines set by the Board of Directors; ii. Commission of acts inimical to the MIF or the Republic of the philippines, such as any loss suffered by the Fund caused by negligence, willful misconduct, fraud, or actions in breach of any Investment Agreement; and/or

iii. Failure to meet performance standards set by the Board of Directors. in) To appoint officials and employees as may be necessary to assist the Board of Directors in carrying out its functions; n) To submit regular reports on investment performance to the Advisory Body and to the President of the Republic of the Philippines; o) p) Act as Trustee of the MIF and such other assets as may be assigned to it and direct how its assets are managed; and q) To perform other functions, duties and responsibilities necessary, related and incidental to the performance of the above-mentioned powers and functions. To review and confimi the MIC/MIF financial statements;1

Section 18. Quorum and Meetings of the Board

The Board of Directors shall meet at least once every month from the effectivity of this Act. It may hold special meetings to consider urgent matters upon call of the Chairperson and Chief Executive Officer or upon initiative of at least 2 members of the Board of Directors.

In order to constituteaquoruminBoardmeetings,amajorityofthetotalmembershipoftheBoard, or at least five (5) members, shall be present. The approval by a majority of all members of the Board, or at least five (5) members, shall be required to constitute a decision of the Board.

The Board of Directors shall maintain and preserve a complete record of the proceedings and deliberations of the Board of Directors, including the tapes and transcripts of the stenographic notes, either in the original form or in microfilm. The meetings of the Board of Directors may be conducted through modem technologies such as, but not limited to, teleconferencing and videoconferencing.

Section 19. Compensedon Of the Chairperson and Members Of the Board Of Directors.

The Chairperson and Chief Executive Officer and the Members of the Board of Directors shall be entitled to honoraria and/or other reasonable allowances, and/or per diem for each meeting actually attended, and shall be reimbursed for actual and reasonable expenses incurred in the performance of their duties and functions. The rate of the honoraria shall be fixed at a sum commensurate to the importance and responsibility attached to the position.

The salary of the Independent Members of the Board of Directors from the private sector shall be fixed based on the rules set under section 27 of this Act.

Section 20. Advisory Body

An Advisory Body shall be composed of the Secretary of Finance, SecretaryoftheDBM,theDirectorGeneralofNEDA/SocioeconomicPlanningSecretary,andthe Treasurer of the Philippines.

Section 21. Powers and Functions Of the Advisory Body

The Advisory Body shall exerc.ise the following powers and functions:

a) Advise and assist the Board of Directors in the formulation of the general policies related to investment and risk management, and other matters as may be necessary to carry out the provisions and purposes of this Act; b) Advise and provide guidance on issues pertaining or related to the plans and projects of the MIF c) Perform other functions, duties and responsibilities, as it may deem necessary.

The Advisory Body shall not take part in the management or control of the MIF.1

Article 6: Rewards, Incentives and Termination

Section 22. Rewards and Incentives

The Board of Directors, officials, employees and staff of the MIC shall be entitled to honoraria, performance bonus, or any similar performance-based compensation as may be determined by the Board, based on their sound judgment, taking into consideration, among others, the performance of the Fund, the performance of the individual employee or officer, and industry standards and practices.

Section 23. E#ecfo/Seprrofror!

Notwithstanding the separationofanofficialoremployeefrom MIC, theprovisionofSection22shallapplytotheperformancebonusthatsaidofficeroremployee isentitledtoreceiveon account of actual performancebytheseparatedofficialoremployeeduring the period covered by the performance bonus.