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POLICY ON CONFLICT OF INTEREST
(Article IV, Manual of Corporate Governance)
The personal interest of directors and officers should never prevail over the interest of the Corporation. They are required to be loyal to the organization so much so that they may not directly or indirectly derive any personal profit or advantage by reason of their position in the Corporation. They must promote the common interest of all shareholders and the Corporation without regard to their own personal and selfish interests.
A conflict of interest exists when a director or an officer of the Corporation–
- Supplies or is attempting or applying to supply goods or services to the Corporation;
- Supplies or is attempting to supply goods, services or information to an entity in competition with the
Corporation;
- By virtue of his office, acquires or is attempting to acquire for himself a business opportunity which should belong to the Corporation;
- Is offered or receives consideration for delivering the Corporation’s business to a third party;
- Is engaged or is attempting to engage in a business or activity which competes with or works contrary to the
best interests of the Corporation.
If an actual or potential conflict of interest should arise on the part of directors, it should be fully disclosed and the
concerned director should not participate in the decision making. A director who has a continuing conflict of interest of a
material nature should either resign or, if the Board deems appropriate, be removed from the Board.
A contract of the Corporation with one or more of its directors or officers is voidable, at the option of the Corporation,
unless all the following conditions are present:
- The presence of such director in the board meeting in which the contract was approved was not necessary to
- constitute a quorum for such meeting;
- The vote of such director was not necessary for the approval of the contract;
- The contract is fair and reasonable under the circumstances;
- In case of an officer, the contract has been previously approved by the Board of Directors.
Where any of the first two conditions set forth in the preceding paragraph is absent, in the case of a contract with a
director, such contract may be ratified by the vote of stockholders representing two-thirds (2/3) of the outstanding capital
stock in a meeting called for that purpose; provided that full disclosure of the adverse interest of the director involved is
made at such meeting; and provided further that the contract is fair and reasonable under the circumstances.
Where a director, by virtue of his office, acquires for himself a business opportunity which should belong to the
Corporation, thereby obtaining profits to the prejudice of the Corporation, the director must account to the latter for all
such profits by refunding the same, unless his act has been ratified by a vote of the stockholders owning or representing
at least two-thirds (2/3) of the outstanding capital stock. This provision shall be applicable notwithstanding the fact that the director risked his own funds in the venture.
The foregoing is without prejudice to the Corporation’s existing Rules or Code of Conduct and Ethics for its officers,
employees and staff.
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