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CORPORATE GOVERNANCE

The Bank has an established corporate governance policy which is formulated at the Board level and is based on the guidelines of the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC). The Board of Directors, on an annual basis, conducts a self-assessment of its performance based on the principles of accountability, fairness/equity, transparency and professionalism.

In line with good corporate governance, the Bank has adopted fit and proper standards on key personnel taking into consideration their integrity, technical expertise, education, diligence, and experience or training. The Bank's corporate governance principles take into account the interest of the stakeholders and ensure that directors, officers and employees conduct business in a safe and sound manner. These principles also ensure that transactions entered into between the Bank and related parties are conducted at arm's length and in the regular course of business.

The Bank has a sufficient number of independent directors that gives the assurance of independent views and perspectives. Likewise, the independent functions of internal audit, the compliance office, and the risk management unit lend comfort to stakeholders, including the regulators, of the bank’s commitment to the principles and practices of good corporate governance.

THE BOARD OF DIRECTORS
The corporate powers of the bank are vested in and exercised by the Board of Directors, composed of members elected by the stockholders.

There are 15 directors, 5 of which are classified as independent directors under relevant law and regulation. All 15 directors are known for their independence, professionalism and integrity and make decisions for RCBC with complete fidelity to RCBC and are cognizant of their responsibilities under relevant law and regulation.

The responsibility to act and pass upon matters for action in between meetings of the Board has been delegated to an Executive Committee.

The Board has delegated other responsibilities to its sub-committees. The Audit Committee provides oversight of the Bank's financial reporting and control, and internal and external audit functions. It monitors and evaluates the adequacy and effectiveness of the Bank’s internal controls, including financial, operational and compliance controls, and risk management. The Corporate Governance Committee assists the Board in fulfilling its corporate governance responsibilities. It reviews and evaluates the qualifications of all persons nominated to the Board as well as those nominated to other positions requiring appointment by the Board. It is responsible for ensuring the Board's effectiveness and due observance of corporate governance principles and guidelines. It makes recommendations to the Board regarding the continuing education of the directors. The Risk Management Committee oversees the system of limits to discretionary authority that the Board delegates to management. It ensures that the system remains effective, that the limits are observed and that immediate corrective actions are taken whenever limits are breached. It likewise enables the Board to establish the Bank's risk tolerance within a risk-reward framework and ensures that a risk management strategy is in place that adheres to this framework. The Trust Committee oversees the trust and fiduciary business of the Bank. The Technology Committee oversees the bank's hardware/software purchases, monitors performances of various IT applications of the bank as well as the status of various IT projects. The Personnel Evaluation and Review Committee investigates cases of violation of clearly defined Bank policies, rules and regulations. It also recommends to the Board the disciplinary measures and penalties to be meted out.