Corporate Governance Committee

The Corporate Governance Committee (CG Com) has the following duties and functions:

1. To review and recommend the organizational structure of the Bank and its units;
2. To review and evaluate the qualification standards for all positions in the Bank:
3. To review and recommend the selection/promotion of the officers as endorsed by the Selection Board II;
4. To ensure the Board’s effectiveness and due observance of corporate governance principles and guidelines;
5. To oversee the periodic performance evaluation of the Board and its committees and executive management;
6. To conduct an annual self-evaluation of its performance;
7. To decide whether or not a director is able to and has been adequately carrying out his/her duties as director bearing in mind the director’s contribution and performance;
8. To adopt, propose and recommend to the Board such internal guidelines to address the competing time commitments that are faced when directors and other Bank officers serve on multiple boards;
9. To study and recommend to the Board such policies regarding the continuing education of the Directors, assignment to Board Committees, succession plan for the senior officers and their remuneration commensurate with corporate and individual performance;
10. To decide the manner by which the Board’s performance may be evaluated and propose an objective performance criterion to be approved by the Board;
11. To study and recommend policies to ensure appropriate and effective management through organizational and procedural controls and independent audit mechanisms;
12. To promote transparency and operational responsibility and accountability in a manner consistent with the Bank’s vision, mission, strategic intent and operating values.

Based on its charter, the Corporate Governance Committee has to meet at least every quarter of every year. It held a total of eight meetings in 2019.

The CG Com issued 57 resolutions which tackled the results of the Performance Rating System, organizational changes, establishment of Lending Centers, promotions of senior officers and personnel movements.

Audit and Compliance Committee

The Audit and Compliance Committee’s (AC Com) primary purpose is to provide assistance to the LANDBANK Board of Directors in fulfilling its oversight responsibilities specifically:

1.   For Internal Audit and Internal Control:

a. To oversee Senior Management in establishing and maintaining an adequate, effective and efficient internal control framework; it shall ensure that systems and processes are designed to provide assurance in areas including reporting, monitoring compliance with laws, regulations and internal policies, efficiency and effectiveness of operations, and safeguarding of assets

 b. To oversee the internal audit function

2.   For Compliance:

1. To oversee the implementation of the Bank’s Compliance Program
2. To ensure that oversight on the Bank’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) compliance and management is adequate

Functional Supervision of the Audit and Compliance Committee

1. Internal Audit

• Approved the revisions in the AC Com Charter and the IAG Plans and Programs for 2019 including amendments thereof
• Approved various internal audit policies/action plans/audit tools, such as (1) Mainframe Security Audit Procedures and Risk Scoring of Non-SDLC projects, (2) Changes in the Criteria in Reporting Long Outstanding Findings to AC Com, (3) Revised Risk Scoring of Application Systems, (4) revisions in the Rules of Conflict of Interest of Internal Auditors, (5) revisions in the IAG Charter, (6) revisions in the Audit Risk Scoring System of Business Units, (7) Criteria in the Selection of Types of Audit, (8) Conduct of Special Audit, (9) Draft Warning Letter for BUs regarding their audit rating, and (10) circumstances that will warrant audit of Office of the Group Head
• Confirmed the IAG’s Management-approved budget for CY 2019
• Noted IAG’s Declaration of Organizational Independence and various periodic reports , such as: (1) 2018 Overall Internal Audit Opinion, (2) Accomplishment Reports, (3) results of Audit Client Satisfaction Survey, (4) long outstanding findings, (5) outstanding major findings, (6) major/common/recurring findings, (7) Independent validation of the Bank’s 2019 ICAAP, (8) annual confirmation of balances for private deposit accounts, (9) 2019 Risk and Opportunity Assessment,  and (10) various special/fact-finding reports
• Noted the presentation of action plans of units that failed the Risk-Based Internal Audit
• Noted the Minutes of Meetings and Accomplishment Reports of Accountability Assessment Committee
• Noted the AC Com reports, such as: (1) Accomplishment Report, and (2) Results of Performance Rating for PY 2018

2. Compliance Function

• Approved CMG’s Compliance Testing Plan for 2019, revised guidelines on Whitelisting of Accounts and Suppression of Alerts, updated Compliance Manual and Money Laundering/Terrorist Financing  Prevention Program Manual
• Noted CMG’s Plans and Programs for 2019 and Accomplishment Reports
• Confirmed CMG’s 2019 Management-approved budget
• Noted CMG’s participation in the Accounts Review Committee and compliance oversight function on subsidiaries
• Noted various management and compliance reports, such as: (1) results of independent and periodic compliance testing, (2) Reports on Crimes and Losses, (3) Reports on Fines and Penalties, (4) regulations issued, (5) regulatory ratios, and (6) status of Covered Transaction Report submission
• Noted CMG’s presentation of the BSP Report of Examination as of June 30, 2018 and the LBP Actions Taken/Plan of Actions on the BSP Directives  and the status of Letter of Commitment on Bank’s AML/CFP Compliance
• Noted updates on the implementation of action plans on COA Annual Audit Report for 2018 (including prior years updates)
• Noted the Minutes of Meeting of the AML Committee

Aside from the annual joint learning session with the RiskCom members, the AC Com members have also undergone briefing/orientation as part of their continuing education on the following topics:

• LBP Leasing and Finance Corporations, LBRDC, and LCDFI’s overall operations, financial condition and portfolios
• Rules of Procedure in Administrative Cases (RPAC) under RA 9160, as amended, and its IRR and Guidelines and other AMLC  issuances, and the imposition of Administrative Sanctions
• Risk-based Internal  Audit Methodology
• Collection Process Flowchart
• Bank’s Know You Client Procedures

This committee is composed of:

Risk Oversight Committee

The Board-level Risk Oversight Committee (Risk Com) is primarily responsible for the LANDBANK’s Risk Management (RM) framework, policies and guidelines and ensures the alignment of RM objectives with the Bank’s overall business strategies and performance goals.

The Risk Com oversees the RM program of the Bank ensuring that RM systems are in place, limits and tolerances are observed, system of limits remain effective and immediate corrective actions are taken whenever there are breaches.

The Committee is chaired by Director Jaime L. Miralles with the Finance Secretary represented by the Deputy Treasurer of the Philippines Erwin D. Sta. Ana as Vice-Chair while Director Jesus V. Hinlo Jr., Director Nancy Irlanda Tanjuatco, Agriculture Secretary represented by Usec. Francisco M. Villano Jr. complete the Risk Com members for 2019. The Committee held 14 meetings with an average attendance of 76% wherein 417 regular risk reports and 42 special reports comprising of plans, programs, policies and procedures and 22 ad hoc reports were deliberated to assess and mitigate various risk such as credit risk, treasury risk, (e.g., market, interest rate and liquidity), operational risk, legal risk, people risk, information security and technology risk, etc.

Major LANDBANK initiatives and new/enhanced guidelines approved by the Risk Com are as follows:

1. Credit RM

• Proposed Post Credit Review Policy Guidelines
• Updated Industry Benchmarks used in Manual Credit Rating System for Countryside Financial Institution, specifically Rural Banks, Cooperative Banks, Thrift Banks, Universal Banks, Commercial Banks, Offshore Banking Units and Foreign Banks with Local Branches in the Philippines
• Proposed Amendment to Policy on Post Credit Review
• Presentation of Measures in Improving/Strengthening the Bank’s Collection Process
• Revision of EO 64, Series of 2013

2. Market RM

• Guidelines on Demand Deposit Balance Monitoring – Version 2
• Liquidity Contingency Plan – Version 6
• Guidelines on the Preparation of Balance Sheet Duration/Duration Gap Analysis Report – Version 2
• Guidelines for the Preparation of the EVE – version 5
• Guidelines on Monitoring Off-Market rates on Treasury Related Transactions – version 5
• Guidelines on the Preparation of MRPR – version 3
• Updated Pre-Settlement Risk Weights

3. Operational RM

• Revisions on the Implementing Guidelines on Conduct of Business Continuity risk Assessment
• Proposed Prioritization of Bank’s Functions
• Implementing Guidelines on the Assessment of Top-Level Key Performance Indicators/ Key Risk Indicators
• Revised Implementing Guidelines on Conduct of Business Impact Analysis
• Internal Procedures in Risk and Control Self-Assessment Validation
• Business Continuity Management Awareness Training via LANDBANK E-Learning Access Portal
• Revisions on Business Continuity Management Framework and General Policy (AO 33 s. 2018)
• Crisis Management Plan
• Incident Action Plan and Functional Business Continuity Plan for Field Units
• Revised IT Systems Prioritization List
• Proposed Prioritization of Bank’s Functions
• Revisions on People Risk Management Framework
• Legal Risk Management Framework
• Revisions on Business Process Risk Management Framework

4. Information Security & Technology RM

• Revised Confidentiality Agreement, Non-Disclosure Agreement, and Acceptable Use Policy Compliance Commitment Certificate
• Information Security Awareness Training Materials for Service Company Workers
• Information Technology Asset Management on System Obsolescence Monitoring

5. Office of the Group - RMG

• Revised 2019 Plans and Programs
• Review of FVOCI Limit Structure 2019
• Updated Risk Management Manual

6. Other LANDBANK Units

• Policy Disallowing Virtual Currency Exchange to Open Deposit Account with the Bank
• Incident Action Plan for LANDBANK Plaza (Previously Personnel and Building Action Plan)
• Alignment of HTC Business Model
• Policy Amendments on the Bank’s Livelihood and Salary Loans
• Single Borrower’s Limit and Large Exposures
• Computation of the Mandatory Allocation for Agriculture and Agrarian Reform Credit
• IT Key Risk Indicators
• Business Continuity Plan of Legal Services Group
• Revised Personnel and Building Safety Plan for LANDBANK Plaza
• Business Continuity Plan of Strategic Planning Group

Also, as part of the continuing education of the Risk Com members, an Annual Learning Session is held to re-orient and provide updates on regulatory issuances relative to risk policies, procedures, guidelines, strategies and various operational aspects of LANDBANK. The overall 2019 performance rating of the Risk Com is 98.52% or Superior based on the following parameters: Function and Responsibilities, Structure, Process and Performance.

Trust Committee

The Trust Committee (Trust Com), duly constituted and authorized by the Board of Directors, performs its responsibility for overseeing the fiduciary activities of the Bank in accordance with its authority. In the discharge of its function, the Trust Com:

1. Ensures that policies and procedures are in place from account opening to account administration and management up to account termination, in conformity with applicable laws, rules and regulations and prudent practices;
2. Ensures that policies and procedures that translate the Board’s objectives and risk tolerance into prudent operating standards are in place and continue to be relevant, comprehensive and effective;
3. Monitors the implementation of stringent controls for the prudent management of fiduciary assets and its appropriate administration; maintaining adequate books, records and files for each account;
4. Oversees the proper implementation of the risk management framework, compliance program and internal controls to ensure that accounts are managed accordingly in different cycle of the market;
5. Adopts an appropriate organizational structure and staffing complement that will enable the Trust Business Unit to efficiently carry out its function with utmost diligence and skill; and ensures proper and continuous training for its Trust officers and personnel considering growing sophistication and complexity in trust business and changes in the financial market environment.
6. Oversees and evaluates the performance of the Trust Officer and of the Trust operations as regards business objectives and strategies, compliance and risk monitoring and management, requiring periodic reports on the different areas of responsibility;
7. Requires the review of trust and other fiduciary accounts at least once every three years or as needed depending on the nature of the account, to determine the advisability of retaining or disposing of the trust or fiduciary assets;  and whether the account is being managed in accordance with the instrument creating the trust or other fiduciary relationship.  For this purpose, the Trust Committee shall meet whenever necessary and keep minutes of its actions and make periodic reports thereon to the Board;
8. Reviews reports submitted by internal and external auditors and regulatory agencies, and deliberates on major exceptions or non-compliance with existing laws, rules and regulations, policies and procedures and acts on appropriate recommendations;
9. Ensures that the Trust Banking Group (TBG) is taking appropriate measures to address all regulatory requirements under applicable laws, rules and regulations and that action plans are taken to correct reported conditions and accomplishes satisfactory disposition of findings;
10. Reviews and approves the plans and program of activities of the TBG; and,
11. Regularly reports to BOD on matters arising from fiduciary activities.

In particular, the Trust Com oversees the performance of the Trust Officer who is vested with the function and responsibility of managing the day-to-day fiduciary activities.

Agri-Agra Social Concerns Committee

The Agri-Agra Social Concerns Committee (AASCC) is a Board-Level Committee with the following duties and functions:

1. Recommends actions on complex land transfer claim issues;
2. Recommends or resolves matters relevant to agri-agra policies of LANDBANK;
3. Monitors the implementation of agri-agra programs of LANDBANK;
4. Serves as clearing house for agri-agra programs of LANDBANK that need approval of the LANDBANK Board; and
5. Attends to other functions as may be assigned by the LANDBANK Board of Directors

Related Party Transactions Committee

The Related Party Transactions Committee (RPT Com) has the following duties and functions:

1. To evaluate on an on-going basis, existing relations between and among business and counterparties to ensure that all Related Parties (RPs) are continuously identified, Related Party Transactions (RPTs) are monitored, and subsequent changes in relationships with counterparties (i.e., from non-related to related and vice versa) are captured;
2. To evaluate all material RPTs to ensure that these are not undertaken on more favorable economic terms to such RPs than similar transactions with non-related parties under similar circumstances;
3. To ensure that appropriate disclosure is made, and/or information provided to regulating and supervising authorities relating to the Bank’s RPT exposures, and policies on conflicts of interest or potential conflicts of interest;
4. To report quarterly to the LANDBANK Board the status and aggregate exposures to each RP as well as the total amount of exposures to all RPs;
5. To ensure that RPTs, including write-off of exposures, are subject to periodic independent review or audit process; and
6. To oversee the implementation of the system for identifying, monitoring, measuring, controlling, and reporting RPTs, including the periodic review of RPT policies and procedures.

The Committee meets at least quarterly and held a total of seven meetings in 2019. 

The RPT Com vetted 10 loan accounts, one other transaction, three procurement transactions, one HOCAD transaction and one Donation.

The LANDBANK Board approved and confirmed the following:

1. Approved three reports on Material RPT;
2. Confirmed three reports on Non-Material RPT; and
3. Confirmed three reports on status and aggregate exposures on related parties.