Learn More about Corporate Governance

We define Corporate Governance as the framework of rules, systems and processes in the corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to the stakeholders.

We accord importance to our people, our code of conduct, and our corporate policies and standards, which together form the basis of our good governance practices to protect the interests of our stakeholders and promote investor confidence.

We believe that sound and effective corporate practices are fundamental to the smooth, effective and transparent operation of a company and its ability to attract investment, protect the rights of all stakeholders, and enhance shareholder value.

We promote respect for shareholders’ rights. We are committed to treat all Shareholders fairly and equitably, and recognize, protect and facilitate the exercise of their rights that includes:

1. 1 Right to vote on all matters that require their consent or approval
2. 2 Right to inspect corporate books and records
3. 3 Right to information
4. 4 Right to dividends
5. 5 Appraisal right

The Board encourages active Shareholders participation by sending the Notice of Annual and Special Shareholders’ Meeting with sufficient and relevant information at least fifteen (15) business days before the meeting in accordance with the Securities Regulation Code.

The Shareholders are encouraged to personally attend such meetings. Shareholders who are unable to attend are apprised ahead of time of their right to appoint a proxy. Subject to the requirements of law, rules and regulations and the By-Laws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy shall be resolved in favor of the shareholder.

Result of the votes taken during the most recent Annual or Special Shareholders’ Meeting are publicly made available the next working day. In addition, the Minutes of the Annual and Special Shareholders’ Meeting shall be made available on the Company Website within five (5) business days from the end of the meeting.

Role of Stakeholders

Customers’ Welfare

The Company has a customer relations policy and procedure to ensure that customers’ welfare are protected and questions are addressed. Customers are informed with the Company’s customer relations contacts to ensure that their welfare and questions are addressed.

Supplier/Contractor Selection

The Company follows the Supplier Accreditation Policy to ensure that the Company’s suppliers and contractors are qualified to meet its commitments. Suppliers and contractors undergo accreditation and orientation on Company policies.

Employees

Performance-enhancing mechanisms for employee participation

The Company abides by safety, health, and welfare standards and policies set by the Department of Labor and Employment. Likewise, the Company has Security and Safety Manuals that are implemented and regularly reviewed to ensure the security, safety, health, and welfare of the employees in the work place.

The Company continuously provides learning and development opportunities for its employees through the John Gokongwei Institute for Leadership and Enterprise Development, the leadership platform for systematic and sustained development programs across the conglomerate. Its mission is to enable a high performing organization that will facilitate the learning process and develop the intellectual and personal growth of all employees through targeted and customized trainings and development programs.

Anti-corruption programs and procedures

The Company is committed to promoting transparency and fairness to all stakeholders. The Board sets the tone and make a stand against corrupt practices by adopting an anti-corruption policy and program. Some of the Company’s Anti-Corruption programs are embodied in the Code of Business Conduct and Ethics, Conflict of Interest, Offenses Subject to Disciplinary Action (OSDA), among others. The same are disseminated to all employees across the Company through trainings to embed them in the Company’s culture. New employees are oriented regarding policies and procedures related to Business Conduct and Ethics and similar policies. All employees are given periodic reminders. Further, all concerned employees of the Conglomerate are required to comply with the Annual Self-Disclosure Activity on an annual basis.

The Company also has an established suitable framework for whistleblowing and ensuring its enforcement to allow employees and other stakeholders to freely communicate their concerns about illegal or unethical practices, without fear of retaliation and to have direct access to an independent member of the Board or a unit created to handle whistleblowing concerns.

Corporate Governance Highlights

1 The Company submitted the Integrated Corporate Governance Report (I-ACGR) to the Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE) on May 30, 2018.

The I-ACGR is a reportorial requirement under SEC Memorandum Circular No. 15 series of 2017 to all Publicly Listed Companies to disclose the Company’s compliance/non-compliance with the recommendations provided under the Corporate Governance Code for PLCs, with the “comply or explain” approach, voluntary compliance to recommended CG best practices is combined with mandatory disclosure,

The Company’s I-ACGR may be accessed through the Company website by clicking this link, https://www.robinsonsretailholdings.com.ph/I-ACGR

2 Consistent with the Revised Manual of Corporate Governance and pursuant to the recommendations provided in the I-ACGR, the Company strengthened and instituted the following policies to reinforce the governance framework of the Company:

Board Diversity Policy

We recognize the benefits of having a diverse Board and its value in maintaining sound corporate governance while achieving strategic objectives and sustainable growth. The Policy applies to the Board of Directors and establishes the approach to realize diversity of Board membership.

Board Nomination and Election Policy

We recognize the importance of having a qualified and competent Board of Directors to achieve Company objectives as well as to protect the interest of all its stakeholders and shall ensure that proper nomination and election process is in place to attain this.

Whistleblowing Policy

We are committed to conduct business in accordance with the highest ethical and legal standard. In line with this commitment, we encourage employees, business partners and other stakeholders to report concerns involving actual or suspected violations of Company policies, its code of conduct, criminal or unlawful acts or omissions, and instances when an act or omission endangers the health and safety of the employees. We provide clear procedures for reporting any actual or suspected violation of Company policies, misconduct, malpractice, irregularities or risks against the Company and protecting the Whistleblower against any form of retaliation.

Company Website

RRHI updates the public with operating and financial results through timely disclosures filed with SEC and PSE. These are available on the company’s website:

https://www.robinsonsretailholdings.com.ph/

GET TO KNOW THE BOARD OF DIRECTORS

The Board of Directors (“The Board”) is primarily responsible for the governance of the Company and provides an independent check on management.

The Board is responsible for fostering the long-term success of the Company and sustaining its competitiveness and profitability in a manner consistent with its corporate objectives for the best interest of the company and its stakeholders.

The Board formulates the Company’s vision, mission, strategic objectives, policies and procedures that guides its activities, including the means to effectively monitor Management’s performance.

The Board provides direction and approval in relation to matters concerning the Company’s business strategies, policies and plans, while the day-to-day business operations are delegated to the Executive Committee.

The Board exercises care, skill and judgment and observe good faith and loyalty in the conduct and management of the business and affairs of the Company. The Board ensures that all its actions are within the scope of power and authority as prescribed in the Articles of Incorporation, By-Laws, and existing laws, rules and regulations.

To ensure high standard for the Company, its Shareholders and other Stakeholders, the Board conducts itself with honesty and integrity in the performance of its duties and responsibilities

Balanced Board Composition

The posts of Chairman and Chief Executive Officer of the Company are separate to ensure a clear distinction between the Chairman’s responsibility to manage the Board and the Chief Executive Officer’s responsibility to manage the Company’s business. The division of responsibilities between the Chairman and the Chief Executive Officer is clearly established and set out in the Revised Corporate Governance Manual.

The Company recognizes the benefits of having a diverse Board and its value in maintaining sound corporate governance while achieving strategic objectives and sustainable growth.

The Board is currently comprise of 9 members whose biographical details are set out in the Board of Directors section of this CG report. Updated biographical details of each director are also available in the Information Statement.

The board is diverse in terms of expertise, gender and professional experience.

Of the 9 directors, 7 directors are non-executive, 2 of which are independent directors. The Board also has 2 women forming part of the non-executive directors.

Profiles of The Board of Directors

1. John L. Gokongwei, Jr.

Director

John L. Gokongwei, Jr. is a director of the Company and had been Chairman and Chief Executive Officer until his retirement in March 2016. He is also the founder and Chairman Emeritus of JG Summit Holdings, Inc., Universal Robina Corporation and Robinsons Land Corporation. He is currently the Chairman of Gokongwei Brothers Foundation and a director of Cebu Air, Inc. and Oriental Petroleum and Minerals Corporation. He was elected a director of Manila Electric Company in March 31, 2014. He is also a non-executive director of A. Soriano Corporation. Mr. John L. Gokongwei, Jr. received a Masters degree in Business Administration from the De La Salle University and attended the Advanced Management Program at Harvard Business School.

2. James L. Go

Vice-Chairman

James L. Go is the Vice Chairman of the Company and the Chairman of JG Summit Holdings, Inc., and Cebu Air, Inc. He is also Chairman and Chief Executive Officer of Oriental Petroleum and Minerals Corporation. He is the Chairman Emeritus of Universal Robina Corporation, Robinsons Land Corporation, JG Summit Petrochemical Corporation and JG Summit Olefins Corporation. He is also a director of Marina Center Holdings Private Limited, United Industrial Corporation Limited and Hotel Marina City Private Limited. He is also the President and Trustee of the Gokongwei Brothers Foundation, Inc. He has been a director of PLDT, Inc. since November 3, 2011. He is a member of the Technology Strategy and Risk Committees and Advisor of the Audit Committee of the Board of Directors of PLDT, Inc. He was elected a director of Manila Electric Company on December 16, 2013. Mr. James L. Go received his Bachelor of Science Degree and Master of Science Degree in Chemical Engineering from Massachusetts Institute of Technology, USA.

3. Lance Y. Gokongwei

Chairman

Lance Y. Gokongwei is the Chairman of the Company. He is the Chairman of Robinsons Supermarket Corporation, Robinson’s Incorporated, Robinsons Convenience Stores, Inc., and Robinsons Handyman, Inc., Handyman Express Mart, Inc., Robinsons Appliances Corp., Robinsons Daiso Diversified Corp., Robinsons Specialty Stores, Inc., Robinsons Toys, Inc., Robinsons Ventures Corporation, South Star Drug, Inc., Waltermart-Handyman, Inc., Angeles Supercenter, Inc., Everyday Convenience Stores, Inc., and Robinsons True Serve Hardware Philippines, Inc. He is the President and Chief Executive Officer of JG Summit Holdings, Inc. and Cebu Air, Inc. He is the Chairman of Universal Robina Corporation, JG Summit Petrochemical Corporation, JG Summit Olefins Corporation, Robinsons Land Corporation and Robinsons Bank Corporation. He is a director and Vice Chairman of Manila Electric Company and a director of Oriental Petroleum and Minerals Corporation and United Industrial Corporation Limited. He is also a trustee and secretary of the Gokongwei Brothers Foundation, Inc. Mr. Lance Y. Gokongwei received a Bachelor of Science degree Finance and a Bachelor of Science degree in Applied Science from the University of Pennsylvania.

4. Robina Y. Gokongwei-Pe

President and Chief Executive Officer

Robina Y. Gokongwei-Pe is the President and Chief Executive Officer of the Company. She is a Director of JG Summit Holdings, Inc., Robinsons Land Corporation, Cebu Air, Inc., and Robinsons Bank Corporation. She is a Trustee of the Gokongwei Brothers Foundation Inc. and the Immaculate Conception Academy Scholarship Fund. She is also a member of the Board of Trustees of Xavier School. She was a member of the University of the Philippines Centennial Commission and was a former Trustee of the Ramon Magsaysay Awards Foundation. She attended the University of the Philippines-Diliman from 1978 to 1981 and obtained a Bachelor of Arts degree (Journalism) from New York University in 1984. Ms. Pe joined the group in 1984 as a management trainee. She is a daughter of Mr. John L. Gokongwei, Jr.

5. Faith Y. Gokongwei-Lim

Director

Faith Y. Gokongwei-Lim is a Director of the Company. She is currently the Group General Manager of Robinson Gourmet Food and Beverage, Inc. (operator of Costa Coffee) and Chic Centre Corporation, and was the Vice President- Merchandising for Ministop. Ms. Faith graduated from the De La Salle University with a Bachelor of Arts degree (English Literature). She started out as a management trainee and has over two decades of retail experience obtained from the Company. She is a daughter of Mr. John L. Gokongwei, Jr.

6. Antonio L. Go

Independent Director

Antonio L. Go has been an independent director of the Company since July 4, 2013. He also currently serves as Director and President of Equitable Computer Services, Inc. and is the Chairman of Equicom Savings Bank and ALGO Leasing and Finance, Inc. He is also a director of Medilink Network, Inc., Maxicare Healthcare Corporation, Equicom Manila Holdings, Equicom Inc., Equitable Development Corporation, United Industrial Corporation Limited, T32 Dental Centre Singapore, Dental Implant and Maxillofacial Centre Hong Kong, Oriental Petroleum and Minerals Corporation, Pin-An Holdings, Inc., Equicom Information Technology, Cebu Air, Inc., JG Summit Holdings, Inc. and Steel Asia Manufacturing Corporation. He is also a Trustee of Go Kim Pah Foundation, Equitable Foundation, Inc., and Gokongwei Brothers Foundation, Inc. He graduated from Youngstown University, United States with a Bachelor Science Degree in Business Administration. He attended the International Advance Management program at the International Management Institute, Geneva, Switzerland as well as the Financial Planning/Control program at the ABA National School of Bankcard Management, Northwestern University, United States.

7. Roberto R. Romulo

Independent Director

Roberto R. Romulo has been an independent director of the Company since July 4, 2013. He is the Chairman of AIG Philippines Insurance Inc., Medilink Network Inc., Nationwide Development Corporation, and Romulo Asia Pacific Advisory. He is currently a board member of A. Soriano Corporation, Equicom Savings Bank, Philippine Long Distance Telephone Co. and Maxicare Healthcare Corporation. He was also a board member of United Industrial Corporation Limited from January 2003 to April 2010 and of Singapore Land Limited from January 2003 to August 2014. He is a Member of the Board of Counselors of McLarty Associates (formerly Kissinger McLarty Associates). He is also the Chairman of several non-profit organizations, namely, Zuellig Family Foundation, Carlos P. Romulo Foundation for Peace and Development and Asia Europe Foundation of the Philippines. He graduated with a Bachelor of Arts degree (Political Science) from Georgetown University, Washington, D.C. and a Bachelor of Laws degree from Ateneo de Manila University.

8. Samuel Sanghyun Kim

Director

Samuel Sanghyun Kim was elected as a director of the Company on November 23, 2018. He joined Dairy Farm Group as the Chief Executive Officer, South East Asia Division in April 2018. Prior to joining Dairy Farm, he was the Chief Executive Officer of Home plus (formerly Tesco) in South Korea. He spent 30 years at Procter & Gamble and became a Regional Head for Procter & Gamble ASEAN and Asia Development Markets from 2008 to 2015. He personally helped start up Procter & Gamble Korea in 1989, and later also served as the President of Procter & Gamble Korea from 2003 to 2008. He is also an advisor to the Asian Alumni Council of Phillips Academy, Andover, and a member of the Andover Development Board. He has dual degrees in Political Science and Management from Wharton School, University of Pennsylvania, where he also serves currently on the Board of Advisors for Penn’s Huntsman Program.

9. Ian James Winward McLeod

Director

Ian James Winward McLeod was elected as a director of the Company on November 23, 2018. He was named Group Chief Executive of The Dairy Farm Group in September 2017 (the pan-Asian multi-format retailer), having spent the previous two years as Chief Executive Officer of Southeastern Grocers, the fifth largest supermarket chain in the United States. With over 30 year’s retail experience, Ian began his career with Asda (subsequently Wal-Mart) in 1981, where he spent 20 years working in the United Kingdom and Germany. Following this, he moved to Halfords (the UK’s leading cycling and motoring retailer) where he became Chief Executive Officer in 2005. In 2008, he moved to Australia as Managing Director of Coles, overseeing 2,200 outlets and 100,000 employees. Whilst there he oversaw fundamental improvements in product quality and value as well as customer service. This resulted in Coles producing substantial increases in both turnover and profits, as well as significant market outperformance. Ian attended the Harvard Business School Advanced Management Program in 1999 and was awarded an Honorary Doctorate in his native Scotland in 2010 for services to Business and Retail.

The Board Committees

To enable better and more focused attention on the affairs of the Company and aid in the optimal performance of its roles and responsibilities, the Board delegates particular matters to the Board Committees set up for the purpose mainly (a) Audit Committee (b) Board Risk Oversight Committee (BROC) and (c) Corporate Governance Committee.

A. Audit Committee

The Audit Committee provides oversight over the Company’s financial reporting, Internal Control System, Internal and External Audit processes, and monitor compliance with applicable laws and regulations. It ensures that systems and processes are put in place to provide assurance in areas including reporting, monitoring compliance with laws, regulations and internal policies, efficiency and effectiveness of business operations, and proper safeguarding and use of the Company’s resources and assets.

Position	Director
Chairman	Antonio L. Go (ID)
Members	James L. Go Lance Y. Gokongwei Robina Y. Gokongwei-Pe Roberto R. Romulo

B. Corporate Governance Committee

The Corporate Governance Committee oversees the development and implementation of Corporate Governance principles and policies and recommends a formal framework on the nomination, remuneration and evaluation of the performance of the Directors and key Management Officers consistent with the Company’s culture, strategies and the business environment.

Position	Director
Chairman	Lance Y. Gokongwei
Members	James L. Go Robina Gokongwei-Pe Roberto R. Romulo

C. Board Risk Oversight Committee

The Board Risk Oversight Committee oversees the establishment of ERM framework that effectively identify, monitor, assess and manage key business risks and assess the effectiveness of risk management strategies. The BROC is responsible for defining the Company’s level of risk tolerance and providing oversight over its risk management policies and procedures to anticipate, minimize, control or manage risks or possible threats to its operational and financial viability.

Position	Director
Chairman	Lance Y. Gokongwei
Members	James L. Go Robina Gokongwei-Pe Antonio L. Go

Board Meetings and Quorum Requirement

The Board schedules meetings at the beginning of the year, and hold regular meetings in accordance with its By-Laws and convene special meetings when required by business exigencies. The notice and agenda of the meeting and other relevant meeting materials are furnished to the Directors at least five (5) business days prior to each meeting, which meeting must be duly minuted. The members of the Board attends regular and special meetings in person or through video/teleconferencing conducted in accordance with the rules and regulations of the SEC except for justifiable reasons that prevent them from doing so. The Independent Directors shall always attend Board meetings. Unless otherwise provided in the By-Laws, their absence shall not affect the quorum requirement. However, the Board may, to promote transparency, require the presence of at least one (1) Independent Director in all its meetings.

To monitor the Directors’ compliance with the attendance requirements, the Company submits to the Commission, within five (5) business days from the end of the Company’s fiscal year, an advisement letter on Directors’ record of attendance in Board meetings.

Attendance of Directors

From January 1, 2018 to December 31, 2018

Board	Name	Date of election	No. of meetings Held during the year	No. of meetings Attended	%
Chairman	Lance Y. Gokongwei	May 28, 2018	7	7	100.00%
Vice-Chairman	James L. Go	May 28, 2018	7	7	100.00%
Member	John L. Gokongwei, Jr.	May 28, 2018	7	7	100.00%
Member	Robina Y. Gokongwei-Pe	May 28, 2018	7	7	100.00%
Member	Lisa Y. Gokongwei-Cheng	May 28, 2018	7	7	100.00%
Member	Faith Y. Gokongwei-Lim	May 28, 2018	7	6	85.72%
Member	Hope Y. Gokongwei-Tang	May 28, 2018	7	7	100.00%
Independent	Roberto R. Romulo	May 28, 2018	7	7	100.00%
Independent	Antonio L. Go	May 28, 2018	7	6	85.72%

The Corporate Secretary

The Corporate Secretary assists the Board and the Board Committees in the conduct of their meetings, including preparation of the annual schedule of Board and Committee meetings and the annual Board calendar. She also assists the Board Chairs and its Committees in setting agendas for the meetings, safe keeps and preserves the integrity of the minutes of the meeting of the Board and its Committees, as well as other official records of the Company.

The Corporate Secretary keeps herself abreast on relevant laws, regulations, all governance issuances, relevant industry developments and operations of the Company, and advice the Board and the Chairman on all relevant issues as they arise. She works fairly and objectively with the Board, Management and Shareholders and contributes to the flow of information between the Board and Management, the Board and its Committees, and the Board and its Stakeholders, including Shareholders.

Atty. Rosalinda F. Rivera or Atty. Lynn as she is fondly called in the office is the current Corporate Secretary of JGSHI. She was appointed as Corporate Secretary on August 6, 2003 and has been Assistant Corporate Secretary since May 2002. She is also the Corporate Secretary of Universal Robina Corporation, Robinsons Land Corporation, Cebu Air, Inc., Robinsons Retail Holdings, Inc. and JG Summit Petrochemical Corporation. Prior to joining the Company, she was a Senior Associate in Puno and Puno Law Offices.

She received a degree of Juris Doctor from the Ateneo de Manila University School of Law and a Masters of Law in International Banking from the Boston University School of Law.

The Compliance Officer

The Compliance Officer monitors, reviews, evaluates and ensures the compliance by the Company; its Officers and Directors with the provisions and requirements of the Corporate Governance Manual and the relevant laws, the Corporate Governance Code, rules and regulations and all governance issuances of regulatory agencies. He also ensures the integrity and accuracy of all documentary submissions to the regulators; identifies possible areas of compliance issues and works towards the resolution of the same. He assists the Board and the Corporate Governance Committee in the performance of their governance functions, including their duties to oversee the formulation or review and implementation of the Corporate Governance structure and policies of the Company.

Bach Johann M. Sebastian is Senior Vice President and Chief Strategy Officer of the Company. In addition, he is also Senior Vice President and Chief Strategy Officer of JG Summit Holdings Inc., Universal Robina Corporation, Robinsons Land Corporation and Cebu Air, Inc. Prior to joining JG Summit in 2002, he was Senior Vice President and Chief Corporate Strategist of RFM Corporation, Swift Foods Inc., Selecta Dairy Products Inc., Cosmos Bottling Corporation, and PSI Technologies Inc. Between 1981 and 1991, he was with the Department of Trade and Industry as Chief of Economic Research, and Director of Operational Planning. He received a Bachelor of Arts in Economics from the University of the Philippines in 1981, and a Master in Business Administration degree from the Asian Institute of Management in 1986.

Adequate and Timely Information

To enable the Directors to properly fulfill their duties and responsibilities, Management provides the Directors with complete, adequate, and timely information about the matters to be taken up in their meetings. Information may include the background or explanation on matters brought before the Board, disclosures, budgets, forecasts, and internal financial documents. If the information provided by Management is not sufficient, further inquiries may be made by a Director to enable him to properly perform his duties and responsibilities. The Directors have independent access to Management and to the Corporate Secretary.

The Directors, either individually or as a Board, and in the performance of their duties and responsibilities, may seek access to independent professional advice within the guidelines set by the Board.

Accountability and Audit

The Board ensures that its Shareholders are provided with a balanced and comprehensible assessment of the Company’s performance, position and prospects on a quarterly basis, including interim and other reports that could adversely affect its business through its website and its submissions and disclosures to the SEC and Philippine Stock Exchange (PSE). Management formulates the rules and procedures on financial reporting and internal control for presentation to the Audit Committee in accordance with the following guidelines:

• 1. The extent of its responsibility in the preparation of the financial statements of the Company, with the corresponding delineation of the responsibilities that pertain to the External Auditor, should be clearly defined;
• 2. An effective system of internal control that will ensure the integrity of the financial reports and protection of the assets of the Company for the benefit of all Shareholders and other Stakeholders;

• 3. On the basis of the approved Internal Audit Plan, Internal Audit examinations should cover, at the minimum, the evaluation of the adequacy and effectiveness of controls that cover the Company’s governance, operations and information systems, including the reliability and integrity of financial and operation information, effectiveness and efficiency of operations, protection of assets, and compliance with contracts, laws, rules, and regulations; and
• 4. The Company consistently complies with the financial reporting requirements of the SEC.
• 5. The External Auditor is rotated or changed every five (5) years or earlier, or the signing partner of the External Auditing firm assigned to the Company, should be changed with the same frequency. The Corporate IA Head should submit to the Audit Committee and Management an annual report on the Internal Audit department’s activities, responsibilities, and performance relative to the Internal Audit Plan as approved by the Audit and Risk Committee. The annual report should include significant risk exposures, control issues, and such other matters as may be needed or requested by the Board and Management. The Internal Audit Head should certify that he conducts his activities in accordance with the International Standards on the Professional Practice of Internal Auditing. If he does not, the Internal Audit Head shall disclose to the Board and Management the reasons why he has not fully complied with the said documents.
• 6. The Board, after consultations with the Audit Committee recommends to the Shareholders an External Auditor duly accredited by the SEC who shall undertake an independent audit of the Company, and shall provide an objective assurance on the matter by which the financial statements shall be prepared and presented to the Shareholders.

Internal Audit

The Corporate Internal Audit is focused on delivering its mandate of determining whether the governance, risk management and control processes, as designed and represented by management, are adequate and functioning in a manner that provides reasonable level of confidence that:

• Employees’ actions are compliant with policies, standards, procedures, and applicable laws and regulations;
• Quality and continuous improvement are fostered in the control processes;
• Programs, plans, and objectives are achieved;
• Resources are acquired economically, used efficiently, and protected adequately;
• Significant financial, managerial, and operating information is accurate, reliable, and timely;
• Significant key risks are appropriately identified and managed;
• Significant legislative or regulatory issues impacting the Company are recognized and properly addressed.

Opportunities for improving management control, profitability and the Company’s reputation may be identified during audits.

The Board of Directors (BOD) oversees Management’s adoption and implementation of a sound risk management framework for identifying, monitoring and managing key risk areas. The BOD review Management reports with due diligence to enable the company to anticipate, minimize, control and manage risks or possible threats to its operational and financial viability.

Enterprise Risk Management (ERM)

The Enterprise Risk Management (ERM) ensures that a sound ERM framework is in place to effectively identify, monitor, assess and manage key business risks. The risk management framework guides the Board in identifying units/business lines and enterprise level risk exposures, as well as the effectiveness of risk management strategies.

The ERM framework revolves around the following eight interrelated risk management approaches:

• 1 Internal Environmental Scanning -

  it involves the review of the overall prevailing risk profile of the Business Unit (BU) to determine how risks are viewed and addressed by the management. This is presented during the strategic planning, annual budgeting and mid-year performance reviews of the BU.

• 2 Objective Setting -

  the Company’s BOD mandates Management to set the overall annual targets through strategic planning activities, in order to ensure that management has a process in place to set objectives that are aligned with the Company’s goals.

• 3 Event Identification –

  it identifies both internal and external events affecting the Group’s set targets, distinguishing between risks and opportunities.

• 4 Risk Assessment -

  the identified risks are analyzed relative to the probability and severity of potential loss that serves as basis for determining how the risks will be managed. The risks are further assessed as to which risks are controllable and uncontrollable, risks that require management’s action or monitoring, and risks that may materially weaken the Company’s earnings and capital.

• 5 Risk Response -

  the Company’s BOD, through the oversight role of the Internal Control Group ensures action plan is executed to mitigate risks, either to avoid, self-insure, reduce, transfer or share risk.

• 6 Control Activities -

  policies and procedures are established and approved by the Company’s BOD and implemented to ensure that the risk responses are effectively carried out enterprise-wide.

• 7 Information and Communication -

  relevant risk management information is identified, captured and communicated in form and substance that enable all personnel to perform their risk management roles.

• 8 Monitoring -

  the Internal Control Group of the respective Company and BUs, Corporate Internal Audit and Corporate Governance and Management Systems constantly monitor the management of risks through audit reviews, compliance checks, revalidation of risk strategies and performance reviews.

Internal Controls

With the leadership of the Company’s Chief Financial Officer (CFO), internal control is embedded in the operations of the company and each BU thus increasing their accountability and ownership in the execution of the BU’s internal control framework. To accomplish the established goals and objectives, BUs implement robust and efficient process controls to ensure:

• 1. Compliance with policies, procedures, laws and regulations
• 2. Economic and efficient use of resources
• 3. Check and balance and proper segregation of duties
• 4. Identification and remediation control weaknesses
• 5. Reliability and integrity of information
• 6. Proper safeguarding of company resources and protection of company assets through early detection and prevention of fraud.

Risk Assessment tool

To help Business Units in the Risk Assessment Process, the Risk Assessment Tool which is a database driven web application was developed for departments and units to help in the assessment, monitoring and management of risks.

The Risk Assessment Tool documents the following activities:

• 1. Risk Identification –

  is the critical step of the risk management process for the early identification of events that may have negative impact on the Company’s ability to achieve its goals and objectives.

• 1.1. Risk Indicator –

  is a potential event or action that may prevent the continuity of operation or business.

• 1.2. Risk Driver –

  is an event or action that triggers the risk to materialize.

• 1.3. Value Creation Opportunities –

  is the positive benefit of addressing or managing the risk.

• 2. Identification of Existing Control Measures –

  this refers to activities, actions or measures already in place to control, prevent or manage the risk.

• 3. Risk Rating/Score –

  is the quantification of the likelihood and impact to the Company if the risk materialize. The rating has two (2) components:

• 3.1. Probability –

  refers to the likelihood of occurrence of risk.

• 3.2. Severity –

  refers to the magnitude of the consequence of risk.

• 4. Risk Management Strategy –

  is the structured and coherent approach to managing the identified risk.

• 5. Risk Mitigation Action Plan –

  is the overall approach to reduce the risk impact severity and/or probability of occurrence.

Results of the Risk Assessment Process is summarized in a Dashboard that highlights risks that require urgent actions and mitigation plan. The dashboard helps Management to monitor, manage and decide a risk strategy and needed action plan.

Other Matters

1. External auditor and their fees

2. Ownership sructure

Holding 5% shareholding or more (as of December 31, 2018)

Shareholder	No. of Shares	Percent	Beneficial Owner
JE Holdings, Inc.	484,749,997	30.7%	Same as record owner
PCD Nominee Corporation (Filipino)	406,901,531	25.8%	PCD Participants & their clients
PCD Nominee Corporation(Non-Filipino)	389,124,225	24.7%	PCD Participants & their clients
Mulgrave Corporation B.V.	191,489,360	12.1%	Same as record owner

3. Dealing in securities (changes in shareholdings of directors and key officers)

A. Directors

Name of Director	No. of Direct Shares	% of capital stock
John L. Gokongwei, Jr.	1	0.0%
James L. Go	31,928,005	2.03%
Lance Y. Gokongwei	107,538,351	6.82%
Robina Y. Gokongwei-Pe	89,906,846	5.70%
Faith Y. Gokongwei-Lim	29,968,949	1.90%
Ian James Winward Mcleod	1	0.00%
Samuel Sanghyun Kim	1	0.00%
Antonio L. Go	1	0.00%
Roberto R. Romulo	1	0.00%
TOTAL	259,342,156	16.45%

B. Officers

Name of Officer	No. of Direct Shares	% of capital stock
Bach Johann M. Sebastian	0	0.00%
Mylene A. Kasiban	0	0.00%
Graciela A. Banatao	0	0.00%
Gabriel O. Tagala	0	0.00%
Rosalinda F. Rivera	0	0.00%
Gilbert S. Millado, Jr.	500	0.00%
Gina R. Dipaling	1,500	0.00%
TOTAL	2,000	0.00%

4. Dividends

The Board of Directors of RRHI approved on May 28, 2018 the declaration of a cash dividend in the amount of Seventy Two Centavos (Php0.72) per share from the unrestricted retained earnings of the Company as of December 31, 2017 to all stockholders of record as of June 18, 2018 and paid on July 12, 2018.