Corporate Governance

The charter of the Board articulates the governance and oversight responsibilities exercised by the directors and their roles and functions in the Bank. It includes provisions on Board composition, Board committees, and Board governance, subject to provisions of the corporation’s Articles of Incorporation, By-laws, and applicable laws. The Board charter is not intended to limit, enlarge, or change in any way the responsibilities of the Board, as determined by such articles, by-laws, and applicable laws. The Board charter of the Bank is incorporated in its Corporate Governance Manual.

July 2024 - March 2025

 To assist the Board in competently acting upon its responsibilities, it established 11 committees, namely:

• Executive Committee (EXECOM)

• Corporate Governance & Compliance Oversight Committee (CGCOC)

• Related Party Transactions (RPT) Committee

• Remuneration Committee (REMCOM)

• Audit Committee (AUDITCOM)

• Risk Management Oversight Committee (RMOC)

• Credit Committee (CRECOM)

• Human Resources Committee (HRCOM)

• IT Steering Committee (ITSC); and

• Asset Disposal Committee (ADCOM)

• Trust Committee (TRUSTCOM)

THIS SECTION IS FOR UPDATE.

In January and March 2025, Atty. Carlos Alfonso T. Ocampo, Alfredo S. Panlilio and Anthony M. Te were elected as new directors, respectively. In September 2024, Mr. Francisco S. Magsajo, Jr. passed away.

The primary duty of the Board of Directors is to provide the Bank’s overall leadership, strategic oversight, and control environment to achieve its ultimate goal of maximizing long term value for shareholders while considering sustainability for its stakeholders and adhering to the principles of good governance and accountability. Board succession is ensured by the Nominations Committee, which is tasked to conduct prescreening through assessment against policies and regulatory requirements. Upon the conclusion of the vetting process, a final list is prepared in which nominee details required by law are made available to the appropriate government agency. Further, the Board ensures that a system of checks and balances is in place so that risks are identified, prevented, or mitigated. The Board is also expected to set the tone from the top in terms of shaping the company culture. The Board Chairperson works closely with the President & Chief Executive Officer. This complementary relationship provides appropriate balance of power, increased.

July 2024 - March 2025

The Bank, through its Compliance Group, remains dedicated in continuously strengthening its money laundering and terrorist financing prevention through regulatory compliance and adopting best practices in the industry. Among its initiatives are:

• Improved Compliance and AML awareness by:

  • Continuous conduct of orientation of CLOs, post-implementation training of  AML system and focus group discussions on AML and the new circular/issuances;

  • Issuance of AML bulletins and advisories;

  • Provide consulting/advisory to Line Units on business program/project prior to implementation 

• Enhanced the monitoring and review processes through:

  • Implementation of the AML system and its upgrade and improved CTR/STR/ Alerts review processes;

  • Establishment of a trigger mechanism to alert/prompt the concerned units on the timely submission of regulatory reports;

  • Creation of the Compliance Regulatory Matrix, timely cascading and uploading of regulatory issuances in the Compliance Desk Facility;

• Strengthened compliance mechanism through the designation of a Compliance Liaison Officer (CLO) per Unit/Branch tasked to periodically conduct self-assessment to determine their Unit’s/Branch’s state of compliance with relevant banking rules and regulations and promptly address compliance issues and concerns.

The Bank ensures an environment that protects the rights of financial consumers and implements measures under the conditions of fair treatment, disclosure and transparency, protection of consumer assets against fraud and misuse, data privacy, timely handling, and redress of complaints.

 The Bank shall at all times adhere to the following Consumer Protection Standards of Conduct:

• Disclosure and Transparency. The Bank shall provide financial consumers all the information that accurately represents the nature and structure of the product or service, its terms and conditions, as well as its fundamental benefits and risks. It also applies to financial products and services offered electronically and to financial products catering to different market segments, with particular consideration to segments where financial knowledge may be limited.

a. Disclosure of information on financial products or services shall be available to the public through available channels of the bank.
b. The way information is disclosed, in advertising materials, terms and conditions, and other forms of communication are clear, concise, accurate, understandable and not misleading. Client segments with limited financial knowledge or certain disabilities or deficiencies that prevent them from reading or understanding the proposed written contract are given a clear verbal explanation of the terms and conditions, as well as its features, risks, and costs, in a language they can understand.
c. The Bank shall notify clients of any change in terms and conditions of the products/services not later than 60 days prior to effectivity of the change.

• Protection of Client Information. The bank has existing Information Security and Data Privacy policies to safeguard client information and Code of Conduct to ensure that all employees comply with these policies and infractions are properly dealt with.

• Fair Treatment. The Bank shall not discriminate against Clients on the basis of race, age, financial capacity, ethnicity, origin, gender, disability, health condition, sexual orientation, religious affiliation and practice, or political affiliation.

• Effective Recourse. Financial Consumers should be provided with accessible, independent, fair, accountable, timely, and efficient means for resolving complaints, inquiries, and requests about their financial transactions.

• Protection of Consumer Assets against Fraud and Misuse. The Bank shall provide financial education and awareness to clients by providing the necessary information on protection of their assets and prevention of fraudulent or unauthorized transactions. The Bank shall adequately inform Financial Consumers of their responsibilities, as users of financial products and services, and provide timely transaction notifications which are essential in curtailing and detecting fraudulent or unauthorized transactions.

At the core of Veterans Bank’s corporate citizenship is its social responsibility to the Filipino veteran and his family and to preserve and nurture the legacy of the Bank’s shareholders. PVB’s revitalized charter retains the mandate that the Bank allocate 20% of its annual net income for the benefit of veterans, their widows, orphans, and compulsory heirs as “grants-in-aid” coursed through the Board of Trustees of the Veterans of World War II (BTVWWII). This annual grant is intended to better the welfare of the veteran community and may be used for educational, social, charitable and rehabilitation purposes in partnership with organizations that share PVB’s commitment to uplift the lives of veterans and their families.

As a matter of policy, the Bank treats all its shareholders equally or without discrimination. Likewise, the Bank gives its shareholders the right to participate in shareholders meetings and to be informed of matters that relate directly to the business of the Bank.
The Bank owes its very existence to the hundreds of thousands of World War II veterans and their families, who are also the Bank’s shareholders. In upholding its unique legacy, Veterans Bank has embraced as part of its values and beliefs the principles of moral integrity, professionalism, and honor as demonstrated by our Filipino veterans of World War II, our nation’s heroes.

All first-time Directors are required to attend a special seminar on corporate governance for board of directors. The orientation program ensures that new members are appropriately apprised of their duties and responsibilities, before beginning their directorships, and throughout their tenure. They are furnished with a copy of the general responsibility and specific duties and responsibilities of the Board and of a Director. Directors are required to certify under oath that they have received copies and fully understand and accept the general responsibility and specific duties. The certification is also submitted to the BSP, together with a certification that he or she has all the prescribed qualifications and none of the disqualifications after their election.
The Bank also has a policy on continuing education for Directors. In maintaining their professional proficiency, the Directors are encouraged to continuously enhance their skills, knowledge and understanding of the activities that the Bank is engaged in or intends to pursue, as well as the developments in the banking industry, including regulatory changes through continuing education or training.

There are three support units of the oversight committees of the Board which are independent from the business activities of the Bank, to wit:

• The Risk Management Group (RMG) led by the Chief Risk Officer, reports functionally to the Board of Directors through the Risk Management Oversight Committee. The RMG oversees the implementation of the Bank’s ERM framework and supports business units and risk owners in identifying and assessing risks, developing mitigation plans aligned with the Board-approved risk appetite, and monitoring these plans until full resolution.

• The Internal Audit Group (IAG) of Philippine Veterans Bank (PVB) functions as the institution’s Third Line under the Institute of Internal Auditor’s Three Lines Model, providing the Board of Directors and Senior Management with the highest level of independent and objective assurance. Positioned with direct reporting accountability to the Audit Committee and the Board, the IAG operates free from undue influence, allowing it to deliver professional, risk-based evaluations that support strong governance, responsible risk-taking, and effective oversight across the Bank.

  • The purpose of the IAG is to strengthen Veterans Bank's ability to create, protect, and sustain value by offering independent, risk-based, and objective assurance, advice, insight, and foresight. Through its work, internal audit enhances the Bank’s ability to achieve its objectives, strengthens governance and internal control processes, decision making and oversight, reputation and credibility with its stakeholders and ability to serve the public interest.

  • Based on the recent results of the External Quality Assessment (EQA) conducted by an independent assessor, the Internal Audit Activity of the Philippine Veterans Bank (PVB) is assessed as General Achievement (General Conformance) with the IIA Global Internal Audit Standards (GIAS), represents a significant affirmation of the overall quality and effectiveness of Veterans Bank's internal audit practices.

• The Compliance Group led by the Chief Compliance Officer identifies/monitors all relevant laws and regulations or jurisdictions and ensures the Bank’s compliance in the said laws and regulations. Likewise, it is charged to ensure that all new or amended compliance policies are communicated and understood by all concerned banking units. The Compliance Department reports directly to the CGCOC.

The Board assessment process is undertaken to measure Board efficiency through a balanced and objective platform against the goals set at the beginning of the year, roles and responsibilities as mandated by the various regulatory agencies, as well as the Bank’s own Corporate Governance Manual. Further, the assessment provides the Board valuable information that can be used as guiding tools in succession planning and objective setting as well as analysis of strengths and weaknesses, enabling the Board to act and address concerns.

 The Board self-assessment has three areas:

a. The Individual Directors’ Assessment;
b. The Board Assessment and;
c. The Board Committee’s Assessment

Performance assessment is conducted annually with the result summary, presented to the Board and the Committee Chairpersons for their consideration and discussion.

The Remuneration Committee and the HR Committee assist the Board of Directors in setting up a program of compensation and benefits for the Board and Senior Management that would attract the best talents in the industry. By periodically benchmarking with practices/offers in the industry, the Committees ensure the adequacy, effectiveness and consistency of the Bank’s compensation program vis-à-vis corporate philosophy and strategy.

Veterans Bank respects the rights of shareholders, as provided for in the Corporation Code, to wit:

• Right to vote on all matters that require their consent/approval;

• Pre-emptive right to all stock issuances of the Bank;

• Right to inspect corporate books and records;

• Right to information;

• Right to dividends; and

• Appraisal right.

The Bank announces in advance the venue, date, time, and agenda of the annual shareholders’ meeting, discussion of each agenda item requiring shareholders’ approval, provides opportunities to ask questions and/or raise issues. It has a method of voting, including disclosure of voting results.
Recognizing the need of shareholders for accurate and updated information, the PVB corporate web site (www.veteransbank.com.ph) contains information about the Bank’s financial condition, product and services, annual reports, news, announcements, and other valuable information. Through this website, shareholders (and other stakeholders for that matter) may request/inquire relevant information; raise questions or concerns through the contact details provided for in the website.

Veterans Bank adopts an Enterprise Risk Management (ERM) framework that embeds risk culture, capabilities, and practices into strategic planning and execution. The Bank’s ERM supports its mission by strengthening risk-based decision-making. This reduces financial losses, ensures regulatory compliance, and enhances operational resilience for the benefit of key public and private sector constituents, especially our veterans and their families, the military, and other uniformed personnel.
The Board of Directors provides the ultimate oversight and accountability for Enterprise Risk Management, through the Risk Management Oversight Committee and Senior Management, ensuring that the organization’s strategic objectives are achieved within its defined risk appetite. The Risk Management Group (RMG), led by the Chief Risk Officer, functions as the Bank’s second line of defense as it independently oversees the ERM implementation, supporting business units in identifying, assessing, controlling, mitigating, and monitoring risks, and ensuring adherence to the Board‑approved risk appetite.

The President is assisted by the following management committees, among others:

• The Management Committee (ManCom) to enable scalability, the existing management committee must be restructured under a unified charter into three distinct teams:

  • Leadership Team: Comprising 5-7 senior officers, this team exercises distributed leadership authority, takes ownership of specific tasks or missions, and plays active roles in board and management committees.

  • Executive Team: This team evolves from the current management committee to include the Leadership Team alongside group and division heads.

  • Management Team: An expanded branch that integrates the Executive Team with expertise-based middle-to-high-ranking officers within the organization.

• The Assets and Liability Committee (ALCO) ensures that the Bank and its business units maintain adequate liquidity, capital, and funding to meet all business requirements at all times. ALCO is tasked to effectively manage capital with strict adherence to the risk disciplines set by the Board. ALCO is chaired/led by the President and is composed of senior line management officers. 

• The Administrative Investigation Committee (AIC) investigates offenses involving deliberate disobedience, fraud, dishonesty, unethical behavior, and other offenses that carry the sanction of suspension to dismissal.

• The Bank Anti-Money Laundering Evaluation Committee (BAMLEC) primarily oversees the implementation of the Bank’s AMLA Program across the organization. BAMLEC deliberates, evaluates, discusses, and approves suspicious transactions to be reported and submitted to the Anti-Money Laundering Council (AMLC) as well as issues and concerns on AML and improvements in AML monitoring and reporting processes.

The Veterans Affairs Office (VAO) was created to ensure that the Bank's primary stakeholders, the veterans, are actively engaged in the activities and programs of the Bank and, in the process, maximize the benefits that the veterans get from the Bank. To achieve this, VAO develops and implements programs, projects, and activities for the veterans either as individuals or as members of organizations or associations.