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August 5, 2025 – Makati City  – The Institute of Corporate Directors (ICD) paid a courtesy visit to the newly appointed Securities and Exchange Commission (SEC) Chairperson, Atty. Francis Lim, to reaffirm its commitment to advancing corporate governance in the Philippines and to explore areas of collaboration. Representing ICD were Chairperson Atty. Benedicta Du-Baladad, Vice Chairperson Ida Ceniza-Tiongson, Trustees Catherine L. Hufana-Ang, Amb. Jose Cuisia Jr., Maricelle Narciso, Jonathan Juan D.C. Moreno, and Atty. Jose Tomas C. Syquia, Sustainability Committee Chairperson Dennis Montecillo, Consultancy Committee Chairperson Dr. Vaughn Montes, Board Diversity & Inclusion Committee Chairperson Monette Iturralde-Hamlin, Executive Director Catherine Denise Jalandoni, Programs Director Carla Ronquillo-Solis, and R&D Assistant Manager Kenneth Vicarl Lagera. Chairperson Lim was joined by Atty. Rachel Esther Gumtang-Remalante, Director of the Corporate Governance and Finance Department, and Atty. Jacqueline Liu, Chief Counsel of the Corporate Governance Division, and Chairman Chief of Staff John Cedrick De Leon. The meeting underscored mutual priorities in advancing good corporate governance and capital market development, as both parties exchanged views on strengthening oversight, enhancing investor confidence, and supporting initiatives that promote sustainable economic growth. The ICD delegation expressed its readiness to work with the SEC in pursuing these shared objectives. The discussions ended on a positive note, with both institutions reaffirming their commitment to advancing a corporate governance culture that benefits companies, investors, and the broader economy.

15 August 2025 NOTICE & AGENDA, ANNUAL GENERAL MEMBERSHIP MEETING OF THE INSTITUTE OF CORPORATE DIRECTORS 10 October 2025, Friday, 2:00 PM to 4:00 PM NOTICE IS HEREBY GIVEN that the Annual General Membership Meeting of the Institute of Corporate Directors (ICD) will be held on, Friday, 10 October 2025, at 2:00PM via videoconference using Zoom platform as well as onsite at the Mayuree 2, Dusit Thani Manila, Ayala Center, 1223 Makati City. The Agenda items are as follows: Invocation and National Anthem Call to Order Proof of Notice of Meeting & Certification of Quorum Induction of Members Approval of Minutes of the 16 October 2024 Annual General Membership Meeting Message of the Chairman Report of the President Messages from the Trustees Report of the Approved Audited Financial Statements as of 31 December 2024 by the Treasurer Appointment of External Auditor for Fiscal/Calendar Years 2025 & 2026 Ratification of all Acts and Resolutions of the Officers and Board of Trustees from 01 October 2024 to 30 September 2025 Election of the Board of Trustees (announcement of results of Online Voting) Open Forum Closing Message from the Chairman Emeritus Adjournment Please note that only Fellows (FICD) in good standing are entitled to nominate, be nominated, vote, and be elected to the Board of Trustees. Separate notices for nomination and election, including relevant deadlines, will be sent directly to qualified Fellows. The membership book will be closed 20 days before the meeting, on 20 September 2025. All members in good standing may attend the meeting in person or via Zoom. The Zoom link for the meeting will be shared on 09 October 2025. For Fellows who wish to be represented at the meeting by proxy for quorum purposes, a signed proxy authorization should be submitted through the online proxy form on or before the close of business day at 5:00 PM of 09 October 2025. Four (4) seats on the Board of Trustees are up for election this year 2025 to fill up the corresponding vacancies in the Board due to the conclusion of regular terms of four trustees. The final list of nominees will be announced on 18 September 2025, and thereafter, election and voting will follow. Similar to last year, voting shall be online. Instructions for the online elections will be emailed to Fellows in good standing on 18 September 2025 . The voting results and the names of the duly elected trustees will be announced during the Annual General Membership Meeting. The organizational meeting of ICD’s newly-elected Board of Trustees shall be held immediately after the adjournment of the members’ meeting, if there is a quorum for the Board meeting. Please note that both the annual general membership meeting and, if it proceeds, the organizational meeting shall be recorded. For questions about the meeting, you may email membersrelations@icd.ph . Thank you and we look forward to your participation on 10 October 2025. Sincerely, Atty. Felix Sy Corporate Secretary Note:  Registration and materials for the 2025 Annual General Membership Meeting are sent via email to all ICD Members. For inquiries, kindly email ICD Members Relations at membersrelations @icd.ph .

By: Nelljay Kahlil Tuppal Research and Content Coordinator, Research and Development Institute of Corporate Directors Makati City, July 7, 2025  — As artificial intelligence (AI) continues to transform industries and public institutions worldwide, the Institute of Corporate Directors (ICD) brought together corporate leaders, governance experts, and policymakers for its event, Board Insights: National AI Strategy , held at Dusit Thani Manila and streamed online. The forum explored how AI is shaping national development and changing the way companies are governed. Organized by ICD’s Membership and Technology Governance Committees, the event aimed to help directors and senior leaders understand the responsibilities and opportunities brought about by AI. The event began with a solemn invocation, followed by warm welcomes to both in-person and online attendees. Atty. Benedicta Du-Baladad, FICD, Chairperson of ICD, opened the session by emphasizing AI as a national priority. “We’re here to talk about artificial intelligence as a national imperative,” she said. “Embracing AI with a clear purpose and strategic intent could open new opportunities for growth, improve public services, build smarter institutions, and respond to the evolving needs of our people.” She also raised important questions for leaders: How do we adopt AI responsibly? How do we govern its use while still encouraging innovation? Keynote Insights: A National Vision for AI DOST Secretary Renato Solidum Jr. Introduced by Ms. Ida Tiongson, FICD, Vice-Chairperson of ICD, Secretary Solidum presented a comprehensive update on the National AI Strategy (NAIS) and the Philippines’ rising global innovation standing. “Innovation is more than technology—it is a test of our values and vision,” he said, proudly noting the Philippines’ leap to 53rd place in the Global Innovation Index. He highlighted how AI is already improving healthcare, agriculture, education, and disaster resilience, and stressed the importance of data sovereignty: “Data will fuel AI. Without sovereign data, we cannot build reliable systems.” Secretary Solidum emphasized that innovation must remain accessible, ethical, and responsive to real needs, guided by five pillars: infrastructure, workforce, innovation, ethics, and deployment. DICT Secretary Henry Aguda, FICD (via video) Secretary Aguda, who was accompanying the President at another event, shared his keynote through a video message. “AI is no longer the future—it is now. But with powerful tools come great risks,” he said. “Digital transformation is not just about tech, it’s about people. We must build not just fast systems, but fair ones.” He echoed the government’s commitment to a digitally empowered Philippines: “No Filipino left offline. No Filipino left behind.” DICT Atty. Leandro Angelo Aguirre, GICD Representing DICT, Atty. Aguirre stressed that AI governance must be local and context-specific. “We cannot simply copy what other countries are doing. AI must reflect our own realities.” He clarified that while there’s no dedicated AI law yet, several existing laws already govern aspects of AI. He advocated for regulatory balance, cautioning against both over- and under-regulation, and emphasized the need for stronger inter-agency collaboration. Panel Discussion In the afternoon, the panel discussion—moderated by Mr. VJ Africa, FICD—featured DOST Secretary Solidum and Atty. Aguirre. The session tackled pressing questions around: Expanding scholarships in STEM Regulating AI in public services Energy demands of AI data centers Creating job-ready training programs Adopting global regulatory frameworks with local context Both panelists reiterated the importance of reskilling the workforce, leveraging DOST’s infrastructure, and aligning AI efforts under the National Innovation Council, led by the President, to ensure a unified whole-of-government approach. Attendee questions sparked discussion on data readiness, digital infrastructure timelines, and practical implementation of AI tools in government. The importance of interoperable data standards, especially for disaster response, was also highlighted. As the event concluded, ICD President Mr. Senen Matoto, FICD, expressed heartfelt thanks to the speakers and moderator for their insights. Induction of New ICD Members A special highlight was the Induction of New ICD Members, strengthening ICD’s growing community of governance professionals. Trustee Mr. Donald Patrick Lim, FICD, led the induction and oath-taking ceremonies. Newly Inducted Members: Fellows (FICD): Rev. Msgr. Roger Joseph B. Erestain, FICD Joselito Mallari Jr., FICD Graduate Members (GICD): Atty. Leandro Angelo Aguirre, GICD Aaron Jon Atienza, GICD Atty. Celine Melanie Dee, GICD Brent Estrella, GICD Associate Members (AICD): Freniel Mikko Austria, AICD Joseph Feliciano, AICD Charting the AI Journey Together Board Insights: National AI Strategy  affirmed the Philippine government’s serious commitment to using AI for inclusive development, backed by ethical guardrails and responsible governance. The open dialogue between public and private sector leaders made one thing clear: advancing AI in the country is not a task for government alone, but a collaborative national effort . With the support of the ICD community and a broad range of stakeholders, the Philippines is steadily building a future where AI becomes a powerful tool for innovation, resilience, and inclusive growth.

By: Hanna Arrojo and Nicolie Narce Intern, Research and Development Institute of Corporate Directors Every fourth Monday of July, the Philippine President delivers the constitutionally mandated State of the Nation Address (SONA), offering a comprehensive overview of the country's economic, political, and social landscape, alongside government accomplishments, ongoing initiatives, and future objectives. In his fourth SONA, President Ferdinand "Bongbong" Marcos Jr. spotlighted critical national issues, outlining current efforts and future strategies to bolster key sectors vital to the nation's progress. This article delves into these pivotal topics, highlighting their significance and impact on members of the Institute of Corporate Directors (ICD). Key Takeaways from the SONA Governance President Marcos Jr. emphasized his administration's drive for improved governance in the remaining years of his term. He called for unity and collective action in national service, pushing for enhanced government performance. Labor & Enterprise The President remains focused on strengthening job creation and entrepreneurial endeavors: The Department of Labor and Employment (DOLE), Department of Trade and Industry (DTI), and Department of Social Welfare and Development (DSWD) will continue their joint efforts in job creation and livelihood support. The government plans to expand low-interest, collateral-free loans for small businesses. Free training and funding support will be provided for 2.5 million low-income households to establish microenterprises. Agriculture & Food Security The administration reiterated its commitment to agricultural development and food affordability: The PHP 20/kilo rice initiative launched in several areas is backed by a PHP 113 billion allocation to Department of Agriculture (DA) programs for its sustainability and expansion. Rice traders were warned against price manipulation, with violators facing prosecution. Targets include increased production of pork and other crops through local support and biosecurity measures. Over 8.5 million farmers and fisherfolk received aid. The government will continue developing farm-to-market roads and providing more irrigation systems, farm equipment, fiberglass boats, and rice processing facilities. Plans include planting 15 million hybrid and high-quality coconut seedlings this year to boost the coconut industry, with a broader goal of planting 100 million trees nationwide. The Department of Science and Technology (DOST) will promote scientific innovations and modern farming techniques like intercropping and off-season planting to support farmers. Emphasis was placed on expanding key industries such as automotive, electronics, biotechnology, pharmaceuticals, critical minerals, textiles, Halal products, construction, and power generation. Efforts are underway to fast-track the distribution of land titles (CLOAs, E-Titles, COCROMs) to help farmers own their land and be free from agrarian debt. Education The administration reinforced its commitment to improving educational quality and accessibility: Expanded school mental health programs received a PHP 1 billion allocation, with more counselors hired. Over 300 Barangay Child Development and Bulilit Centers were developed. The Yakap Caravan was launched, offering free health checkups, lab tests (including cancer screening), and medicines for students and teachers. Digital tools such as smart TVs, free Wi-Fi, and Bayanihan SIM cards with load are being prepared to support digital learning. 60,000 new teaching posts were created, and nearly 100 non-teaching tasks were removed to reduce paperwork and support educators. Remaining work processes are being digitized, and laptops are being provided to teachers. Teacher overload and overtime are now compensated. 22,000 new classrooms have been built, with 40,000 more planned. Scholarships and agriculture-focused programs are being introduced to attract youth to farming. President Marcos urged DOLE and DSWD to continue internship and pre-employment programs for college students. Laptops will be distributed to teachers, with transparency in procurement ensured. Free Tertiary Education The President highlighted significant achievements in free tertiary education: The Philippines now ranks second in Southeast Asia for youth enrollment in college and TechVoc programs. Over 2 million students benefit from the government’s free higher education program annually, with an additional 260,000 pupils supported. More than 200,000 TESDA scholarships were awarded in 2024 alone. For 2026, the government provided almost PHP 60 billion for free college and technical-vocational education. Funding support for tertiary education over the next three years will prioritize students under the Pantawid Pamilyang Pilipino Program (4Ps) and Listahanan. The government reaffirmed its long-term vision of having one scholar or TESDA graduate per Filipino family. Tech-Voc Education Expansion The President underscored the integration of Technical-Vocational Education and Training (TVET) into the Senior High School curriculum through the TESDA program: This program, already implemented in various schools, allows Senior High School students to earn National Certificates (NC I and NC II) through TESDA-accredited training in specialized fields like bookkeeping, agribusiness production, electrical installation and maintenance, computer systems servicing, animation, and graphic design. These qualifications are recognized by employers and are improving employability both locally and internationally. Presidential Merit Scholarships A new program, the Presidential Merit Scholarships, was established to recognize exemplary academic achievement among graduating high school students, awarded to those who graduate with Highest Honors. While official guidelines are pending, this program signals the government's push to enhance merit-based incentives and promote academic excellence. Poverty Reduction and Social Protection The President highlighted remarkable progress in poverty reduction and social protection: The 4Ps program has benefited over 5 million families since 2022. Local Government Units (LGUs) were instructed to prioritize the integration of homeless individuals into 4Ps and other DSWD programs. The "Walang Gutom" program already reaches 600,000 nutritionally vulnerable families and aims to expand to 750,000 families by 2027. The DSWD and Department of Education (DepEd) are sustaining feeding programs in daycare centers and public schools, providing nutritious food and milk to over 3.5 million children. An additional PHP 1 billion has been set aside to increase feeding programs next year. Promotion of Active Lifestyles The administration aims to promote active lifestyles: The Philippine Sports Commission (PSC) will provide track and field ovals for open public use in Pasig, Manila, and Baguio. Engagement in people-oriented health activities like fun runs, Zumba, and grassroots sports competitions is encouraged to address increasing obesity among Filipinos. LGUs were encouraged to open parks and plazas and implement Car-Free Sundays to promote physical activity. The government will continue to push the development of national sports through competitions like the Palarong Pambansa and Batang Pinoy Games. A new national sports program is planned for public schools, emphasizing the revitalization of sports clubs, intramurals, and competitions. President Marcos also acknowledged prominent Filipino athletes like Senator Manny Pacquiao, Hidilyn Diaz, Carlos Yulo, EJ Obiena, Alex Eala, and the Philippine Men's Curling Team. Healthcare Healthcare remains a top government priority, alongside education and poverty reduction: At least one doctor has been deployed to every city and municipality across the country. The President declared the upgrading of public hospitals through the opening of 53 Bagong Urgent Care and Ambulatory Service (BUCAS) facilities across 32 provinces. These centers offer free checkups, X-rays, laboratory tests, and outpatient care. PhilHealth now covers heart disease treatments (stents, open-heart surgery, valve replacement, post-kidney transplant care) and provides free year-round dialysis treatments, including associated drugs. A Cancer Assistance Fund was launched, making funds available for HPV vaccines and allocating PHP 1.7 billion for cancer patient medicines not covered by PhilHealth. Increased PhilHealth coverage also includes a maximum of PHP 47,000 for severe dengue in children, an increase from PHP 16,000 to PHP 87,000 for cataract operations, and coverage for therapy and assistive aids for individuals with disabilities (PWDs). Procedures for seeking medical aid will soon be integrated into the eGov PH app for greater accessibility. Infrastructure & Utilities The administration continues to prioritize access to power, clean water, and modern infrastructure to drive inclusive growth: 2.5 million households now have electricity, with 3 million remaining a priority. Around 200 new power plants are targeted for completion in the next three years to electrify 4 million households, over 2,000 factories, and about 7,000 offices and businesses. The Department of Energy (DOE) and the National Electrification Administration (NEA) will extend power to areas with limited electricity access. Plans include electrifying 1 million more homes using solar home systems by 2028. The DOE will push the Net Metering Program to help lower electricity costs, and the Lifeline Rate subsidy will be expanded to benefit more low-income families. A state of calamity was declared in Siquijor due to power issues; President Marcos Jr. ordered DOE, NEA, and ERC to restore electricity by year-end and implement long-term solutions. Government large-scale projects prioritize bulk water supply and access to potable water, especially for island communities, addressing the over six million consumers still facing poor water service. The Local Water Utilities Administration (LWUA) is taking strong action against underperforming water districts. The Build Better More program continues, including the building and upgrading of roads, bridges, railroads, airports, seaports, irrigation facilities, and public housing. Announced enhancements in mass transport include more fare discounts for LRT and MRT passengers. Free Love Bus Revival and Other Projects President Marcos Jr. highlighted progress in infrastructure projects: The "Love Bus" free public transport service will be brought back, starting in Davao and Cebu, and eventually expanding throughout Visayas and Mindanao. Large-scale transportation and infrastructure projects include the completed Nalil-Sikkiat Bridge in Tawi-Tawi, the Bataan-Cavite Interlink Bridge (construction to start before year-end), and the Malassa-Lupa Pula Bridge (expected to open in 2026). Rehabilitation efforts are underway for the PNR Bicol Line, Binahan Bridge, and SLEX Toll Road 5. The Mindanao Transport Connectivity Improvement Project is under active development, and rehabilitation of Guadalupe Bridge is in progress. The President cited the collapse of the PHP 1-billion Cabagan-Sta. Maria Bridge in Isabela, emphasizing that the safety of hanging bridges, particularly in rural regions, is now a top priority. Internet Connectivity Significant strides have been made in countrywide internet speed and connectivity: Completion of Phases 1, 2, and 3 of the National Fiber Backbone Project has significantly boosted internet infrastructure. The administration has fixed 19,000 free Wi-Fi hotspots nationwide. Over 1 million SIM cards offering free data were distributed, particularly to schools in disadvantaged areas. The government has accelerated the rollout of cellular towers in Geographically Isolated and Disadvantaged Areas (GIDAs). The President assured that the entire public school system will be internet-enabled by the end of 2025. eGovPH App Expansion Launched in 2023, the eGovPH application has expanded to include over 40 government services, such as driver’s license renewal, PhilHealth, Pag-IBIG, and GSIS management, customs and immigration declarations, OFW document access, bio-data creation, and national/government ID management. Future services include NBI Clearance and Beep Card integration for MRT/LRT and eTIN services from the Bureau of Internal Revenue (BIR). LTO Backlog Clearance The Land Transportation Office (LTO) has resolved the motorcycle license plate backlog since 2014. The administration instructed the agency to issue new vehicle plates and registrations within three days. Peace and Security The President highlighted progress in peace and security: Hundreds of former rebels have been successfully reintegrated into society, receiving livelihood and community development assistance. There are no more active guerrilla fronts, and efforts are focused on preventing their return. The modernization of the Philippine National Police (PNP) and Armed Forces of the Philippines (AFP) continues with new firearms, vehicles, and equipment. The AFP, PNP, and former rebels are now collaborating to achieve peace in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). Crime and Human Rights The administration is actively investigating cases of missing individuals connected to illegal sabong syndicates. The President reiterated commitment to uphold human rights and pursue accountability. Anti-Drug Campaign The administration confiscated around PHP 83 billion in illegal drugs. More than 153,000 people have been detained, including over 9,600 high-value detainees and 677 government officials. Foreign Policy The President reasserted the country's independent foreign policy, declaring, "A friend to all, an enemy to none." Key foreign policy achievements include the release of Filipino hostages by Houthi rebels with assistance from Oman, clemency granted to over 600 overseas Filipinos in UAE, Qatar, and Bahrain, and the Philippines hosting the ASEAN Summit in 2026. Disaster Preparedness The government is actively improving disaster preparedness and response to climate change: Active use of advanced technology, including Doppler radars, seismic stations, and command cars, is enhancing early warning systems and emergency response. Proposals to build modern evacuation centers aim to avoid disrupting school activities. The President emphasized discipline, vigilance, and solidarity in saving lives during calamities, calling on citizens to participate in preparedness programs, engage in drills, obey evacuation orders, practice proper waste disposal, and assist others during crises. Appeal to the People The President called on the Filipino people to maintain their focus on the country's direction toward progress, promoting patriotism, courage, diligence, and compassion as fundamental Filipino values that foster change. He concluded his speech by saying: "Tayo ito. Tayo ang Bagong Pilipino." Strategic Implications for Corporate Directors President Marcos Jr.'s 2025 State of the Nation Address presents a clear roadmap for inclusive growth, digital transformation, and enhanced governance. For board directors, the SONA underscores the critical importance of aligning corporate priorities with these national development goals. Specifically, boards should consider strategic partnerships that support: Micro, Small, and Medium Enterprise (MSME) development: Leveraging government initiatives for loans and training. Workforce upskilling and and reskilling: Supporting programs that align with the government's focus on tech-voc integration and digital literacy in schools. Agriculture modernization: Exploring investments and collaborations that enhance food security and support farmers. Expanded access to education and healthcare: Identifying opportunities to contribute to these vital social sectors. The administration’s commitment to merit-based programs, TVET integration, and digital tools in schools calls on businesses to strengthen talent pipelines, support scholarship and internship programs, and invest in digital inclusion. Infrastructure, energy, and connectivity were again emphasized as national enablers. With over 200 power plants, mass transport upgrades, and digital infrastructure projects in the pipeline, corporations in construction, utilities, real estate, and telecommunications can actively engage in public-private partnerships and green investments. The administration's efforts to expand access to clean water, reliable electricity, and affordable internet—especially in rural and underserved areas—offer strategic openings for inclusive innovation and long-term growth. Finally, the President’s renewed call for unity, ethical leadership, and patriotism places a significant spotlight on corporate governance. Boards are strongly encouraged to lead by example, embedding sustainability, accountability, and and stakeholder responsiveness into their core strategies. As the country enters a critical stage in its post-pandemic recovery, ICD members play a vital role in shaping organizations that not only deliver shareholder value but also contribute meaningfully to the broader vision of a resilient and equitable Philippines.

By: Ma. Aurora D. Geotina-Garcia, FICD Fellow Institute of Corporate Directors For decades, diversity, equity, and inclusion (DEI) initiatives have played a significant role in creating inclusive workplaces, which contributed to women achieving progress in society, particularly in business and leadership. Yet, as with any advocacy, there are shifts in perspectives, and DEI is now facing a crossroad. While some corporations, like Facebook (now Meta), have reduced or eliminated DEI as a priority, institutions like the Vatican are breaking new ground by appointing women to senior roles. This tension between corporate retreat and societal advancement leads us to question: Is DEI still relevant, or has it become a passing trend? DEI in the corporate world: Retreat or recalibration?  The evolution of DEI has reshaped the corporate landscape. Historically, many companies viewed DEI initiatives as a moral and ethical obligation. However, over the past decade, a broader understanding emerged: diversity isn’t just “nice-to-have,” it’s a strategic advantage. A 2023 McKinsey and Co. report revealed that businesses with more diverse leadership are 39 percent more likely to outperform their peers in profitability. Despite these benefits, DEI faces criticism. Meta, for instance, scaled back its DEI efforts citing “shifting legal and policy landscape,” questioning whether the costs outweigh the benefits. According to Forbes (2025), some critics argue that corporate DEI programs have become too focused on quotas or symbolic gestures rather than driving real systemic change. Undeniably, this necessitates a delicate balance. On the one hand, DEI is about promoting a workplace culture that values diverse experiences and perspectives. On the other, it requires ongoing evaluation and recalibration to ensure that it does not become a box-ticking exercise. For DEI to work, it must be approached as a long-term commitment to transformation, not just an annual initiative. A broader view: Gender inclusivity in the Vatican.  In striking contrast to the corporate world, the Vatican recently made history by appointing a woman, Sister Raffaella Petrini, to the highest-ranking position ever held by a female in the Vatican’s governance structure. This move signals the Church’s commitment to inclusivity in one of the most traditional and male-dominated institutions globally, expanding beyond business and politics into cultural and religious institutions. This is a powerful reminder that DEI efforts need not be confined to the corporate sector; social change can happen anywhere, and the appointment of women to leadership positions in religious institutions signals a transformative shift toward equality in all domains. DEI in the current and future environment.  The views on DEI vary across different regions and industries. A 2022 PwC survey revealed that while 85 percent of organizations believe DEI is crucial for success, 31 percent see it as a barrier to their progression. These mixed sentiments suggest that many business leaders are rethinking how to approach DEI, especially in light of shifting economic priorities. These global concerns are mirrored in the Philippines. In some industries, DEI is viewed as a marketing tool rather than deeply embedded in a company’s DNA. The Philippine Women’s Economic Network (PhilWEN), through the Philippine Business Coalition for Women Empowerment (PBCWE), advocates for DEI by demonstrating how it can be a catalyst for business success. A recent census conducted by the PBCWE shows a steady increase in the number of women in leadership roles in publicly listed companies across various industries in the Philippines. However, challenges remain in ensuring equal representation at the top levels. For PhilWEN and many Filipino businesses, the future of DEI lies in its integration into every facet of the company—from hiring practices to leadership development. Global surveys such as those from Glassdoor show that three in four job seekers consider diversity and inclusion as consideration in their choice of potential employers. This means that DEI is not just a trend but a key factor in creating a long-term employer-employee relationship. The path forward: Why DEI matters.  As we move further into 2025, it is clear that DEI is not fading but evolving. For some companies, this evolution means refining their DEI approach to focus on systemic change rather than just representation. While some companies may question the long-term viability of DEI, we should stand firm and believe that it is more than just a passing trend—it is a necessary evolution for every sector, including business, politics, and culture. As we look back on the significance of Women’s History Month, let us reaffirm our commitment to advancing gender equality and social justice through effective, meaningful DEI strategies. By doing so, we ensure that women, and all marginalized groups, have an equal stake in shaping the future. ————— Ma. Aurora “Boots” Geotina-Garcia is founding chair and president of PhilWEN, and governing council chair of PBCWE. ————— Women Who Lead is an initiative of PhilWEN. Disclaimer: On April 3, 2025, “Divergent perspectives on DEI: Is it still relevant?” was published. It was authored by Ma. Aurora D. Geotina-Garcia, a fellow of the Institute of Corporate Directors. You can read here:

By: Mr. Michael M. Calma, FICD Fellow Institute of Corporate Directors (Part 1 of 3) Last 29-30 May, the Institute of Corporate Directors Technology Governance Committee (ICD TGC) hosted an online seminar entitled: “Beyond the Algorithm: Exploring the Cybersecurity and AI Revolution.” The two-day event brought together more than a hundred board directors and senior executives of publicly listed companies, government agencies and MSMEs. (Because nothing says “AI revolution” quite like buffering Zoom connections and “Can you hear me now?” moments.) At the ICD TGC, our goal is simple: to demystify AI and cybersecurity for boards so they can govern effectively in this new era. Or at least ask slightly smarter questions at the next board meeting. Fresh off the grill — here are your nuggets of insight, expertly curated from our speakers and served with a side of straight talk: Henry Rhoel Aguda , secretary of the Department of Information and Communications Technology: Speed is survival . Speed is no longer a competitive edge. In the AI space, it’s a requirement for survival. Risk isn’t a brake, it’s a compass . If you identify an AI technology risk — that becomes a future market advantage for you. People must remain at the center of tech decisions . It’s so easy to get lost in the narrative of AI — but ultimately it redounds to how it affects people’s lives. Jennifer Tongco , president, CEO and founder of Netrust Philippines: Cyber risks require board-level attention . AI and cybersecurity governance are now boardroom issues — not just technical concerns. The board is ultimately accountable for cyber risk and AI transparency . The board is ultimately accountable for cyber risk. One of the most important questions boards should ask is: How did the AI arrive at that decision? If no one can answer that, that’s a warning sign of falling behind in AI and cyber governance. Actionable governance starts with visibility . Start with an inventory of all AI tools being used across the organization. Paul Albert Sy Santos , lead consultant at Arrows Consulting: Boards must ask higher-order questions, not just use buzzwords . Let’s avoid asking, “Are we using AI?” Instead, ask: “What specific business problem are we solving with AI — and how will we measure its success?” AI strategy must link directly to shareholder value . If your AI project doesn’t tie back to margin growth, cost containment, or risk reduction, it’s not a strategy — it’s a science project. Balance speed with governance . Let me challenge the panel a bit — should boards slow down innovation to manage risk, or speed up innovation and embed risk along the way? In Part 2, we will distill the takeaways from the speakers of Day 2. Disclaimer: On June 21, 2025, “Back to Basics” was published. It was authored by Mr. Michael M. Calma, FICD, a fellow of the Institute of Corporate Directors. You can read here:

By: Dr. Carlos P. Gatmaitan, FICD Fellow Institute of Corporate Directors Let me share a true story of a dilemma faced by a Board of Directors of a fast-growing dealership in Cebu not too long ago. Typical of a well-run business that has grown so fast, its exposure to risk has grown exponentially as well. Variances of forecasts were alarmingly volatile, having insufficient attention to the necessity of a Risk Management Framework for strategic governance, risk avoidance, and potential impacts of the market fluctuations, technology changes, human capital, economic ups and downs… and so on. Thankfully, the creation of a more structured approach to addressing these inevitables were put in place. One of the major outputs was the creation of an Internal Audit Department, which represents the gist of this article. So, what role does the Internal Audit (IA) Department play?  Surely it is understood to be a compliance mechanism, one wherein internal controls are strengthened, however, the IA has evolved to become much more than this. The IA these days provides a strategic function that provides valuable insight and foresight into the corporation’s risk landscape aside from operational effectiveness — a coach to the Board and the CEO as well.  To perform this role effectively, the Internal Audit Department must operate with full independence and professionalism. It reports functionally to the Board — through the Audit and Risk Committee — and administratively to the CEO, allowing it to escalate issues without interference. This reporting line enables auditors to carry out their responsibilities objectively and to maintain freedom from undue influence in the performance of their duties. A sound Internal Audit Charter provides a formal mandate, granting the department unrestricted access to records, personnel, and resources necessary to carry out its work. It also empowers the department to determine audit scope, allocate resources, engage external expertise, and communicate results directly to the highest levels of governance. A cornerstone of effectiveness is the commitment to The Institute of Internal Auditors’ Global Internal Audit Standards, including a Quality Assurance and Improvement Program (QAIP). This ensures that the internal audit function operates in alignment with global best practices and that its performance, ethics, and quality are continuously assessed and enhanced. Internal auditors must embody principles of integrity, objectivity, competency, confidentiality, and due professional care — while avoiding any roles that might impair their independence. At the center of this function is the Chief Audit Executive (CAE). The CAE leads the Internal Audit Department, ensuring the team possesses the right skills, methodologies, and resources to meet its mandate. The CAE is responsible for developing an annual risk-based audit plan, reporting performance and risk insights to the Board, and adjusting the plan in response to evolving risks. The CAE must also communicate any limitations in scope or independence, and ensure that all findings and recommendations are clearly reported and followed up on. The scope of Internal Audit’s services is enterprise-wide, covering all units, assets, and operations. These services include both assurance — evaluating the effectiveness of governance, risk, and control systems — and advisory engagements that may identify improvement opportunities. Internal Audit may also provide operational support services when requested by management, as long as it does not assume operational responsibility or audit its own work to preserve objectivity. Audit engagements often assess whether: risks are well managed; operations align with objectives; laws, regulations, and policies are followed; data integrity is maintained; and resources are used efficiently. In doing so, Internal Audit acts as a proactive guardian of value, offering clarity in uncertainty and helping management navigate complex operational and regulatory environments. In summary, the Internal Audit Department is a critical partner in achieving sustainable organizational resilience, integrity and performance. Its independence, professionalism, and strategic insight enable it to fulfill a vital oversight role while driving continuous improvement across the enterprise. Through an IA charter and its practical application, the IA supports the Board and Management in making informed, ethical, and forward-looking decisions for the organization’s sustained success. A sound IA approach is essential for sustainable success. Your shareholders deserve and demand it! Disclaimer: On May 18, 2025, “Internal audit: A strategic governance imperative for board directors” was published. It was authored by Dr. Carlos P. Gatmaitan, a fellow of the Institute of Corporate Directors. You can read here:

By: Dr. Carlos P. Gatmaitan, FICD Fellow Institute of Corporate Directors Another true story. In fact, this happens all the time in the realm of family-owned businesses, wherein many of whom are faced with a succession planning crisis. The dilemma is both inevitable and deeply personal. For many founding chairpersons, particularly those who have grown their enterprises from the ground up, turning over Board responsibilities and executive functions is not just a technical shift — it is an emotional and psychological struggle. The struggle they face lies in letting go of authority, legacy, and control while trying to ensure that what they built continues to thrive without them. This transition becomes even more complex when successors are chosen from the next generation or, more controversially, from outside the family circle. Succession becomes a defining governance challenge — fraught with the hard truth that not all heirs are ready, and not all founders are willing to accept that. The founder’s dilemma Founders often view their companies as extensions of themselves. This is why the decision to pass on leadership is laced with fear — fear of decline, mismanagement, or cultural erosion. The situation intensifies when the Board must confront the reality that family loyalty does not always equate to leadership readiness. Many chairpersons hesitate to relinquish power, not due to greed or ego, but out of sincere concern for continuity and the risk of decline under unprepared successors. However, the refusal to address succession proactively leads to stagnation, internal conflict, or even collapse. What could have been an opportunity for renewal and sustainability instead becomes a crisis of leadership. The power of family constitutions and shareholder agreements A well-written family constitution provides a foundational framework to guide family members in their roles as shareholders, Board members, or professional managers. These documents are not mere formalities; they reflect a family’s shared values, commitment to unity, and respect for professional governance. When anchored by a clear succession policy, they create predictability and reduce emotional decision-making. Likewise, a strong shareholders’ agreement delineates voting rights, share transfers, dividends, and dispute resolution mechanisms. This empowers family enterprises to professionalize their governance and resolve tensions before they escalate into open conflict. Learning from San Miguel’s succession A well-known example is the transition within San Miguel Corporation. Eduardo “Danding” Cojuangco, its influential leader and patriarch, recognized the importance of sustainable leadership. Rather than insisting on a family successor, he appointed Ramon Ang — a trusted, non-family executive with deep operational understanding and vision — as CEO and eventually president. This bold decision was rooted in meritocracy, not heredity. Ang’s tenure is now regarded as a turning point that led to expansion, diversification, and the strengthening of San Miguel’s institutional structure. Cojuangco’s trust in outside talent was not a betrayal of legacy — it was its preservation. This case underscores the value of hiring competent professionals to sustain the enterprise beyond the founder’s lifetime. The role of governance advisors Succession is not only about replacing people; it’s about evolving systems. This is where governance advisors become essential. Experienced advisors guide families in drafting policies, governance charters, and Board structures that promote long-term collaboration. They create a necessary structure that separates the Board of Directors with management, that separates the chairperson’s functions with that of the CEO, hence the destructive interference of a chairperson with the CEO. These are safeguards that reduce dependence on any one individual, ensuring that leadership is systemic and sustainable. Governance must be nurtured in a culture that appreciates performance, not one that punishes mistakes. A culture of fear, driven by legacy protection, does more damage than calculated risk-taking backed by preparation. Final thoughts The true legacy of a founder is not just the empire they built, but the foresight they showed in letting go at the right time, to the right people, with the right structures in place. In this light, succession is not a dilemma. After all, succession planning is the Chairman’s greatest opportunity to create the legacy that he or she deserves. Disclaimer: On June 15, 2025, “Succession: A chairman’s dilemma or opportunity” was published. It was authored by Dr. Carlos P. Gatmaitan, a fellow of the Institute of Corporate Directors. You can read here:

By: Dr. Karen V. De Asis, MICD Member Institute of Corporate Directors MANILA, Philippines — Most products and services are generally commodities, not brands. But owners and founders of companies are led to believe they are holding on to brands. Commodity products and services are hinged on low price. They are nonsustainable and innovations are vulnerable to imitations and copycat models. Awareness of some commodities in today’s world of social media rose through high-impact one-time narratives. Their type of storytelling may generate massive awareness but only for a limited time. Kevin Lane Keller, touted as the father of strategic brand management, defines a brand as a set of associations or brand elements that help differentiate one product or service from another and which customers hold in their memory over a sustainable period. Unlike commodity products and services, a brand has positive and consistently meaningful associations built over time that resonate with consumers regardless of generation. How can it happen that a pair of shoe, purse, retail shop or clothing patronized and loved more than a decade or centuries ago remains the favorite of a generation called Generation Alpha (born between 2010 and 2024) or Generation Z (born between 1997 and 2009)? Some models of these brands are even labeled as vintage, scoring much higher prices than regular brand items. Here are some insights that make brands stand apart from commodities. Brands are self-expressions A brand represents the identity of a user or consumer. It is borne of a unique narrative owned by that brand. This can come in the form of a proprietary design, aesthetics, or technology identified only with the brand that resonates well with the consumer. The 37-year-old Maison Margiela brand, founded in 1988 by Belgian designer Martin Margiela, is a fave among millennials and Gen Zs. This Paris-based minimalist fashion house and avant-garde fashion brand is best known for Tabi, a split-toe shoe design where the big toe occupies a separate space inside the shoe. Brand positioning Brands have clear-cut, identifiable statement and messaging in the minds of consumers, otherwise known as the brand positioning. The brand positioning statement is a summation of the vision and purpose of the brand that must resonate with targeted consumers. Brands have acquired personalities that clearly define who and what they stand for. Thus, brands are recognizable to different generation cohorts: boomers, Generation X, Generation Y or the millennials, Generation Z, and the Generation Alpha. A strong positive brand is inclusive with the right sustained positioning through time. Wokeism and inclusivity While a brand positioning statement is crafted with a target market in mind, good positioning appeals to consumer segments of different generational cohorts, chronological age, race, location or cultural ideologies. For example, in today’s marketing landscape, the cultural ideology of wokeism has come to attention, along with cancel culture or public shaming that occurs on social media. Wokeism first came to be in the 1920s. Originated by Jamaican activist Marcus Garvey, the term was largely a call for black liberation and social injustice. Today, wokeism is a cultural ideology far more associated with extreme liberalism and progressiveness. But regardless of cultural belief, a strong positive brand automatically becomes inclusive, bringing together people of different races, culture, and belief, celebrating its usage and ownership. For example, McDonald’s is famous worldwide for iconic menu items like Big Mac, Chicken McNuggets, quarter pounder and French fries and McDonald characters like Ronald McDonald and Hamburglar. McDonald’s is a familiar, heartwarming setting for many regardless of race, culture and belief. It’s the same with the Filipino restaurant franchise, Jollibee. Founded in 1978, it’s famous for its menu options that include Chickenjoy, Yumburger and peach mango pie as well as Jollibee, the character. The brand is cult-like, with 50 years of celebrating get-togethers. Any attempt toward massive public shaming on social media is disastrous to any proponent. Brand longevity Strong brands are sustained for the long term. Majority of the world’s top 100 global brands have consistently been part of the list because they have sustained their awareness through generations in many countries and regions. BMW, a 112-year-old brand founded in 1916, ranked No. 10 in Interbrand’s 2024 Top 100 global brands. BMW, at $52 billion, gained a 2-percent share increase from previous year. Its 2024 brand campaign, The Gift, celebrates multiple generations of BMW lovers, reminding them of the joy of driving a BMW following its iconic tagline “The Ultimate Driving Machine”. The original Louis Vuitton company was founded in 1854 as a French luxury fashion house. In 1987, it merged with Moet Hennessy to become LVMH. Through 174 years, it has remained as one of the most coveted consumer brand, generation after generation. Its LV monogram has now been extended from the original travel trunks and luggage to luxury retail bags, leather goods and accessories, ready-to-wear apparel and footwear, jewelry and perfumes, among others. Louis Vuitton in 2024 was the world’s No. 11 global brand, enjoying a 9-percent volume increase from previous year at $50.9 billion. In 2026, Louis Vuitton is expected to open its new extended product line in the hotel and travel industry with a gigantic shaped LV-monogrammed trunk that is actually a luxury hotel at 103 Champs Elysees, Paris, right beside its iconic LV store. Brand building: No easy feat Brands are no drop-down manna from heaven. They are the result of visionary thinking and leadership, hard toil and resoluteness in building a legacy name from one generation to the next. Visionary founders and their next generation of heirs must build a brand that fosters strong, differentiated, positive associations through time, people, generations and geographic locations. However, major challenges abound, including family or ownership disputes, short-term thinking and management of heirs and brand keepers, tempting aggressive buyouts—all of which are far from the purposive, visionary-like way of building a legacy brand. Owners of businesses with an opportunity to take their commodity products or services to the next level of building a legacy brand must strongly assess this directional opportunity for successful businesses and legacy brands do not come so often. —CONTRIBUTED The writer is chief brand strategist at MKS Marketing Consulting and a member of Global Strategic Consulting Network. She is an alumna of Oxford University’s Said Graduate School of Business Strategic Leadership and Strategic Marketing Executive Education Program and Stanford Graduate School of Business Strategic Marketing Executive Education. Feedback at karenvdeasis@gmail.com . Disclaimer: This article was originally published on May 30, 2025. It was authored by Dr. Karen V. De Asis, a member of the Institute of Corporate Directors. You can read the original article:

By: Ma. Aurora D. Geotina-Garcia, FICD Fellow Institute of Corporate Directors As we celebrate Women’s Month, it is timely to reflect on the role of mentorship and networking in empowering women and advancing their economic potential. Mentorship is often viewed simply as a tool for sharing advice and wisdom, but when done right, it can be a transformative experience that empowers women to take action, break barriers, and achieve long-term success. This is the philosophy that guides the work of the Philippine Women’s Economic Network (PhilWEN), a coalition of 5 women’s business organizations that share the belief that mentorship is not just about guidance—it’s about creating spaces for collaboration, inclusivity, and shared growth. Further, through the collective efforts of its member organizations, the coalition can build networks that not only cultivate personal development but also contribute to societal change. Breaking Barriers through Mentorship Mentorship, when approached inclusively, can help women overcome the unique barriers they face in their personal and professional lives. From PhilWEN’s point of view, mentorship can be the bridge that connects women across diverse backgrounds and sectors—whether they are entrepreneurs in micro, small, and medium-sized enterprises (MSMEs), CEOs, Board directors and professionals associated with large corporations, or women from marginalized communities. These mentoring relationships provide women with the resources and opportunities they need to grow, succeed, and lead, regardless of their socio-economic status or geographic location. Studies have shown that women with mentors are more likely to receive promotions, increase their income, and gain a sense of empowerment that drives sustainable success. Intersecting Mentorship with Networking The strength of mentorship lies not only in one-on-one guidance between the mentor and the mentee but also in the power of networking and collaboration. By connecting women from different industries, professions, and backgrounds, mentorship can create a dynamic, diverse, and resilient network that encourages cross-sectoral innovation and shared success. A report by McKinsey & Company in 2020 highlights that diverse teams outperform their less-diverse counterparts in decision-making and innovation. Through inclusivity, women can tap into a rich pool of knowledge and experience, which can lead to new business opportunities, collaborations, and solutions that might not have been possible in isolated environments . PhilWEN’s commitment to inclusivity ensures that every woman in its network, regardless of her background, has access to the tools and support she needs to thrive. Women in rural areas, marginalized communities, or those facing significant hardships, such as poverty and violence (referred to as Women in Especially Difficult Situations or WEDS), often lack access to mentorship and opportunities. Yet, by integrating them into broader networks, mentorship creates pathways to leadership and self-sufficiency. According to Sweden’s 2009 report on women’s economic empowerment, supporting women’s participation in networks should be seen as a fundamental element in all efforts aimed at empowering women. PhilWEN’s focus on supporting these women is part of a broader global effort to ensure that women facing adversity are not excluded from economic opportunities. Mentorship and Policy Reform While mentorship is powerful in advancing individual growth, it is even more effective when combined with advocacy for systemic change. At PhilWEN, we recognize that women’s economic empowerment doesn’t just rely on personal support and guidance—it requires policy reforms that address the structural challenges women face in the economy. An IMF (International Monetary Fund) study on women in the labor force in 2020 found that policy interventions that specifically target the economic inclusion of women can lead to more equitable growth . As such, PhilWEN actively engages in advocacy, working to shape policies that create an environment where women’s voices are heard and their economic needs are prioritized. This holistic approach of mentorship, combined with advocacy, ensures that women are not only equipped to succeed in their careers and businesses, but are also supported by policies that promote equal access to resources and opportunities. The inter-connectedness of mentorship and policy change is particularly vital for women in difficult situations. Mentorship can provide the tools and guidance necessary to break the cycle of poverty, while policy changes can ensure that women have access to legal, financial, and social support. In this way, PhilWEN’s work contributes to both personal and systemic transformation. The inclusive nature of the coalition ensures that no woman is left behind, whether they are from rural areas, marginalized communities, or facing significant challenges in their lives. Why do they Matter? As we look at the global landscape, the importance of mentorship and networking for women cannot be overstated. According to the 2024 Global Gender Gap report, women’s economic participation continues to lag behind men’s, with a significant gender gap in entrepreneurship, leadership roles, and employment. The World Economic Forum stresses that closing these gaps requires targeted efforts, including mentorship programs that address the unique challenges faced by women in the workforce. This is why PhilWEN’s work is so crucial—not only do we provide mentorship and networking opportunities, but we also work to ensure that women’s contributions are recognized and supported at the policy level. The power of mentorship and networking lies in its ability to create real, tangible opportunities for women while cultivating a culture of collaboration and inclusivity. Through networks and mentorship, women from all walks of life can connect, learn, and grow together. By ensuring that every woman has access to the resources, guidance, and support she needs, we can break down barriers, build resilient networks, and create an economy where women can thrive. The work of mentorship and networking is not just about offering advice—it is about making a collective commitment to creating a future where all women, regardless of their background or circumstances, have the opportunity to succeed. (The author is a member of the MAP Diversity, Equity & Inclusion Committee. She is Founding Chair of the Philippine Women’s Economic Network (PhilWEN) and Chair of the Governing Council of the Philippine Business Coalition for Women Empowerment (PBCWE). She is the first female Chair of the Bases Conversion & Development Authority (BCDA).  She is President of Mageo Consulting Inc., a company providing corporate finance advisory services. Feedback at < map@map.org.ph > and < magg@mageo.net >.) Disclaimer: On March 31, 2025, “Women Supporting Women: The Power of Mentorship and Networking” was published. It was authored by Ma. Aurora D. Geotina-Garcia, a fellow of the Institute of Corporate Directors. You can read the original article:

By: Leonardo J. Matignas, Jr., MICD Member Institute of Corporate Directors AS THE SAYING GOES, “prevention is better than cure.” This principle is especially true when addressing dishonest or illegal acts committed by individuals or organizations for unjust advantage — commonly known as occupational fraud. Occupational fraud involves the misuse of one’s position or access to an organization’s resources or information for personal or organizational gain. According to the Association of Certified Fraud Examiners’ (ACFE) “Occupational Fraud 2024: A Report to the Nations,” the average loss per case of occupational fraud is a staggering $1.7 million. Given these high stakes, it is essential for organizations to examine their governance frameworks and ensure that the four lines of defense described below are present and functioning effectively. 1ST LINE OF DEFENSE: A STRONG CODE OF CONDUCT A well-designed and actively maintained code of conduct or ethics forms the first line of defense. Every director, officer, and employee should be guided by a fundamental question: “When faced with a dilemma that tests their values, how will they respond?” Common ethical dilemmas include: When is a gift a bribe? When does a relationship pose a conflict of interest? To be effective, the code should emphasize positive behavior — what people should do — rather than merely listing prohibitions. It should not read like a list of “Thou shall nots,” but rather reflect the organization’s values and ethical expectations. The code must be a living document, embedded in daily operations through: • Ongoing communication and training (e.g., e-learning, workshops). • Annual individual acknowledgment and certification of compliance. • A confidential hotline for reporting violations or seeking clarification. • A robust Whistleblower Policy that protects anonymity and prevents retaliation. As I emphasized in my book on fraud and forensics: “No amount of super effective internal controls can prevent a person from doing the wrong thing if he or she truly wants to.” This underscores the critical role of the Human Resources or Talent team. Hiring strategies must go beyond traditional background checks to assess alignment with the organization’s core values and ethical standards. Remember Enron? According to a report by Vinson & Elkins, a Houston-based law firm, and as reported in The Wall Street Journal by Joan Lublin and John Emshwiller on Jan. 17, 2002, Enron’s board suspended the company’s ethics code twice in 1999. This was done to allow the formation of partnerships to conceal debt and artificially boost reported earnings. These actions also enabled executive Andrew Fastow to lead and participate in these partnerships — ultimately facilitating one of the most infamous corporate frauds in history. Had the board effectively upheld this first line of defense, the scheme might never have been carried out. Therefore, the overall effectiveness of this and subsequent lines of defense hinges on the diligence and competence of those charged with governance. 2ND LINE OF DEFENSE: EFFECTIVE INTERNAL CONTROLS If the first line fails, the second must act as a barrier and deterrent. This is where internal controls come in. Effective internal controls should: • Be well-designed and regularly updated. • Include preventive measures to reduce the opportunity for fraud. • Offer detective measures to ensure the continuing effectiveness of the preventive controls. Controls can be system-based, people-based, or a combination of both. System-based controls are often more reliable, as they reduce subjectivity and human error. Internal controls serve to reinforce the perception that: “If you attempt to commit fraud, the system or process will catch you.” This psychological deterrent can be just as powerful as the controls themselves. 3RD LINE OF DEFENSE: INDEPENDENT INTERNAL AUDIT Internal audit provides assurance that the first and second lines of defense are working as intended. Their responsibilities include: • Verifying adherence to the code of conduct. • Ensuring hotline reports are acted upon. • Reviewing compliance with the whistleblower policy, in particular regarding strict confidentiality. • Assessing whether internal controls are properly designed, consistently applied, and effectively mitigating the fraud risk. Contrary to popular perception, internal auditors do not design or implement controls. That responsibility lies with management under the oversight of the board usually through its audit committee. Internal audit, however, evaluates and tests those controls to identify gaps and weaknesses. When breaches occur — whether due to ethical lapses or control failures — internal audit investigates and provides recommendations to prevent recurrence. 4TH LINE OF DEFENSE: EXTERNAL AUDIT The external audit is the fourth and final line of defense. While external auditors operate with a broader objective and are not involved in day-to-day operations, they are also considered as a line of defense for material misstatements of the financial statements — whether caused by error or fraud, in accordance with the Philippine Financial Reporting Standards Accounting Standards. Although most occupational fraud is discovered through internal mechanisms, external auditors are still responsible for: • Designing audit procedures to identify material misstatement due to fraud, • Reporting concerns to those charged with governance (e.g., the audit committee) following professional standards, such as Philippine Standards on Auditing (PSA) 240, and guidance from the International Ethics Standards Board for Accountants (IESBA) on reporting non-compliance with laws and regulations. An essential part of the external audit process is open communication with the audit committee about how fraud risks are being addressed. CONCLUSION Boards must ensure that all four lines of defense are not only established but function effectively to prevent and detect fraud. A best practice is to integrate these lines into a comprehensive fraud risk management framework — also known as an anti-fraud program. The collapse of corporate giants like Enron, Tyco, and WorldCom serves as a stark reminder: fraud is often at the center of catastrophic organizational failures. These corporate scandals catalyzed a global shift toward stronger corporate governance and ethical oversight — a journey that continues to this day. Leonardo J. Matignas, Jr. is a retired partner of SGV & Co. (a member practice of Ernst & Young) and its first chief risk officer. He was also Ernst & Young’s ASEAN risk management leader until his retirement. He is a multi-awarded and internationally recognized authority on Enterprise Risk Management. Aside from being a Philippine CPA, he also holds a Fellow CPA Australia (FCPA) title which is the highest rank in CPA Australia and is recognized globally. He is also a certified internal auditor (CIA), certified fraud examiner (CFE), and has Certification in Risk Management Assurance (CRMA) — all of which are global certifications. It has been his advocacy to encourage Philippine accountants to explore various areas of expertise and certifications to stay relevant considering the changing business and professional environment. He sits as an independent director of Bank of Commerce and the chairman of its Audit Committee. He is also an independent director of PNB Holdings Corp. and the chairman of its Audit and Risk Management Committee. He released his first book, A Practical Approach to Enterprise Risk Management, before he retired. This is the first comprehensive book on ERM written by a Filipino author for the Filipino. His second book, Piercing the Numbers — Fraud and Forensics, was published in November 2023. Disclaimer: On April 25, 2025, “Occupational fraud: The four lines of defense” was published. It was authored by Mr. Leonardo J. Matignas, Jr., a member of the Institute of Corporate Directors. You can read the original article through this link:

By: Maria Victoria A. Betita, MICD Member, Institute of Corporate Directors Corporate Strategist and Digital Transformation Practitioner This isn’t another AI-is-the-future piece. You’ve read that one. Probably more than once. This is about now—how board members can use AI today: practically, strategically, and without needing a data science degree (or a 22-year-old intern). AI isn’t new—it’s just having a very loud moment. The AI universe includes everything from the recommendation algorithms on Netflix to the fraud detection systems at your bank. Machine learning has been around and even generative AI isn’t as fresh as it seems (GPT-3, the predecessor to today’s models, launched back in 2020). What’s different now is accessibility—what used to be buried in research labs is now sitting in your inbox, your search engine, and your PowerPoint slides. The rise of generative AI and advancements in natural language processing (NLP) have made it noticeably more useful. No longer just running in the background, it has stepped into everyday workflows, making itself harder to ignore. What’s interesting for us is figuring out where it fits into the board’s rhythm—prep, meetings, oversight, and yes, ethics. The Toolkit That Earned a Seat at My Table Let’s start with something practical—tools. I rotate between a few AI tools depending on what I need to get done. I wouldn’t call them magical, but they’re reliable enough—like a smart colleague who’s helpful most of the time but occasionally says something flawed. NotebookLM : Think of it as a smart research assistant who reads what you send them. It lets you upload your own documents (notes, reports, even random PDFs you’ve been meaning to get to), and then asks intelligent questions based on your own content. No guessing, no hallucinating. It also lets you search across everything you’ve uploaded— basically, a CTRL+F for your knowledge base. You can even transform your notes into summaries, FAQs, outlines... and yes, if reading feels like too much, there's a podcast mode where it reads your notes back to you. Equal parts productive and oddly soothing. ChatGPT, Gemini, and Copilot : I use these interchangeably depending on which one is behaving that day. Copilot integrates neatly with Office (useful for PowerPoint and Word), Gemini is snappy for brainstorming, and ChatGPT is my go-to when I need organized thoughts with many layers. Perplexity : This is what I use when I want to quote actual articles or research. It provides sources, which is helpful when you want to sound informed without appearing to have made it up. Quillbot : Excellent for paraphrasing my own rough drafts, and I also run text through it to see how much was likely AI-generated. A reality check when I’m blending my voice with machine assistance. I ran this article through it by the way – not that it should matter. Otter AI and Read AI : Meeting summarization without the manual notetaking. Not perfect, but they capture enough to ensure follow-ups don’t fall through the cracks. SlideGPT and Copilot for Presentations : They won’t replace a good deck designer anytime soon, but they help draft my speaker notes or frame a rough outline. If I need polish, I still go manual—but they do save time. Most of these have free versions—except Copilot, which is Microsoft’s enterprise-grade tool. Worth it if you’re deep into that ecosystem. What’s AI Actually Good for at Board Level? Let’s break it down: Prep Work : AI tools can streamline board meeting preparation by summarizing lengthy documents, highlighting key points, and spotting inconsistencies. There are some platforms out there that’s made for Board functions specifically - for example, Diligent Boards AI (which I have not personally tried) -- which offer features that condense complex materials into actionable insights and prepare targeted questions for meetings. This allows directors to focus more on strategic discussions rather than getting bogged down in extensive reading. A word of caution: it's essential to balance efficiency with due diligence; AI should complement, not replace, a director's thorough review of materials. Additionally, always ensure that sensitive information is handled within secure, enterprise-level AI environments to maintain confidentiality. Curating Intelligence : Want to know what regulators are up to in a specific sector? Or track how a competitor is positioning its AI strategy? Tools like Feedly (paired with AI) or Perplexity help filter the noise and bring in just the right level of context. Note-Taking & Meeting Summaries : I rarely worry about capturing every word in a meeting anymore. With Otter or Read AI running, I can focus on listening—and circle back to the summary later to ensure action items don’t get lost. Strategic Exploration : I’ve asked AI to simulate competitor reactions or explore “what-if” scenarios around new markets. Are the results perfect? No. But they trigger good questions—which is sometimes more valuable than a polished answer. Where AI Fits in the Board’s Bigger Agenda Beyond the time-saving bits, there’s a strategic layer that’s emerging: AI is a business lever. It’s not just an IT thing anymore. AI is not for techies. Boards should be asking: How is management using AI across the value chain? Where are the risks? Where’s the upside? It’s also a cultural signal. Are we experimenting? Are we learning fast? Boards don’t need to run pilots—but we should know whether the organization is stuck in fear or leaning into responsible innovation. And it’s definitely a governance issue. Who approves AI deployments? How do we manage transparency, bias, and unintended consequences? These are oversight questions now. A Few Things to Keep in Mind Let’s skip the policy language and keep it real: These tools sometimes hallucinate —especially when asked confidently. Just because it sounds right doesn’t mean it is right. Always verify the facts. They’re only as smart as the material you give them (and the questions you ask). Garbage in, garbage out still applies—only faster. Uploading confidential documents into a free AI tool? Not your best moment. Use enterprise or private instances for anything sensitive. Assume public by default unless you’re sure otherwise. Treat AI like a sharp intern: useful, fast, but not ready to run the show without supervision. And Yes—The Ethics Bit Still Matters AI ethics doesn’t need to be a TED Talk. But a few practical checks go a long way:  Transparency : Do we know how decisions are being made by the AI tools in our business? Can someone explain it clearly to the board? Bias & Fairness : Who’s testing the systems for unintended consequences? AI isn’t neutral by default—someone has to check. Accountability : If something goes wrong, who’s responsible? If AI recommends a course of action and a human approves it, where does the buck stop? Data Governance : Are we using data ethically, not just legally? That’s not a compliance- only question. It’s a reputational one too. At board level, these aren't just operational risks—they're trust risks. Wrapping It Up: What AI Can—and Can’t—Do AI won’t replace board judgment. It won’t challenge a shaky assumption in a forecast or detect body language in a tense meeting. But it will help you: Think faster Spot blind spots Ask sharper questions Save hours in prep and post-meeting follow-ups And for that, it deserves more than just a slide in the CIO’s quarterly update. It deserves a seat at the table—not as a director, but as a tool that helps directors stay ahead. If you’ve been curious, try any of the tools above. Don’t worry about mastering them. Just start small. Use them to help you think. Because better thinking? That’s still the board’s biggest job. Disclaimer: Vicky is not an AI expert, futurist, or tech evangelist. Just a practical user who likes tools that actually work and doesn’t have time for the ones that don’t. When not sitting through meetings, enjoying time with her family, or reading long reports, she’s quietly testing out AI tools to make thinking (and life) a little easier.