• About us|
  • VI. Duties of Directors and Officers

6.1 Fiduciaries of the State. Directors and Officers are fiduciaries of the State in that:

(a) they have the legal obligation and duty to always act in the best interest of NORTHRAIL, with utmost good faith in all dealings with the properties, interests and monies of the NORTHRAIL; and (b) they are constituted as trustees in relation to the properties, interests, and monies of NORTHRAIL.

Where a Member of the Board or an Officer, by virtue of the office, acquires or receives for oneself a benefit or profit, of whatever kind or nature including, nut not limited to, the acquisition of shares in corporations where NORTHRAIL has an interest, using the properties of NORTHRAIL for their own benefit, receiving commission on contracts from NORTHRAIL’s Assets, or taking advantage of corporate opportunities of NORTHRAIL, all such profits or benefits shall be subject to restitution under section 24 of Republic Act 10149, without prejudice to any administrative, civil or criminal action against Members of the Board of Directors or Officers. This provision shall be applicable notwithstanding the fact that such member of the Board or Officer risked one’s own funds in the venture.

6.2 Directors and Officers as Public Officials. Directors and Officers are also Public Officials as defined by, and are therefore covered by the provisions of the “Code of Conduct and Ethical Standards for Public Officials and Employees,” with its declared policies: (a) to promote a high standard of ethics in public service; (b) public officials and employees shall at all times be accountable to the people and shall discharge their duties with utmost responsibility, integrity, competence, and loyalty, act with patriotism and justice, lead modest lives, and uphold public interest over personal interest.

6.3 Respect for and Obedience to the Constitution and the Law. As a Public Official, a Director or Officer shall respect and obey the Constitution, and shall comply, and cause NORTHRAIL to faithfully and timely comply, with all legal provisions, rules and regulations, and corporate governance standards, applicable to them and to NORTHRAIL in which they serve, and to act within the bounds of their Corporate Charter.

6.4 Duty of Diligence. The fiduciary duty of diligence of Directors and Officers to always act in the best interest of NORTHRAIL, with utmost good faith in all its dealings with the property and monies of NORTHRAIL, includes the obligation to:

(a) Exercise independent judgment by viewing each problem/situation objectively. When a disagreement with other board members occurs, the director should carefully evaluate the situation and state his position. He should not be afraid to take a position even though it might be unpopular. Corollarily, he should support plans and ideas that he thinks are beneficial to the corporation;

(b) Gain a working knowledge of the statutory and regulatory requirements affecting NORTHRAIL, including the contents of its mandate, applicable laws, rules and regulations. A Director should also keep himself informed of industry developments and business trends in order to safeguard the corporation’s competitiveness;

(c) Apply sound business principles to ensure the financial soundness of NORTHRAIL; and

(d) Elect and/or employ only officers who are fit and proper to hold such office with due regard to the qualifications, competence, experience and integrity.

Every Director or Officer, by the act of accepting such position in NORTHRAIL, affirms and agrees: (1) to have a working knowledge of the statutory and regulatory requirements affecting the North Luzon Railways Corporation he is to serve, including the contents of its Corporate Charter (Articles of Incorporation and ByLaws), the requirements of the GCG, and where applicable, the requirements of other Supervising Agencies; and (2) to always keep in himself informed of industry developments and business trends in order to safeguard NORTHRAIL’s interests and preserve its competitiveness.

6.5 Duty of Loyalty. The fiduciary duty of loyalty of Directors and Officers to always act in the best interest of NORTHRAIL, with utmost good faith in all its dealing with the property and monies of NORTHRAIL, includes the obligation to:

(a) Act with utmost and undivided loyalty to NORTHRAIL;

(b) Avoid conflicts of interest and declare any interest they may have in any particular manner before the Board;

(c) Avoid (1) taking for themselves opportunities related to NORTHRAIL’s business; (2) using NORTHRAIL’s property and information or using one’s position for personal gain; or (3) competing with NORTHRAIL’s business opportunities.

6.6. Duty of Confidentiality. Pursuant to their duties of diligence and loyalty, a member of the Board or an Officer shall not use or divulge confidential or classified information officially made known to them by reason of their being an officer and not made available to the public, either: (1) to further their private interests, or give undue advantage to anyone; or (2) which may prejudice public interest.

6.7. Duty to be Responsive to Stakeholders. Every Director and Officer accepts the position fully aware that he assumes certain responsibilities not only to NORTHRAIL and its Stockholders, but also with different constituencies or stakeholders, who have the right to expect that NORTHRAIL is being run in a prudent manner and with due regard to the interests of all stakeholders. Consequently, members of the Board and officers shall deal fairly with NORTHRAIL’s employees, suppliers and other stakeholders. No member of the Board or Officer may take unfair advantage of NORTHRAIL’s employees, suppliers and other stakeholders through manipulation, concealment, abuse of confidential or privileged information, misrepresentation of material facts, or any other unfair dealing practice.