governance

board matters

Board Matters

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Composition

Composition

Governance  > Board Matters > Composition

The Board of Directors of Ayala is composed of seven directors who are elected annually at the company’s stockholders’ meeting. On April 21, 2017, the following were elected to the Board:

  • Jaime Augusto Zobel de Ayala, Chairman and Chief Executive Officer
  • Fernando Zobel de Ayala, President, and Chief Operating Officer
  • Delfin L. Lazaro, Non-Executive Director
  • Keiichi Matsunaga, Non-Executive Director
  • Ramon del Rosario, Jr. Independent Director
  • Xavier P. Loinaz, Lead Independent Director
  • Antonio Jose U. Periquet, Independent Director


The Chairman of the Board is Jaime Augusto Zobel de Ayala, who assumed the position in 2006. Fernando Zobel de Ayala has held the position of Co-Vice Chairman since 1994 and sole Vice Chairman since 2006. The profiles of each board director may be viewed here.


The independent directors have no interest or relationship with the company that may hinder their independence from the company, Management or shareholders which could materially interfere with their exercise of independent judgment in carrying out their responsibilities as directors. 


In 2017, the non-executive and independent directors met on April 21, 2017 without the presence of any of the executive directors and/or management. Meetings of the non-executive and independent directors were also held in April 2014 and on April 10, 2015.

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Appointment

Appointment

Governance  > Board Matters > Appointment

A stockholder of the Company may nominate members of the Board of Directors. The Nomination Committee evaluates the nominees and approves a list of nominees eligible to be elected as members of the Board.

Lead Independent Director shall be appointed if the Chairman of the Board is not independent from Management, such as when the positions of the Chairman of the Board and the CEO are held by one person. The Lead Independent Director shall, among others:

  1. intermediate between the Chairman of the Board and other Directors, if and when needed;
  2. convene and chair the periodic meetings of the Non-Executive Directors with the external auditor and heads of internal audit, compliance and risk, as may be needed; and 
  3. contribute to the performance evaluation of the Chairman of the Board.

A director of the Company shall have the following qualifications:

  1. Ownership of at least one (1) share of the capital stock of the Corporation standing in his name in the books of the Corporation;
  2. College degree or its equivalent or adequate competence and understanding of the fundamentals of doing business or sufficient experience and competence in managing a business to substitutute for such formal education;
  3. Relevant qualifications, such as previous business experience, membership in good standing in relevant industry and membership in business or professional organizations;
  4. Integrity, probity, diligence and assiduousness in the performance of duties;
  5. Directorships in other companies, taking into account the following factors:
    • (i) directorships in other companies, taking into account the following factors:
    • (ii) the number of directorships in other companies;
    • (iii) any possible conflict of interest; and
    • (iv) the age of the director;
  6. for independent directors, beneficial equity ownership in the Corporation or in its related companies, which must not exceed two percent (2%), and
  7. the term limit set for independent directors under applicable laws, rules and regulations;

ORIENTATION

The Corporate Secretary briefs each new director of the By-laws and Manual of Corporate Governance, the schedule of regular meetings of the Board and Board committees, their rights, including access to information and advice, and the procedure and processes for the provision of information to them.

The Office of Corporate Strategy and Chief Finance Officer also give each new director a briefing of existing and planned investments, current strategic directions, budgets and internal controls and processes.
 

RE-APPOINTMENT

A stockholder of the Company may submit in writing to the Nomination Committee his or her nominees to the Board of Directors at least 30 business days before the date of the regular meeting. The Nomination Committee evaluates the nominees and comes up with list of nominees eligible to be elected as members of the Board.
 

PERMANENT AND TEMPORARY DISQUALIFICATION

The Company abides with the rules set forth in its Manual of Corporate Governance, the SEC Code of Corporate Governance and existing laws.

The following persons are disqualified from being a director of the Corporation:

  1. Any person who has been finally convicted by a competent judicial or administrative body of any crime involving the purchase or sale securities, arising out of the person’s conduct as an underwriter, broker, dealer, and arising out of his relationship with a bank, quasi-bank and investment house.
  2. Any person finally convicted judicially of an offense involving moral turpitude or fraudulent acts or transgressions;
  3. Any person finally found by the SEC or a court or other administrative body to have wilfully violated or wilfully aided any provision of the Securities Regulation Code;
  4. Any person judicially declared to be insolvent;
  5. Any person finally found guilty by a foreign court or equivalent financial regulatory authority of acts, violation or misconduct listed above;
  6. Any person convicted by final and executory judgment of an offense punishable by imprisonment for a period exceeding six (6) years, or a violation of the Corporation Code, committed within five (5) years prior to the date of his election of appointment;

The temporary disqualification of the director requires a resolution of a majority of the Board.

The following persons are disqualified from being a director of the Corporation:

  1. Refusal to fully disclose the extent of his business interest as required under the Securities Regulation Code and Implementing Rules and Regulations.
  2. Absence or non-participation for whatever reason/s other than illness, death of immediate family or serious accident in more than fifty percent of all board meetings during his incumbency, or any twelve month period during his incumbency.
  3. Dismissal or termination from directorship in another listed corporation;
  4. Being under preventive suspension by the Corporation for any reason;
  5. Conviction that has not yet become final referred to in the grounds for disqualification of directors.

REMOVAL

A director may be removed with or without cause with the affirmative vote of shareholders owning 2/3 of outstanding capital stock. However, a director may not be removed without cause if it will deny minority shareholders representation in the Board.

RE-INSTATEMENT

A temporarily disqualified director shall, within 60 business days from such disqualification, take the appropriate action to remedy or correct the disqualification.

If the beneficial security ownership of an independent director in the Corporation or in its related companies exceeds 2%, the Corporation shall cease to consider him as an independent director until his beneficial security ownership is reduced to 2% or lower.

SUSPENSION

After due notice and hearing, a director who violates the Manual of Corporate Governance will be subjected to the penalties as set forth in the said Manual.

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Committees and Charters

Committees and Charters

Governance  > Board Matters > Committees and Charters

The Board has established committees to assist in exercising its authority in monitoring the performance of the company. The committees provide organized and focused means for the directors to achieve specific goals and address issues, including those related to governance. 

At its organizational meeting held immediately after the stockholders’ meeting on April 21, 2017, the Board of Directors elected the following:

Executive Committee

Jaime Augusto Zobel de Ayala – Chairman

Fernando Zobel de Ayala – Member

Keiichi Matsunaga – Member

Audit Committee

Xavier P. Loinaz – Chairman

Keiichi Matsunaga – Member

Ramon R. del Rosario, Jr. – Member

Risk Management and Related Party Transactions Committee

Antonio Jose U. Periquet– Chairman

Keiichi Matsunaga – Member

Ramon R. del Rosario, Jr. – Member

Nomination Committee

Ramon R. del Rosario, Jr. – Chairman 

Xavier P. Loinaz – Member 

Antonio Jose U. Periquet – Member

Personnel and Compensation Committee

Ramon R. del Rosario, Jr. – Chairman 

Delfin L. Lazaro – Member 

Keiichi Matsunaga – Member

Finance Committee

Delfin L. Lazaro – Chairman

Antonio Jose U. Periquet – Member

Jaime Augusto Zobel de Ayala – Member

Fernando Zobel de Ayala – Member

Committee of Inspectors of Proxies and Ballots*

Solomon M. Hermosura – Chairman

Catherine H. Ang – Member

Josephine G. De Asis – Member

*May not be members of the Board of Directors

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Meetings And Attendance

Meetings And Attendance

Governance  > Board Matters > Meetings And Attendance

The Board meets at least six times every year. Board materials are made available to the directors at least five working days in advance of the scheduled meeting. Discussions during board meetings are open and independent views are given due consideration. Average attendance in the Board’s six meetings in 2016 was 95%.

The meetings of the board of directors are scheduled at the beginning of the year. The independent and non-executive directors of the Corporation meet at least once a year without the presence of any executive director and/or management. 

In 2016,  the Board and each of its committees reported the following attendance in their respective meetings:

Board Meeting
Office Name of Director Date of Election No. of Meetings Held/Attendance %
Chairman (ED) Jaime Augusto Zobel de Ayala April 15, 2016 6/6 100%
Member (ED) Fernando Zobel de Ayala April 15, 2016 6/6 100%
Member (NED) Yoshio Amano April 15, 2016 6/6 100%
Member (NED) Delfin L. Lazaro April 15, 2016 5/6 83%
Member (ID) Xavier P. Loinaz April 15, 2016 6/6 100%
Member (ID) Antonio Jose U. Periquet April 15, 2016 6/6 100%
Member (ID) Ramon R. del Rosario, Jr. April 15, 2016 5/6 83%
Executive Committee Meeting
Office Name of Director Date of Appointment Attendance %
Chairman Jaime Augusto Zobel de Ayala May 10, 1996 0/0 -
Member Fernando Zobel de Ayala May 10, 1996 0/0 -
Member Yoshio Amano April 20 2012 0/0 -

The actions of the Executive Committee may also be taken by written consent (in physical, electronic or digital format) by majority of the members when deemed necessary or desirable by the Committee or its Chairman. 

 

Audit Committee Meeting
Office Name of Director Date of Appointment Regular Meeting Attendance %
Chairman Xavier P. Loinaz April 3, 2009 4/4 100%
Member Yoshio Amano April 20, 2012 3/4 100%
Member Ramon R. del Rosario, Jr. April 16, 2010 4/4 100%
Nomination Committee Meeting
Office Name of Director Date of Appointment Attendance %
Chairman Ramon R. del Rosario, Jr April 18, 2011 4/4 100%
Member Antonio Jose U. Periquet April 20, 2012 4/4 100%
Member Fernando Zobel de Ayala* March 6, 2004 2/2 100%
Member Xavier P. Loinaz* April 15, 2016 2/2 100%

   *Mr. Loinaz replaced Mr. Zobel de Ayala on April 15, 2016. 

Personnel And Compensation Committee Meeting
Office Name of Director Date of Appointment Attendance %
Chairman Ramon R. del Rosario, Jr. April 16, 2010 3/3 100%
Member Delfin L. Lazaro March 30, 2007 3/3 100%
Member Yoshio Amano April 20, 2012 3/3 100%
Finance Committee Meeting
Office Name of Director Date of Appointment Attendance %
Chairman Delfin L. Lazaro April 16, 2010 16/17 100%
Member Antonio Jose U. Periquet April 18, 2011 17/17 100%
Member Jaime Augusto Zobel de Ayala May 29, 201 16/17 100%
Member Fernando Zobel de Ayala April 15, 201 10/13*  

*During incumbency as a member of the committee.

**Nine out of the 17 meetings of the Committee were via electronic/digital means. In 2016, the committee passed 11 resolutions and the corresponding per diem were paid to the non-executive directors and independent directors. 

*During incumbency as a member of the committee.

**Nine out of the 17 meetings of the Committee were via electronic/digital means. In 2016, the committee passed 11 resolutions and the corresponding per diem were paid to the non-executive directors and independent directors.

Risk Management Committee Meeting
Office Name of Director Date of Appointment Attendance %
Chairman Antonio Jose U. Periquet September 1, 2014 4/4 100%
Member Yoshio Amano September 1, 2014 4/4 100%
Member Ramon R. del Rosario, Jr. September 1, 2014 4/4 100%
Committee Of Inspectors of Proxies and Ballots Meeting
Office Name of Director Date of Appointmen Attendance %
Chairman Solomon M. Hermosura April 16, 201 2/2 100%
Member Catherine H. Ang April 11, 2014 2/2 100%
Member Josephine G. de Asis April 19, 2013 2/2 100%
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Remuneration

Remuneration

Governance  > Board Matters > Remuneration

Non-Executive Directors are entitled to receive from the Corporation, pursuant to a resolution of the Board of Directors, fees and other compensation for their services as Directors. The Board of Directors shall have the sole authority to determine the amount, form and structure of the fees and other compensation of the directors.

The Personnel and Compensation Committee shall have the responsibility of recommending to the Board of Directors the fees and other compensation for directors. In discharging this duty, the committee shall be guided by the objective of ensuring that the level of compensation should fairly pay directors for work required in a company of the Corporation’s size and scope. In no case shall the total yearly compensation of directors exceed one percent (1%) of the net income before tax of the Corporation during the preceding year.

Directors who hold executive or management positions do not receive directors’ fees. Independent directors do not receive any compensation other than the retainer fee and per diem allowance as set forth above.

Stockholders have the opportunity to approve the decision on total remuneration during the annual meeting.

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Continuing Education and Performance Evaluation

Continuing Education and Performance Evaluation

Governance  > Board Matters > Continuing Education and Performance Evaluation

The company sets an annual training budget for the directors and encourages new directors to attend an orientation program in corporate governance.

Since 2014, all of our directors attended the a Corporate Governance Seminars which were facilitated by the Institute of Corporate Directors, Inc. (ICD) and Sycip Gorres Velayo and Co., Inc.

The directors of the Corporation, in their own capacity, attend education programs, seminars, and roundtable discussions with service providers such as the ICD.

In the past three years, directors and senior management of Ayala have attended several in-house training and external courses:

  • Ayala-LEAP (Ayala Leadership Acceleration Program) 
  • EAGLE (Emerging Ayala Group Leaders Program) 
  • The Leadership Circle (integrated within Ayala-LEAP and EAGLE) 
  • LEAP Alumni Learning Series (presentations by visiting professors and practitioners in the fields of customer centricity, strategy, leadership, etc.)
  • Executive Coaching 
  • Ayala Group Sustainability Summit
  • Ayala Group Corporate Governance Summit 
  • Corporate Governance and Risk Management for Banks 
  • Corporate Governance Orientation Program by ICD 
  • Corporate Governance Seminar by SGV 
  • Ayala Group Corporate Governance and Risk Management Summit held on Febuary 4, 2014
  • Ayala Group Corporate Governance Summit held on February 18, 2015
  • Corporate Governance Seminar by SGV on December 8, 2015
  • Ayala Corporation Corporate Governance and Risk Management Summit held on March 8, 2016
  • CFA Phils Financial Modeling & Valuation, March 14-15, 2016
  • Corporate Governance Seminar by SGV on April 11, 2016
  • ECOP BOSH Certificate, May & August 2016
  • Strategic Risk Forum, May 17, 2016, Singapore
  • Project Management Institute - Project Managment Fundamentals, June 20-24, 2016
  • Certified Knowledge Manager, June 20-24, 2016, Virginia USA
  • BSI Audit Training, June 20-24, 2016, Singapore
  • CINO Summit, June 28-July 1, 2016
  • IIA International Conference, July 17-20, 2016, NYC, USA
  • CIO Summit, July 24-27, 2016, Bhutan
  • ECC International HR Metrics and Analytics, August 2-3, 2016
  • SEC Corporate Goveranance Forum on August 3, 2016
  • Harvard Comparative Tax Policy on August 15-26, 2016, Boston MA,  USA
  • Tourism Sercurity Conference, August 24-25, 2016, Singapore
  • ECC International Crisis Communication Planner, September 1-2, 2016
  • Customer Experience Magement Summit, September 6-7, 2016, Singapore
  • Distinguished Corporate Governance Speaker Series on October 7, 2016
  • Corporate Governance Seminar by SGV on December 9, 2016
  • Corporate Governance Seminar by SGV on Febuary 27, 2017
  • Distinguished Corporate Governance Speaker Series on May 10, 2017

Consistent with the Guidelines in Conducting Performance Assessments, the Board conducts annual survey to evaluate the performance of the Board and its individual members, measure the effectiveness of the Company's governance practices and identify areas for improvement, and adopt new methodologies to further strengthen the Company's corporate governance standards. The self-assessment tool will cover the 1) structure of the Board, 2) shareholder benefit, 3) fulfillment of the Board's key responsibilities, 4) oversight function, 5) effectiveness of the Board's processes and meetings, 6) quality of the Board-Management relationship, 7) code of ethics and 8) performance evaluation.

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