Board Matters

Governance  >  Annual Corporate Governance Report  > Board Matters

I. BOARD OF DIRECTORS

COMPOSITION OF THE BOARD

The following are the directors of the Corporation, classified in accordance with the Revised Code of Corporate Governance for publicly listed companies and SEC Memorandum Circular No. 16, series of 2002:

Director’s Name  Type [Executive (ED), Non-Executive (NED) or Independent Director (ID)] If nominee, identify the principal Nominator in the last election (if ID, state the relationship with the nominator) Date first elected Date last elected (if ID, state the number of years served as ID)* Elected when (Annual /Special Meeting) No. of years served as director
Jaime Augusto Zobel de Ayala ED Mermac, Inc. Ma. Angelica B. Rapadas May 1987 April 20, 2018 Annual Meeting 31
Fernando Zobel de Ayala ED Mermac, Inc. Ma. Angelica B. Rapadas May 1994 April 20, 2018 Annual Meeting 24
Delfin L. Lazaro NED N.A. Ma. Angelica B. Rapadas January 2007 April 20, 2018 Annual Meeting 11
Keiichi Matsunaga NED Mitsubishi Corporation (MC) Ma. Angelica B. Rapadas April 2017 April 20, 2018 Annual Meeting 1
Ramon R. Del Rosario, Jr. ID N.A Ma. Angelica B. Rapadas (not related to Mr. Del Rosario) April 2010 April 20, 2018 (Served as ID for 6 years from April 2012) Annual Meeting 8
Xavier P. Loinaz Lead ID** N.A Ma. Angelica B. Rapadas (not related to Mr. Loinaz April 2009 April 20, 2018 (Served as ID for 6 years from April 2012) Annual Meeting 9
Antonio Jose U. Periquet ID N.A Ma. Angelica B. Rapadas (not related to Mr. Periquet) September 2010 April 20, 2018 (Served as ID for 6 years from April 2012) Annual Meeting 7

*Reckoning of the cumulative terms is from 2012, in connnection with the SEC Memorandum Circular No. 9, series of 2011.

**Lead ID since April 2017

Ms. Ma. Angelica B. Rapadas  is a minority stockholder of the Company.

Profiles of our Board of Directors:

Jaime Augusto Zobel de Ayala, Filipino, 59, Director of Ayala Corporation since May 1987. He is the Chairman and CEO of Ayala Corporation since April 2006. He holds the following positions in publicly listed companies: Chairman of Globe Telecom, Inc.,   Integrated Micro-Electronics, Inc. and Bank of the Philippine Islands; and Vice Chairman of Ayala Land, Inc. and Manila Water Company, Inc.  He is also the Chairman of AC Education, Inc., Ayala Retirement Fund Holdings, Inc., AC Industrial Technology Holdings, Inc., AC Ventures Holding Corp., AC Infrastructure Holdings Corporation and Asiacom Philippines, Inc.; Co-Chairman of Ayala Foundation, Inc. and Ayala Group Club, Inc.; Director of Alabang Commercial Corporation, Ayala International Pte. Ltd., AC Energy, Inc., Ayala Healthcare Holdings, Inc., Light Rail Manila Holdings, Inc.  and AG Holdings Limited; Chairman of Harvard Business School Asia-Pacific Advisory Board and Endeavor Philippines; and member of the Harvard Global Advisory Council, Mitsubishi Corporation International Advisory Committee, JP Morgan International Council, Global Board of Advisors of the Council on Foreign Relations, Asia Society International Council, University of Tokyo Global Advisory Board, Singapore Management University Board of Trustees, and Eisenhower Fellowships Board of Trustees. He was the Philippine Representative to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council from 2010 to December 2015. In 2007, he received the Harvard Business School Alumni Achievement Award, the school’s highest recognition. He was a recipient of the Presidential Medal of Merit in 2009 for enhancing the prestige and honor of the Philippines both at home and abroad.  In 2010, he was bestowed the Philippine Legion of Honor, with rank of Grand Commander, by the President of the Philippines in recognition of his outstanding public service. In 2015, he received the Order of Mabini, with rank of Commander, for his vital contributions during the Philippines’ hosting of the Asia Pacific Economic Cooperation (APEC) Summit.  In 2017, he was recognized as a United Nations SDG Pioneer for his work in sustainable business strategy and operations.  He graduated with B.A. in Economics (Cum Laude) at Harvard College in 1981 and obtained an MBA at the Harvard Graduate School of Business Administration in 1987.

Fernando Zobel de Ayala, Filipino, 58, Director of Ayala Corporation since May 1994. He is the President and Chief Operating Officer of Ayala Corporation since April 2006. He holds the following positions in publicly listed companies: Chairman of Ayala Land, Inc. and Manila Water Company, Inc.; and Director of Bank of The Philippine Islands, Globe Telecom, Inc. and Integrated Micro-Electronics, Inc.; and Independent Director of Pilipinas Shell Petroleum Corporation. He is the Chairman of AC International Finance Ltd., Liontide Holdings, Inc., AC Energy, Inc., Ayala Healthcare Holdings, Inc.,  Automobile Central Enterprise, Inc., Alabang Commercial Corporation, Accendo Commercial Corp. and Hero Foundation, Inc.; Co-Chairman of Ayala Foundation, Inc. and Ayala Group Club, Inc.; Vice-Chairman of ALI Eton Property Development Corporation, Aurora Properties Incorporated, Vesta Property Holdings, Inc., Ceci Realty Inc., Fort Bonifacio Development Corporation, Bonifacio Land Corporation, Emerging City Holdings, Inc., Columbus Holdings, Inc., Berkshires Holdings, Inc. and Bonifacio Art Foundation, Inc.; Director of LiveIt Investments, Ltd., AG Holdings Ltd., AC Infrastructure Holdings Corporation, Asiacom Philippines, Inc., Ayala Retirement Fund Holdings, Inc., AC Education, Inc. and AC Ventures Holding Corp., Honda Cars Philippines, Inc., Isuzu Philippines Corporation, and Manila Peninsula; Member of the Philippine-Singapore Business Council, INSEAD East Asia Council, World Presidents’ Organization; and Chief Executives Organization; Chairman of Habitat for Humanity’s Asia-Pacific Capital Campaign Steering Committee; and Member of the Board of Trustees of Caritas Manila, Pilipinas Shell Foundation, and the National Museum.   He graduated with B.A. Liberal Arts at Harvard College in 1982 and holds a CIM from INSEAD, France.

Keiichi Matsunaga, Japanese, 54, Non-Executive Director of Ayala Corporation starting April 2017. He is the General Manager of Mitsubishi Corporation Manila Branch. Currently, he is also the Chairman of International Elevator & Equipment Inc.; President of MC Diamond Realty Investment Phils., MC Oranbo Investment, MC Cavite Holdings, Inc., FMT Kalayaan, Inc.; and Director of Century City Development II Corporation (CCDC II), Isuzu Philippines Corporation, Kepco Ilijan Corporation, Trans World Agro-Products Corp., Japanese Chamber of Commerce & Industry of the Philippines (JCCIPI) and The Japanese Association Manila, Inc. (JAMI). He is not a director of any publicly listed company in the Philippines other than Ayala Corporation.  He entered Mitsubishi Corporation after graduating from the Faculty of Law at Waseda University in 1988 and has since held various leadership positions.

Ramon R. del Rosario, Jr., Filipino, 74, Independent Director of Ayala Corporation since April 2010. He holds the following positions in publicly listed companies: President and Chief Executive Officer of Phinma Corporation; Chairman of PHINMA Energy Corp. and PHINMA Petroleum and Geothermal, Inc. He is the President and Chief Executive Officer of Philippine Investment Management, Inc.; Chairman of Araullo University, University of Iloilo, University of Pangasinan, Cagayan de Oro College, Southwestern University, United Pulp and Paper Co., Inc.,  PHINMA Power Generation Corporation, PHINMA Renewable Energy Corp., One Subic Power Generation Corp., PHINMA Microtel Hotels, Inc. and PHINMA Hospitality, Inc.  He is Vice-Chairman of Phinma Foundation, Inc. and Phinma Property Holdings Corp., Director of Union Galvasteel Corp. and other PHINMA managed companies; Chairman of The National Museum of the Philippines and Philippine Business for Education; and Vice-Chairman of Caritas Manila and Philippine Business for Social Progress (PBSP). He is a former chairman of the Ramon Magsaysay Award Foundation and Makati Business Club, where he remains a Trustee. Mr. del Rosario graduated from De La Salle College in 1967 with degrees in BSC-Accounting and AB Social Sciences Magna cum Laude and from Harvard Business School in 1969 for a Master in Business Administration degree. He has managed Phinma since 2002 and brings with him a wealth of experience in leading a diversified conglomerate.

Delfin L. Lazaro, Filipino, 72, Non-Executive Director of Ayala Corporation since January 2007. He holds the following positions in publicly listed companies: Director of Ayala Land, Inc., Integrated Micro-Electronics, Inc., Manila Water Company, Inc., and Globe Telecom, Inc. His other significant positions include: Chairman of Atlas Fertilizer & Chemicals Inc., Chairman and President of A.C.S.T. Business Holdings, Inc.; Vice Chairman and President of Asiacom Philippines, Inc.; Director of AC Industrial Technology Holdings, Inc., AYC Holdings, Ltd.., Purefoods International Limited and Probe Productions, Inc. He graduated with BS Metallurgical Engineering at the University of the Philippines in 1967 and took his MBA (with Distinction) at Harvard Graduate School of Business in 1971.

Xavier P. Loinaz, Filipino, 75, Independent Director of Ayala Corporation since April 2009 and Lead Independent Director since April 21, 2017. He is also an Independent Director of the Bank of the Philippine Islands, a publicly listed company. He also holds the following positions: Independent Director of BPI Family Savings Bank, Inc., and BPI/MS Insurance Corporation; Trustee of E. Zobel Foundation; Chairman of Alay Kapwa Kilusan Pangkalusugan and XPL Manitou Properties, Inc.; and Vice Chairman of XPL MTJL Properties, Inc. He was formerly the President of the Bank of the Philippine Islands (BPI) from 1982 to 2004.  He was also the President of Bankers Association of the Philippines from 1989 to 1991.   He graduated with an AB Economics degree at Ateneo de Manila University in 1963 and took his MBA-Finance at Wharton School, University of Pennsylvania in 1965.

Antonio Jose U. Periquet, Filipino, 57, Independent Director of Ayala Corporation since September 2010. He is the chairman of BPI Asset Management and Trust Corporation, the Campden Hill Group and Campden Hill Advisors, Inc.  He also sits as an independent director of the Bank of the Philippine Islands, ABS-CBN Corporation, DMCI Holdings, The Max's Group of Companies, The Philippine Seven Corporation and the Albizia ASEAN Tenggara Fund.  Mr. Periquet is a trustee of Lyceum of the Philippines University and a member of the Dean's Global Advisory Council at the University of Virginia's Darden School of Business.  He graduated with an AB Economics degree at Ateneo de Manila University in 1982 and took his Masters of Science in Economics at the Oxford University, UK in 1988 and Masters in Business Administration at University of Virginia, USA in 1990.

 

CORPORATE GOVERNANCE POLICY THAT THE BOARD HAS ADOPTED 

It is the duty of the directors to promote shareholders rights, remove impediments to the exercise of shareholders rights and provide effective redress for violation of those rights. The directors shall encourage the exercise of shareholders’ voting rights and the resolution of collective action problems through appropriate mechanisms. They shall be instrumental in reducing or eliminating costs and other administrative or practical impediments to shareholders participating in meetings and/or voting in person. The directors shall pave the way for the electronic filing and distribution of shareholders information necessary to make informed decisions subject to legal constraints.

As mandated by the Board Charter, the Board of Directors establishes the vision, strategies, key policies, and procedures of the company, and the mechanisms to monitor, evaluate, and improve management performance. The Board leads the review of the company’s vision and mission every year, revisits the group's corporate strategy and monitors its implementation. In 2015, the Board reviewed a refreshed vision statement of the company. As a result, the company adopted a new vision statement that is available in the company website.

The Board also reviews and ensures the adequacy of internal control mechanisms and risk management process for good governance, and the proper implementation of the company’s Code of Conduct and Ethics. The Board also promotes and enhances shareholders’ rights.

 

FREQUENCY OF REVIEW AND APPROVAL OF THE COMPANY'S VISION AND MISSION STATEMENTS

The Board reviews and approves the vision and mission at least once a year, as part of the review and approval of the Company’s strategy as recommended by Management. The Board and Management also revisit the Company’s vision and mission as part of the budget review process.

On September 22, 2015, the Board reviewed the mission and vision statements of the Company. As the result of that review, the Company adopted the following new vision statement that has been published in the Company website.

 

VISION STATEMENT:

We will be the most relevant, innovative, and enduring Philippine-based business group, enabling shared value and prosperity for the many markets and stakeholders we serve

 

The following is the Company’s mission statement:

Ayala Corporation, a holding company with a diverse business portfolio, has a legacy of pioneering the future. Founded in 1834, it has achieved its position of leadership by being values driven, goals oriented, and stakeholder focused. Anchored on values of integrity, long-term vision, empowering leadership, and commitment to national development, we fulfill our mission to ensure long-term profitability, increase shareholder value, provide career opportunities, and create synergies as we build mutually beneficial partnerships and alliances with those who share our philosophy and values. With entrepreneurial strength, we continue to create a future that nurtures to fruition our business endeavors and personal aspirations.

 

In 2017, the Board has reviewed and affirmed the appropriateness of the vision and mission statement of the company.

 

DIRECTORSHIPS IN OTHER COMPANIES 

WITHIN THE GROUP

Director’s Name Corporate Name of the Group Company

Type of Directorship (Executive, Non-Executive, Independent). Indicate if director is also the Chairman.

Jaime Augusto Zobel de Ayala

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of the Philippine Islands

Chairman, Non-Executive Director

Integrated Micro-Electronics, Inc.

Chairman, Non- Executive Director

Globe Telecom, Inc.

Chairman, Non-Executive Director

Ayala Land, Inc

Vice Chairman, Non-Executive Director

Manila Water Company, Inc.

Vice Chairman, Non-Executive Director

Alabang Commercial Corporation

Non-Executive Director

Ayala International Pte Ltd.

Non-Executive Director

AC Energy, Inc.

Non-Executive Director

Ayala Group Club, Inc.

Co-Chairman, Non-Executive Director

AC Education, Inc.

Chairman, Non-Executive Director

Ayala Retirement Fund Holdings, Inc.

Chairman, Non-Executive Director

Asiacom Philippines, Inc.

Chairman, Non-Executive Director

LiveIt Investments Limited

Non-Executive Director

AG Holdings Limited

Non-Executive Director

Ayala Healthcare Holdings, Inc.

Non-Executive Director

AC Industrial Technology Holdings, Inc.

Non-Executive Director

AC Venture Holdings Corp.

Chairman, Non-Executive Director

AC Infrastructure Holdings Corporation

Chairman, Non-Executive Director

Ayala Foundation, Inc. 

Co-Chairman of the Board of Trustees

Fernando Zobel de Ayala

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AC International Finance Limited

Chairman, Non-Executive Director

Ayala International Holdings Limited

Chairman, Non-Executive Director

Ayala Land, Inc.

Chairman, Non-Executive Director

Bank of the Philippine Islands

Vice Chairman, Non-Executive Director

LiveIt Investments, Ltd.

Vice Chairman, Non-Executive Director

Globe Telecom, Inc.

Non-Executive Director

Integrated Micro-Electronics, Inc.

Non-Executive Director

Manila Water Company, Inc.

Non-Executive Director

Asiacom Philippines, Inc.

Non-Executive Director

AG Holdings Limited

Non-Executive Director

Ayala International Pte. Ltd. 

Non-Executive Director

Accendo Commercial Corporation

Chairman, Non-Executive Director

Ceci Realty, Inc.

Vice Chairman, Non-Executive Director

Vesta Property Holdings, Inc.

Vice Chairman, Non-Executive Director

Columbus Holdings, Inc.

Vice Chairman, Non-Executive Director

Emerging City Holdings, Inc.

Vice Chairman, Non-Executive Director

Fort Bonifacio Development Corporation

Vice Chairman, Non-Executive Director

Bonifacio Land Corporation

Vice Chairman, Non-Executive Director

AC Energy, Inc.

Chairman, Non-Executive Director

AC Infrastructure Holdings Corporation

Non-Executive Director

Alabang Commercial Corporation

Chairman, Non-Executive Director

Aurora Properties, Inc.

Vice Chairman, Non-Executive Director

Automobile Central Enterprises, Inc.

Chairman, Non-Executive Director

AC Industrial Technology Holdings, Inc.

Chairman, Non-Executive Director

Liontide Holdings, Inc.

Chairman, Non-Executive Director

Ayala Group Club, Inc.

Co-Chairman, Non-Executive Director

Ayala Retirement Fund Holdings, Inc.

Non-Executive Director

Ayala Healthcare Holdings, Inc.

Chairman, Non-Executive Directors

Ayala Foundation, Inc.

Co-Chairman of the Board of Trustees

AC Education, Inc.

Non-Executive Director

AC Venture Holdings Corp.

Non-Executive Director

ALI ETON Property Development Corp.

Vice-Chairman, Non-Executive Directors

BPI Asset Management and Trust Corporation

Non-Executive Director

BPI Foundation, Inc.

Chairman of the Board of Trustees

Hero Foundation, Inc.

Chairman of the Board of Trustees

Bonifacio Art Foundation, Inc.

Vice Chairman of the Board of Trustees

Berkshire Holdings, Inc.

Vice Chairman, Non-Executive Director

Delfin L. Lazaro

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AYC Holdings, Ltd.

Chairman, Non-Executive Director

Purefoods International, Ltd.

Chairman, Non-Executive Director

A.C.S.T. Business Holdings, Inc.

Chairman, Non-Executive Director

Globe Telecom, Inc.

Non-Executive Director

Ayala Land, Inc.

Non-Executive Director

Integrated Micro-Electronics, Inc.

Non-Executive Director

Manila Water Company, Inc.

Non-Executive Director

AC Industrial Technology Holdings, Inc.

Non-Executive Director

Asiacom Philippines, Inc.

Non-Executive Director

Xavier P. Loinaz

 

 

 

Bank of the Philippine Islands

Independent Director

BPI Family Savings Bank

Independent Director

BPI M/S Insurance Corporation

Independent Director

Antonio Jose U. Periquet

 

 

 

 

Bank of the Philippine Islands

Independent Director

BPI Capital Corporation

Independent Director

BPI Family Savings Bank, Inc.

Independent Director

BPI Asset Management Corporation

Independent Director

 

IN OTHER PUBLICLY-LISTED COMPANIES OUTSIDE THE GROUP

Director’s Name Name of Listed Company Type of Directorship (Executive, Non-Executive, Independent). Indicate if director is also the Chairman.​

Antonio Jose U. Periquet

 

 

 

 

 

ABS-CBN Corporation

Independent Director

ABS-CBN Holdings Corporation

Independent Director

DMCI Holdings, Inc.

Independent Director

Philippine Seven Corporation

Independent Director

Max’s Group of Companies, Inc.

Independent Director

Ramon R. del Rosario, Jr

 

 

 

Phinma Corporation

Executive Director

Trans-Asia Petroleum Corporation

Executive Director

PHINMA Energy Corp. (formerly Trans-Asia Oil & Energy Dev’t. Corp.)

Executive Director

Fernando Zobel de Ayala

Pilipinas Shell Petroleum Corporation Independent Director

 

RELATIONSHIP WITH SIGNIFICANT SHAREHOLDERS OF THE COMPANY

Director’s Name Name of the Significant Shareholder Description of the relationship
Jaime Agusto Zobel de Ayala Mermac, Inc.

Mr. Zobel is an officer and a stockholder of Mermac, Inc.

Fernando Zobel de Ayala  Mermac, Inc.

Mr. Zobel is an officer and a stockholder of Mermac, Inc.

Keiichi Matsunaga Mitsubishi Corporation

Mr. Matsunaga is the General Manager of Mitsubishi Corporation-Manila Branch

 

DIRECTORSHIP LIMIT

To ensure that our Directors devote adequate time and attention to their duties, we encourage our Independent Directors and Non-Executive Directors to hold no more than five (5) board seats in publicly listed companies (PLCs), and our Executive Directors to hold no more than two (2) board seats in PLCs outside our group. These limits may be waived by the Board at its discretion provided the interests of our stockholders and stakeholders are not prejudiced. The Board may also allow Executive Directors to hold directorships that are necessary or desirable in the pursuit of the Corporation's business.

SHAREHOLDINGS IN THE COMPANY

Name of Director Number of Direct shares* Number of Indirect shares / Through (name of record owner)* % of Capital Stock

Jaime Augusto Zobel de Ayala

 

Common-39,731

Voting Preferred-543,802

Common (through ESOWN subscription)- 260,456

Preferred B (through PCD) – 20,000

0.09845%

Fernando Zobel de Ayala

 

Common- 53,189

Voting Preferred-554,983

Common (through ESOWN subscription)- 253,128

0.09814%

Delfin L. Lazaro

 

Common - 1

Voting Preferred-258,297

Common (through ESOWN subscription)- 32,091

Common (through PCD Nominee)-1,683

0.03328%

Keiichi Matsunaga

Common-1 None 0.0000%

Xavier P. Loinaz

Common-126,614 

Voting Preferred-65,517

None 0.02189%
Ramon R. Del Rosario, Jr.

Common-1

None 0.0000%
Antonio Jose U. Periquet Common-1,200

Preferred B (through PCD) – 400,000

0.04571%
TOTAL 1,643,336 967,358 0.29747%

 

 

II. CHAIRMAN AND CEO

Chairman of the Board Jaime Augusto Zobel de Ayala
CEO/President Jamie Augusto Zobel de Ayala (CEO)/ Fernando Zobel de Ayala (President)

 

Among the checks and balances laid down to ensure that the Board gets the benefit of independent views are:

(1) the powers and responsibilities of the Chairman and of the CEO are specified and separate in the By-laws;

(2) only two of the seven directors are executive directors and the powers and responsibilities of directors are clearly delineated from the powers and responsibilities of management; and

(3) three of the seven directors are independent directors.

 

 ROLES, ACCOUNTABILITIES AND DELIVERABLES OF THE CHAIRMAN AND CEO

  Chairman Chief Executive Officer
Role
  1. Schedule meetings to enable the Board to perform its duties responsibly while not interfering with the flow of the Corporation’s operations;
  2. Prepare the meeting agenda;
  3. Exercise control over quality, quantity and timeliness of the flow of information between Management and the Board; and
  4. Assist in ensuring compliance with the Corporation’s guidelines on corporate governance.
  1. Have general supervision of the business, affairs, and property of the Corporation, and over its employees and officers;
  2. See that all orders and resolutions of the Board of Directors are carried into effect;
  3. Submit to the Board as soon as possible after the close of each fiscal year, and to the stockholders at the annual meeting, a complete report of the operations of the Corporation for the preceding year, and the state of its affairs; and
  4. Report to the Board from time to time all matters within its knowledge which the interest of the Corporation may require to be brought to their notice.
Accountabilities

Deliverables

 

 

 

 

 

 

BOARD OF DIRECTORS' PLAN FOR THE SUCCESSION OF THE CEO/MANAGING DIRECTOR/PRESIDENT AND THE TOP KEY MANAGEMENT POSITIONS

The Corporate Governance and Nomination Committee of the Board conducts a review and evaluation of the qualifications of all persons nominated to positions in the Corporation which require appointment by the Board. In conducting its review, the Committee considers the following factors:

a) Duties and responsibilities of the position/s under consideration;

b) For the nominees:

(i) level of knowledge on the Corporation’s business;

(ii) potential to assume greater responsibility in the organization;

(iii) ability, integrity and expertise; and

(iv) results of previous performance assessments.

The Committee’s review of the management succession plan shall also take into account relevant human resource policies of the Corporation and its vision, mission and overall corporate strategy. (Charter of the Nomination Committee, Section 4)

The Board approves the succession plans for the CEO/Managing Director/President and the top key management positions based on the recommendations of the Committee and other factors that the Board may deem proper and relevant. (Charter of the Board of Directors, Section 6.1 (t), and Annex B)

 

III. OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS 

 

COMPANY POLICY FOR ENSUREING DIVERSITY OF EXPERIENCE AND BACKGROUND OF DIRECTORS IN THE BOARD

The Board shall be composed of members who possess the necessary knowledge, skills and experience required to properly perform the duties of the Board.

The Board shall encourage the selection of a mix of competent directors, each of whom can add value and independent judgment in the formulation of sound corporate strategies and policies. Careful attention must be given to ensure that there is independence and diversity, and appropriate representation of women in the Board to the greatest extent possible. (Charter of the Board of Directors, Section 2.2)

Mr. Keiichi Matsunaga, a Non-Executive Director of the Corporation, is the General Manager of Mitsubishi Corporation-Manila Branch. Mitsubishi Corporation is also a holding company. Mr. del Rosario, an Independent Director of the Corporation, has been the President and CEO of Phinma, Corporation, a holding company, for at least ten years.

 

ROLES, ACCOUNTABILITIES, AND DELIVERABLES OF THE EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS

 

  Executive Directors Non-Executive Directors Independent Directors

Role

 

  1. Conduct fair business transaction with the corporation and ensure that personal interest does not bias Board decisions.
  2. Devote time and attention necessary to properly discharge his duties and responsibilities.
  3. Before deciding on any matter brought before the Board, every director should carefully study the issue.
  4. The director should view each company issues objectively and support plans and ideas which he believes are beneficial to the Company
  5. The director should be knowledgeable of the statutory and regulatory requirements affecting the corporation.
  6. The director should not disclose any non-public information of the Company to any person without the authority of the Board.
  7. Each director is responsible for assuring that actions taken by the Board maintain the adequacy of the control environment within the Corporation.
  8. Prior to assuming office, the director is expected to attend a seminar on corporate governance conducted by a duly recognized private or government institution.

Perform the same roles and deliverables as those given to the executive and non-executive directors. In addition, independent directors serve as chairs of the Audit Committee, Risk Management and Related Party Transactions Committee, Compensation Committee and Corporate Governance and Nomination Committee of the Company.

 

 

 

 

 

 

 

 

Deliverables

 

 

 

 

 

 

 

 

 

 

 

Accountabilities

 

 

 

 

Directors who willfully and knowingly vote for or assent to patently unlawful acts of the Corporation or who are guilty of gross negligence or bad faith in directing the affairs of the Corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors, shall be liable jointly and severally for all damages resulting therefrom suffered by the Corporation, its stockholders and other persons.

When a director attempts to acquire or acquires, in violation of his duty, any interest adverse to the Corporation in respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for the Corporation and must account for the profits which otherwise would have accrued to the Corporation.

 

The Board has established an effective performance management framework that ensures that Management’s performance is at par with the standards set by the Board and Senior Management.

  Process Criteria
CEO/President/Senior Management Group The performance of the Senior Management Group, including the Chairman and the President, are regularly evaluated. The Company uses an Evaluation System which includes self-assessment and discussions. The company’s Performance Evaluation System includes metrics, deliverables, accomplishments and development plan.
Managers & Staff

1. The performance review of all managers are regularly evaluated and is supported by an online evaluation system.

2. Deliverables are set at the start of every performance year,  discussed and agreed upon as a collaborative effort between Immediate Supervisors and employees.

3. Regular Feedback and mid-year review is set and observed.

4. Evaluations are done based on defined and agreed upon metrics.

5. Performance Dialogue is an important part of the evaluation system.

The company’s Performance Evaluation System includes metrics, deliverables, accomplishments and development plan

 


INDEPENDENT DIRECTOR

The Corporation adheres to both Philippine law and the rules of the Securities and Exchange Commission and of the Philippine Stock Exchange. (the “Philippine Requirements”) and the standards set by the Association of Southeast Asian Nations (ASEAN) for the strengthening of the ASEAN capital market development and integration for the establishment of an ASEAN Economic Community (the “ASEAN Standards”) in the determination of independent directors. In line with this, the Corporation has adopted the following definition of independent directors:

Independent directors under the Philippine Requirements shall, apart from their fees and shareholdings, hold no interests or relationships with the Corporation that may hinder their independence from the Corporation, Management or shareholders which could or could reasonably be perceived to, materially interfere with the exercise of independent judgment in carrying out the responsibilities of a director. For this purpose, each independent director submits to the Corporate Secretary a letter of confirmation stating that he holds no interest affiliated with the Corporation, the Management or controlling stockholder at the time of his election or re-election.

On the other hand, independent directors under the ASEAN standards shall also possess the qualifications and none of the disqualifications for independent directors under the Philippine Requirements provided and except that, when relevant in the application of the qualifications and disqualifications, a “substantial stockholder” shall mean a stockholder who possesses the power to direct or govern, directly or indirectly, the financial and operating policies of the Corporation so as to obtain benefits from its activities. (Charter of the Board of Directors, Section 2.4 and Annex A).

 

OFFICERS ATTESTATION TO THE COMPANY'S FULL COMPLIANCE WITH THE SEC CODE OF CORPORATE GOVERNANCE

On January 9, 2015, the Company submitted to the SEC the Consolidated Changes in the Annual Corporate Governance Report for 2014 that was reviewed and approved by the Board of Directors of the Company at their meeting on December 4, 2014.

On January 7, 2016, the Company submitted to the SEC the Consolidated Changes in the Annual Corporate Governance Report for 2015 that was reviewed and approved by the Board of Directors of the Company at their meeting on December 3, 2015.

On May 12, 2017 , the Company submitted to the SEC the Annual Corporate Governance Report for 2016 that was reviewed and approved by the Board of Directors of the Company at their meeting on April 21, 2017.

The Chairman of the Board, Compliance Officer and Chief Audit Executive attest to the adequacy of the Corporation’s systems for internal control and risk management and processes for compliance and governance. Please click the link below:

2017 Attestation of Internal Controls

 

TERM LIMIT FOR INDEPENDENT DIRECTORS

In accordance with SEC Memorandum Circular No. 4, Series of 2017, an Independent Director, after serving for nine (9) years, shall be perpetually barred from being elected as such in the Corporation, without prejudice to being elected as a non-Independent Director in the Corporation and as an Independent Director in other companies outside of the business conglomerate, where applicable, under the same conditions provided for in the rules and regulations of the SEC. In case the Corporation wants to retain an Independent Director who has served for nine (9) years already, the Board should provide meritorious justifications and seek shareholders' approval during the annual shareholders' meeting.

 

IV. CHANGES IN THE BOARD OF DIRECTORS 

 

SELECTION/APPOINTMENT, RE-ELECTION, DISQUALIFICATION, REMOVAL, REINSTATEMENT AND SUSPENSION

Directors shall hold office for a term of one (1) year, more or less, immediately upon their election and until their successors shall have been elected and qualified in accordance with the Company By-Laws and applicable rules.In case any vacancy or vacancies should occur on the Board of Directors other than removal or expiration of term, due to death, resignation or other causes, the remaining Directors, if still consisting a quorum, may fill said vacancies by election from among the stockholders and the stockholders so elected shall act as members of said Board until the new Board of Directors is elected.

Procedure Process Adopted Criteria
a. Selection/Appointment
(i) Executive Directors

The stockholders of the Company may submit written nominations to the Board at least 30 business days before the next annual meeting of the stockholders. The Corporate Governance and Nomination Committee evaluates the nominees and approves a list of nominees eligible to be elected as members of the Board.

The Corporate Governance and Nomination Committee may consider and recommend to the Board other qualifications for directors, including independence criteria/standards for independent directors, which are aligned with the Corporation’s vision, mission and corporate strategy that are now or may hereafter be provided in relevant laws or any amendments thereto.

The Corporate Governance and Nomination Committee likewise identifies and recommends qualified individuals for nomination and election to the Board through the use of professional search firms and other external sources of candidates.

 

 

 

 

 

 

 

 

A director of the Company shall have the following qualifications:

  1. Ownership of at least one (1) share of the capital stock of the Company;
  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;
  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 his functions;
  5. Directorships in other companies, taking into account the following factors: i) the nature of the business of the Corporation ii) the number of directors in other companies; iii) any possible conflict of interest; and iv) the age of the director; and
  6. For independent directors, beneficial equity ownership in the Corporation or in its related companies, which must not exceed two percent (2%).
(ii) Non-Executive Directors

(iii) Independent Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

b. Re-appointment
(i) Executive Directors

The stockholders of the Company may submit written nominations to the Board at least 30 business days before the next annual meeting of the stockholders. The Corporate Governance and Nomination Committee evaluates the nominees and approves a list of nominees eligible to be elected as members of the Board.

The Corporate Governance and Nomination Committee may consider and recommend to the Board other qualifications for directors, including independence criteria/standards for independent directors, which are aligned with the Corporation’s vision, mission and corporate strategy that are now or may hereafter be provided in relevant laws or any amendments thereto.

The Corporate Governance and Nomination Committee likewise identifies and recommends qualified individuals for nomination and election to the Board through the use of professional search firms and other external sources of candidates.

 

 

 

 

 

 

 

 

 

 

 

A director of the Company shall have the following qualifications:

  1. Ownership of at least one (1) share of the capital stock of the Company;
  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;
  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 his functions;
  5. Directorships in other companies, taking into account the following factors:         i) the nature of the business of the Corporation                ii) the number of directors 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.
(ii) Non-Executive Directors

(iii) Independent Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

c. Permanent Disqualification
(i) Executive Directors

The Company abides with the rules set forth in its  Corporate Governance Manual, 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 willfully violated or willfully 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;
  7. Any person engaged in any business which competes with or is antagonistic to that of the Corporation; and
  8. After serving as independent director for nine years, the independent director shall be perpetually barred from being elected as such in the Corporation, without prejudice to being elected as independent director in other companies outside of the business conglomerate, where applicable, under the same conditions provided for in the rules and regulations of the SEC.
(ii) Non-Executive Directors

(iii) Independent Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

d. Temporary Disqualification
(i) Executive Directors

The Company abides with the rules set forth in its Corporate Governance Manual, the SEC Code of Corporate Governance and existing laws. The temporary disqualification of the director requires a resolution of a majority of the Board.

 

 

 

 

 

 

 

 

 

 

 

  1. The following are the grounds for temporary disqualification of incumbent directors: 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 nonparticipation for whatever reason/s other than illness, death of immediate family or serious accident in at least 75% 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; and 5. Conviction that has not yet become final referred to in the grounds for disqualification of directors
(ii) Non-Executive Directors

(iii) Independent Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

e. Removal
(i) Executive Directors

The removal of directors requires an affirmative vote of 2/3 of the outstanding capital stock of the Company.

 

 

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.

(ii) Non-Executive Directors

(iii) Independent Directors

 

 

f. Re-instatement
(i) Executive Directors

A temporary 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.

(ii) Non-Executive Directors

(iii) Independent Directors

 

 

g. Suspension
(i) Executive Directors After due notice and hearing, a director who violates the Corporate Governance Manual will be subjected to the penalties as set forth in the said Manual.
(ii) Non-Executive Directors
(iii) Independent Directors

 

VOTES FOR DIECTORS DURING THE LAST ANNUAL STOCKHOLDERS' MEETING

 

Name of Director Votes Received (in favor based on total outstanding shares)
Jaime Augusto Zobel de Ayala 647,093,265 (78.79%)
Fernando Zobel de Ayala 642,434,149 (78.22%)
Delfin L. Lazaro 644,748,351 (78.50%)
Keiichi Matsunaga 648,097,609 (78.91%)
Xavier P. Loinaz 652,400,681 (79.44%)
Ramon R. Del Rosario, Jr. 644,936,051 (78.53%)
Antonio Jose U. Periquet 641,507,101 (78.11%)

                                                               

V. ORIENATION AND EDUCATION PROGRAM

 

ORIENTATION PROGRAM FOR NEW DIRECTORS

All new Directors of the Corporation shall undergo at the minimum an eight-hour orientation program on the Corporation's business and corporate structure, vision and mission, corporate strategy, Governance Codes and Policies, Articles, By-Laws, this Manual, the Charters, the SEC-mandated topics on governance matters and other matters essential for the effective performance of their duties and responsibilities.

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

Prior to assuming office, each director is required to attend a seminar on corporate governance conducted by a duly recognized private or government institution.

Mr. Keiichi Matsunaga, being a newly elected director of the Company in 2017, had his orientation programs on May 9, 2017 for Audit Committee related matters and on June 21, 2017 for governance and board matters. 

 

IN-HOUSE TRAINING AND EXTERNAL COURSES ATTENDED BY DIRECTORS AND SENIOR MANAGEMENT FOR THE PAST THREE (3) YEARS:

  • 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 Corporate Governance Summit
  • Corporate Governance and Risk Management for Banks
  • Ayala Group Corporate Governance Summit held on 18 February 2015
  • Corporate Governance Seminar by SGV on December 8, 2015
  • Ayala Corporation Corporate Governance and Risk Management Summit held on 8 March 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 Management 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 & Analytics, August 2-3, 2016
  • SEC Corporate Governance Forum on August 3, 2016
  • Harvard Comparative Tax Policy on August 15-26, 2016 at Boston MA, USA
  • Tourism Security Conference, August 24-25, 2016, Singapore
  • ECC International Crisis Communication Planner, September 1-2, 2016
  • Customer Experience Management Summit, September 6-7, 2016, Singapore
  • Distinguished Corporate Governance Speaker Series on October 7, 2016 by the ICD
  • Corporate Governance Seminar by SGV on December 9, 2016
  • Strategic Negotiations Program on January 9 to 13, 2017
  • Corporate Governance Seminar by SGV on February 27, 2017
  • Financial Modeling and Valuation on March 13 to 14, 2017
  • Distinguished Corporate Governance Speaker Series on May 10, 2017 by the ICD
  • Risk Financing & Transfer Solutions on May 18, 2017 by Asia Risk Management Institute
  • Employee Benefits Asia on May 18-19, 2017, Singapore
  • Rapid Earthquake Damage Assessment System Training on June 5-10, 2017
  • Integrated Learning on Innovation on  June 21-22, 2017 by IXL Center
  • HPE Philippines Executive Summit on July 5-7, 2017
  • Understanding Corporate University on July 7, 2017
  • Risk Based Auditing: A Value Add Proposition on July 21-22, 2017
  • IIA International Conference on July 23-26, 2017, Australia
  • Flexible Work Arrangements in PH on July 26, 2017 by PMAP
  • Corporate Governance Seminar by SGV on July 26, 2017
  • Level-Up Leadership on July 27-28, 2017 by Francis Kong
  • BCM5000 ISO 22301 BCMS Expert Implementer on July 31 – August 4, 2017, Singapore
  • Ayala Corporate Governance and Risk Management Summit on August 11, 2017
  • The Accidental Project Manager on August 11-12, 18-19, 2017
  • Moody's Analytics Intro to Derivatives on August 16-17, 2017
  • Strategic Leadership Communication on August 30 – September 1, 2017
  • Aon Risk Symposium on September 4-6, 2017
  • Data Privacy Learning Session on September 5, 2017
  • Cultivating a Thriving Workforce in an Era of Disruption on September 21-22, 2017
  • UN Global Compact Leaders Summit on September 23-24, 2017, USA
  • Microsoft Envision: Digital Transformation on September 25-27, 2017
  • Corporate Governance Conference on September 26, 2017
  • Leadership for Social and Economic Renewal on September 29-30, 2017 by the Center of Asia Leadership
  • People Management Association of the Philippines Conference on October 11-12, 2017
  • Innovations in Library Tech, Communications Resources and Services on October 11-13, 2017
  • Advance Cash Flow Management and Working Capital Optimization on October 16-17, 207
  • Moody's Advanced Financial Statement Analysis on October 16-18, 2017, Hong Kong
  • Adversity Quotient/GRIT Workshop on October 20, 2017
  • Formulating and Manualizing Policies and Procedures on October 23, 2017
  • Certificate in the Foundations of Organization Development on October 23-27, 2017
  • Risk LEADERS Masterclass on October 30 – November 1, 2017
  • Simplified Strategic Planning on November 2-3, 2017
  • Ayala HR Summit on November 7, 2017
  • Transformation in an Era of Disruption on November 9, 2017
  • Pan-Asia Risk and Insurance Management Association on November 14-15, 2017
  • Knowledge Management Asia Conference on November 15-16, Hong Kong
  • Advanced Certificate for Executive Personal Assistants on November 20-24, 2017, Singapore
  • Ayala Innovation Conference on November 22, 2017
  • SEC 2017 Annual Disclosure Seminar on November 27, 2017
  • Corporate Governance Seminar by SGV on December 6, 2017
  • Conference on Intellectual Capital and Knowledge Management on December 7-8, 2017, Hong Kong
  • Treasury Operations Certificate Program on December 7-9, 14-16, 2017
  • Distinguished Corporate Governance Speaker Series on February 13, 2018 by the ICD
  • Corporate Governance Seminar by SGV on August 15, 2018
  • Ayala Group Corporate Governance and Risk Management Summit on September 10, 2018
  • Advanced Corporate Governance Training on 5 October 2018

Continuing education programs for directors: programs and seminars and roundtables attended during the years 2017 and 2018.

Name of Director/Officer Date of Training Program* Name of Training Institution
Jaime Augusto Zobel de Ayala

August 11, 2017  and September 10, 2018

 

 

 

Ayala Group Corporate Governance and Risk Management Summit

 

 

Institute of Corporate Directors, Inc.

 

 

Fernando Zobel de Ayala
Keiichi Matsunaga (NED)
Xavier P. Loinaz (Lead ID)
Ramon R. del Rosario (ID) July 26, 2017 and August 15, 2018 Corporate Governance Seminar SyCip Gorres Velayo & Co.
Delfin L. Lazaro (NED) May 10, 2017 and September 10, 2018

Distinguished Corporate Governance Speaker Series and  Ayala Group Corporate Governance and Risk Management Summit

Institute of Corporate Directors
Antonio Jose U. Periquet (ID) February 27, 2017  Corporate Governance Seminar SyCip Gorres Velayo & Co.
February 13, 2018 Distinguished Corporate Governance Speaker Series Institute of Corporate Directors
*each program lasted for four (4) hours

 

The directors of the Corporation, in their own capacity or as sponsored by the Corporation, attend education programs, seminars, and roundtable discussions on corporate governance with service providers that are duly accredited by the SEC. 

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