Corporate Governance Manual

Ayala’s Corporate Governance Manual supplements and complements the corporation′s Articles and By-Laws by setting forth principles of good and transparent governance. On the following instances, the Company revised the Manual of Corporate Governance and submitted the same to the Securities and Exchange Commission, Philippine Stock Exchange and Philippine Dealing and Exchange Corporation:

July 30, 2014

To comply with the Securities and Exchange Commission Memorandum Circular No.9, Series of 2014.

December 11, 2014

To adopt the revisions and updates in our Board Charter, board committee charters and Code of Conduct and Ethics.

July 3, 2015              

To reflect the change in name of our Board's Risk Management Committee to Risk Management and Related Party Transactions Committee.

September 28, 2015

To include in the Manual the updated vision statement the Company.

 

MANUAL OF CORPORATE GOVERNANCE

ARTICLE I - DEFINITIONS, FRAMEWORK OF GOVERNANCE AND ORGANIZATIONAL COMMITMENT TO GOOD GOVERNANCE

Corporate governance refers to “the framework of rules, systems and processes in the Corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to the stockholders and other stakeholders which include customers, employees, suppliers, and financiers, and the government and the community in which it operates” . It encompasses the entirety of the legal and factual regulatory framework for managing and supervising a Corporation . The primary goal of corporate governance is to create and sustain increased value in the Corporation for all of its stockholders and other stakeholders. To achieve this goal, it is necessary – among other things – to clearly set forth the principles of appropriate supervision and good management, and thereby lay the groundwork for development and implementation of value-creating activities. Moreover, it is as important that these agreed principles of governance are made transparent to all stockholders and other stakeholders concerned, thereby safeguarding stockholders’ and other stakeholders’ rights as well as promoting stockholders’ and other stakeholders’ participation in the corporate governance process.

The governing rules for Corporate Governance are not drawn from any single document. The Philippine Corporation Code lays down the basic legal framework for corporate governance of every Philippine corporation. It is supplemented by the Securities Regulation Code (Republic Act No. 8799), and the implementing rules and regulations, and the Code of Corporate Governance (SEC Memorandum Circular [MC] No. 2, Series of 2002, as amended by SEC MC No. 6, Series of 2009 and SEC MC 9, Series of 2014) issued by the Securities and Exchange Commission (“SEC” or “Commission”). When the context allows and when appropriate, a term used herein shall have the meaning given to such term in the relevant and applicable laws and implementing rules and regulations.

The structure for corporate governance of Ayala Corporation (“Ayala Corporation” or “Ayala” or the “Corporation”) is principally contained in the Corporation’s Articles of Incorporation and By-Laws and their amendments. These constitutive documents lay down, among others, the basic structure of governance, minimum qualifications of directors, and the principal duties of the Board of Directors and officers of the Corporation. The function of this Revised Manual of Corporate Governance is to supplement and complement the Corporation’s Articles and By-Laws by setting forth principles of good and transparent governance.

The Board of Directors, Management, Officers and employees of Ayala Corporation commit themselves to the principles and best practices of governance contained in this Manual as a guide in the attainment of its corporate goals. The Corporation shall make a continuing effort to create awareness of a good corporate governance within the organization. At the same time, the entire organization declares its continuing commitment to the Vision and Mission Statements and core values of Ayala Corporation made an integral part of this Manual.

 

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CORPORATE GOVERNANCE MANUAL OF AYALA CORPORATION

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