Policy on Conflict of Interest

BOARD DIRECTORS AND OFFICERS

The personal interest of directors and officers should never prevail over the interest of the Corporation. They are required to be loyal to the organization so much so that they may not directly or indirectly derive any personal profit or advantage by reason of their position in the Corporation. They must promote the common interest of all shareholders and the Corporation without regard to their own personal and selfish interests.

A conflict of interest exists when a director or an officer of the Corporation -

  1. Supplies or is attempting or applying to supply goods or services to the Corporation;
  2. Supplies or is attempting to supply goods, services or information to an entity in competition with the Corporation;
  3. By virtue of his office, acquires or is attempting to acquire for himself a business opportunity which should belong to the Corporation;
  4. Is offered or receives consideration for delivering the Corporation's business to a third party;
  5. Is engaged or is attempting to engage in a business or activity which competes with or works contrary to the best interests of the Corporation.

If an actual or potential conflict of interest should arise on the part of directors, it should be fully disclosed and the concerned director should not participate in the decision making. A director who has a continuing conflict of interest of a material nature should either resign or, if the Board deems appropriate, be removed from the Board.

A contract of the Corporation with one or more of its directors or officers is voidable, at the option of the Corporation, unless all the following conditions are present:

  1. The presence of such director in the board meeting in which the contract was approved was not necessary to
  2. constitute a quorum for such meeting;
  3. The vote of such director was not necessary for the approval of the contract;
  4. The contract is fair and reasonable under the circumstances;
  5. In case of an officer, the contract has been previously approved by the Board of Directors.

Where any of the first two conditions set forth in the preceding paragraph is absent, in the case of a contract with a director, such contract may be ratified by the vote of stockholders representing two-thirds (2/3) of the outstanding capital stock in a meeting called for that purpose; provided that full disclosure of the adverse interest of the director involved is made at such meeting; and provided further that the contract is fair and reasonable under the circumstances.

Where a director, by virtue of his office, acquires for himself a business opportunity which should belong to the Corporation, thereby obtaining profits to the prejudice of the Corporation, the director must account to the latter for all such profits by refunding the same, unless his act has been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the outstanding capital stock. This provision shall be applicable notwithstanding the fact that the director risked his own funds in the venture.

The foregoing is without prejudice to the Corporation's existing Rules or Code of Conduct and Ethics for its officers, employees and staff.

(Article IV, Manual of Corporate Governance)

EMPLOYEES

Ayala employees are expected to avoid situations of conflicts of interest or impropriety. As a general rule, they may not engage in business with a competitor, customer or supplier of Ayala Corporation or any of the subsidiaries or affiliates of Ayala without the prior approval of the ExCom Chairman.

 

a. Employees who hold influence over Company business decisions may not have any financial interests in a non-       publicly owned enterprise, particularly if the employee deals with the enterprise in behalf of the Company or if         the enterprise is a competitor, supplier or customer of the Company or any of the subsidiaries or affiliates of         Ayala.

    Likewise, the employee’s relatives by the first and second degrees of consanguinity and first degree of affinity       may not hold interests in such enterprises.

b. Managers, professionals, and technical employees engaged in non-Ayala enterprises shall fully disclose the           relevant facts of the situation to their Unit Head or to the Managing Director for Strategic Human Resources. The     disclosure should include the names of the employee’s business partners or associates.

     The information will remain confidential except to the extent necessary to evaluate the situation and preempt         the conflict of interest.

c. Employees shall inform their unit heads of any familial or personal relationships they may have with anyone they    have to transact with in behalf of the Company or any of the Group Companies. Particularly if the relationship        may influence or even just appear to influence the employee’s business recommendations or decisions.

d. Employees may not approve actions that result in Company expenditures if the expense is not authorized; such     expenditures cannot be reimbursed under Company policies.

e. Employees may not use Company facilities, materials, resources or intellectual property for personal purposes or     for a third party without the prior consent of the employee’s superiors.

f. Employees may not disclose or use any confidential Company information for personal profit or advantage.            Likewise, the employee may not disclose the information to assist the interests of a third party. The prohibition      includes speculations in investment or securities.

g. Employees must immediately report any offer or gift of any value given to them or their immediate family to get     favors or to influence business recommendations, proposals or decisions affecting the Company or any Group         Company.

If a conflict of interest situation does develop, the employee involved shall disclose the facts to his/her supervisor or to the Managing Director for Strategic Human Resources as soon as possible.

(Ayala Corporation Code of Conduct)

 

 

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