Board Committees

Governance  >  Annual Corporate Governance Report  > Board Committees

NUMBER OF MEMBERS, FUNCTIONS AND RESPOSIBILITIES

Committee No. of Members Committee Charter Functions Key Responsibilities Power

Executive

Dirctor (ED)

Non-executive

Director (NED)

Independent

Director (ID)

Executive 2 1   Yes

The Committee, in accordance with the authority granted by the Board, or during the absence of the Board, shall act by majority vote of all its members on such specific matters within the competence of the Board of Directors as may from time to time be delegated to the Executive Committee in accordance with Corporation’s By-Laws, except with respect to:

  1.  Approval of any action for which shareholders’ approval is also required;
  2. Filling of vacancies on the Board or in the Executive Committee;
  3.  Amendment or repeal of By-Laws or the adoption of new By-Laws;
  4. Amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable;
  5. Distribution of cash dividends; and
  6. Exercise of powers delegated by the Board exclusively to other committees, if any.
Audit 0 1 2 Yes

Assists the Board of Directors in fulfilling its responsibility for oversight of the organization’s corporate governance processes, with the following particular duties:

  1.  Regularly reports to the Board on the results of the audits conducted by the independent and internal auditors, the integrity of the company’s financial statements, the appropriateness and effectiveness of the systems of internal controls, risk management, and governance processes.
  2.  Recommends the appointment or re - appointment of the independent auditors; reviews and approves all audit, audit -related, and permissible non -audit services provided by the independent auditors to Ayala and the related fees to ensure that their independence is not compromised.
  3.  Reviews and approves the Internal Audit Charter to ensure the independence and effectiveness of the internal audit function; ensures that the internal audit function is adequately resourced and all its activities are performed in accordance with the International Standards for the Professional Practice of Internal Auditing.
  4.  Reviews and approves the overall scope and plans for the respective audits of the company’s internal auditors and independent auditors, and the results of their assessment of the company’s internal controls and overall quality of the financial reporting process.
  5. Reviews the quarterly and annual financial statements and all related disclosures with Management and the independent auditors.
  6. Reviews and assesses the adequacy of the Audit Committee Charter at least annually, requesting Board approval for proposed changes.
  7. Conducts self-assessment to evaluate the effectiveness of their performance as against the requirements of its Charter and in accordance with the SEC Memorandum Circular Number 4, Series of 2012.

Reports annually to the Board of Directors describing the committee’s composition, responsibilities and how they were discharged, and any other information required by law; confirms annually that all responsibilities outlined in its charter have been carried out.

Risk Management and Related Party Transactions 0 1 2 Yes

The Risk Management and Related Party Transactions Committee of the Board of Directors is established by the Board to provide assistance in fulfilling the Board’s oversight responsibilities in relation to risk governance. The assistance includes ensuring that Management maintains a sound risk management framework and internal control system, and identifies and assesses material risk exposures, In addition, the Committee:

  1. Promote s an open discussion regarding risks faced by the Corporation, as well as risks faced by its subsidiaries that may have potential impact on the Corporation’s operations, and ensure s that risk awareness culture is pervasive throughout the organization.
  2. Reviews and discusses with Management the Corporation’s risk governance structure and adequacy of policies and processes for risk identification, assessment and mitigation.
  3. Reviews and recommend s to the Management the Corporation’s levels of risk appetite and risk tolerance, and risk exposure allocation for approval by the Board of Directors.
  4. Reviews the Corporation’s risk profile on an ongoing basis and re -evaluate the likelihood of occurrence, severity of impact of risk exposures, and any mitigating measures affecting those risks.
  5. Monitors the implementation of the Corporation’s risk mitigation plans and other risk management activities with the assistance of the risk management function.
  6. Reviews and discusses risk management -related reports and issues raised by the Management, internal auditors, external auditors, legal counsel and regulators that impact the Corporation’s risk management framework.
  7. Reviews disclosures regarding risk contained in the Corporation’s Annual Report and other publicly -issued statements.
  8. Reviews the objectivity, effectiveness and efficiency of the Corporation’s risk management function in the context of the Corporation’s size, scale, complexity and scope of operations.
  9. Secure s independent expert advice on risk management matters where considered necessary or desirable.
  10. In coordination with the Audit Committee, ensure s that the 35 Corporation’s internal audit work plan is aligned with risk management activities and that the internal control system considers all risks identified in the risk assessment process.
  11. Determines the advisability of, and review and evaluate the terms and conditions of any material or significant related party transactions and their required reporting disclosures.
  12. Performs other activities related to this Charter as requested by the Board.
Corporate Governance  and Nomination 0 0 3 Yes
  1.  Review and monitor the structure, size and composition of the Board and make recommendations to ensure compliance with applicable laws, rules and regulations as well as the Corporation’s By -laws and Manual of Corporate Governance
  2. Encourage the selection of a mix of competent directors, each of whom can add value and contribute independent judgment to the formulation of sound corporate strategies and policies;
  3. Ensure that all nominations to the Board are fair and transparent, and that all nominees are qualified in accordance with the By -laws, Manual of Corporate Governance and relevant laws, rules and regulations;
  4. Review and evaluate the qualifications of persons nominated to positions which require appointment by the Board, and provide guidance and advice as necessary for appointments by the Chairman or President to positions below Managing Director;
  5. Review succession plans for members of the Board and senior executives (from group heads to the Chief Executive Officer);
  6. Assess the effectiveness of the Board’s processes and procedures in the election or replacement of Board members and in appointing officers or advisors, and develop, update and recommend to the Board policies for considering nominees for directors, officers or advisors; and
  7. Perform such other duties and responsibilities that may be delegated to the Committee by the Board from time to time.
Personnel and Compensation 0 2 1 Yes
  1. Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of corporate officers and directors, and provide 36 oversight over remuneration of senior management and other key personnel ensuring that compensation is consistent with the Corporation’s culture, strategy and control environment;
  2. Designate the amount of remuneration, which shall be in a sufficient level to attract and retain directors and officers who are needed to run the Corporation successfully;
  3. Develop a form on Full Business Interest Disclosure as part of the pre-employment requirements for all incoming officers, which among others compel all officers to declare under the penalty of perjury all their existing business interest or shareholdings that may directly or indirectly conflict in their performance of duties once hired;
  4. Disallow any director to decide his own remuneration during his incumbent term;
  5. Provide in the Corporation’s annual reports, information and proxy statements a clear, concise and understandable disclosure of compensation of its executive officers for the previous fiscal year and the ensuring year;
  6. Review the existing Human Resources Development or Personnel Handbook, to strengthen provisions on conflict of interest, salaries and benefits policies, promotion and career advancement directives and compliance of personnel concerned with all statutory requirements that must be periodically met in their respective posts;
  7. In the absence of a Personnel Handbook, cause the development of such covering the same parameters of governance stated above.
Finance 2 1 1 Yes
  1. Responsible for reviewing and evaluating the financial affairs of the Corporation from time to time.
  2. Conduct an annual financial review and operations review prior to each annual stockholder’s meeting.
Inspectors of Proxies and Ballots 3* 0 0 Yes Has the power to pass on the validity of proxies submitted by the stockholders for the annual or special meetings.

* Officers of the company who are not members of the company’s Board of Directors.

II. COMMITTEE MEMBERS 

EXECUTIVE COMMITTEE 

Office Name Date of Appointment No. of Meetings Held No. of Meetings Attended % Length of Service in the Committee
Chairman (ED) Jaime Augusto Zobel de Ayala May 10, 1996 None* N.A. N.A. 21
Member (ED) Fernando Zobel de Ayala May 10, 1996 N.A. N.A. 21
Member (NED) Yoshio Amano** April 30, 2012 N.A. N.A. 5
Member (NED) Keiichi Matsunage** April 21, 2017 N.A N.A. 1

                *The was no actual meeting held in 2017. The actions of the Executive Committee were taken by written consent (electronic or digital format) by majority of the members of the Committee.

    **Mr. Amano was replaced by Keiichi Matsunaga on April 21, 1017.

 

AUDIT COMMITTEE 

Office Name Date of Appointment No. of Meetings Held* No. of Meetings Attended* % Length of Service in the Committee
Chairman (ID) Xavier P. Loinaz April 3, 2009 4 4 100% 8
Member (NED) Yoshio Amano** April 20, 2012 2 2 75% 5
Member (ID) Ramon R. Del Rosario, Jr. April 16, 2010 4 4 100% 7
Member (NED) Keiichi Matsunaga** April 21, 2017 2 1 50% 1

         * In 2017 and during incumbency of the directors. 

         **Mr. Amano was replaced by Keiichi Matsunaga on April 21, 2017.

Xavier P. Loinaz, Filipino, 74, Independent Director since April 2009.  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.

Keiichi Matsunaga, Japanese, 53, has been a Director of Ayala Corporation since 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, 73, Independent Director of Ayala 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.

 

AUDIT COMMITTEE'S RESPONSIBILITIES RELATIVE TO EXTERNAL AUDITOR

  1. Review the performance and recommend the appointment, retention or discharge of the Independent Auditors, including the fixing of their remuneration to the Board of Directors. In case of resignation or cessation from service of an independent auditor, ensure that there is a process for reporting in the annual and current reports the reason for cessation from service, and the date thereof, of an independent auditor. A preliminary copy of the said report shall be given by the corporation to the independent auditor before its submission.
  2. Ensure the rotation of the lead engagement partner at least once every five (5) years and consider whether there should be a regular rotation of the audit firm itself.
  3. Review and pre-approve the Independent Auditor's plans and ascertain the basis for their risk assessment and financial statement materiality, including the scope and frequency of the audit. In this regard, the Committee shall discuss with the Independent Auditors, before the audit commences, the nature and scope of the audit, and ensure cooperation when more than one professional service firm is needed.
  4. Monitor the coordination of efforts between the external and internal auditors. The Committee shall ensure that the internal and external auditors act independently from each other.
  5. Review of the reports of the Independent Auditors, where applicable, and ensure that management is taking appropriate corrective actions in a timely manner, including addressing control, governance, and compliance issues.
  6. Conduct a separate meeting in executive session, with the external auditors to discuss any matter that the committee or auditors believe should be discussed privately, including the results of the audit, year-end financial statements, the quality of management, financial and accounting controls.
  7. Review and approve the proportion of audit versus non-audit work both in relation to their significance to the auditor and in relation to the Corporation's year-end financial statements, and total expenditure on consultancy, to ensure that non-audit work will not be in conflict with the audit functions of the independent auditor. The amount of both audit and non-audit work of independent auditors shall be disclosed in the annual report.
  8. Ensure that the independent auditor has unrestricted access to all records, properties and personnel to enable performance of the required audit.
  9. Review with the independent auditor any problems or difficulties, including any restrictions on the scope of the independent auditor's activities or on access to requested information and any significant disagreements with management. The review may also include discussion of any proposed accounting adjustments that were "passed' or not recorded.
  10. Review of the independent auditor's evaluation of internal accounting controls. Independent auditors shall provide feedback to the Audit Committee on their observations of internal control weaknesses arising from statutory financial audits. Independent auditors should highlight findings which are disputed by Management or where Management has not agreed to implement remedial actions that would rectify the identified weaknesses.

 

CORPORATE GOVERNANCE AND NOMINATION COMMITTEE 

Office Name Date of Appointment No. of Meetings Held* No. of Meetings Attended* % Length of Service in the Committee
Chairman (ID) Ramon R. Del Rosario, Jr. April 18, 2011 3 3 100% 6
Member (ID) Antonio Jose U. Periquet April 20, 2012 3 100% 5
Member (ID) Xavier P. Loinaz April 15, 2016 3 100% 2

           *In 2017

                                   

PERSONNEL AND COMPENSATION COMMITTEE

Office Name Date of Appointment No. of Meetings Held* No. of Meetings Attended* % Length of Service in the Committee
Chairman (ID) Ramon R. del Rosario, Jr. April 16, 2010 1 1 100% 7
Member (NED) Delfin L. Lazaro March 30, 2007 1 100% 10
Member (NED) Yoshio Amano** April 20, 2012 1 100% 4
Member (NED) Keiichi Matsunaga** April 21, 2017 - - 1

             * In 2017 and during incumbency of the directors. 

             **Mr. Amano was replaced by Keiichi Matsunaga on April 21, 2017.

 

FINANCE COMMITTEE 

Office Name Date of Appointment No. of Meetings Held* No. of Meetings Attended* % Length of Service in the Committee
Chairman (NED) Delfin L. Lazaro April 16, 2010 10

10

100% 8
Member (ED) Jaime Augusto Zobel de Ayala April 29, 2012 10 100% 6
Member (ID) Antonio Jose U. Periquet April 18, 2011 9 90% 7
Member (ED) Fernando Zobel de Ayala April 15, 2016 10 100% 2

  * In 2017

 

COMMITTEE OF INSPECTORS OF PROXIES AND BALLOTS

Office Name Date of Appointment No. of Meetings Held* No. of Meetings Attended* % Length of Service in the Committee
Chairman Solomon M. Hermosura April 16, 2010 2 2 100% 7
Membe Catherine H. Ang April 11, 2014 2 100% 3
Member Josephine G. De Asis April 19, 2013 2 100% 4

     * In 2017

RISK MANAGEMENT AND RELATED PARTY TRANSACTION COMMITEE 

Office Name Date of Appointment No. of Meetings Held* No. of Meetings Attended* % Length of Service in the Committee
Chairman (ID) Antonio Jose U. Periquet September 1, 2014 3 3 100% 3
Member (ID) Ramon R. del Rosario, Jr. September 1, 2014 3 100% 3
Member (NED) Yoshio Amano** September 1, 2014 2 2 100% 3
Member (NED) Keiichi Matsunaga** April 21, 2017 1 1 100% 1

           * In 2017 and during incumbency of the directors. 

           **Mr. Amano was replaced by Keiichi Matsunaga on April 21, 1017.

 

CHANGE IN COMMITTEE MEMBERS OCCURRED DURINGTHE YEAR 

Name of Committee Name  Reason
Executive  Mr. Yoshio Amano was replaced with Mr. Keiichi Matsunaga on April 21, 2017.  The term of Mr. Amano expired on April 21, 2017.  He did not stand for election during the 2017 Annual Stockholders' Meeting. 
Audit  Mr. Yoshio Amano was replaced with Mr. Keiichi Matsunaga on April 21, 2017.  The term of Mr. Amano expired on April 21, 2017.  He did not stand for election during the 2017 Annual Stockholders' Meeting. 
Corporate Governance and Nomination None  
Remuneration Mr. Yoshio Amano was replaced with Mr. Keiichi Matsunaga on April 21, 2017.  The term of Mr. Amano expired on April 21, 2017.  He did not stand for election during the 2017 Annual Stockholders' Meeting. 
Finance Committee None  
Risk Management and Related Party Transactions Committee Mr. Yoshio Amano was replaced with Mr. Keiichi Matsunaga on April 21, 2017.  The term of Mr. Amano expired on April 21, 2017.  He did not stand for election during the 2017 Annual Stockholders' Meeting. 
Committee of Inspectors of Proxies and Ballots None  

 

WORK DONE AND ISSUES ADDRESS BY THE COMMITEES DURING THE YEAR 

Name of Committee Work Done and Issues Addresed 
Executive

Passed and approved the following resolutions:

1. Renewal and amendment of administrative support and service agreements between the Corporation and subsidiaries;

2. Additional capital infusions to subsidiaries;

3. Reduction of invesment in a subsidiary;

4. Redemption of shares held by the stockholders of a non-publicly listed subsidiary;

5. Adoption by the Corporation of a revised corporate goverannce manual in compliance with the SEC Memorandum Circular Number 19, series of 2016; and

6. Matters related to fund raising activities of the Company. 

Audit

1. Reviewed the 2016 audited parent and consolidated financial statements; 

2. Reviewed the 2016 Audit and Non-audit Fees paid to Sycip Gorres Velayo & Co. (SGV); 

3. Reviewed and approved SGV's audit plan for 2017 and engagement  fee of PhP5.4 Million for 2017;

4. Reviewed and approved the 2016 CG Disclosure Survey for submission to the Philippine Stock Exchange; 

5. Discussed the results of the Committee’s 2016 Performance Self-Assessment and approved its Report to the Board for the year 2016; 

6. Reviewed and approved the proposed fees of SGV and Pricewaterhouse Cooper PWC for the conduct of mid-year review of the group financial statements for a combined fee of PhP6 Million;

7. Reviewed the revised Corporate Governance Manual of the Company;

8. Reviewed the proposed Ayala Group Internal Audit Maturity Framework for discussion and approval by the companies’ respective audit committees;

9. Evaluated the performance of the Corporation's Internal Audit; 

10. Reviewed and approved the proposed fees of SGV, PWC and Deloitte for the auditor’s comfort letter on Project Infinity;

11. Reviewed the on-going work of the Ayala Group Internal Audit; 

12. Approved the transfer pricing review engagement with SGV; and 

13. Revised Audit Committee Charter and Internal Audit Charter. 

Corporate Governance and Nomination

1. Reviewed the qualifications of all persons nominated to positions requiring appointment by the Board; 

2. Approved the final list of nominees for directors for election at the 2017 annual stockholders’ meeting after ensuring that all nominees to the Board have met all the qualifications and none of the disqualifications as set forth in the Corporation’s By-Laws, Revised Manual of Corporate Governance and the rules of the SEC; and

3. Approved revision of committee charter and the additional functions as the reconstituted Corporate Governance and Nomination Committee. 

Remuneration

 1. Approved the performance bonus, merit increase of the employees of the Corporation; and

2. Approved the 2017 Employee Stock Ownership Plan (ESOWN).

Finance Committee

Approved the following:

1. Additional equity infusions and advances to wholly-owned subsidiaries of the Company;

2. Allocation and Use of the General Investment Fund; 

3. Issuance of Fixed-For-Life Bond of up to US$400 Million

4. Sale of available-for-sale securities; 

5. Availment of credit Facilities and authorized counterparties for peso yield enhancer/investment products;

6. Exercise of Right of First Refusal over Renewable Energy Test Center shares; 

7. Capital allocation for operating subsidiaries; 

8. PhP30 Billion bond shelf registration with the Securities and Exchange Commission;

9. Availment of a revolving UD dollar credit facility; and

10. Availment  of a bilateral fixed term loan facility; 

Risk Management and Related Party Transactions Committee

1. Investment of the Corporation in Globe Fintech Innovations, Inc.;

2. Renewal of lease contract between Technopark Land, Inc. and Integrated Micro-electronics, Inc.; 

3. Ayala Hotels, Inc.'s intercompany borrowings within the Ayala Land Group;  and 

4. Revision of the committee charter. 

 

Top
Top

Copyright © 2017, Ayala Corporation

privacy | terms of use