The Board composed of various Board Committees, namely Executive Committee (ExCom), Audit CDommittee (AuditCom), Risk Management Committee (RMC), Nom&Gov Committee, Remuneration and Leadership Development Committee (RLDC), Finance Committee (FinCom), Related Party Transactions Committee (RPTCom), and Sustainability Committee (SusCom). The Board has delegated specific responsibilities to each of these Committees guided by their respective committee charters.
All committees have approved charters defining and specifying the scope of their responsibilities.
Executive Committee (ExCom)
Composed of five (5) directors, one (1) of whom is an independent director. The ExCom may act, by majority vote of all its members, on such specific matters within the competence of the Board, as may be delegated to it under the By-Laws, or upon a majority vote of the Board, subject to the limitations provided by the Revised Corporation Code. The ExCom conducted four (4) meetings in 2023.
| Executive Committee Charter | Download PDF |
Nomination and Governance Committee (Nom&Gov)
The Nom&Gov is composed of six (6) directors with an independent director as chair. The duties and responsibilities of Nom&Gov as reflected in its charter include screening qualified nominees for election as directors, assessing the independence of directors, introducing improvements on Board organization and procedures, setting-up of mechanisms for performance evaluation of the Board and Management, and providing programs for continuing education of the Board.
The Nom&Gov undertakes the process of identifying the qualification of directors aligned with the Company's strategic directions. It reviews and recommends to the Board the appointment of members to the Board Committees. The process involves identifying, reviewing, and recommending potential candidates to the Board for consideration.
The Nom&Gov has put in place a formal and transparent process for the nomination of new Directors to the Board. Stakeholders who have identified suitable candidates submit the Nomination and Acceptance Letters, Full Business Interest Disclosure Forms and curriculum vitae of such candidates to Nom&Gov for discussion and review on or before the deadline set by the Nom&Gov.
These candidates are sourced from the business networks of Board members and from professional search firms such as the Institute of Corporate Directors (ICD), or from shareholders. These candidates should be skilled in core competencies such as strategic planning, business expertise, and industry knowledge.
The shareholders elect the directors during the Annual Stockholders’ Meeting ASM held every last Tuesday of May.
The Company sends out a formal letter setting the responsibilities of the duly elected director. The new director then attends an onboarding program facilitated by the CGO.
The Nom&Gov Comm held four (4) meetings in 2022 and performed the following:
- Reviewed the results of Board, Board Committees, and President and CEO performance assessment
- Assessed MERALCO’s public ownership report
- Screened the nominees to the Board
- Reviewed the Board committee composition
- Assessed MERALCO’s compliance to the Revised ASEAN Corporate Governance Scorecard (ACGS)
- Reviewed and endorsed MERALCO’s Integrated Annual Corporate Governance Report (I-ACGR) for 2022
- Reviewed and approved the Code of Business Conduct and Ethics for Vendors (Revised Suppliers Business Conduct Policy), RPT Policy Guidelines, Finance Committee Charter, Remuneration and Leadership Development Committee Charter, and Speak Out Policy
- Reviewed the Company’s Vision, Mission, and Values Statements
- Facilitated the annual CG enhancement and continuing education programs
| Nomination and Governance Committee Charter | Download PDF |
Audit Committee (AuditCom)
he AuditCom consists of three (3) independent directors, and four (4) non-executive directors, one of whom, Ms. June Cheryl A. Cabal-Revilla, has solid experience in the areas of accounting, corporate finance, treasury, financial control and risk management, having been the Chief Finance, Risk and Sustainability Officer of another publicly-listed company and Appointed Member of the Financial and Sustainability Reporting Standards Council (FSRSC) of the Philippines, the accounting and sustainability standards-setters in the country, since 2010 for FRSC. The AuditCom is chaired by the Lead Independent Director.
The AuditCom has the power to
- Review with Management and the external auditors the results of the audit of the financial statements and evaluation of internal accounting controls;
- Review and evaluate procedures and criteria for the selection, appointment, annual performance evaluation and if appropriate, termination of services of the external auditors and recommend to the Board for approval, the appointment, reappointment, or removal of the external auditors, duly accredited by the SEC and ratified by the shareholders; and
- Monitor compliance and adherence by the Company with all applicable laws and regulations pursuant to which the Company conducts its operations and business activities.
The AuditCom had six (6) meetings in 2023 with the following accomplishments:
Internal Control
- Obtained management’s assurance on the adequacy and effectiveness of the Company’s internal control system and noted Management’s Control Policy
- Evaluated the effectiveness of the internal control system of the Company
- Reviewed and discussed updates on fraud investigations, recoveries from losses and appropriate actions of the Management.
Financial Reporting
- Reviewed the unaudited consolidated quarterly financial statements and the audited consolidated annual financial statements of the Company
- Endorsed for Board approval the Audited Consolidated Financial Statements of the Company
Audit Process
- Assessed the independence, performance, and effectiveness of the External Auditors, SGV & Co. CPAs (SGV) taking into consideration their credibility, competence, ability to understand complex transactions, and the adequacy of their quality control procedures. Based on this assessment, SGV was re-nominated by the Committee to the Board as the External Auditors of the Company with the assurance that the lead audit partner complies with Rule 68 of the Securities Regulation Code on rotation of External Auditors.
- Held executive sessions with the External Auditors and Internal Audit without the presence of Management. On December 8, 2022, the Audit Committee held separate executive session with the engagement partner of the external auditors, SGV, including the private session of the Audit Committee Chair with the Chief Audit Executive. The agenda in these meetings involved matters the Audit Committee and the auditors believe should be discussed without the presence of the executive director or officers from management.
- Reviewed and approved the audit plan, scope of work and proposed fees of SGV for audit and non-audit services.
- Reviewed and approved the annual Internal Audit Plan, the related key performance indicators, and all subsequent changes to the Internal Audit Plan, as needed.
- Discussed and dissected the results of audits reported by the Chief Audit Executive in her quarterly and year-end status reports to the Committee.
- Monitored Management’s timely implementation of appropriate corrective actions to address the audit issues and recommendations of Internal Audit and the External Auditor.
- Assessed Internal Audit’s performance for the preceding year.
- Assessed the performance of the Subsidiaries’ Audit committees
- Reviewed the Internal Audit and Audit Committee Charters on an annual basis for any updates or changes.
Compliance
- Reviewed and assessed Management’s processes of monitoring compliance with laws and regulations through Internal Audit.
- Reviewed and assessed subsidiaries' and associate companies' processes of monitoring compliance with laws and regulations.
| Confirmation on Internal Control | Download PDF |
| Audit Committee Charter | Download PDF |
Risk Management Committee (RMC)
The RMC consists of two (2) independent directors and four (4) non-executive directors. It assists the Board in its oversight role on the risk management process.
The RMC held two (2) meetings in 2022 and performed the following:
- Reviewed Key Enterprise Risks Report for the Distribution Utility and Subsidiaries (Meralco group)
- Review of Risk Confirmation Statements for submission to Metro Pacific Investments Corp. (MPIC)
- Reviewed and discussed with the Chief Risk Officer and external auditors MERALCO group's key business risks as well as its ongoing and proposed risk mitigation measures.
- Reviewed the integration of Environment, Social, and Governance matters into the Company’s Risk Assessment process.
- Evaluated the effectiveness and certified the adequacy of One Meralco’s risk management process such that material risks are periodically identified, evaluated, managed, and reported appropriately by management.
The Board of Directors, through the RMC, institutes a framework of prudent and effective controls which enables risks to be identified, assessed, and managed accordingly.
| Risk Management Committee Charter | Download PDF |
Remuneration and Leadership Development Committee (RLDC)
The RLDC is composed of four (4) directors, one (1) of whom is an independent director. The duties and responsibilities of RLDC as defined in its charter include assistance to the Board in the development of the Company’s overall performance management, compensation, retirement, and leadership development policies and programs based on the Company-approved philosophy and budget.
The RLDC held six (6) meetings in 2023 and accomplished the following:
- Approval of candidates for rank conferment
- Approval of proposed budget for the 2023 salary review program
- Review of annual incentive plan
- Approval of 2019 - 2022 Long Term Incentive Plan Payout
- Approval of 2022 – 2024 Board Cash/Stock Grant Approval of Meralco Table of Organization
- Review of performance evaluation plan results
- Approval of Recommendation for Appointment and Employment Extension
The RLDC recommends to the Board, for the approval of the shareholders, a framework of remuneration for Directors and Management, including the President and CEO.
For the President and Management, the framework takes into account all aspects of executive remuneration including salaries, allowances, bonuses, and benefits in kind. The framework is benchmarked against pay and employment conditions within the industry and it links rewards to corporate and individual performance.
For employees, the Company adopts a Remuneration Policy comprised of fixed and variable components in the form of base salary and variable bonus linked to the Company’s and the individual’s performance. Compensation packages and revisions of key Management’s remuneration are subject to the review and approval of the RLDC.
| Remuneration and Leadership Development Committee Charter | Download PDF |
Finance Committee (FinCom)
The FinCom is composed of seven (7) directors, two (2) of whom are independent directors, with the Chief Finance Officer (CFO) as ex-officio member. It reviews the financial operations of the Company and matters regarding major purchase contracts, and acquisition and/or divestment of investments, businesses, or ventures.
In its twelve (12) meetings in 2023, the major accomplishments of FinCom were:
- Review and approval of all service and supply contracts in excess of PhP50 million
- Review of Unaudited Quarterly Consolidated Financial Statements and Audited Annual Consolidated Financial Statements
- Treasury updates
- Declaration of final cash dividend
- Renewal of credit lines and bonds
- Review and approval of cash optimization strategy
- Review and approval of PSAs and any changes or issues regarding their execution
- Review and approval of annual budget and medium- term business plan and forecast
- Review of Meralco directors’ and officers’ insurance policy
- Review additional capital call, surety bonds, capital infusions for subsidiaries
- Review of special payment agreements
- Review of equity call
- Review of investments
- Review and endorsement of the renewal of Wholesale Electricity Spot Market surety bond for the retail electricity supply transactions
| Finance Committee Charter | Download PDF |
Related Party Transactions Committee (RPT Comm)
The RPTCom consists of six (6) directors, two (2) of whom are independent directors. It assists the Board in reviewing De Minimis, Significant, and Material RPTs to determine whether they are in the best interest of the Company and shareholders, and ensure that all RPTs of the Company are conducted in fair and at arms' length terms.
The following activities were accomplished by the RPTCom in 2023:
- Discussed and improved the RPT Review Process for Purchase Orders (POs) and Non-Pos
- Reviewed the RPT Policy Guidelines
- Reviewed and approved De Minimis, Significant, and Material RPTs
- Reviewed RPT Reports together with the RPT Review Team, and evaluated MERALCO’s purchases of goods and services from related parties to be fair and at arm’s length terms
- Endorsed Material RPTs to the Board for approval
In 2023, all RPTs of the Company were conducted in fair and at arm’s length terms. The names of all related parties, degree of relationship, nature and value for each material/significant RPT are disclosed by the Company in its Consolidated Financial Statements.
| Related Party Transactions Committee Charter | Download PDF |
Sustainability Committee
In 2021, the SusCom was established to institutionalize MERALCO’s sustainability commitment and corporate ESG imperatives. Composed of seven (7) members, including the President and CEO and Chief Sustainability Officer who are both acting as non-voting members, SusCom is responsible for overseeing the Company's sustainability strategy, policies, and programs. The Committee also accounts for and monitors the economic, environmental, social, and governance (EESG) performance of the Company in alignment with the UN SDGs, with the aim of delivering long-term value to all the stakeholders.
In 2023, the SusCom formally met to review One Meralco’s Long-Term Sustainability Strategy (LTSS) and thereafter endorsed the same to the Board for final approval.
| Sustainability Committee Charter | Download PDF |
