Our Board of Directors established Board Committees that focus on specific board functions to aid in the optimal performance of its roles and responsibilities.
Currently, there are eight (8) standing Board Committees with the recent addition in 2021 of the Sustainability Committee which is tasked to oversee the development and/or review of the Company’s sustainability framework, agenda and policy in alignment with the Company’s business philosophy and strategies.
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 Corporation Code.
2020 to 2021 Composition
|Executive Committee Charter||Download PDF|
Nomination and Governance Committee (Nom&Gov)
Composed of six (6) directors with an independent director as chairman, Nom&Gov assists the Board in 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 quality of directors aligned with the Company's strategic directions. It reviews and recommends to the Board for the appointment of Directors and members to the Board Committees. The process involves identifying, reviewing and recommending potential candidates to the Board for consideration.
The Nom&Gov implements the Nomination and Election Policy which provides for a formal and transparent process for the nomination and election of Directors to the Board. Stakeholders, including minority stockholders, who have identified suitable candidates may 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.
Nominees from the Board may be sourced from the business network of Board members and from professional search firms such as the Institute of Corporate Directors (ICD), or from shareholders. The Company’s Corporate Secretary, Atty. Simeon Ken R. Ferrer is a Fellow of the ICD. These nominees 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.
Upon appointment, the Company sends out a formal letter setting the Director’s roles and responsibilities and the new director will then attend various briefings with Management.
The Nom&Gov Comm held five (5) meetings in 2020 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 2019
- Reviewed and approved the Revised Finance Committee Charter
- Discussed the implementation of electronic voting in absentia for the 2020 ASM, CG Disclosures App, and Project One Meralco
- Reviewed the results of the Ethical Climate Survey
- Reviewed the e-Report Mo Statistics
- Facilitated the annual CG enhancement and continuing education programs
- Conducted the onboarding orientation for the new director Mr. Frederick D. Go
|Nomination and Governance Committee Charter||Download PDF|
Audit Committee (AuditCom)
Consisting of three (3) independent directors, and four (4) non-executive directors, the AuditCom assists the Board in fulfilling its oversight responsibilities for the financial reporting process, the system of internal control, the internal and external audit process, and compliance with laws and regulations.
The AuditCom is chaired by the lead independent director who is not the Chairman of the Board or of any other committee. All members have professional qualifications and adequate background in business, finance, law, management and accounting, including Ms. Annabelle L. Chua has over twenty (20) years of experience in the areas of accounting, corporate finance, treasury, financial control and credit risk management and was a Vice President at Citibank, N.A. for ten (10) years.
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 2020 with the following accomplishments:
- 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
- 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
- Assessed the independence, performance, and effectiveness of the External Auditors, SGV & Co. CPAs (SGV) taking into consideration their credibility, competence, ability to understandcomplex related party transactions, and the adequacy of their quality control procedures.
- Held executive sessions with the External Auditors and Internal Audit without the presence of 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 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.
- 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.
- Obtained updates on the status of compliance as well as the remaining challenges confronting the Company, as they relate to the requirements of the ERC, the SEC and other regulators concerned with environment and safety, labor, and others
|Confirmation on Internal Control||Download PDF|
|Audit Committee Charter||Download PDF|
Risk Management Committee (RMC)
Composed of two (2) independent directors and four (4) non-executive directors, RMC assists the Board in its oversight role on the risk management process. The Board, through the RMC, institutes a framework of prudent and effective controls which enables risks to be identified, assessed, and managed accordingly.
2020 to 2021 Composition
The RMC held two (2) meetings in 2020 and performed the following:
- Reviewed management’s top business risks and discussed on going risk treatments
- Reviewed the Enterprise-Wide Risk Management (EWRM) Plans
- Considered Management’s short to medium term plans to EWRM integration in the annual strategic planning activities to institutionalize risk management functions at the subsidiaries
- and to develop a risk reporting dashboard that will facilitate reporting and monitoring of top risks and mitigation plans
- Reviewed the effectiveness and certified the adequacy of the Company’s risk management system
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)
Composed of four (4) directors, one of whom is an independent director, the RLDC assists 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.
2020 to 2021 Composition
The RLDC held four (4) meetings in 2020 and accomplished the following:
- Approval of candidates for rank conferment to
- Chief Commercial Officer and Vice President
- Review of performance evaluation plan results
- Review of merit increase programs
- Review of annual incentive plan
- Presentation and review of proposed succession
- planning programs
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. Compensation packages and revisions of key Management’s remuneration are subject to the review and approval of the RLDC.
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.
|Remuneration and Leadership Development Committee Charter||Download PDF|
Finance Committee (FinCom)
FinCom reviews the financial operations of the Company and matters regarding major purchase contracts, and acquisition and/or divestment of investments, businesses or ventures. It is composed of six (6) directors, two (2) of whom are an independent directors with the Chief Finance Officer (CFO) as ex-officio member.
In its twelve (12) meetings in 2020, 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)
Consisting six (6) directors, two (2) of whom are independent directors, the RPTCom assists the Board in reviewing material/significant 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.
2020 to 2021 Composition
The RPT Com held two (2) meetings in 2020 and perfromed the following:
- Discussed the implementation of the Revised RPT Policy
- Reviewed and endorsed material and significant RPTs for the Board’s approval.
In 2020, 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|
Composed of seven (7) members, two (2) of whom are the President and CEO and Chief Sustainability Officer acting as non-voting members, the Sustainability Commitee 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.
|Sustainability Committee Charter||Download PDF|