Board Matters

Our Company is headed by a competent, working Board of Directors that fosters our long-term success and sustains the Company’s competitiveness and profitability in a manner consistent with its corporate objectives and the long- term best interests of its shareholders and other stakeholders. The Board of Directors reviews and approves major projects, policy decisions, annual budgets, major investment funding, and major restructuring of core businesses on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the company.

By-Laws	763 KB	Download PDF
Articles of Incorporation	43.70 KB	Download PDF

Board Charter

The Board of Directors is guided by its Charter which was approved on May 29, 2018. Supplemented by the Company’s Revised Manual of Corporate Governance, By-laws, and respective Board Committee Charters, the Board Charter formalizes and clearly states the roles, responsibilities, and accountabilities of the Board and its individual members in carrying out their fiduciary role.

The duties and responsibilities of the Board, its Chairman and individual directors are listed in Sections 4, 4.3, 4.6 and 7.3 of Article 1 of the Revised Manual of Corporate Governance as well as in the Board Charter.

Board Charter	763 KB	Download PDF
Duties and Responsibilities	43.70 KB	Download PDF

Board Independence

We comply with Rule 38 of the Implementing Rules of the SRC on the qualifications, nomination, and election of independent directors. Each elected independent director has no business or other relationship with Meralco that could, or could reasonably be perceived to, materially interfere with the exercise of his independent judgment in carrying out his responsibilities as a director. Furthermore, the Company has no shareholder agreements, by-law provisions, or other arrangements that constrain the directors' ability to vote independently.

Certification of Independent Directors
Certificates of Independent Directors - Artemio V. Panganiban 2024	3.32MB	Download PDF
Certificates of Independent Directors - Lydia B. Echauz 2024	1.99MB	Download PDF
Certificates of Independent Directors - Pedro E. Roxas 2024	2.27MB	Download PDF

Independent Directors

An independent director means a person who, apart from his fees and shareholdings, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director in any corporation that meets the requirements of Section 17.2 of the Securities Regulation Code.

Sections 2.1, 2.2 and 2.3 of the Board Charter delineates the qualifications and disqualifications of an independent director.
As a rule, independent directors may serve for a maximum of nine consecutive years reckoned from 2012, making sure however that the shareholders’ legal right to vote and be voted directors remains inviolable. If the Company wants to retain an independent director who has served for nine consecutive years or more, the Board should provide meritorious justification and advise the shareholders of such justification during the annual shareholders’ meeting.

Lead Independent Director

Section 4.4 of the Meralco’s Revised Manual of Corporate Governance provides that the Board shall consider designating a lead director among the independent directors if the Chairman of the Board is not independent and if the positions of the Chairman of the Board and Chief Executive Officer are held by one person.

On December 18, 2017, the appointment of a Lead Independent Director was endorsed to, and approved by, the Board of Directors. The Board appointed Independent Director (ID) Ret. Chief Justice Artemio V. Panganiban as the Lead Independent Director to perform the following functions:

To serve an intermediary between the Chairman and the other directors when necessary;
To convene and chair meeting of the non-executive directors; and
To contribute to the performance evaluation of the Chairman, as required.

The Lead Independent Director does not, however, act as Chairman in the absence of the Chairman, the same having been delegated to the Vice-Chairman.

Board Diversity

The Company adopted a Board Diversity Policy to ensure that the Board has an appropriate mix of expertise, experience, independence, and skills that would encourage critical discussion and promote a balanced decision in the attainment of the Company’s strategic objectives and sustainable development.

Accordingly, the members of the Board of Directors shall be selected from a broad pool of qualified nominees. In order to achieve a diverse board, varied aspects are to be considered, including, but not limited to: academic, professional and business background, age, gender, and other regulatory requirements. The final composition of the board shall be grounded on merit and potential contribution of the selected directors to the Company.

Directors are selected from a broad pool of qualified nominees. In order to achieve a diverse board, varied aspects are to be considered as measurable objectives, including, but not limited to: academic, professional and business background, age, gender, and other regulatory requirements. The final composition of the Board are grounded on merit and potential contribution of the selected directors to the Company.

Measurable Objectives	2023 Board Composition	Description	2022 Board Composition	Description
Gender Diversity	√	Mix of Male and Female Directors 9 male and 2 female directors	√	Mix of Male and Female Directors 9 male and 2 female directors
Racial Diversity	√	Mix of Racial or Ethnic Backgrounds	√	Mix of Racial or Ethnic Backgrounds
Age Diversity	√	Age ranges from 50 to 90 years old	√	Age ranges from 50 to 90 years old
Board Tenure	√	Tenure ranges from 1 to 10 years	√	Tenure ranges from 1 to 10 years
Expertise
E.1. Industry Expertise	√	Mix of directors sitting as members of the BOD in Energy, Electric Retail and Power Generation companies	√	Mix of directors siting as members of the BOD in Energy, Sustainability, Petrochemical, Telecommunications, Electric Retail and Power Generation companies
E.2. Management or Operations	√	Mix of directors sitting as members of BOD or officers of electric supply, energy, power generation, retail, banking, telecommunications, realty, media, medical, insurance and other companies	√	Mix of directors sitting as members of BOD or officers of electric supply, energy, power generation, retail, banking, telecommunications petrochemical, realty, media, medical, insurance and other companies
E.3. Financial, Audit, or Risk Management Expertise	√	Mix of directors acting as Chief Risk Management Officer, Member of Philippine Disaster and Risk Foundation, or members of Financial, Audit, or Risk Management committees of other companies	√	Mix of directors acting as Chief Risk Management Officer, Member of Philippine Disaster and Risk Foundation, or members of Financial, Audit, or Risk Management committees of other companies
E.4. Legal or Regulatory Expertise	√	Mix of directors who are lawyers, or with Regulatory Management background, a Former Chief Justice of the Supreme Court of the Philippines, Former Chairperson of the Presidential Electoral Tribunal, Judicial and Bar Council and Philippine Judicial Academy	√	Mix of directors who are lawyers, or with Regulatory Management background, a Former Chief Justice of the Supreme Court of the Philippines, Former Chairperson of the Presidential Electoral Tribunal, Permanent Court of Arbitration, Judicial and Bar Council and Philippine Judicial Academy
E.5. Corporate Governance	√	Director with membership in Shareholders Association of the Philippines, Fellowship in ICD, Former Governor of Philippine Stock Exchange,	√	Director with membership in Shareholders Association of the Philippines, Former Governor of Philippine Stock Exchange,
E.6. Technology or Digital Media Expertise	√	Mix of directors who are likewise directors, advisors or consultants of media, technology or telecommunications companies	√	Mix of directors who are likewise directors, advisors, or consultants of media, technology, or telecommunications companies
E.7. Retail, Sales or Marketing Expertise	√	Mix of directors who are likewise directors, advisors or consultants of media, telecommunications, banking, telecommunications, realty, media, medical, insurance and retail companies	√	Mix of directors who are likewise directors, advisors or consultants of media, telecommunications, banking, telecommunications, realty, media, medical, insurance and retail companies
Professional, Academic or Advocacy Background or Affiliation
F.1. Academic Institutions	√	Mix of directors who have degrees in Finance and Commerce, Business Management, or who are member of Board of Overseers, Board of Trustees of colleges or business schools, or graduate of International Management Development Program	√	Mix of directors who have degrees in Finance and Commerce, Business Management, or who are member of Board of Overseers, Board of Trustees of colleges or business schools, or graduate of International Management Development Program
F.2. Advocacy Groups or Foundations	√	Directors with membership in environmental and socio-civic advocacy groups and foundations	√	Directors with membership in environmental and socio-civic advocacy groups and foundations
F.3. Professional Organizations	√	Directors with membership in Integrated Bar, Philippine Bar Association, and Inter-Pacific Bar Association, Philippine Stock Exchange	√	Directors with membership in Integrated Bar, Philippine Bar Association, and Inter-Pacific Bar Association, Federation of Philippine Industries, Philippine Olympic Committee,

Election of Directors

Our Nomination and Election Policy was issued to set forth the procedures in the director selection process, including the acceptance of nominations from minority shareholders and the evaluation and screening of nominees vis-à-vis the applicable qualifications and disqualifications set forth in the Company’s Revised Manual of Corporate Governance, By-laws and other applicable law, policy or regulation, how the board shortlists candidates, and an assessment of the effectiveness of the Board’s processes in the nomination, election or replacement of a director.

In accordance with the provisions of the Meralco’s By-Laws and Revised Manual of Corporate Governance, the Corporation Code of the Philippines and the SRC, nominees for board directorship go through a nomination and screening process, taking in consideration the qualifications and disqualifications provided in the Board Charter under sections 4.1.1.2 to 4.1.1.3.2 of the revised Corporate Governance Manual. 

The Company uses professional search firms or other external sources of candidates (such as director databases set up by director or shareholder bodies) when searching for candidates to the board of directors/commissioners such as the Institute of Corporate Directors (ICD) to search for candidates to the Board of Directors. These candidates would be skilled in core competencies such as strategic planning, business expertise, and industry knowledge. The final list of nominees is determined after pre-screening and evaluation. The shareholders will then elect the directors during the Annual Stockholders Meeting held every last Tuesday of May.

Upon appointment, the Company sends out a formal letter setting out the Director’s roles and responsibilities and the new Director will then attend various briefings with Management as listed in the Annual Report. They serve for a period of one year or until their successors are qualified and elected.

Nomination and Election Policy	46.35 KB	Download PDF
Qualifications and Disqualifications of Directors	40.80 KB	Download PDF

Orientation and Continuing Education Programs

The Board of Directors ensures that the Company complies with all relevant laws, regulations, and endeavor to adopt best business practices and to keep it abreast with the latest developments in corporate governance regulatory landscape and best practices, implements a policy on orientation and continuing training for all directors and key officers, including an annual CG training with SEC-Accredited providers, in accordance with the Board Charter.

Orientation Programs

The Company has an established orientation program for every new director to ensure their practical understanding of business in general, and of Meralco in particular. Each newly elected director is provided with a director’s kit which contains policies and other information pertaining to his duties and obligations as a director provided under existing laws and regulations. An in-house orientation program, incorporating briefings from the corporate and regulatory units, is arranged for any new director to better familiarize himself with the Company’s businesses, stakeholders, regulatory environment, and governance practices. Contents of this program are discussed in the downloadable file below.

Orientation Program for New Directors	244 KB	Download PDF

Continuing Education

Our Company has a policy that encourages directors to attend annual continuing training programs. The Company believes that its directors must keep abreast with the latest developments in business, corporate governance best practices, laws and regulations, and other relevant matters that help them function effectively in the Board and in their respective committees in order to direct the Company to achieve its mission, vision and goals.

In pursuit of this ideal, the Company, together with the MVP Group of Companies, regularly conducts in-house corporate governance enhancement sessions for its Directors, Key Officers and Middle Managers to ensure that they are updated on the most recent corporate governance trends and best practices through participating in seminars and trainings. Accordingly and pursuant to the requirements of the Company’s MCG, the ERC Resolution No. 1, Series of 2004, and the SEC Memo Circular No. 20, Series of 2013, the Directors, together with the Senior Management, attended via online platform the MVP Group Annual Corporate Governance Enhancement Session (ACGES) on November 9, 2023, entitled Governance Imperatives, Opportunities, and Challenges in the Age of Artificial Intelligence by Dr. Max Tegmark and Atty. Edsel F. Tupaz.. This session covered four (4) hours of governance training and was accredited by the SEC.

2023 ATTENDANCE TO CORPORATE GOVERNANCE TRAINING AND CONTINUING EDUCATION PROGRAMS
	Program	Resource Person/ Name of Training Institution
June Cheryl A. Cabal-Revilla Lydia B. Echauz Ray C. Espinosa Frederick D. Go Ret. Chief Justice Artemio V. Panganiban Pedro Emilio O. Roxas Victorico P. Vargas	MVP Group Annual Corporate Governance Enhancement Session: “The Metaverse and How it will Transform Business & Human Interaction” and “Proof of Learn: A Philippine Perspective to the Metaverse”	Mr. Matthew Ball Ms. Sheila Lirio Marcelo
Manuel V. Pangilinan	First Pacific Directors' Training - Cyber Security and Artificial Intelligence	PwC Hong Kong
LANCE Y. GOKONGWEI	Unbox Extra: The Gokongwei Group Innovation Festival	JG Summit Digital Transformation
JAMES L. GO	SEC Granted Mr. James L. Go a permanent exemption from the corporate governance training requirement in its en banc meeting on November 10, 2015.

For details on the 2023 governance training or seminar attended by our Directors and Officers, please click the following link:

Director		Seminar
Manuel V. Pangilinan		Download PDF
Lance Y. Gokongwei		Download PDF
Ray C. Espinosa		Download PDF
James L. Go		Download PDF
Patrick Henry C. Go		Download PDF
June Cheryl A. Cabal-Revilla		Download PDF
Jose Ma. K. Lim		Download PDF
Victorico P. Vargas		Download PDF
Lydia B. Echauz		Download PDF
Artemio V. Panganiban		Download PDF
Pedro E. Roxas		Download PDF

Board Meetings

Our Board holds monthly meetings and special Board meetings, if so required, with an agenda that includes updates by the Chairman of the Board and the Board committees, reports on financial performance by the Chief Finance Officer or CFO, and operational performance by the President and CEO, the Senior Executive Vice President and Chief Operating Officer, or COO, among other major issues of Meralco.

Our Board has separate and independent access to the Corporate Secretary, who oversees the adequate flow of information to the Board prior to meetings and advises directors about their duties. During Board meetings, discussions are open and independent views are given due consideration. 

Our Board jointly plans meeting dates before the beginning of every year, with at least twelve meetings a year. The Board, as part of the agenda of its meeting on November 6, 2023, approved the schedule of 2023 Board meetings.

A first meeting of the Board of Directors, for organization, is immediately conducted after their election, of which meeting no notice shall be required. Thereafter, regular meetings may be held at such time and in such places, and upon such notice, if any, as the Board of Directors may by resolution prescribe.

Special meetings of the Board may be called by the Chairman or by written request of any two directors, upon at least one (1) day’s notice of the time and place of holding the same, given personally or by letter, telegram, or telephone.

Meetings may be held at any time and place without notice if all the directors are present or of those not present waive notice in writing before or after the meeting.

The Corporate Secretary and the Assistant Corporate Secretary shall assist the Board and the board committees in the conduct of their meetings, including preparing an annual schedule of Board and committee meetings and the annual board calendar, and assisting the chairs of the Board and its committees to set agendas for those meetings.

Members of the Board or Board Committees are informed, in accordance with the by-laws, of the agenda of their meetings, at least five working days in advance, and are provided with accurate information that will enable them to arrive at intelligent decisions on matters that require their approval.

We likewise observe the pertinent guidelines set in SEC Memorandum Circular No. 15, Series of 2001 in the conduct of Board meetings through teleconferencing or videoconferencing and Memorandum Circular No. 6, Series of 2020 on Guidelines on the Attendance and Participation through Teleconferencing, Videoconferencing, and other remote or electronic means of communication.

Board Meeting through Teleconferencing or Videoconferencing	66 KB	Download PDF

The Board scheduled fifteen (15) Board meetings in 2023 and each director has attended at least 96% of these meetings.

The table in the link below shows the participation of the Board in the ASM, Organizational Meeting and its regular meetings:

2023 ASM and Board Meeting Attendance
Director	Designation	Annual Stockholders' Meeting	Board and Organizational Meetings
Manuel V. Pangilinan²	Chairman	Present	14/15
Lance Y. Gokongwei	Director	Present	15/15
Ray C. Espinosa³	Director	Present	15/15
Anabelle L. Chua⁴	Director	Present	6/6
June Cheryl A. Cabal-Revilla⁵	Director	Attended as Stockholder	9/9
Frederick D. Go	Director	Present	15/15
James L. Go	Director	Present	15/15
Jose Ma. K. Lim	Director	Present	11/15
Victorico P. Vargas	Director	Present	15/15
Lydia B. Echauz	Independent Director	Present	15/15
Artemio V. Panganiban	Independent Director	Present	15/15
Pedro Emilio O. Roxas	Independent Director	Present	15/15

Board Remuneration

Our Board ensures that the remuneration of directors and officers is consistent with the Company’s culture, strategy, and the business environment in which it operates and aligned with the long-term interest of the Company.

Directors, as such, do not receive any compensation unless approved by the stockholders or provided in the By-Laws of the Company. No director participates in the approval of his compensation. However, the Board may, from time to time, approve a reasonable per diem that a director may receive for attendance in Board and Board Committee meetings. 

Details of 2023 Board Remuneration (in PhP)
	Remuneration for Board Meetings Attended in 2023	Remuneration for Committee Meetings Attended in 2023	Total


EXECUTIVE DIRECTORS
Manuel V. Pangilinan¹	₱1,960,000.00	₱ 240,000.00	₱2,200,000.00
Ray C. Espinosa²	₱2,100,000.00	₱ 0	₱2,100,000.00
NON-EXECUTIVE DIRECTORS
Lance Y. Gokongwei	₱2,100,000.00	₱552,000.00	₱2,652,000.00
Anabelle L. Chua³	₱840,000.00	₱288,000.00	₱1,128,000.00
June Cheryl A. Cabal-Revilla⁴	₱1,260,000.00	₱216,000.00	₱1,476,000.00
James L. Go	₱2,100,000.00	₱552,000.00	₱2,652,000.00
Frederick D. Go	₱2,100,000.00	₱360,000.00	₱2,460,000.00
Jose Ma. K. Lim	₱1,540,000.00	₱552,000.00	₱2,092,000.00
Victorico P. Vargas	₱2,100,000.00	₱432,000.00	₱2,532,000.00
INDEPENDENT DIRECTORS
Lydia B. Echauz	₱2,100,000.00	₱528,000.00	₱2,628,000.00
Artemio V. Panganiban	₱2,100,000.00	₱336,000.00	₱2,436,000.00
Pedro Emilio O. Roxas	₱2,100,000.00	₱792,000.00	₱2,892,000.00
TOTAL INDEPENDENT DIRECTORS	₱6,300,000.00	₱1,656,000.00	₱7,956,000.00
GRAND TOTAL	₱22,400,000.00	₱ 4,848,000.00	₱27,248,000.00

The Directors and Officers are covered by a Casualty Line Insurance Policy effective until June 27, 2022. The policy covers Company Securities, Company Employment Practices Breach, Regulatory Crisis Event Costs, Investigation Costs, Public Relations Expenses, Investigation Costs for Derivative Demands, Tax Liability and other additional limits such as Bodily Injury & Property Damage Defense Costs, Health & Safety Costs, Gross Negligence Manslaughter Defense Costs and Environmental Violation (Defense Costs Including Civil and admin Fines).

In 2013, the shareholders approved an additional remuneration for the Board, which could be in the form of a fixed retainer, bonus or stock grant or a combination thereof, as may be approved by the Board. The total value of such additional compensation, in whatever form so given, shall not exceed one percent (1%) of the income before tax of the Company during the preceding year. The rationale of such additional remuneration of directors is to recognize the invaluable services rendered by the Company’s directors in profitably steering the business affairs of the Company, which has produced record highs in financial performance over the past four years. The role and responsibility of directors is critical in the success, accomplishments, and profitability of the Company. It is for this reason that the approval for additional remuneration for directors was sought. In line with the said rationale, during its 25 October 2013 meeting, the Board approved the provision of additional and performance-based remuneration in the form of a Stock Grant ("Grant"). 

The Company's directors receive per diem fees for their attendance to Board and Board Committee meetings. In 2023, each director is entitled to a per diem allowance of PhP140,000 for every board meeting attended and PhP24,000 for every committee meeting.

For the President and CEO, 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. The Board ensures that the remuneration of its members and key officers is aligned with the long-term interest of the Company. Directors do not participate in discussions or deliberations involving their own remuneration.

Board Performance

Our Board recognizes the importance of a regular performance assessments, individually and collectively as part of their accountability. Assessments were done to evaluate their specific and overall performance for the past calendar year. The Board conducted the performance assessment for 2023 on February 26, 2024 wherein directors were given opportunity to give their opinions and suggestions or identify special issues of interest about their performance or different aspects of the Company’s operation. 

Every three years, the assessments are supported by an external facilitator. In 2023, the Company engaged the services of the Good Governance Advocates and Practitioners of the Philippines (GGAPP) in the evaluation of the 2022 performance of the board, board committees, the Chairman, the CEO, and other key officers.

Four (4) assessment instruments with corresponding evaluation criteria were accomplished by the directors:

Board, Committee and CEO Performance Assessment FORMS

1. Collective Board Assessment - each director assessed the board performance as a whole based on the following categories:

Board composition;
Board efficiency and Performance;
Board meetings and participation

2. Individual Director Self-Rating – each director evaluated their performance for the previous year.

3. Board Committee Assessment – each director assessed the overall performance of the board committees as well as the individual board committees based on the provisions of Board Committee Charters.

4. Key Officer Ratings – each director assessed the performance of the President and CEO, Chief Compliance Officer Chief Risk Officer, and Chief Audit Executive. In addition, the Chairman participated in the self-assessment of his performance in the previous year.

Scale	Category
1	Not at all Satisfied; Poor (NS)
2	Slightly Satisfied; Needs improvement (SS)
3	Satisfied; Meets requirements (S)
4	Moderately Satisfied; Exceeds requirements (MS)
5	Very Satisfied; Outstanding (VS)

The evaluation forms were then submitted to the Corporate Governance Office which consolidated and analyzed the responses based on the grading scores 1 to 5 with 5 being the highest mark.

Results thereof were then presented to the Nom&Gov Committee and to the Board through the Nom&Gov last March 14, 2024.

Succession Planning

Together with the Board, the Nomination and Governance Committee (Nom&Gov) is responsible for recommending a succession planning program for its members while the Remuneration and Leadership Development Committee (RLDC) is responsible for overall guidance and direction on succession planning and leadership development of the President and CEO and Senior Management. The Committee, working closely with the head of Human Resources (HR), drives the strategy for succession planning, leadership development, and talent management. The HR head develops and implements the processes and the tools to ensure robust pools of succession candidates for the President and CEO, senior management, middle management and first line management.

Retirement

The Board adopts a policy on the retirement for directors and key officers. The Remuneration and Leadership Development Committee 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.

Corporate Governance