Corporate Governance in Meralco
Guided by principles of Fairness, Accountability, Integrity, Transparency and Honesty (FAITH), Meralco aims for excellence that goes beyond compliance.
Meralco (“the Company”) commits to strengthening its culture of good governance and responsible management practices, while benchmarking with the international community and global companies. Meralco believes that the reward of good governance is not just recognition but the continuous improvement on Company operations, breakthrough performance and sustainable growth that will serve the best interest of all its stakeholders.
As the country’s largest power distribution utility that caters to the power requirement of its more than six (6) million customers in its franchise area, Meralco has been at the forefront in promoting good governance regulations, policies and practices within its organization in its dealings with private and public stakeholders.
The structure, functions, policies and programs of the Company are in accordance with the stringent laws and policies enforced by the regulatory agencies such as, the Securities and Exchange Commission (SEC), the Philippine Stock Exchange (PSE), the Philippine Dealing and Exchange Corporation (PDEx), the Department of Energy (DOE) and the Energy Regulatory Commission (ERC). Policies and implementing rules on Corporate Governance, Code of Ethics, Whistleblowing, Conflict of Interest, Related Party Transactions and Management Control, are in place to set out the duties and responsibilities of the Board, Management and Employees in safeguarding the rights of the shareholders and stakeholders.
Corporate Governance Structure
The Manual of Corporate Governance (MCG) is the foundation of Meralco's governance policies, which states the responsibilities of the Board, Management and the Company to stockholders and all other stakeholders.
In compliance with the SEC Code of Corporate Governance under SEC Memorandum Circulars No. 2 Series of 2002, No. 6 Series of 2009, No. 9 Series of 2014, and No. 19 Series of 2016, the Company’s Manual of Corporate Governance was amended and submitted to the SEC on April 24, 2017.
Consistent with the Revised Manual of Corporate Governance and pursuant to the recommendations provided in the SEC-PSE Integrated Annual Corporate Governance Report (I-ACGR) which now combines voluntary compliance to recommended CG best practices with mandatory disclosure, the Company strengthened its governance framework by instituting the following developments in 2017:
2017 Meralco Corporate Governance Milestones
- Approval of Board Diversity Policy
- Approval of Nomination and Election Policy
- Approval of Related Party Transactions Policy
- Creation of Related Party Transactions Committee Organizational Charter
- Designation of Lead Independent Director
- Approval of Revised Internal Audit Charter
The Corporate Governance Office (CGO), which was established since March 16, 2010 attests to the Company’s dedication to pursue excellence in corporate governance. Its mandate is to support the Board of Directors and Management in the formulation and implementation of CG plans, programs and initiatives, and in monitoring compliance among the ranks to achieve the highest standards of competence and ethical culture among directors, officers and employees of the Company. CGO functionally reports to the Nomination and Governance Committee of the Board and administratively to the Management.
CGO's vision is to strengthen the awareness of all employees on the governance policies promulgated by the Board. CGO developed the tagline "Be Right" as a brand and a challenge to all members of the Company. The challenge is not only to do what is right but to develop one's character to embody the core principles of corporate governance – to be right.
It is also the objective of CGO to ensure that there is an open communication line that would keep the senior management abreast of the concerns of the employees across all its offices within the franchise area. Accordingly, the Company implemented the "BE RIGHT Communication Policy" in promoting Corporate Governance in Meralco. Through this, the lines of communication were created not just for Management to relay directions but also for employees to express their ideas and concerns to Management. To reinforce its mandate, CGO explored various media to raise the level of awareness and interest of the employees about the policies and projects launched by the office.
Under the administration of CGO, online platforms were developed to monitor CG compliance by officers and employees. The MyHRExpress is a customized Meralco online facility powered by SAP. The Company’s officers and employees use this to signify Commitment to Corporate Governance; submit their Conflict of Interest Disclosure and Full Business Interest Disclosure forms; report any violation of Corporate Governance Rules or Policies using the e-Report Mo form; and disclose gifts or tokens received through the Gift Registry.
In pursuit of further improvements in governance, the Company is actively involved with national and international CG advocates and organizations such as the Good Governance Advocates and Practitioners of the Philippines (GGAPP) and the Ethics and Compliance Officers Association (ECOA). The Company participates in best practice and knowledge-sharing events organized by GGAPP and ECOA with CG practitioners, Board and Senior Management. United by Good Governance principles and philosophy, responsible owners, directors and professionals yield ethical companies and ultimately, economically sustainable businesses.
As a testament to the trust accorded to it by the stakeholders, the Company’s consolidated revenues and consolidated sales volume consistently grow. On June 21, 2017, the Standard & Poor’s (S&P) global ratings raised its long-term corporate credit rating on Meralco to Investment Grade at BBB- with Stable Outlook from BB+ with Positive Outlook. Moving forward, the Company strives to continue improving its service and performance.
|Corporate Governance Report 2017||Download PDF|
|2017 Integrated Annual Corporate Governance Report||Download PDF|