Corporate Governance in Meralco

Corporate Governance in the Better Normal

Corporate governance remains a vital key to Meralco’s growth and success, permeating all facets of the Company’s organizations, business operations, and stakeholder touchpoints and driving the Company forward towards its long-term strategic objectives.

Through good corporate governance, we ensure that our company and our business operations strictly conform to relevant laws, regulations, contracts, strategies, and policies governing its operations. Through strong culture of good governance and responsible management practices, we maintain our firm commitment to our social, organizational, and environmental responsibilities while ensuring that our long-term strategic goals and objectives are achieved.

In 2023, the Company remains fully compliant with the corporate governance code, rules, and regulations promulgated and enforced by the Securities and Exchange Commission (SEC), the Philippine Stock Exchange (PSE), the Philippine Dealing & Exchange Corporation (PDEx), and other relevant regulatory bodies.

We have also been at the forefront in promoting good governance regulations, policies, and practices within our organization and in our dealings with our private and public stakeholders and have continued to adopt or strengthen our policies and programs to be aligned with the best corporate governance practices under the SEC’s 2017 Code of Corporate Governance for Publicly- Listed Companies, the Integrated Annual Corporate Governance Scorecard (I-ACGR) and the ASEAN Corporate Governance Scorecard (ACGS):

2022 ASEAN Corporate Governance Scorecard	2.80MB	Download PDF
2023 Corporate Governance Report	10.2MB	Download PDF
2023 Integrated Annual Corporate Governance Report (I-ACGR)	2 MB	Download PDF

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Board Governance
Board Charter The Board Charter sets the purposes, authority, duties, and responsibilities, structure and procedures of the Board of Directors.	Board Diversity Policy The Board Diversity Policy ensures 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 boardroom.	Lead Independent Director The Board designated a Lead Independent Director to reinforce board independence and act as intermediary between the Chairman and the other directors.	Non-Executive Directors Non-executive directors have separate periodic meetings with the external auditor and respective heads of internal audit, compliance and risk functions, without any executive director present to ensure that proper check and balance are in place within the corporation. The meetings are chaired by the lead independent director or an independent director.
Board notification prior acceptance of Directorship in another Company Directors are required to notify the Board of Directors before accepting a directorship in another company.	Board Assessment by External Facilitator Good Governance Advocates and Practitioners of the Philippines (GGAPP) was engaged by Meralco as an external facilitator to assess the effectiveness of board evaluation process.	Attendance and Participation Through Remote or Electronic Means of Communication The Company allows Directors and Stockholders to attend Meetings through Remote or Electronic Means of Communication such as the Stockholders’ Electronic Registration and Voting Express (SERVE) in accordance with SEC Guidelines.	Retirement and Succession Planning Policy The Board Remuneration and Leadership Development and Nomination and governance Committees assist the Board in the development of the Company’s compensation, retirement, succession planning and leadership development policies and programs.
Policies
Related Party Transactions Policy All the RPTs of the Company were conducted in fair and at arm’s length terms and there was no case of insider trading or policy violations involving directors and officers of the Company. Under the RPT Policy, Meralco does not grant loans or any special financial assistance to directors.”	Policy against Bribery and Corruption The Company’s Anti-Bribery and Corruption Policy formalizes its stand against corrupt practices and emphasizes the prohibition against corporate gift-giving to public and private individuals or entities that constitutes bribery or corruption.	Remuneration Policy 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. MERALCO discloses its remuneration policy and practices for its executive directors and key officers in the Annual Report filed to the Securities and Exchange Commission.	Nomination and Election Policy The Nomination and Election Policy provides procedures on how the Company accepts nominations from minority shareholders, reviews nominated candidates and assesses the effectiveness of the Board’s processes and procedures in the nomination, election, or replacement of a director.
Stakeholder Engagement
Shareholder Rights The Board encourages active stockholder participation, including allowing stockholders to call a special shareholders’ meeting, submit a proposal for consideration or agenda item, and relay concerns and questions to the Board at the annual meeting.	Information Technology Governance The Board, through its Risk Management Committee, oversees the governance process around IT issues including disruption, cyber security, disaster recovery, to ensure that all key risks are identified, managed, and reported to the board.	Whistleblowing Policy The e-Report Mo (Whistleblowing Policy/Anti-Corruption Programs and Procedures) encourages the reporting of any violation of corporate governance rules or policies, questionable accounting or auditing matters, and other malfeasance committed by the Company’s directors, officers, and employees.	Sustainability Reporting The Company has a clear and focused policy on the disclosure of non-financial information, with emphasis on the management of economic, environmental, social and governance (EESG) issues of its business, which underpin sustainability and adopts a globally recognized standard/framework in reporting sustainability and non-financial issues.

In pursuit of further improvements in governance, Meralco 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 Institute of Corporate Governance (ICD). Meralco participates in best practice and knowledge-sharing events organized by GGAPP and ICD 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 its strong brand of corporate governance and ethical culture, the Company has again been recognized in the Philippines as one of the top publicly-listed companies with strong commitment to principles of good corporate governance.

On September 28, 2023, MERALCO received a three-arrow recognition from the Institute of Corporate Directors (ICD) during the Golden Arrow Awards.

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