Annual Corporate Governance Seminar

Mandatory seminars are conducted to impress upon and refresh all employees’ awareness and understanding of the Company’s Manual of Corporate Governance and Code of Ethics and Business Conduct, as well as the underlying principles of corporate governance and ethical behavior and conduct for the company.

 

In 2011, the Board mandated a Corporate Governance Seminar for all employees. This was followed by a mandate in 2012 requiring all newly-hired employees to attend a new hires’ seminar and an annual Quality Focus seminar which includes an orientation on the company’s Manual of Corporate Governance and Code of Ethics and Business Conduct.

 

In 2013, the company launched its online Corporate Governance E-learning Course for all newly-hired employees. This was taken by all employees through a web-based portal with a standard test, the results of which are reported to management and the Board Corporate Governance Committee.

 

On July 24, 2014 and March 25, 2015 in compliance with Memorandum Circular 20, Series of 2013 of the Securities and Exchange Commission and in partnership with the Institute of Corporate Directors, the company held its Aboitiz Annual Corporate Governance Seminar at its principal office in Bonifacio Global City, Taguig City. The seminar was attended by the Company’s Board of Directors and key officers.

 

On March 28, 2016, the company held its 2016 Mandatory In-House Corporate Governance Seminar at the Shangrila at the Fort, Bonifacio Global City, Taguig City. The Securities and Exchange Commission approved the company’s accreditation as a corporate governance seminar provider.

 

On March 28, 2017,  The Pan-Asia Risk and Insurance Management Association (PARIMA) held its first regional conference in Manila at the Shangri-La at the Fort Manila, Taguig City, Philippines. This year’s theme is ‘Sustainable, Resilient, & Intelligent Future,’ which aimed to strengthen and educate risk management professionals and key industry players in today’s rapidly changing risk landscape. With more than 270 participants, the PARIMA Manila Conference was a landmark event for the risk professional community. In Aboitiz Group, around 50 delegates composed of some members of the Board of Directors, Risk Managers and Senior Executives attended.

 

On March 29, 2017, AEV Group Risk Management, in coordination with AEV Governance and Compliance team, organized an Executive Briefing for the Board and Directors and Senior Executives of the Group, with more than 80 participants. The briefing covered three topics such as The 2017 Top Global Risks: World Economic Forum, Millennial Mindset – Risk and Opportunity in the Workforce, and Cyber Security. The participants were also given an opportunity to raise their concerns during the Q&A portion of the program.

 

On August 31, 2018, AEV Group Risk Management, in coordination with AEV Governance and Compliance team, organized 2018 Annual Corporate Governance Seminar for the Board of Directors and Senior Executives of the Group, with more than 60 participants. The briefing covered three topics such as Digital Disruption: Reshaping Leadership, Innovation and Risk; Cyber Risk; and Discussion on the Asia-Pacific Risk Landscape 2018. The participants were also given an opportunity to raise their concerns during the Q&A portion of the program.

Enterprise Risk Management

Risk management plays its part in the achievement of the Aboitiz Group’s strategic objectives by creating a culture of measuring and managing risk.

 

Now on its third year of assessing the risk maturity of the Aboitiz Group, the Group’s average rating is at 3.9 on a scale of 1 -5. This puts the Group at the top 15% of all organizations that participate in the global Risk Maturity Index (RMI) assessment conducted by AON annually. The  2014 assessment was participated by 110 Aboitiz Group team leaders, including board members, C-Suite, key operating team leaders, and risk managers from 16 business units.


See discussion of the Company’s risk management initiatives in the company’s Integrated Annual Report and Definitive Information Statement.

Other Committees

The Company and its Management teamwork through other committees for the formulation and implementation of management policies.

BOARD AUDIT COMMITTEE

Purpose / Objective

 

  • Ensures the integrity of the Company’s financial reporting processes, including ensuring the integrity of financial reports and other financial information provided by the Company to the public, governmental and/or regulatory bodies.
  • Ensures the adequacy and effectiveness of the Company’s internal control system, governance processes and risk management processes and reviewing the performance on the Company’s internal audit function.
  • Reviews the annual independent audit of the Company’s financial statements and the external auditors’ qualifications and independence.
  • Ensures compliance with applicable laws and regulations which may represent material financial exposure to the company.

BOARD CORPORATE GOVERNANCE COMMITTEE

Purpose / Objective

 

The purpose of the Corporate Governance Committee is to oversee the adoption and implementation of governance principles and guidelines of the Aboitiz Group, including the following:

 

  • The establishment of legal and regulatory compliance structures and processes required under securities laws, rules, and regulations and other applicable laws;
  • The adoption of the nomination process and procedures for Board membership and senior leadership roles in the Aboitiz Group, and the review of various compensation matters;
  • The selection and identification of qualified individuals to become members of the Board;
  • The determination of the appropriate composition of the Board and its committees;
  • The performance evaluation of the Board, Board Committees, and Senior Officers; and
  • The onboarding and continuing education of directors;

BOARD EXECUTIVE COMMITTEE

Purpose / Objective

 

The Executive Committee was constituted to assist the Board of Directors in overseeing the Company’s day to day operations. This ensures agility in the management of the Company and in strategic decision-making, as well as compliance with the Company’s governance policies, during the intervening period between Board meetings.

BOARD RELATED PARTY TRANSACTIONS COMMITTEE

Purpose / Objective

 

The Board Related Party Transactions (RPT) Committee was constituted to ensure transparency and fairness of RPT within the Group. Its duties and responsibilities under the charter include:

 

  • to review proposed material RPT for the purpose of determining whether or not the transaction is conducted at an arm’s length basis and on terms no less than favorable than any such terms available to unconnected third parties under the same or similar circumstances.
  • to review, on an ongoing basis existing relations between and among business and counterparties to ensure that all related parties are continuously identified, RPTs are monitored, and subsequent changes in relationships with counterparties (from non-related to related and vice versa) are captured.
  • to ensure that appropriate disclosures are made, and/or information are provided to regulatory and supervisory authorities relating to AEV and AboitizPower’s RPT exposures, and policies on conflicts of interest.
  • to report to the Board, on a regular basis, the status and aggregate exposures to each related party, as well as the total amount of exposures to all related parties.
  • to ensure that transactions with related parties, including write-off of exposures are subject to a periodic independent review or audit process; and
  • to oversee the implementation of the system for identifying, monitoring, measuring, controlling, and reporting RPTs.

BOARD RISK AND REPUTATION MANAGEMENT COMMITTEE

Purpose / Objective

 

The Board Risk and Reputation Management Committee is established to provide a venue for discussion of risk and reputation management issues for the purpose of:

 

  • Establishing and maintaining a constructive and collaborative relationship among the Group’s senior management team and the Board.
  • Assisting the Board, and to some extent the Board Audit Committee, in fulfilling its corporate governance responsibilities through better integration and collaboration of risk, reputation and audit management functions.

The Board Risk and Reputation Committee is authorized to deal with any activity within its Charter, including the authority to secure the attendance of outsider experts with relevant experience and expertise as it deems necessary in the performance of its duties.

 

The Committee shall represent the Board in discharging its responsibility relating to risk and reputation management related matters around the Group as outlined below. The Committee does not have decision-making authority, except in the circumstances described herein or to the extent that such authority is expressly delegated by the Board:

 

  • At least annually, review and consider the Group’s risk management policy considering (but not limited to) the following: strategic risks, operational risks, financial risks, legal and compliance risks, emerging risks, project risks.
  • Provides a forum to review exposures and strategies to mitigate risks with relevant Group senior leaders and business managers and make recommendations to the Board related to changes to the policy based on this review;
  • Undertake a periodic review of the delegated authorization and control levels. Following consultation with the CEO, COO and CFO, make recommendations to the Board related to any changes in these levels seen to be appropriate based on this review;
  • Review the Group’s senior leadership’s proposed risk appetite and risk tolerance at least annually and if advisable, recommend it for Board approval;
  • At least annually, reviews policies and procedures in consultation with individual business leaders and risk managers and recommend changes as appropriate.
  • Monitor and review the Group’s senior leadership’s reports on the following: Group’s risk profile-identifying material risks associated with the Group’s business and operations; emerging risk issues and trends; compliance with the risk appetite and risk tolerance limits and established policies and procedures; overall adherence to the Group’s defined risk appetite;
  • Ensure the proper implementation of the reputation management framework across the Group by identifying, evaluating and monitoring reputation issues to mitigate risk;
  • Review with the Group senior leadership the following: results of the reputation survey that is conducted annually by the reputation management team; Group’s corporate brand and communication strategy; exposures and strategies that will mitigate reputation risks; social media strategy and corporate policy in place, as well as strategy and programs on corporate social responsibility to ensure that these are updated; ensure the proper implementation of the reputation management framework across the Group by identifying, evaluating and monitoring reputation issues to mitigate risk.

CSU LEVEL COMMITTEES

Purpose / Objective

 

  • Provides a standard way of pulling together information on investment opportunities.
  • Provides an early opportunity for information to flow in two ways to help team members and management to understand any deal.
  • Ensures timely investment and timely evaluation of opportunities available to us.

BUSINESS INSIGHTS (DATA) COMMITTEE

Purpose / Objective

 

  • AEV Data Science and Analytics will harness all data to create synergy and improve efficiencies in the Aboitiz Group.
  • Gather all the data permitted by data privacy rules and link it together, so we gain a deeper understanding of our customer ecosystem while improving customer experience.
  • The mandate is to leverage on the Aboitiz Group’s capabilities, so we can expand and explore new products and services relevant to the B2B and B2C market.

BUSINESS INSIGHTS (DATA) COMMITTEE

Purpose / Objective

 

  • AEV Data Science and Analytics will harness all data to create synergy and improve efficiencies in the Aboitiz Group.
  • Gather all the data permitted by data privacy rules and link it together, so we gain a deeper understanding of our customer ecosystem while improving customer experience.
  • The mandate is to leverage on the Aboitiz Group’s capabilities, so we can expand and explore new products and services relevant to the B2B and B2C market.

CORPORATE MANCOM

Purpose / Objective

 

  • Review the overall strategic direction, plans, programs, initiatives and budgets of the Corporate Service Units (CSU)
  • Review group-wide initiatives, projects and programs prior to endorsement and approval by the Group Mancom; monitor execution of approved initiatives, projects and programs
  • Review and approve AEV policies and benefits
  • Conduct Key Talent Reviews (KTR) for officer positions
  • Review and approve CSU manpower plantilla
  • Review and approve promotions from manager to AVP, and from AVP to VP level
  • Review CSU achievements of goals and performance

DIGITAL COMMITTEE

Purpose / Objective

 

  • Sets and oversees group Digital Strategies and Direction
  • Create a digital strategy and framework to enable the Aboitiz Group to become an intelligent and digital-ready business.
  • Provide common goals on technologies, processes, and capabilities to build models for digital business and service delivery.
  • Strengthen organizational culture and stakeholder experiences by building a unified digital environment.

FINANCE COMMITTEE

Purpose / Objective

 

  • Reviews long-term financing requirements including operational companies, greenfield projects, and business development projects, which include acquisitions
  • Reviews placement limits and investment outlets
  • Reviews credit lines (short-term lines and credit borrower’s limit)
  • Reviews cash flows
  • Reviews foreign exchange hedging requirements
  • Updates on market directions on interest rates and foreign exchange

GOVERNMENT RELATIONS COUNCIL

Purpose / Objective

 

  • Monitors, assesses, and leads discussion on proposed government policies and legislation
  • Monitors, assesses, and leads discussions on key national issues

GROUP HUMAN RESOURCE COMMITTEE

Purpose / Objective

 

  • Develops Group HR strategy and goals; recommends to Group Mancom for approval
  • Develops Group HR Policies and Guidelines; recommends to Group Mancom for approval
  • Champions Group projects, initiatives, and programs that support HR strategy; monitors execution of plans at SBU/BU level; supports critical BU needs in partnership with CEO/COO
  • Develops RACI where relevant; Identifies role of Corporate HR vs SBU/BU HR Teams
  • Partners with AEV Group HR team to deliver on AEV CSU roles – Governance, Business Partnering and Center of Excellence
  • Manages Group talent-related risks in partnership with CEO/COO/ SBU HR and Risk Teams

GROUP MANCOM/RISK MANAGEMENT COUNCIL

Group Mancom Purpose/Objectives

 

  • Develops group business goals and strategies, for approval by the ACO, AEV, and AboitizPower Boards
  • Reviews and provides input into SBU business goals and strategies
  • Communicates goals and strategies, along with appropriate success measures, to other leaders throughout the Group
  • Oversees the successful execution of group strategies and achievement of goals
  • Reviews and approves all group policies and guidelines.
  • Reviews and approves group-wide initiatives, projects and programs that are aligned to group strategic goals; approves cost allocation across BUs
  • Conducts Key Talent Reviews (KTR), reviews succession plans, and approves appointments and promotions for senior management positions

 

Risk Management Council Purpose/Objectives

 

  • Provide a venue for discussion of Group Risk Management strategies, programs and initiatives
  • Promote a proactive perspective in identifying, mitigating or managing all known and emerging risks
  • Assist the Board in ensuring that Aboitiz Group has a structured, consistent and effective approach to risk management

 

Duties and Responsibilities

 

  • Ensure a structured and consistent approach to Group risk management through establishing four major focus areas demonstrated as risk management strategic pillars: Governance, Business Partnering, Process and Integration and Capability Building.
  • Promote a proactive and dynamic perspective in monitoring and handling all known and emerging risks, risk trends and mitigation strategies.
  • Establish a clear and credible approach to fulfilling its social and environmental responsibilities to avoid exposure to reputational risks.
  • Assist the board in ensuring that the company has an effective risk management process, which includes the management of the key risks the company is facing and the follow up of risk appetite, risk tolerance, risk framework and risk strategy.
  • Continually obtain reasonable assurance from risk management heads that all known and emerging risks have been identified and mitigated or managed.
  • Review and assess the effectiveness of the company’s enterprise-wide risk assessment processes and risk management capabilities, recommend improvements, where appropriate; review and address, as appropriate, management’s corrective actions for deficiencies that arise with respect to the effectiveness of such programs.
  • Ensure that risk management is aligned with the Statement of Risk Appetite approved by the Board.
  • Enhance corporate governance by developing and implementing a comprehensive, Enterprise Risk Management (ERM) programs to cultivate awareness, understanding, and support for risk management initiatives as part of the Group’s overall strategic plan.
  • Approves all insurance strategies and insurance premiums beyond 2B insured value.

INSURANCE MANAGEMENT COMMITTEE

Purpose/Objectives

 

  • Formalize the governance and management of insurance requirements across the Group.
  • Ensure risk transfer strategy is in accordance with BU’s / Group’s risk management plan.
  • [General] Oversight function on insurance requirements of the group including review, evaluation, sufficiency and competitiveness of insurance programs
  • [General] Management of operation and administration of the Group’s Captive Insurance company.
  • Approval of insurance programs for risks up to Php2B. Beyond this amount, endorse approval to Risk Management Council
  • Review, validate and approve insurance management strategies
  • Approval of the appointment of Risk Management Advisor (insurance broker)
  • Approval on the use of Risk Management Fund of the Group

IT COMMITTEE

Purpose/Objectives

 

  • Ensure the effective and efficient use of technology and resources in executing the digital strategies and direction of the group.
  • Develop IT strategies and the Group IT Plan
  • Ensure IT risks are managed at an optimal level
  • Secure maximum value from IT-enabled initiatives
  • Monitor and evaluate IT execution and performance

LEGAL AND COMPLIANCE COMMITTEE

Purpose/Objectives

 

  • Provide a venue for discussion of major legal and compliance risk management issues of the Aboitiz Group;
  • Review key governance, legal and compliance policies for the Group;
  • Address cross-functional challenges in transactions and projects by promoting high coordination among the SBUs and AEV.
  • Foster strong partnership and alignment of practices among the SBUs and AEV.

REPUTATION COUNCIL

Purpose

 

  • Develops strategy and group-wide initiatives related to reputation management, CSR, and sustainability
  • Sets policies and guidelines related to corporate communication, media relations, branding, CSR and sustainability
  • Reviews, monitors, and reports implementation progress of group-wide projects related to corporate communication, media relations, branding, CSR, and sustainability

Objectives

 

  • To BUILD trusting relationships
  • To ENHANCE our brand through effective communication
  • To PROTECT against risks
  • To RESTORE and rebuild trusting relationships

RETIREMENT FUND COMMITTEE

Purpose

 

  • Resolve all questions relating to the operations, administrations, and interpretation of the rules and regulations of the Retirement Plan, except those strictly pertaining to its investments.

RISK MANAGEMENT STEERING COMMITTEE

Purpose

 

  • AEV’s Risk Management Steering Committee (“Steercom”) is an oversight committee of all risk management activities in the Aboitiz Group.
  • It provides assurance to the Board Risk and Reputation Management and Risk Management Council that at all times, AEV has a sound, comprehensive, appropriate, and effective risk management framework in place, capable of addressing risk-related issues that may affect the achievement of the Company’s objectives.

 

Objectives

 

  • Reviews and recommends group-wide Risk Management and Insurance policies, strategies and initiatives for RM Council review and approval
  • Reviews, monitors, and reports implementation progress of group-wide Risk Management and Insurance projects and initiatives
  • Serves as forum for discussing key risk issues, emerging risks and sharing Risk Management knowledge, best practices, experience and research work

SAFETY COMMITTEE

Purpose

 

  • Safety in Aboitiz Group at NAC Tower, BGC, Taguig City requires that everyone is formally informed of policies, procedures and practices.
  • Implementation of safety programs is effective if meetings are held in the realization of desired key results areas and if the need to organize safety workforce is addressed.

 

Objectives

 

  • Ensure that an organization between management and rank & file is in place to comply with regulatory standards, spearhead effective and efficient implementation of OSH policies and programs;
  • Promote and maintain and atmosphere of open and harmonious discussion of safety issues for the prevention of accidents and injuries and control of hazards;
  • Applicable safety organization and meetings are indispensable in the continual effectiveness and efficiency in implementing safety programs

SAFETY COMMITTEE

Purpose/Objectives

 

  • Oversight council of all physical assets security management activities in the Aboitiz Group
  • Provides assurance to AEV Board and Senior Management that at all times, the Group has a sound, comprehensive, effective and efficient physical security management framework in place, capable of addressing security-related threats and issues that may affect the achievement of the Company’s objectives