Nomination, Selection, and Election of Directors

 

The Aboitiz Group believes that the nomination, selection, and election of directors are the fundamental elements of a well-functioning  corporate governance system. AEV and AboitizPower both follow a formal and transparent board nomination, selection, and election process to ensure that the interests of all shareholders are protected. Any shareholder may nominate a director and independent director. The ESCG Committees of AEV and AboitizPower act as the nomination committees and oversee the selection of candidates for their respective independent, executive, and non-executive directors. In determining the right candidates for directors, both AEV and AboitizPower may use professional search firms and external sources of candidates, including director databases and professional organizations in the Philippines or abroad.

 

The members of the Boards of AEV and AboitizPower comply with the qualifications for directors found in the Revised Corporation Code, Securities and Regulation Code and its Implementing Rules and Regulations, related SEC issuances, and best practices in corporate governance. Considering that AEV and AboitizPower are involved in complex and highly regulated businesses, Board members are identified and nominated based on their wealth of experience, in-depth knowledge, wisdom, and capability to contribute to the long-term success of each company. The ESCG Committees of both companies, after rigorous screening of the candidates, provide the final list of candidates for directors to each company’s Corporate Secretary, for inclusion in the ASM agenda. This gives the stockholders the opportunity to assess the background and qualifications of the nominees before the actual ASM.

 

Every year during the ASMs, AEV and AboitizPower shareholders elect their representatives to the Boards by voting in person, by proxy, and – for the first time in 2020 – by voting in absentia. Proxy votes received by the Corporate Secretary of AEV and AboitizPower before the ASM are validated by each of the company’s Proxy Validation Committee. The members of the AEV and AboitizPower Proxy Validation Committees include each of the company’s compliance officer, its principal  accounting officer, and the head of its internal audit team.

 

AEV and AboitizPower both follow the rule of One-Share, One-Vote. Under this rule, any minority shareholder can influence the Board composition by individual nomination and by the power of cumulative voting rights. The right to cumulative voting is a statutory right granted by the Revised Corporation Code. A director holds office for one year until his successor is elected at the next ASM, in accordance with the Revised Corporation Code, each company’s by-laws, and the relevant SEC guidelines.