In 2021, the AboitizPower Board reviewed the governance framework and implemented the necessary changes to implement effective governance in the Aboitiz Group and ensure that both Boards are able to build on their companies’ future prosperity, adapt to the changing business environment, and carry out their strategic direction and growth aspirations.

3 Program Components

The AboitizPower Board perform the crucial role of articulating and reviewing each company’s purpose, vision and mission, and strategies to carry out its goals. They ensure that the strategic direction of each company’s businesses are well defined, properly managed, and are aligned with the overall strategic goals of the Aboitiz Group. Independent from management, they are committed to provide each company a strategic roadmap towards long-term growth, competitiveness, and building a sustainable business that will thrive for another 100 years.

In 2021, the members of the AboitizPower Board of Director were the following:

Commitment to the Corporate Mission, Vision, and Strategy

The AboitizPower directors acknowledge the importance of their role to lead and steer their respective companies as profitable and sustainable enterprises. The Board’s role for each company is to represent and protect the interests of its shareholders – the owners of the business – and other key external stakeholders. Guided by the Aboitiz Group’s purpose, brand promise, mission, and vision, the members of each Board, together with key officers and heads of the Strategic Business Units, participate in an Annual Board Retreat and Strategy Refresh. They review and align the corporate initiatives and strategic roadmaps of the Group’s core businesses with contemporary market and economic trends, both locally and worldwide.

Roles and Responsibilities of the Board of Directors   

The Company believes that compliance with the principles of good governance begins with the Board of Directors. The Director’s office is one of utmost trust and confidence. The Board of Directors is expected to act in a fully informed basis, in good faith, with due diligence and care and act in the best interest of the Company in a manner characterized by transparency, accountability and fairness in the exercise of leadership in directing the Company’s sustainable growth.

The Board is actively engaged in discussions of strategic business issues and the directors are consulted for their invaluable inputs through the special strategy board meetings and gatherings with the management teams. The Board ESCG formalized these gatherings into an annual Board Retreat or strategy meetings in an atmosphere of relaxed, open and intellectual exchange.

As part of its director development program and to ensure that the members of the Board remain up to date with business and legal developments, the Board is provided with regular legal bulletins, and invited to economic and industry-specific briefings and strategy and management conferences within the Aboitiz Group. All directors, including the Independent Directors, actively participate in corporate governance seminars to further enhance their knowledge and expertise.

The Company’s By-Laws require that the quorum for valid board meetings is a majority of the members of the Board, in accordance with the with the Revised Corporation Code of the Philippines. As a matter of long-standing Board practice, decisions of the Company’s Board are always made with the consensus or vote of all the Company’s independent directors, thus resulting in a unanimous vote of all directors of the Board.

Board Independence

By virtue of their respective Manuals and Committee charters, the Environmental, Social and Corporate Governance Committees of AboitizPower were tasked to develop and recommend a set of corporate governance principles, aimed to promote the independence of their respective Boards, including standards and guidelines applicable to the selection, contribution, and conduct of Board members.

In 2021, the AboitizPower Board is composed of a majority of Non-Executive Directors and Independent Directors. AboitizPower has three qualified Independent Directors and five Non-Executive Directors out of its nine Board members. In addition, AboitizPower Board has each appointed a Lead Independent Director who serves as an intermediary between the Chairman and the other directors whenever necessary.

Board Diversity Policy (405-1)

The AboitizPower Board diversity policies encourage the selection of a diverse mix of highly- competent directors and officers with in-depth knowledge and experience in the core industries.

By virtue of their respective Manuals and Committee charters, the Environmental, Social and Corporate Governance Committees of AboitizPower were tasked to develop and recommend a set of corporate governance principles, aimed to promote the independence of their respective Boards, where AboitizPower is involved. Other factors considered are diversity of business experience, behavioral and technical competencies, background, age, and gender. Both Boards are composed of legal and finance professionals, engineers, former or current CEO/COOs, auditors, and accountants. Many of them have management experience in the private and government sectors, as well as in multilateral agencies.

Recognizing that a sustainable enterprise goes beyond the current generations of leaders, the AboitizPower Board appointed Mr. Danel C. Aboitiz as Directors in 2018. Danel is part of a new generation of homegrown leaders who add fresh perspectives to each Board’s deliberation.

Term Limits of Independent Directors 

AboitizPower complies with the requirements of SEC Memorandum Circular No. 19, Series of 2016, prescribing a maximum term of nine years for independent directors, starting from 2012. In the nomination, selection, and election of the members of AboitizPower Boards recognize and respect the inviolable statutory right of each shareholder to vote and be voted as a director. If AboitizPower intends to retain an independent director who has served the maximum of nine consecutive years, the shareholders of the relevant company shall be advised and provided with meritorious justifications during the Annual Shareholders’ Meeting (ASM) for which the election will take place.

Directorships in Other Listed Companies

The ESCG Committee, respectively, selects qualified nominees for election as directors. One consideration is the number of directorships a nominee has in other corporations or organizations. As a corporate practice, AboitizPower directors, including Independent Directors, are discouraged from sitting as directors in more than five publicly-listed companies (PLCs). Executive Directors of AboitizPower do not generally sit on other boards of PLCs outside the Group, unless they have substantial interests in those PLCs or have been elected as independent directors. The AboitizPower Manual require that the CEO and other executive directors shall submit themselves to a low active limit on membership in other corporate boards. In 2021 none of the AboitizPower directors sat in more than five PLCs.

The Environmental, Social, and Corporate Governance Committee (ESCG, formerly the Corporate Governance Committee) of AboitizPower is responsible for ensuring the establishment of a governance mechanism that promotes sustainability practices through proper environmental stewardship, social development, and sound corporate governance. The ESCG Committees also perform the functions of the Nomination and Remuneration Committees. In carrying out their duties and responsibilities, the ESCG Committee is supported by the company’s Compliance Officer, Chief External Relations Officer, as well as the Group Chief Human Resources Officer. These officers regularly attend committee meetings to act as resource persons. The chairmen of the ESCG Committees are the Lead Independent Directors.

Key Areas of Focus in 2021

The Audit Committee continued to provide oversight over the AboitizPower financial reporting policies, practices and controls, and over the internal and external audit functions necessary for making good audit-related decisions. Chaired by independent directors, the Audit Committees are composed of all three independent directors and two non-executive directors. Each company’s Chief Financial Officer and Internal Audit Head, who performs the functions of a Chief Audit Executive, are regular attendees and resource persons at committee meetings. At the end of every Audit Committee meeting, Committee Members meet without any executive present.

Key Areas of Focus in 2021

Sufficiency of Internal Control and Compliance System

The AboitizPower Audit Committee assists their respective Boards in fulfilling oversight responsibilities over their company’s system of internal control. They are responsible for monitoring, overseeing, and evaluating the duties and responsibilities of management, the internal audit activity, and the external auditors as those duties and responsibilities relate to the organization’s processes for controlling its operations.

In 2021, the President and Chief Executive Officer, Chief Financial Officer, and Internal Audit Head of AboitizPower attested to the sufficient internal control and compliance system of their respective companies.

Audit and Non-Audit Fees

The Independent External Auditor of AboitizPower is the accounting firm of SyCip Gorres Velayo & Co. (SGV), with Ms. Maria Veronica Andresa R. Pore as current audit partner who has served since 2017.

As a policy, the Board Audit Committee makes recommendations to the Board concerning the choice of external auditor and pre-approves audit plans, scope, and frequency before the audit is conducted. Audit services of external auditors for the years 2021 and 2010 were pre-approved by the Board Audit Committees of AboitizPower. The Committee also reviewed the extent and nature of these services to ensure that the independence of the external auditors is preserved. The following table sets out the aggregate fees paid by the Company for each of the last two years for professional fees rendered by SGV:

AboitizPower engaged SGV to auditits 2021 and 2020 annual financial statements. SGV was also engaged to conduct post reviews and other procedures for the purpose of issuing comfort letters in connection with the issuance of the ₱8 bn and ₱12 bn bonds in 2021 and ₱9.6 bn bonds in 2020. In 2021, the Company also engaged SGV to provide financial and tax due diligence in relation to the Company's preparation of BIR form 1709, comparability analysis and benchmarking update, and transfer pricing documentation. As a policy, the Board Audit Committee makes recommendations to the Board of Directors concerning the choice of external auditor and pre-approves audit plans, scope, and frequency before the audit is conducted. Audit services of SGV for 2021 and 2020 were pre-approved by the Board Audit Committee. The Board Audit Committee also reviewed the extent and nature of these services to ensure that the independence of the external auditors was preserved. SGV does not have any direct or indirect interest in the Company.

The Risk and Reputation Committee exercise oversight functions over each company’s enterprise risk management and reputation management, including their respective corporate brands and communication strategies.

The Related Party Transactions (RPT) Committee of AboitizPower is composed entirely of independent directors. The RPT Committee has the mandate to ensure that related party transactions are taken at an arm’s length basis and within market rates, with sufficient documentation, and coursed through all appropriate levels of necessary approvals.

Key Areas of Focus in 2021

The Executive Committee of AboitizPower, organized in May 2018, are composed of five regular members, with at least two non-executive directors. The committees were formed to assist the Board in the management and oversight of each company’s day-to-day operations and strategic decision–making during the intervening period between full Board meetings. The President and CEO of AboitizPower is the chairman of the Executive Committees.

The Board Cyber and Information Committee was established on March 8, 2021. It assists the Board in providing strategic direction and ensuring the establishment of the company’s system of governance (processes, policies, controls and management) on matters relating to information security and cybersecurity.

Key Areas of Focus in 2021

Please click here to view the Committee members and its charters.

The year 2020 and 2021 brought with it the challenge of an unprecedented global pandemic. Business activities worldwide ground to a near standstill as governments imposed tight restrictions on travel and social gatherings to control the spread of COVID-19. Faced with these challenges, AboitizPower held – for the first time ever – a Virtual ASM. Despite the difficulties posed by the community quarantine restrictions, both ASMs were held on schedule, and in a business-as-usual manner, without needing to avail of the ASM extension period granted by the SEC to Philippine Companies. The notices for the ASM, information statements and the annual reports were also distributed on time to stockholders, through all available channels, including via quick response (QR) code, electronic mail, publication in newspapers of general circulation, and through each company’s respective websites. AboitizPower also provided the ASM notice and information on all proposed resolutions, and the rationale and corresponding explanation for each agenda item requiring shareholders’ approval, 28 days before the date of the ASM.

Driven by its commitment to practice sound corporate governance and guided by its core value of innovation, AboitizPower were able to provide an accessible and convenient venue for its shareholders to exercise their basic and inviolable right to elect their representatives to the Boards of Directors while remaining in the comfort and safety of their homes.

Please click here to know more about ASM-related materials.

The approved shareholders’ resolutions with a summary of votes, the results of the organizational meetings, and the minutes of the ASM of AboitizPower are always disclosed and posted on the website the next day. Click here to access the minutes.

The AboitizPower Board of Directors are expected to serve with diligence. In order to facilitate their attendance in meetings, the schedule for the regular Board and committee meetings for the upcoming year is approved and circulated to members before the start of the year. Directors are not only expected to attend meetings but to actively participate by providing valuable professional counsel, strategic guidance, and constructive feedback. The timely distribution of meeting materials within five days before each Board or committee meeting ensures the directors’ active participation.

Despite COVID-related travel restrictions in 2020, the AEV and AboitizPower Boards continued to discharge their duties and responsibilities. Board and committee activities remained business as usual. Meetings were conducted through a secure videoconferencing platform that allowed each member to interact and participate remotely. Like in previous years, meeting materials were circulated to Board members through a secure digital platform at least five days before the meeting. Meeting protocols were regularly reviewed and modified for more efficient virtual Board and committee meetings. 

The table below shows the attendance record of AboitizPower directors for the Board and Board Committee meetings in 2020:

AboitizPower strives to maintain a transparent and fair conduct of their respective Annual and Special Shareholders’ Meetings. They also ensure that accurate and timely information is available to shareholders to enable them to make a sound judgment on all matters brought to their attention for consideration or approval. The Definitive Information Statement and the Annual Report, distributed prior to the shareholders’ meeting and posted on the company’s website, include the highlights and summary of the financial condition of both companies. Stockholders are provided with individual profiles of new and returning directors, as well as a summary of the Board meeting attendance and performance record of Directors. All shareholders receive notices not less than 28 days from the date of the shareholders’ meeting, and the agenda items to be discussed and decided upon during the meeting.

All shareholders of AboitizPower are encouraged to participate in the meetings for the opportunity to ask questions or raise issues. Issues and motions raised, agreements and resolutions arrived at, corporate acts approved or disapproved, and voting results are reported in the minutes.

AboitizPower also discloses to PSE, PDEx and the SEC all the items approved at the shareholders’ meeting no later than the next business day. The voting results including quorum and summary of resolutions approved are made public the next working day in the Investor Relations’ page of the companies’ respective websites. There are no barriers or impediments preventing shareholders from consulting or communicating with one another, with the Directors, and with the Corporate Secretary.

AboitizPower continues to exert efforts to broaden the communication channels between them and their institutional and individual stockholders through the Investor Relations Office and Shareholder Relations Office, respectively.

Every year, AboitizPower pays dividends in an equitable and timely manner. All shareholders are treated equally, receiving dividends that are proportionate to their shareholdings. The period for paying the dividends is based on trading requirements or constraints of the SEC and PSE. In the last three years, AboitizPower have paid the following dividends:

As a matter of policy, AboitizPower encourages the active participation of shareholders in corporate decisions, such as amendments to the Articles of Incorporation and By-laws, appointment of auditors, and the approval of audited financial statements, among others. At the ASM, the Board of Directors present and submit to the shareholders the proposed actions for approval. The shareholders are also given an opportunity to ask questions regarding the proposed actions during the meeting. Only upon receipt of the affirmative vote of shareholders representing at least 2/3 of the issued and outstanding capital stock of each company, will such action be considered as duly approved by the shareholders.

In 2020, AboitizPower amended their Articles of Incorporation to (1) Article Two: include in the primary purpose the power to act as guarantor or surety for the loans and obligations of its affiliates and associates; (2) Article Four: amend the corporate term to perpetual existence, and (3) Article Seven: amend the features of the preferred shares. The amendment to Article Four was proposed to align with the provisions of the Revised Corporation Code on the perpetual existence of corporations. Meanwhile, the amendments to Articles Two and Seven were proposed to give AboitizPower additional flexibility in their capital- and fund-raising activities. The proposals received the affirmative vote of shareholders representing at least 2/3 of the issued and outstanding capital stock of each company.

On October 1, 2020, the SEC approved the amendment of the Articles of Incorporation of AboitizPower.

The Company has a policy on transparency of compensation for its Directors and key officers, in accordance with the SEC rules. Information on the basis of Board remuneration is readily accessible through the Company’s SEC Form 17-A (Annual Report), the Annual Corporate Governance Report, Board ESCG Committee minutes and its Company Website. The Board ESCG Committee ensures that the Directors’ and executives’ remuneration are consistent with the Company culture, strategy and business policies at a level sufficient to attract and retain Directors and officers who are needed to run the Company successfully. The Company rewards its individual Directors and Officers based on ability to execute their duties and responsibilities. It is the Company’s philosophy to reward officers and employees based on individual performance measured through established Human Resources management metrics.

Performance is evaluated and compensation is reviewed on an annual basis. The Company ensures that it pays its Directors and Officers competitively by comparing rates with other Philippine based companies through participation in and access to market salary surveys.

All shareholders have the right to nominate individually all the members of the Board. Nominations for the position of a director are received by the Corporate Secretary in accordance with the Company’s By- Laws and recently amended Guidelines for the Nomination and Election of Independent Directors which was approved on March 23, 2017. The process of nomination is clearly set out in the Company’s Definitive Information Statement, Annual Report, Guidelines for the Nomination and Election of Independent Directors, and these information are readily accessible through the Company’s website. The gist of the nominations guidelines is also broadcast to the shareholders at every Annual Shareholders’ Meeting. The Board ESCG Committee oversees the selection of candidates for the Board of Directors.

The exercise of a shareholder’s voting right is encouraged by the Company to ensure meaningful participation in all shareholders’ meetings. The Board is committed to removing costs and other administrative or practical impediments to a shareholder’s right to vote. The counting of shareholders’ votes is done in accordance with the general provisions of the Corporation Code and the Company’s internal procedures. The Office of the Corporate Secretary supervises the counting of votes through an electronic platform and through the appointed third party vote canvasser/validator.

The voting methods and vote-counting systems employed by the Company during every shareholders’ meeting are disclosed in the Information Statement and clearly explained by the Corporate Secretary to shareholders during the shareholders’ meeting to ensure the intelligent exercise of the shareholders’ right to vote.

The Company follows the system of cumulative voting for the election of directors, to allow shareholders an opportunity to elect each member of the Board of Directors individually. Other matters are also decided through voting by shares of stock. The Company adheres to the one-share, one-vote policy for the same class of shares. Proxy voting is allowed at all meetings and is facilitated through proxy voting forms. In its regular board meeting last November 12, 2010, the Board of Directors of the Company approved the deletion of the notarization requirement of proxy forms to be used in all stockholders’ meetings of the Company. This is to facilitate easy voting by shareholders, in line with the Company’s efforts to promote shareholder engagement and to improve corporate governance practices. The Company makes the results of the votes publicly available the next working day.

The Office of the Corporate Secretary ensures that all minutes of annual and special meetings of shareholders clearly and satisfactorily reflect all matters taken up during these meetings. All shareholders are encouraged and given the right to participate in the meetings. The opportunity to ask questions or raise issues, the questions, answers, issues and motions raised, the agreements and resolutions arrived at, the corporate acts approved or disapproved, and the voting results are reported in the minutes. The Company also discloses to PSE, PDEx and the SEC all the items approved at the shareholders’ meeting no later than the next business day. The voting results including quorum and summary of resolutions approved are made publicly available by the next working day through the Company’s website under Investor Relations’ page.

At every ASM, the Company ensures the effective exercise of the rights of its shareholders. There are no barriers or impediments preventing shareholders from consulting or communicating with one another, with the Directors and with the Corporate Secretary. Questions raised during the shareholders’ meeting by the shareholders are minuted or documented.

The Chairman and members of the Board of Directors, the President and Chief Executive Officer, Executive Vice President and Chief Operating Officer, the Chairman of the various Board Committees particularly the Board Audit Committee, and the Company Corporate Secretary all attend the ASM of the Company to answer any questions which shareholders may have concerning the Company. Likewise, the Chairman and all members of the Board of Directors, other key officers and the Company’s auditors are present at the shareholders’ meeting to give shareholders the opportunity to interact with the Board and top management on the current state of the Company’s business and affairs and to ask any questions from the Directors and Corporate Officers. Shareholders and investors are encouraged to ask the CEO or any officer of the Company any questions they may want to be clarified.

The minutes of the ASM available in the Company’s website also document the attendance and participation of the Board of Directors, Management, and the members of the different Board committees.

The shareholders may vote in person or by proxy. Arrangements for proxy voting or voting in absentia are in line with existing rules and regulations. The Company provides shareholders with a copy of the proxy form through the following: (1) printed copy enclosed in the Definitive Information Statement; (2) digital copy inserted in the USB kit containing the soft files of the Information Statement; and (3) downloadable form from the Company’s website.

In its regular board meeting last November 12, 2010, the Board of Directors of the Company approved the deletion of the notarization requirement of proxy forms to be used in all shareholders’ meetings of the Company. This is to facilitate easy voting by shareholders, in line with the Company’s efforts to improve corporate governance practices.

Every year, a Proxy Validation Committee, consisting of representatives from senior management was formed by the Company in order to validate and count proxies received for the ASM. An independent auditor, Luis Cañete & Company, was appointed as independent inspector/ scrutineers for the validation of votes during 2021 and 2022 ASM.

Voting during the ASM is done by poll, under the supervision of the Company’s Corporate Secretary, Stock and Transfer Agent, and validated by the Proxy Validation Committee and an independent third party inspector of votes. The Board Secretariat also uses an electronic platform to record the votes.

At the ASM, the Company engages an independent third party to assist in the validation of proxy and the counting of votes. In the 2017 ASM, a Proxy Validation Committee, consisting of representatives from senior management, was formed by the Board Secretariat in order to validate and count proxies received for the meeting. Luis Cañete & Co., an independent third party, provided the proxy and vote validation functions for the 2021 and 2022 ASM.

Approved Shareholders’ resolutions and the minutes during the ASM are disclosed and made publicly available on the Company’s website on the next working day after the ASM. The minutes of the 2021 and 2022 meeting of shareholders were uploaded to the Company’s website the day after the ASM. The minutes can be accessed on the Company’s website under Investor Relations’ page.

The Company provides at least 28 days prior notice of the meeting and information on all proposed resolutions and rationale thereof with corresponding explanation for each agenda item requiring shareholders’ approval in the notices of the ASM. The Company also publishes notices of the shareholders’ meetings in national newspapers of general circulation.

Each resolution relates to only one agenda item, and a brief rationale or explanation for its inclusion in the ASM is provided. The Company does not include any additional and unannounced agenda item in the ASM if not disclosed prior to the ASM.

The Board delegates to Management the power and discretion to engage independent parties to evaluate the fairness of the transaction price for the acquisition or disposal of assets, which will depend on the size of the transaction, the jurisdiction(s) involved, and the availability and capacity of expertise in-house. Depending on the factors mentioned, Management then decides whether to engage an independent party to evaluate the fairness of the transaction price.

The Company has a deep bench of competent investment and finance experts who are capable of evaluating the fairness of the transaction price. The Chief Strategy Officer of the Company has a wealth of experience in management, investment banking, and private equity investing, including almost 38 years of experience in energy markets. Taking into account the size of the transaction and its overall effect on the Company’s businesses and positions, the entire transaction, including the transaction price, is presented to the Board for approval.

In 2018, the Company appointed Morgan Stanley as financial advisor to the Aboitiz Group in the acquisition of a 75% stake in Gold Coin Management Holdings Limited.

The Company strives to maintain a transparent and fair conduct of its annual and special shareholders’ meetings and ensures that accurate and timely information should be made available to the shareholders to enable them to make a sound judgment on all matters brought to their attention for consideration or approval. The Definitive Information Statement and the Aboitiz Integrated Annual Report, distributed prior to and during the ASM and available in the Company’s website, include the highlights and summary of the financial condition of the Company. The Definitive Information Statement filed with the PSE, PDEx and SEC is prepared with the objective of providing full and accurate and truthful information enabling stakeholders to make informed decisions. Shareholders are provided with individual profiles of new and returning directors, as well as a summary of the Board meeting attendance and performance record of its Directors. Agenda items are included in the notices and include a rationale for each agenda item.

The Company continues to exert efforts to extend the communication channels between the Company and the institutional shareholders through its Investor Relations Office and to the nominee registered shareholders through the PCD Nominee Corporation. The Governance and Compliance team reach out and provide copies of the notice and agenda of the ASM, sample proxy forms, and the Definitive Information Statement prior to the shareholders’ meeting for dissemination to the brokers to ensure that institutional investors are properly represented during the shareholders’ meeting.

As a matter of policy, the Company does not solicit proxies.

During the ASM, the Company engages an independent third part to assist with the validation of proxy and counting of the votes.  For the 2018 ASM, Luis Canete & Co., provided the proxy and vote validation functions. 

The Board delegates to Management the power and discretion to engage independent parties to evaluate the fairness of the transaction price for the acquisition or disposal of assets, which will depend on the size of the transaction, the jurisdiction(s) involved, and the availability and capacity of expertise in-house. Depending on the factors mentioned, Management then decides whether to engage an independent party to evaluate the fairness of the transaction price.

The Company has a deep bench of competent investment and finance experts who are capable of evaluating the fairness of the transaction price. The Chief Strategy Officer of the Company has a wealth of experience in management, investment banking, and private equity investing, including almost 38 years of experience in energy markets.

Taking into account the size of the transaction and its overall effect on the Company’s businesses and positions, the entire transaction, including the transaction price, is presented to the Board for approval. 

The Company strives to maintain a transparent and fair conduct of its annual and special shareholders’ meetings and ensures that accurate and timely information should be made available to the shareholders to enable them to make a sound judgment on all matters brought to their attention for consideration or approval. The Definitive Information Statement and the Aboitiz Integrated Annual Report, distributed prior to and during the ASM and available in the Company’s website, include the highlights and summary of the financial condition of the Company. The Definitive Information Statement filed with the PSE, PDEx and SEC is prepared with the objective of providing full and accurate and truthful information enabling stakeholders to make informed decisions. Shareholders are provided with individual profiles of new and returning directors, as well as a summary of the Board meeting attendance and performance record of its Directors. Agenda items are included in the notices and includes a rationale for each agenda item.

The Company continues to exert efforts to extend the communication channels between the Company and the institutional shareholders through its Investor Relations Office and to the nominee registered shareholders through the PCD Nominee Corporation. The Governance and Compliance team reach  out and provide copies of the notice and agenda of the ASM, sample proxy forms, and the Definitive Information Statement prior to the shareholders’ meeting for dissemination to the brokers to ensure that institutional investors are properly represented during the shareholders’ meeting.

As a matter of policy, the Company does not solicit proxies. 

Please click here for the latest ownership structure.

While the Company encourages stock ownership by employees, to ensure ethical conduct, the Company through its Governance and Compliance Team and Board Secretariat, monitors the share ownership of directors, executives, officers and management team through the regular SEC disclosures of beneficial ownership (SEC Form 23-B), and tracking of compliance through the implementation of the Company’s General Trading Policy and Trading Black-out dates.

The Company is committed to elevating its standards of disclosure and transparency and the quality and depth of its corporate governance practices to enable the investing community to understand the true financial condition of the Company. Through the Investor Relations Office, the Office of the Corporate Secretary, the Annual Report, Aboitiz Integrated Annual Report, the Company website, the Company’s Information Statement, and all disclosures to the PSE, PDEx, and SEC, the Company publishes timely material information on all matters regarding the Company, including, the financial situation, performance, ownership, and governance of the Company. Regular disclosures include details of the Company’s subsidiaries, associates, joint ventures, and special purpose vehicles if any. There are no special arrangements enabling certain shareholders to obtain a degree of control disproportionate to their equity ownership that needs to be disclosed.

AboitizPower disclosed the beneficial ownership of their directors and key officers in regular filings of the Statement of Beneficial Ownership, and in the Annual Corporate Governance Report. The Revised General Trading Policies of both companies require the Board of Directors and officers to notify the Office of the Corporate Secretary immediately after they deal in company shares.

The Company has an existing policy requiring the Board of Directors and the officers to report to the Office of the Corporate Secretary any transaction related to the purchase and disposal of Company shares within one business day from the date of the transaction. The Company discloses the direct and indirect (deemed) ownership or shareholdings of major and/or substantial shareholders and the details of the subsidiaries, associates, joint ventures and special purpose enterprises/vehicles. The Company’s Information Statement and Public Ownership Report regularly filed by the Company likewise show the direct and indirect ownership of the Company’s shareholders, which include its Board, the Management Team, and employees. Regular disclosures to the PSE, PDEx and SEC are made in the event of any dealings in Company shares. These disclosures are available at the Company’s website and can also be accessed from the PSE portal.

As of December 31, 2021, the directors and key officers of AboitizPower own the following shares:

All relevant disclosures were filed in a timely manner with the Securities and Exchange Commission (SEC), Philippine Stock Exchange (PSE), and the Philippine Dealing & Exchange Corp. (PDEx). All the 2021 filings and relevant information were filed and disclosed within the period indicated below:

Insider trading is strictly prohibited under the Company’s General Trading Policy, the Code of Ethics and Business Conduct, the Company’s Manual on Corporate Governance, and under the PSE and SEC rules. The Company’s General Trading Policy prohibits every member of the Company’s organization from any misuse of insider information. All team members of the Company are mandated to exercise prudence in handling material non-public information in the course of their work and in relation to the trading or dealing with AboitizPower securities. The Company strictly enforces its trading blackout and insider trading policy to curtail opportunistic dealings in the Company’s shares. Any violations are required to be reported to the Board ESCG Committee.

The Company ‘s General Trading Policy requires the Board of Directors and the officers to notify the Company at least one (1) day before they deal in the company shares. Directors and key officers are required to regularly report their beneficial ownership of shares in the Company and any dealings in AboitizPower shares must be reported to the Corporate Secretary within one day from the sale or purchase of AboitizPower shares. In addition, the Company discloses beneficial ownership in its Disclosures (SEC Form 23-B and Public Ownership Report, the Annual Report, and the Information Statements to the SEC including trading of Company shares of its directors and key officers. There has been no investigation of violation and conviction of insider trading and abusive self-dealing by directors, management and employees in the past five years that the Trading Policy has been in place.

AboitizPower’s ERM Framework is composed of a set of components that provide the foundation and organizational arrangements for designing, implementing, monitoring, reviewing and continually improving Risk Management throughout the organization.

The framework classifies the programs and initiatives of ERM under four pillars of Governance, Process and Integration, Business Partnering and Capability Building.

Our risk management process integrates both top-down and bottom-up approaches to ensure that no risks are missed and that every possible risk is identified. From the top-down, senior management sets strategic direction, identifying high-level risks and establishing policies for mitigation. Simultaneously, the bottom-up approach involves input from all levels of the organization, where team members identify and report operational risks and provide valuable insights based on their day-to-day experiences. This dual approach allows for a thorough risk assessment, combining strategic oversight with practical, on-the-ground perspectives, resulting in a robust and effective risk management framework.

The risk registers from AP’s Business Units (BUs) are captured in the Strategic Risk Management Plans (SRMPs) which already considers their own unit’s ORMPs, while the risk registers from the AP Corporate Support Units (CSUs) are documented in the Operational Risk Management Plans (ORMPs). Together, these reports are used to ensure that both strategic and operational risks are effectively identified, assessed, and managed, aligning with the organization's overall risk management framework.

The risk management process in AP is conducted at least semi-annually for strategic and operational risks. At the end of every risk review period, the strategic, operational (if necessary) and emerging risks are reported to AP’s Risk Management Council and, subsequently, to the Board Risk and Reputation Management Committee.

This is AP’s risk governance & reporting structure:

AP’s Risk Management Process has the following steps:

Communication and consultation with external and internal stakeholders are undertaken during all stages of the risk management process to ensure that their needs and expectations are met. Risk Management communication and consultation addresses issues relating to the risk itself, its causes, its consequences (if known), and the measures being taken to treat it.

AP’s financial risk impact criteria is commonly expressed through Net Income After Tax (NIAT) exposure. Other non-financial impact criteria are reputation, data privacy, legal, compliance, operational, safety and environmental. Likelihood criteria is expressed through frequency and probability of occurrence. The criticality level or vulnerability of each risk is defined through likelihood and impact and is expressed through a five-point scale plotted in a risk map.

Each of the identified strategic or top risks of the organization are then assigned to a Management Committee member who will be accountable for updating and mitigating the risk.

Emerging risks are taken up either at the Board Risk and Reputation Management Committee or the full Board meeting of the company for assurance and visibility of the directors and officers of the company.

AboitizPower wants to gain and benefit from defining risk appetite and tolerance. Mainly, the risk appetite and tolerance provide clarity on how much risk should be taken within AP and will specifically provide structure and support. AP aims to take risks in an informed and proactive manner, ensuring that the level of risk is consistent with the potential rewards and that AP understands and can manage or absorb the impact of the risk if it materializes.

AboitizPower’s Risk Appetite Levels are qualitatively expressed through a 5-point level scale which will provide a consistent scale to determine the level of risk appetite, followed by the risk appetite statements which will provide a qualitative description to support the risk appetite levels assigned.

AboitizPower’s Risk Tolerance provides clear boundaries and ensures that risk-taking activity is performed within defined parameters. While risk appetite usually involves qualitative statements, risk tolerance operationalises the statements by using quantitative measures where possible, to better enable monitoring and review. For AboitizPower, risk tolerance will be defined through the concept of Key Risk Indicators (KRI). Every KRI has its own corresponding threshold set by the risk owner. The thresholds set the limits or boundaries such that when exceeded should alert a potential significant change in risk exposure and trigger the review and updating of risk mitigation plans. Thresholds will be composed of three levels - green, amber and red.

The Management Committee vets and identifies the company’s top risks and their corresponding risk appetite level and statements are then developed and updated annually.

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