For an effective Board composition, the selection of Members of the Board is based on the following qualifications: (i) ownership of at least one (1) share of stock of AEV in compliance with the Corporation Code of the Philippines; (ii) university education or sufficient experience in managing the business, in lieu of a college education, (iii) at least twenty one (21) years old; (iv) proven to possess integrity and probity; (v) no conflict of interest; (vi) able to devote his time in fulfilling his duties and responsibilities as Director; (vii) practical understanding of the businesses of the Company; (viii) membership in good standing in relevant industry, business or professional organizations; and (ix) previous business experience.
Three out of the nine directors of the Company’s Board of Directors, or thirty three percent (33%), are Independent Directors. This is more than the requirement under the law, requiring covered companies to have Independent Directors constituting at least two or twenty percent (20%) of the members of the Board, whichever is lesser.
For a full discussion on the process of election of the members of the Board of Directors, their roles and responsibilities, refer to the Company’s Article of Incorporation and By-Laws, Guidelines for the Constitution of the Nomination Committee and the Election of Independent Directors, the Full Corporate Governance Report and the Manual of Corporate Governance.
At the 2017 ASM, shareholders elected the following Board members for the 2017-2018 term:
The Company’s Board Committees consist of the following: Board Audit Committee, Board Risk and Reputation Management Committee, and the Board Corporate Governance Committee.
Members of the Board Committees are the duly elected directors of the Company’s Board of Directors as regular members assisted by key officers of the Company on ex-officio basis. These Board Committees hold meetings at least every quarter to ensure that sound strategies for the Company’s development are reviewed, monitored and achieved.
The Board decided at its May 17, 2010 meeting to amend the Manual and have the functions of the Board Strategy Committee subsumed under the scope of functions of the full Board membership. As a result, the Board holds a special strategy Board meeting in addition to the strategy sessions at regular board meetings and the informal strategy meetings of the Directors.
The Board folded the Board Nominations and Compensation Committee into the Board Corporate Governance Committee. On February 1, 2012, the Board Corporate Governance Committee endorsed the creation of an expanded Board Risk Management Committee into a Board Risk and Reputation Management Committee. Membership of Independent Directors to both Board Corporate Governance Committee and Board Risk and Reputation Committee was recently increased. Independent Directors now comprise 60% of the voting members of the Board Corporate Governance Committee, 60% for the Board Audit Committee and 25% for the Board Risk and Reputation Management Committee.
Board Corporate Governance Committee
The Board Corporate Governance Committee provides information and recommendations necessary for making good governance decisions. The Board’s ability to make decisions with governance impact is supported by the work of the Board Corporate Governance Committee. The Board Corporate Governance Committee assists the Board but does not pre-empt any board responsibilities in making final decisions on corporate governance, nomination and compensation matters.
In performing its duties, the Board Corporate Governance Committee maintains effective working relationships with the Board and the Group’s senior leadership to enable it to perform its role effectively. Each Committee member strives to obtain an understanding of the detailed responsibilities of Committee members as well as the Group’s businesses and operating environment. The Committee is expected to contribute to the management of the Group’s affairs through good governance practices for the overall interests of the stakeholders.
The Committee is composed of a majority of Independent Directors (three out of five directors). The Chairman of the Committee is a non-executive director and brings with him his past valuable experience and expertise in the major businesses of the Company, having served as its Chairman of the Board from 1998 to 2008. Click here to view Board Corporate Governance Committee Charter.
The Board Corporate Governance Committee is currently composed of the following members:
Board Audit Committee
The Board Audit Committee represents the Board on all audit-related matters of the Company’s group companies. Its work focuses on the optimization of effective financial management, as well as compliance with regulatory reporting requirements for all business units. The Company recreated its internal audit group into the Group Internal Audit and is overseen by the Board through the Board Audit Committee. Click here for a copy of the Internal Audit Charter.
The Board Audit Committee oversees the function of the Group Internal Audit in maintaining a comprehensive enterprise-wide compliance program and a robust and institutionalized quality service platform for the Company’s internal audit functions that are annually reviewed. The Board Audit Committee, in conjunction with the Group Internal Audit, performs the following functions: reviews and approves non-audit services conducted by the external auditor sand corresponding fees, assesses and recommends the external auditor on behalf of the Board to ensure a selection of credible, competent, external auditor with the ability to understand the complexity of the entire range of the transactions of the Company, provides the Board with adequate and relevant information on the external auditors for a fair and transparent selection or tender process, and schedules regular meetings and dialogues with the external audit team (with and without management teams present). The Company’s CFO, when invited by the Board Audit Committee, attends the meetings of the Board Audit Committee (a) to ensure immediate clarification and feedback of audit issues to the Board Audit Committee, and (b) to give prompt instructions to the Company of any policy that the Board Audit Committee proposes to implement.
For a full detailed discussion on the Corporate Audit Policies Control and Compliance System, as well as the role and function of the Audit Committee and Board Audit Committee Charter please see the Full Corporate Governance Report and Manual on Corporate Governance.
The Board Audit Committee is composed of the following:
Board Risk and Reputation Management Committee
The Board is committed to establishing a fully functioning enterprise risk management system for the Company and its businesses and oversees the Company’s risk management functions through the Board Risk and Reputation Management Committee.
The Board Risk and Reputation Management Committee represents the Board in discharging its responsibility relating to all risk management related matters across the Aboitiz group companies. Among many tasks, the Committee considers and reviews operational risks, environmental risks, financial asset risks, security risks, and any other form of risk as approved by the Board, with the objective of assessing exposures and strategies, and recommending actions to mitigate these risks. This Committee does not have decision-making authority, except in the circumstances outlined in the Manual or to the extent that the Board expressly delegates certain authority to it.
The Board Risk and Reputation Management Committee is composed of four directors, two of whom, are independent, as well as two non-voting members, the Chief Financial Officer and the Chief Reputation and Chief Risk Management Officer.
The Board Risk and Reputation Management Committee is composed of the following members:
Board Related Party Transaction Committee
For purposes of ensuring transparency and fairness for all stakeholders, the Board constituted the Board Related Party Transactions (RPT) Committee to review proposed RPTs 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.
The Committee evaluates 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.
For a full discussion on the purpose, structure, and duties & responsibilities of the Committee, click here for a copy of the Board RPT Charter and RPT Policy. Click here for the copy of Manual on Corporate Governance.
Mr. Antonio R. Moraza, 60 years old, Filipino, has been a director of AboitizPower since February 13, 1998 and President and Chief Operating Officer since May 19, 2014. He has been a member of the Board Audit Committee and the Board Risk and Reputation Management Committee since May 19, 2014. He has been a director of AEV, a publicly-listed company, since May 2009. Mr. Moraza is also Chairman of the Board of Directors of Pilmico, PANC, Therma Visayas, Inc. (TVI), TSI, TLI, Luzon Hydro Corporation (LHC), Hedcor, Inc. (Hedcor), Hedcor Sabangan, Inc. (Hedcor Sabangan), Hedcor Bukidnon, Inc. (Hedcor Bukidnon), Hedcor Tudaya, Inc. (Hedcor Tudaya), Hedcor Sibulan, Inc. (Hedcor Sibulan), Cebu Private Power Corporation (CPPC), APRI, Cotabato Light, Davao Light, Pagbilao Energy Corporation (PEC), Aseagas Corporation (Aseagas), and Aboitiz Power Distributed Energy, Inc. (APX). He is likewise Vice Chairman of Cebu Energy; a director and Senior Vice President of ACO; President and Chief Executive Officer of Abovant and ARI; and a director of SN Aboitiz Power-Benguet, SN Aboitiz Power-Magat, Southern Philippines Power Corporation (SPPC), STEAG State Power, Inc. (STEAG Power), Western Mindanao Power Corporation (WMPC), Redondo Peninsula Energy, Inc. (RP Energy), Therma Marine, Inc. (TMI), Therma Mobile, Inc. (TMO), East Asia Utilities Corporation (EAUC) and Aboitiz InfraCapital. Mr. Moraza holds directorship and management positions in GNPower Mariveles Coal Plant Ltd. Co. (GNPower-Mariveles) and GNPower Dinginin Ltd. Co. (GNPower-Dinginin) and its holding companies. He is also a director and President of TPI; and a trustee of AFI. He holds a degree in Business Management from the Ateneo de Manila University. He is not connected with any government agency or instrumentality.
The Business Unit Heads for the year 2017-2018 are as follows: