The Manual on Corporate Governance (Manual) is the corporate governance charter of the Company. It is a clear statement by the Company, the Board of Directors, Management, Employees, and Shareholders, that corporate governance is a necessary component of what constitutes sound strategic business management. The Manual was approved by the Board at its regular meeting on August 14, 2002, and was submitted and received by the SEC on September 3, 2002. The Manual has since been reviewed, revised, updated and amended by subsequent Board actions in keeping with evolving best practices.

In 2012, the Company amended its Manual to update the Company’s practices in the following areas: (a) Selection of the Board of Directors and Officers; (b) Composition of the Board Corporate Governance Committee; (c) Changes in the Board Risk Management to Board Risk and Reputation Management Committee and (d) Updates to the Board Audit Committee Charter. Most recently, the Board of Directors during its regular board meeting last July 24, 2014, the amendments to the Manual in compliance SEC Memorandum Circular 9-2014. The amended Manual was submitted to the SEC on July 31, 2014, and uploaded to the Company’s website on the same day. Click here for the copy of the Manual.

Amended Manual on Corporate Governance

The Company’s governance framework and practices are codified in the Amended Manual of Corporate Governance.  These contain the Company’s plan to compy iwht hte Organization ofor Economic Cooperation and Development (OECD) principles on coprorate governance, and are regularly reviewed and updated to ensure that these are at par with the best corporate governance practices in the Philippines and the ASEAN Region.

In 2018, the Company approved revisions in its Manual that adopted emerging best corporate governance practices, documented existing best practices, such as using professional search firms to source board nominees, the avaiablity of alternative dispute resolution to resolve stakeholder disputes, and formalized the assessment processes for dirctors and key officers.

Amended Manual on Corporate Governance (as of May 31, 2017)
Amended Manual on Corporate Governance (as of January 31, 2019)

The Code of Ethics and Business Conduct (Code) adopted by the Company in 2002 and updated in 2016 sets out how the Executive Management, team leaders, and team members can achieve and maintain ethical standards in the Company’s day to day operations and summarize the Company’s fundamental policies and directives.

Since the approval of the Amended Code, Board of Directors, Team Leaders and Members received training and affirmed their commitments of the Code by signing the Personal Commitment Form.

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Please click here for a copy of the Code.

The Company’s Manual is supported by various company policies that are regularly reviewed and issued by the Board of Directors.  These include the Code of Ethics and Business Conduct, Revised General Trading Policy, Whistleblowing Policy, Conflict of Interest Policy, Data Privacy Policy and RPT Policy.

AboitizPower ensures that its Code of Ethics is cascaded to new team members as part of their onboarding processes.  Team members are also required to sign an affirmation that they have read the Code of Ethics. They are expected to act professionally, fairly and with integrity in all of their business dealings, and to comply with all applicable laws and regulations, including those against bribery and corruption.

The Board of Directors of the Company believes that it can usefully supplement its ability to make audit decisions effectively and in a timely manner if it can delegate to an Audit Committee the tasks of (1) preparing a strategic audit agenda for the Company and (2) providing oversight over the Company’s financial reporting policies, practices and control, and internal and external audit functions.

Company Policies and Protocols

Board & Board Committee Charters

As a publicly listed company, the Company is subject to numerous stringent laws and regulations. All Company employees are made aware of their responsibility to know and understand the laws applicable to their respective job responsibilities and are directed to comply with both the letter and the spirit of these laws. All employees are expected to behave properly within the bounds of law and are also cautioned to avoid any appearance of impropriety. The Company ensures that all stakeholders are aware of these various laws operating within its own

environment, and adopts policies to encourage participation and prevent any violation of these laws. One such policy is the non-acceptance of gifts from persons who have a beneficial relationship with the Company. The Company makes it a point that employees know that gifts and special favors may create an inappropriate expectation or feeling of obligation. It is a policy of the Company that business gifts to, and entertainment of, non-government employees in connection with business discussions or the development of business relationships are only appropriate if they are in the ordinary course of business and their value is modest. (See Code of Ethics and Business Conduct).

In dealings with suppliers and other business partners, the Company likewise ensures that they are compliant with the laws, for example, requiring appropriate registration from the Bureau of Internal Revenue, the local government units, the ERC, SEC and PSE, and other regulatory bodies. Another example is the withdrawal of the members of the Board, management and employees from transactions with potential conflict of interests as mandated. All directors are prohibited from participating in any Board discussion or decision affecting their personal, business or professional interests. All employees, officers and directors have an obligation to act in the best interests of the Company.

The Company’s Code of Ethics and Business Conduct, as well as internal policies not only require a disclosure of conflict of interest but also require a behavior to refrain from entering into transactions of the Company. At the Board level, directors are encouraged to disclose and refrain from participating or voting matters that affect their personal, business or professional interests that are likely to give rise to conflicts of interest situation. All employees, officers and directors have an obligation to act in the best interests of the Company.

In dealings with its customers, suppliers and business partners, the Company abides by the Fair Dealing Policy found in its Code of Ethics and Business Conduct. The basis of the policy is the Company’s objective to out-perform its competition fairly and honestly through superior  performance. Every employee, officer and director therefore always prioritizes the best interests of the Company’s clients and endeavours to deal fairly with suppliers, competitors, the public and one another. No one should take unfair advantage of anyone through manipulation, abuse of privileged information, misrepresentation of facts or any other unfair dealing practice.

In dealings with suppliers and other business partners, the Company likewise ensures that they are compliant with the laws. All directors are prohibited from participating in any Board discussion or decision affecting their personal, business or professional interests in a transaction involving the Company as a party. All employees, officers and directors have an obligation to act in the best interests of the Company.

The Company’s power generation and distribution operations are subject to stringent safety, health, environmental and other regulatory standards. For the year 2016, the Company, its subsidiaries and affiliates were fully compliant with the legal standards. AboitizPower and all its generation companies and distribution utilities were granted Certificates of Compliance from the relevant governmental agencies and bureaus requiring certification. The business units of the Company are committed to the needed expenditure and compliance requirements on occupational health and a clear demonstration of how the Company values health and safety measures in the work environment.

Building human capital is one of the four strategic pillars of the Aboitiz Group. The Group’s Human Resources (HR) team is at the forefront of building human capital through programs that are centered on attracting, optimizing, and retaining the right talent. The Group looks for A-people who believe in its purpose and brand promise, whose values are aligned with our core values, and who will thrive in its culture.

The Aboitiz culture is the secret sauce of the Group’s success over the past 100 years. It is about people who shape, evolve, build our culture, and preserve core values. In HR, the role is to find the right talents and place them at the right seat on the right bus at the right time.

The Group HR team functions as the governance body that develops policies and standards and instills best practices across the business units (BUs), a business partner that provides value-added services to our BUs, and a center of excellence for the Group.

HR’s strategic roles in these areas are delivered through 10 major initiatives, or what is referred to as “rocks.” Where relevant and appropriate, the Group initiates projects Group-wide to deliver on these 10 rocks. The Business Units customize and execute these projects through their respective HR teams.

Talent Attraction

For talent attraction, the goal is to sharpen ability to build talent communities and select the right talent with the right fit.
With a Strategic Workforce Planning (SWP), the Group is able to anticipate the talent needs of the Group, prioritize, and align these to the BU’s long-term strategic plans. This is a continuous process, reviewed and embedded in the annual strategic planning process of every BU. This is more important than ever as we move towards digital transformation and plan the talent pool that will be required for the future.

In 2018, the Group started building Talent Communities through online tools, enabling it to reach target talent through social media channels like Facebook, Instagram, and LinkedIn. It also built communities and groups, and engage and source target talent through employer brand communications and social events.

A critical strategy to build human capital is to increase ability to attract the right talent through the power of a strong employer brand. Employer brand is crucial as to how talent perceives Aboitiz as an employer. To attract talent, the Group needs to communicate key attributes or qualities that would entice them to join our organization. These qualities have to be authentic and are actually being experienced by existing team members. The Group has started the activation of its employer brand with our Employee Value Proposition (EVP): A Future Built by You.

The Group has five EVP pillars, namely, shaping a better future (inspiring purpose), personal growth, winning with integrity, finding a better way everyday (innovation), and together for the long haul (family-led).

The journey of employee candidates begins with Awareness, Consideration, and the Desire to Apply. Once shortlisted, they are assessed through tests and interviews. When there’s a right match or fit, they are onboarded. “Discover Aboitiz” is an Onboarding Program that ensures the candidate experience is seamless, personalized, and helps them quickly assimilate The Aboitiz Way.

Talent Optimization

The goal of talent optimization is to get A-people to reach their highest potential in the Aboitiz Group.

The “Bugsay Program” is a Self-Driven Development mindset that the Group launched in 2018. Following the 80-20 principle, 80% of career development comes from hard work and one’s own efforts, while the remaining 20% comes from the support of others – team leaders, mentors, and the resources provided. Talents are responsible for their own development and career growth in the company, with the support of their leaders.

The Group ManCom and each Business Unit Management Committee conduct regular Key Talent Reviews. Everyone is evaluated for succession and career aspirations and development options based on performance, competency, achievement, leadership capability, and potential.

Decisions for succession are made based on a “build, buy, or borrow” replacement strategy for key leadership positions across the Group. The Board of Aboitiz & Company has oversight over this process.

Under Learning and Development, aside from a regular set of core programs that comprise the Aboitiz Academy, the Group offers electives suited to the needs raised by its BUs, such as design thinking, agile and scrum courses, among others.

In 2018, the Group entered the digital learning space, introducing a platform that uses artificial intelligence to feed bite-sized, on-demand customized learning, all accessible via a mobile phone. The Group also converted a few traditional workshops into gamified learning.

We have created five functional pools of high-potential talents in development clusters such as general management, finance, HR, technology, and legal. There are currently 128 high-potential talents in these clusters. The aim is to develop these talents for bigger roles in the organization.

The mentoring partnership program is an important development initiative that connects mentees and mentors from different BUs to facilitate cross-functional and cross-BU learning. It is one of the Group’s most in-demand development interventions, with a 276% increase in participation rate since its inception in 2016. This program is an important foundation for performance management, as we prepare to transition into coaching for performance and career development.

We take pride in Leadership Development strategies. The Group has produced leaders from its ranks and today, 79% of the top executives are homegrown talents. As of 2018, 77% of vacancies for this level has been filled internally. This is a trend the Group wishes to sustain in the future. The global benchmark for internal succession is at 75%.

The Group has a Leadership Circle, composed of about 200 senior leaders from across the Group which adopted a leadership framework with the goal of deepening collective leadership competence and effectiveness.

Talent Retention

The goal of talent retention is to give the A-people a compelling reason to stay with the Group for the long term.

In the area of Culture and Engagement, the Group commissioned Gallup in 2017 to help do a baseline assessment of team member engagement. Results showed that the Group is above average in having engaged team members while implementing significant growth and changes across the organization. The Group has conducted frequent pulse surveys focused on areas of improvement in engaging team members. The George tool pulse checks and creates visibility for team engagement.

Living the Group’s core values is most essential in shaping The Aboitiz Way culture. The behavior of the teams indicate that they abide by the Aboitiz core values of integrity, teamwork, innovation, and responsibility. They have personalized and live by these values inside and outside the workplace.

Under Total Rewards, the Group complies with all legal requirements and remain competitive in the market across all the industries where we operate. We provide compensation, benefits, and retirement packages that promote the current and long-term economic well-being of our team members. These remuneration packages are consistent regardless of age and gender, following a Group-wide position leveling framework based on competencies. All our companies also adhere to the highest standards of occupational health and safety.

Finally, under Group Executive Management, we are managing Group Systems Level (GSL) Talent. This program is used to rationalize positions to establish job levels and to manage succession and mobility, learning and development strategies, compensation, benefits, and rewards. Among top-tier leaders, 87% are Filipinos and were hired from the local community, promoting the Aboitiz Group’s significant presence in the country. Of these senior leadership positions, 27% are female.

In 2019, the Group will focus efforts toward building the right Group Human Capital Management Systems. These will involve updating policies, processes, and guidelines and implementing a robust HR system that is intuitive, flexible, and can meet the requirements and priorities of future workplace.

By choosing the right technology solution, the Group will be able to make HR’s day-to-day operations even more efficient. As such, we can spend more time in strategic business partnering rather than on transactional and operational HR. The Group aims to raise service levels and improve talent experience using technology and tools that are user experience-focused. The Group also intends to use data-driven talent analytics for decisions that will truly drive value.

Talent Analytics

 

 

Members of the Board annually assess the Board’s and their own individual performance through a Board Assessment Review initiated by the Board Corporate Governance Committee. Results of the Board, Self, CEO, Group Internal Audit Head, Compliance Officer and Chief Risk Officer Assessments are presented to the Board Corporate Governance Committee and circulated to the Board for their feedback and confirmation.

Annual Board Assessment Form (Board)

Individual Director Performance Assessment Form

Annual Board Committee Assessment Form

CEO Evaluation Form

Annual Board Assessment for GIA, CCO and CRRO

 

 

Consistent with our core values, including respect for individuals and cultures, the Company is committed to a workplace in which all individuals are treated with dignity and respect. Each individual should have the ability to work in an environment that promotes equal employment opportunities and prohibits discriminatory practices, including harassment. Therefore, the Company expects that all relationships among persons in the workplace will be professional and free of bias, harassment or violence.

To this end, the Company has adopted, among other initiatives, an Anti-Sexual Harassment Policy, in accordance with the provisions of Republic Act No. 7877 or the Anti-Sexual Harassment Act of 1995.

The Company treats its people as its greatest and most valuable asset. All employees, regardless of their position, contribute to the Company’s growth as an organization by striving for quality performance. As such, the Company strives to create an atmosphere that will allow all team members to excel and grow through training, value orientation, and motivation for them to achieve their individual aspirations in line with the corporate goals and objectives.

To encourage all team members to adopt their own set of leadership behavior and to employ their inherent creative talents in pursuit of excellence, the Company has set up a Human Resources (HR) Policy which cater to the different needs of employees and likewise serves as a guide to maximize employee contribution.

The Company’s HR Policy is accessible through the Company portal and covers the following:

• Terms of Employment • Leaves
• Recruitment Procedure • Loans
• Employment Policy • Retirement Benefits
• Team Member Services • Performance Appraisal
• Rules on Working Hours • Employee Health and Safety
• Aboitiz Group Talent Management Program • Government Mandated Policies
• Disciplinary Action • Miscellaneous Provisions
• Termination or Change of Employment • Information Security Policies
• Cash Advance and Expense Reimbursement • Reputation Management Policies
• Compensation & Benefits • Corporate Governance

Data relating to the Health, Safety and Welfare of Employees are provided in the Integrated Annual Report and Definitive Information Statement.