Board of Directors

The Board of Directors (Board) has the primary responsibility of championing the principles of corporate governance. The Board also oversees the risk management function and the adequacy of internal control mechanisms to ensure the reliability of financial reporting, efficiency and effectiveness in operations, protection of assets and compliance with applicable laws and regulations.


Board Structure and Composition

There are 11 members of the Board with complementing expertise and experience necessary to act on various issues and matters affecting the Company. Of these directors, two (2) are executive directors, two are independent and seven are non-executive directors. The Board structure and practices provide clear division of responsibilities at the top of the corporation – between the Board exercising oversight function and Management discharging its executive responsibilities.

All the directors also fully comply with Energy Regulatory Commission (ERC) Resolution No. 1, Series of 2004, entitled "Program to Promote Good Corporate Governance in Distribution Utility," which requires attendance in seminars on corporate governance.
 

Board Independence

The elected independent directors for 2010 are retired Chief Justice Artemio V. Panganiban and Mr. Pedro E. Roxas. This is in accordance with the SRC requiring at least two independent directors or 20% of the members of the Board, whichever is lesser. They were nominated and elected in compliance with Rule 38 of the Implementing Rules of the SRC, as amended.

To further strengthen the Board’s independence, the Company separated the posts of the Chairman of the Board from that of the President and the CEO. Each position has distinct and separate duties and responsibilities in accordance with the Company’s amended By-Laws and Revised Manual of Corporate Governance. The Chairman of the Board is Amb. Manuel M. Lopez, while the President and CEO is Mr. Manuel V. Pangilinan.
 

Election of Directors

In accordance with the provisions of the Company’s By-Laws and Revised Manual of Corporate Governance, the Corporation Code of the Philippines and the SRC, nominees to the Board go through a nomination and screening process. The final list of nominees is determined after pre-screening and evaluation of qualifications. The directors are elected by stockholders who are entitled to vote during the Annual General Meeting (AGM). They serve for a period of one year and until their successors are qualified and elected.
 

Board Remuneration

The Company’s directors do not receive any compensation other than the Board-approved per diem for their attendance in Board and Board committee meetings. In 2010, each director was entitled to a director’s fee of Php120,000 for each Board meeting attended. Each member or advisor of the Audit and Risk Management, Compensation and Benefits, Finance, Nomination and Governance Committees was entitled to a fee of Php20,000 for each committee meeting attended. The fees were last adjusted in April 2010.
 

Board Performance

The Board holds monthly meetings and special Board meetings, if so required, with agenda that include updates by the Chairman and the Board committees; reports on financial performance by the Chief Finance Officer; and operational performance by the President and CEO, the Senior Executive Vice President and COO, among other major Company issues.

See Meetings and Seminars section for the attendance of the Board to these meetings.

On February 28, 2011, the directors conducted its Annual Board Self-Assessment to evaluate their specific and overall performance for 2010. Board members assessed their individual and collective performance on Board structures, processes and responsibilities as it has been done in the past years.
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The Board also conducted an evaluation of the 2010 performance of the President and CEO in the January 14, 2011 Board meeting as a continuing yearly activity. It was based on the attainment of key corporate goals for 2010, relative to his leadership, management, communication and working relationship with the Board.