Meralco | Ang Liwanag ng Bukas

1. Board Meetings

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

The Board has separate and independent access to the Corporate Secretary, who oversees the adequate flow of information to the Board prior to meetings and advises directors about their duties. During Board meetings, discussions are open and independent views are given due consideration. Average attendance in the Board’s 12 meetings last year was more than 89%.

The following table shows the participation of the Board in the AGM, Organizational Meeting and its regular meetings:

The Board recognizes the importance of and their accountability to a regular performance assessment, individually, as a whole Board, and as part of Committees. Integrated Board and Board Committee Assessments were done to evaluate their specific, overall and committee performance for 2011. This integrated assessment of their 2011 performance was conducted on February 3, 2012.

On May 20, 2011 the Board also assessed the 2010 performance of the different Committees. The Board members evaluated their individual and collective performances regarding the Board and its Committees’ structures, processes and responsibilities. The assessment likewise identified the training and skills development program needed by the Board members. Thus, as a result an orientation on the regulatory process and related issues was held on November 28, 2011.

The Board reviewed the 2011 performance of the President and CEO during the January 30, 2012 Board meeting. It was based on the attainment of target corporate goals for 2011.

2. Board Committees Attendance

3. Seminars

Meralco Directors, Officers and Employees ensure that they are updated on the most recent corporate governance trends and best practices through participating in seminars and trainings.

a. Corporate Governance Seminar of the Board of Directors

b. Corporate Governance Seminar of the Senior Management

c. Corporate Governance Seminar of the Management and Employees

Meralco joins Institute for Solidarity in Asia’s Public Governance Forum

Meralco participated in and became part of the sponsors of the Public Governance Forum held at the Philippine International Convention Center on March 30, 2012. The forum has the theme: "One Spirit, One Advocacy", which showcased the efforts and progress made by the public sector in order to eliminate graft and corruption.

The forum is spearheaded by the Institute for Solidarity in Asia (ISA), a collaborative network of various sectoral leaders, public officials and private citizens committed to governance in the different levels of society. It promotes systemic and comprehensive reforms at the national level and serves as knowledge base for such reforms in East Asia. ISA is headed by former Secretary of Finance, Dr. Jesus P. Estanislao.

One of the speakers at the forum Mr. Guillermo M Luz, Co-chair of the National Competitiveness Council, emphasized the importance of employing metrics to gauge progress and success of the institutions’ governance procedures. He also stated that while compliance and self assessment through performance governance system is important, feedback from the public ultimately being served by the public institutions adds a value which cannot be overlooked.

The audience and participants to the forum are public sector leaders, among them were BIR Commissioner Kim Henares, San Fernando Mayor Oscar Rodriguez and PNP Chief Nicanor Bartolome. They reported and clarified questions on their efforts to proceed along the motto "sa daang matuwid, asenso walang patid."

Meralco took part in the forum as a session sponsor to signify publicly that it is one with ISA in good corporate governance spirit and advocacy. The delegates to the forum were Corporate Governance Staff Harold Enriquez and Lair Ambrocio.

Corporate Governance Forum by GGAPP with MERALCO

Meralco sponsored the forum on ethics, compliance and corporate governance as seen from experiences in the United States and other global companies last Dec. 7, 2011, in keeping with its commitment to uphold corporate governance principles.

The forum was entitled, "Tips and Traps: A Discussion on the Experiences of US and Global Companies in Ethics, Compliance and Corporate Governance" organized by Good Governance Advocates and Practitioners of the Philippines (GGAPP), an organization of corporate governance officers and enthusiasts from different publicly listed companies (PLCs). A hundred directors, management personnel and corporate governance practitioners gathered at the forum, including those from government organizations such as the Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE). A large delegation of officers and executives of MERALCO, as well as directors and executives of its subsidiaries were part of those who attended.

Mr. Steve Priest, the founder of Ethical Leadership Group/Global Compliance Services based in New York, USA was the main speaker for the event. Mr. Priest was described by the Wall Street Journal as "one of the most sought consultants to keep companies on the straight and narrow", and has conducted seminars on business ethics in 40 countries. He speaks before organizations, like the Conference Board, Institute of Internal Auditors, Association of General Counsels and the Ethics and Compliance Officer Association. He has raised awareness of the importance of ethical behavior on television, radio, newspaper and magazines.

Through the forum’s discussion on the experience of US and global companies, GGAPP is taking steps to heighten corporate governance awareness and advocacy among directors and management personnel to uphold ethical behavior, good governance culture and stakeholder confidence in the Philippines.

Board Governance Orientation on the Regulatory Process and Related Issues last November 28, 2011.

The Board of Directors participated in a Governance Enhancement course on November 28, 2011, on Regulatory Process and Related Issues on MERALCO's business, as part of its mandate to constantly update itself on evolving structures, legislative framework and regulations of the electric industry. This is part of its strategic planning process which, likewise, enables the members to act pro-actively on the issues and concerns facing the Company.

The orientation was conducted by the Head of MERALCO’s Regulatory Management Office, Ms. Ivanna G. dela Peña and the Head of Utility Economics, Mr. Lawrence S. Fernandez.

In the course of its 2010 annual performance evaluation on May 30, 2011, the Nomination and Governance Committee requested the Board Directors to conduct a self assessment including its committees, namely, Nomination and Governance, Compensation and Benefits, Audit and Risk Management, and Finance for their 2010 performances.

In the same meeting, a majority of the members of the Board requested for the conduct of a Governance Enhancement course on the regulatory process and related regulatory issues applicable to MERALCO, as part of their skills and training needs determination.

The Corporate Governance Office was tasked to organize the ensuing event.

8th Annual Corporate Governance Workshop 2011

The Management Association of the Philippines (MAP), together with the Financial Executives Institute of the Philippines and Corporate Governance Institute of the Philippines (CGIP) conducted the 8th Annual Corporate Governance Workshop on June 23, 2011 at the Inter-Continental Manila in Makati City. The theme of the workshop was "MAPping a Culture of Integrity in Business: Corporate Governance Best Practices."

The workshop aims to instill integrity in Philippine companies. The code of corporate governance, boardroom best practices, communication with minority stakeholders, and enterprise risk management were discussed interactively. These are vital in SEC reporting compliance, improving directors’ knowledge and skills, establishing communication channels with minority stakeholders and ultimately, enhancing shareholder value.

Among the speakers were SEC Chair Teresita J. Herbosa, PSE President and CEO Hans Sicat, ICD Fellow Jonathan Juan Moreno, and MAP President Architect Felino A. Palafox, Jr. This event was attended by Meralco’s Corporate Governance Deputy Head and Corporate Governance Officer - Gerardo F. dela Paz and Lilian P. Umipig, respectively.

Deputy Head of Corporate Governance speaks at National Electrification Administration – Electric Cooperatives (NEA - EC) Conference and Recognition

Deputy Head of Meralco Corporate Governance and Vice President Gerardo F. dela Paz spoke regarding Corporate Governance and Best Practices in Managing an Electric Utility Business during the 2011 NEA-EC Conference and Recognition held on April 28, 2011 at the Radisson Blu Hotel, Cebu City. The theme of the event was "Power Lives On…Through Competition."

The event was attended by members of the board, general managers and executives of NEA and the various ECs in the country. The event aimed to strengthen and sustain the ECs’ business operations through good governance.

NEA is a government owned and controlled corporation (GOCC) that has the primary responsibility to assist in the operations of Philippine ECs. It provides financial, institutional, and technical services to the ECs and promotes competence enhancement in a deregulated environment aiming towards a strong republic.

GGAPP Organization launched, Induction of Officers held

The Good Governance Advocates and Practitioners of the Philippines (GGAPP) held the launch of their organization and induction of their officers last April 1, 2011 at the Meralco Lighthouse.

The GGAPP has members from both the public and private sector. The GGAPP's inducting officer, SEC Commission Secretary Gerard M. Lukban, introduced Trustee and Chairman Santiago A. Pulido of Alaska Milk Corporation, Trustee and Vice Chairman Jaime P. Villegas of Ayala Corporation, Trustee and President Vincent Edward R. Festin of PLDT, Trustee and Secretary, Lizelle G. Zamora-Dimacuha of Manila Water, and Trustee and Treasurer, Reginald H. Tiu of SM Investments Corporation. Lilian P. Umipig of Meralco and Ma. Jasmine D. Medina-Almogino of Energy Development Corporation are the Assistant Secretary and Assistant Treasurer, respectively. Further GGAPP Trustees are: Charles Gamo of PSALM, Francis A. Palafox of Energia, Inc., Hazel Rose B. See of Meralco and Jose Jesus G. Laurel of MPIC.

The keynote speaker at the event was Ethics and Compliance Officer Association (ECOA) Executive Director, Mr. Keith Darcy, says "(They) still have a lot to do and (they) start with a small step with people gathered for a purpose to paint and build a future for our children."

GGAPP envisions to establish a national culture that forsakes shortcuts, patronage and corruption and instead rewards diligence, perseverance and integrity.

Corporate Governance and Risk Management Symposium

A symposium on Corporate Governance (CG) with the theme, "Integration of Corporate Governance and Enterprise Risk Management (ERM) for Sustained Best Performance," was held at the Meralco Lighthouse, Pasig City on December 15, 2010.

The symposium enabled participants to focus on the importance of ERM and CG on crisis management and sustainable growth, as well as of embedding good risk management practices in all parts of an organization. The perspective introduced was identifying risks through the view of one enterprise, a breakaway from working in silos. It was a collective outlook that a sustainable risk diagnostic and management tool to reinforce strategic enterprise decisions should be developed and implemented by Meralco.

Asian Risk Management Institute managing director Marc Ronez was the resource speaker. He is a well-known expert on Enterprise, Strategic and Operational Risk Management and has helped many organizations from various industry sectors to implement ERM frameworks, optimize the way they manage risks and prepare to manage various types of crisis and business interruptions successfully.

The event was attended by the Senior Management of the Company, executives and heads of subsidiaries and affiliates.

Corporate Governance Roadshow and Orientation

The Company ensures that knowledge on corporate governance principles and best practices are cascaded to its officers and employees. A company-wide orientation on Corporate Governance and the Revised Code of Ethics was conducted last October 12 to November 26, 2010. This training was also integrated into the orientation program for new employees of the Company.

2010 Working Sessions with the Institute of Corporate Directors

The Institute of Corporate Directors (ICD) spearheaded the 2010 Corporate Governance Working Session at Sea Wind Resort, Boracay Island, Aklan on November 18-20, 2010. The theme of the session was "Addressing CG Expectations and Realities: Making Best Practices Work." This event was attended by Meralco’s Corporate Governance Deputy Head, Gerardo F. dela Paz.

Palladium and Institute for Solidarity in Asia (ISA) on Strategy Execution and Governance

The Palladium Group – Asia Pacific partnered with the Institute for Solidarity in Asia (ISA) in conducting a seminar at Sofitel Philippine Plaza on September 22-23, 2010. Dr. Matthew Tice, Managing Director of the Palladium Group - Asia Pacific, steered the discussion on the significant function for a company’s longevity and dynamism, strategy execution and governance. Present on this seminar were Meralco’s Corporate Planning Head, Corporate Governance Deputy Head and Corporate Governance Officer – Charina P. Padua, Gerardo F. dela Paz, and Lilian P. Umipig.

Institute of Corporate Directors holds Orientation on Corporate Governance

The Institute of Corporate Directors (ICD) held an Orientation Course on Corporate Governance on September 1-2, 2010 at the Manila Peninsula Conservatory, Makati City, Philippines. This event was attended by Meralco’s Corporate Secretary, Corporate Governance Deputy Head and Corporate Governance Officer - Simeon Ken R. Ferrer, Gerardo F. dela Paz and Lilian P. Umipig.

Public Service 2.0: From e-Government to e-Governance

The Chief Information Officers Forum (CIOF), in partnership with the Commission on Information and Communications Technology, CIOF Foundation, Inc., and E-Governance for Efficiency and Effectiveness Project (E3) directed the event entitled, Public Service 2.0: From e-Government to e-Governance on June 23, 2010 at the Hotel Intercontinental Manila. This event was attended by Meralco’s Corporate Governance Officer and Regulatory Officer.

d. Corporate Governance Seminar of Meralco Subsidiaries

Corporate Governance Orientation for Directors of MERALCO Subsidiaries conducted

A Corporate Governance Orientation for Directors of Meralco Subsidiaries was held at the Meralco Lighthouse on January 27, 2012, where 35 Meralco-assigned directors participated, led by SMART Corporate Governance Office (CGO) Head Atty. Elmer Nitura and SMART CGO Deputy Head Atty. Archilo Matugas.

The orientation provided a basic overview of Corporate Governance and the role of Corporate Directors, showing the link between corporate governance and company performance. The orientation concluded with Meralco Corporate Governance Officer Lilian Umipig presenting the company's corporate governance structure.

Meralco promotes awareness and advocacy among the directors of subsidiaries, to uphold a culture of good governance and unwavering stakeholder confidence.

Corporate Governance Forum by GGAPP with MERALCO

Meralco sponsored the forum on ethics, compliance and corporate governance as seen from experiences in the United States and other global companies last Dec. 7, 2011, in keeping with its commitment to uphold corporate governance principles.

The forum was entitled, "Tips and Traps: A Discussion on the Experiences of US and Global Companies in Ethics, Compliance and Corporate Governance" organized by Good Governance Advocates and Practitioners of the Philippines (GGAPP), an organization of corporate governance officers and enthusiasts from different publicly listed companies (PLCs). A hundred directors, management personnel and corporate governance practitioners gathered at the forum, including those from government organizations such as the Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE). A large delegation of officers and executives of MERALCO, as well as directors and executives of its subsidiaries were part of those who attended.

Mr. Steve Priest, the founder of Ethical Leadership Group/Global Compliance Services based in New York, USA was the main speaker for the event. Mr. Priest was described by the Wall Street Journal as "one of the most sought consultants to keep companies on the straight and narrow", and has conducted seminars on business ethics in 40 countries. He speaks before organizations, like the Conference Board, Institute of Internal Auditors, Association of General Counsels and the Ethics and Compliance Officer Association. He has raised awareness of the importance of ethical behavior on television, radio, newspaper and magazines.

Through the forum’s discussion on the experience of US and global companies, GGAPP is taking steps to heighten corporate governance awareness and advocacy among directors and management personnel to uphold ethical behavior, good governance culture and stakeholder confidence in the Philippines.

Risk Awareness Seminar held

A seminar on risk awareness was held at the Meralco Lighthouse, Pasig City on November 19 and 22, 2010.

The speaker, Ms. Maria Elena (Maya) Baltazar Herrera, FASP emphasized to the subsidiaries of Meralco the importance of developing an integrated Enterprise Risk Management (ERM) framework, structure and tools.

Ms. Herrera is a member of the Financial Executives Institute of the Philippines, the Philippine Academy of Management and the International Actuarial Association. She is also an Associate Professor at the Asian Institute of Management (AIM) where she focuses on executive education. She teaches finance, risk management, corporate valuation, leadership and human resources management. She is program director of AIM’s Strategic Finance, Finance for Senior Executives and Enterprise-Wide Risk Management Programs.

The event was attended by the executives and heads of Meralco’s subsidiaries, including the heads of CIS Bayad Center, Inc. (CBCI), Meralco Energy, Inc. (MEI), Meralco Industrial Engineering Services Corp. (MIESCOR), Clark Electric Distribution Corporation (CEDC), e-Meralco Ventures, Inc. (e-MVI), Meralco Financial Services Corporation (FINSERVE), Republic Surety And Insurance Company, Inc. (RSIC), General Electric Philippines Meter & Instrument Co., Inc. (GEPMICI) , Indra Philippines, Inc., and Miescor Builders, Inc. (MBI) – Manuel Tuason, Jesus P. Francisco, Martin L. Lopez, Monico V. Jacob, Pedro P. Benedicto, Jr., Waldo A. Darvin, Jose T. Guingona and Roberto R. Almazora, respectively. Also present were Meralco’s Chief Finance Officer, Comptroller, Corporate Governance Deputy Head, Corporate Governance Officer, Investment Planning Head and Investment Monitoring Head – Betty C. Siy-Yap, Helen T. de Guzman, Gerardo F. dela Paz, Lilian P. Umipig, Wendel A. Mediarito and Aristotle T. Lumague.