Board Committees

The Board composed of various Board Committees, namely Executive Committee (ExCom), Audit Committee (AuditCom), Risk Management Committee (RMC), Nom&Gov Committee, Remuneration and Leadership Development Committee (RLDC), Finance Committee (FinCom), Related Party Transactions Committee (RPTCom), and Sustainability Committee (SusCom). The Board has delegated specific responsibilities to each of these Committees guided by their respective committee charters.

All committees have approved charters defining and specifying the scope of their responsibilities.
 

Composed of five (5) directors, one (1) of whom is an independent director. The ExCom may act, by majority vote of all its members, on such specific matters within the competence of the Board, as may be delegated to it under the By-Laws, or upon a majority vote of the Board, subject to the limitations provided by the Revised Corporation Code.

The Nom&Gov is composed of six (6) directors with an independent director as chair. The duties and responsibilities of Nom&Gov as reflected in its charter include screening qualified nominees for election as directors, assessing the independence of directors, introducing improvements on Board organization and procedures, setting-up of mechanisms for performance evaluation of the Board and Management, and providing programs for continuing education of the Board.

The Nom&Gov undertakes the process of identifying the qualification of directors aligned with the Company's strategic directions. It reviews and recommends to the Board the appointment of members to the Board Committees. The process involves identifying, reviewing, and recommending potential candidates to the Board for consideration.

The Nom&Gov has put in place a formal and transparent process for the nomination of new Directors to the Board. Stockholders who have identified suitable candidates submit the Nomination and Acceptance Letters, Full Business Interest Disclosure Forms and curriculum vitae of such candidates to Nom&Gov for discussion and review on or before the deadline set by the Nom&Gov.

These candidates are sourced from the business networks of Board members and from professional search firms such as the Institute of Corporate Directors (ICD), or from shareholders. These candidates should be skilled in core competencies such as strategic planning, business expertise, and industry knowledge.

The shareholders elect the directors during the Annual Stockholders’ Meeting ASM held every last Tuesday of June.

The Company sends out a formal letter setting the responsibilities of the duly elected director. The new director then attends an onboarding program facilitated by the CGO.

The Nom&Gov Comm held four (4) meetings in 2025 and performed the following:

• Reviewed the results of Board, Board Committees, and President and CEO performance assessment
• Assessed MERALCO’s public ownership report
• Screened the nominees to the Board
• Reviewed the Board committee composition
• Assessed MERALCO’s compliance to the Revised ASEAN Corporate Governance Scorecard (ACGS)
• Reviewed and endorsed MERALCO’s Integrated Annual Corporate Governance Report (I-ACGR) for 2025
• Reviewed and approved the Amendments to the Manual of Corporate Governance, Finance Committee Charter, Nomination and Governance Committee Charter, Related Party Transaction Charter, and Risk Management Committee Charter
• Reviewed the Company’s Vision, Mission, and Values Statements
• Facilitated the annual CG enhancement and continuing education programs

The AuditCom consists of three (3) independent directors and four (4) non-executive directors, and it is chaired by an Independent Director.

The AuditCom has the power to  

• Review with Management and the external auditors the results of the audit of the financial statements and evaluation of internal accounting controls;  
• Review and evaluate procedures and criteria for the selection, appointment, annual performance evaluation and if appropriate, termination of services of the external auditors and recommend to the Board for approval, the appointment, reappointment, or removal of the external auditors, duly accredited by the SEC and ratified by the shareholders; and 
• Monitor compliance and adherence by the Company with all applicable laws and regulations pursuant to which the Company conducts its operations and business activities. 

The AuditCom had six (6) meetings in 2026 with the following accomplishments: 

Internal Control

• Obtained management’s assurance on the adequacy and effectiveness of the Company’s internal control system and noted Management’s Control Policy 
• Evaluated the effectiveness of the internal control system of the Company 
• Reviewed and discussed updates on fraud investigations, recoveries from losses and appropriate actions of the Management. 

Financial Reporting

• Reviewed, discussed with Management, and approved the unaudited consolidated quarterly financial statements and the audited consolidated financial statements of the Company and its Subsidiaries, including Management’s significant judgments, estimates and impact of new accounting standards and tax changes with respect to the Company’s financial statements and analysis of financial condition and results of operation. 
• The Committee also reviewed the External Auditor’s Report on the audit of the annual financial statements and discussed key audit matters and other required communications with the Committee. 

Audit Process

• Assessed the independence, performance, effectiveness, and qualifications of SGV, considering its credibility, competence, ability to understand complex transactions and the adequacy of its quality control procedures. Based on this assessment, the Committee endorsed the re-appointment of SGV to the Board of Directors and the Shareholders as the independent External Auditor of the Company for the ensuing year. 
• Reviewed and approved the audit plan and scope of work of SGV for the audit of the 2025 Annual Financial Statements, including the audit strategy, areas of significant risk, and reliance on component auditors, to ensure adequate coverage of key risks and compliance with applicable auditing standards. 
• Reviewed and approved SGV’s fees for all audit, audit-related, and non-audit services in Meralco and selected subsidiaries as endorsed by Management. 
• Reviewed, discussed, and approved the results of the SGV’s external audit, its assessment of the Company’s internal controls, and the quality of the financial reporting process. 
• Reviewed the Management Letter issued by SGV after the completion of the audit of the Financial Statements of the preceding year. 
• Held separate executive sessions with the Chief Audit Executive and SGV without the presence of Management. 
• Reviewed and approved the Annual Internal Audit Plan, the related key performance indicators, and all subsequent changes to the Internal Audit Plan, as needed. 
• Reviewed and discussed the results of audits as reported by the Chief Audit Executive in her quarterly and year-end status reports to the Committee with respect to the evaluation of the system of internal controls, overall quality of the financial reporting process, risk management, and governance. 
• All audit activities performed by Internal Audit were conducted in accordance with the International Professional Practices Framework (IPPF) issued by the Institute of Internal Auditors (IIA). This includes Global Internal Audit Standards, Topical Requirements, and Global Guidance. 
• Monitored Management’s timely implementation of appropriate corrective actions to address the audit issues and recommendations of Internal Audit and the External Auditor. 
• Reviewed and discussed the Internal Audit Annual Performance Report, including the Quality Assurance and Improvement Program Annual Report to evaluate the effectiveness of the Internal Audit function. 

Compliance

• Reviewed and discussed updates on investigations, recoveries from losses and appropriate actions of the Management. 
• Reviewed Management’s mid-year and annual confirmation statement on the adequacy and effectiveness of the Company’s internal control and risk management system, which was based on the annual risks & controls assessment validated by Internal Audit. 
• Reviewed and evaluated the Company’s internal control system based on the assessments completed by Internal Audit, SGV, Cybersecurity, Data Privacy Compliance, and matters delegated by the Board of Directors. The Committee is satisfied with the overall system in place and found this to be adequate and effective. 
• Reviewed and monitored compliance and adherence by the Company with all applicable laws and regulations pursuant to which the Company conducts its operations and business activities. This includes reviewing the state of legal compliance with respect to labor laws & regulations, data privacy, and the reportorial requirements of regulatory agencies. 

The RMC consists of two (2) independent directors and four (4) non-executive directors. It assists the Board in its oversight role on the risk management process. In 2025, the RMC had two (2) meetings.

The following activities were accomplished by RMC:

• Reviewed Key Enterprise Risks Report for the Distribution Utility and Subsidiaries
• Reviewed and discussed with the Chief Risk Officer and external auditors MERALCO group’s key business risks as well as its ongoing and proposed risk mitigation measures.
• Evaluated the effectiveness and certified the adequacy of One MERALCO’s risk management process such that material risks are periodically identified, evaluated, managed, and reported appropriately by management.

The Board of Directors, through the RMC, institutes a framework of prudent and effective controls which enables risks to be identified, assessed, and managed accordingly.

The RLDC is composed of four (4) directors, one (1) of whom is an independent director. The duties and responsibilities of RLDC as defined in its charter include assistance to the Board in the development of the Company’s overall performance management, compensation, retirement, and leadership development policies and programs based on the Company-approved philosophy and budget.

The RLDC held five (5) meetings in 2025 and accomplished the following:

• Approval of candidates for rank conferment 
• Approval of proposed budget for the 2025 salary review program 
• Review of annual incentive plan 
• Review of the collective bargaining agreement for supervisory union
• Review of performance evaluation plan results 
• Approval of Recommendation for Appointment and Employment Extension 

The RLDC recommends to the Board, for the approval of the shareholders, a framework of remuneration for Directors and Management, including the President and/or CEO.

For the President and/or CEO and Management, the framework takes into account all aspects of executive remuneration including salaries, allowances, bonuses, and benefits in kind. The framework is benchmarked against pay and employment conditions within the industry and it links rewards to corporate and individual performance. 

For employees, the Company adopts a Remuneration Policy comprised of fixed and variable components in the form of base salary and variable bonus linked to the Company’s and the individual’s performance. Compensation packages and revisions of key Management’s remuneration are subject to the review and approval of the RLDC.

The FinCom is composed of six (6) directors, two (2) of whom are independent directors, with the Chief Finance Officer (CFO) as ex-officio member. It reviews the financial operations of the Company and matters regarding major purchase contracts, and acquisition and/or divestment of investments, businesses, or ventures.

In its twelve (12) meetings in 2025, the major accomplishments of FinCom were:

• Review and approval of all service and supply contracts in excess of PhP50 million
• Review of Unaudited Quarterly Consolidated Financial Statements and Audited Annual Consolidated Financial Statements
• Treasury updates
• Declaration of final cash dividend
• Renewal of credit lines and bonds
• Review and approval of cash optimization strategy
• Review and approval of PSAs and any changes or issues regarding their execution
• Review and approval of annual budget and medium- term business plan and forecast
• Review of Meralco directors’ and officers’ insurance policy
• Review additional capital call, surety bonds, capital infusions for subsidiaries
• Review of capital and debt structure
• Review of special payment agreements
• Review of equity call
• Review of investments
• Review and endorsement of the renewal of Wholesale Electricity Spot Market surety bond for the retail electricity supply transactions

The RPTCom consists of five (5) directors, two (2) of whom are independent directors. It assists the Board in reviewing De Minimis, Significant, and Material RPTs to determine whether they are in the best interest of the Company and shareholders, and ensure that all RPTs of the Company are conducted in fair and at arms' length terms.

The following activities were accomplished by the RPTCom in 2025:

• Reviewed and approved De Minimis, Significant, and Material RPTs
• Reviewed RPT Reports together with the RPT Review Team, and evaluated MERALCO’s purchases of goods and services from related parties to be fair and at arm’s length terms
• Endorsed Material RPTs to the Board for approval

In 2025, all RPTs of the Company were conducted in fair and at arm’s length terms. The names of all related parties, degree of relationship, nature and value for each material/significant RPT are disclosed by the Company in its Consolidated Financial Statements.

In 2021, the SusCom was established to institutionalize MERALCO’s sustainability commitment and corporate ESG imperatives. Composed of  five (5) members, including the Chairman and CEO and Chief Sustainability Officer who as a non-voting member, SusCom is responsible for overseeing the Company's sustainability strategy, policies, and programs. The Committee also accounts for and monitors the economic, environmental, social, and governance (EESG) performance of the Company in alignment with the UN SDGs, with the aim of delivering long-term value to all the stakeholders.

In 2024, the SusCom formally met once to review updates on One Meralco’s Long-Term Sustainability Strategy (LTSS) and progress on 30 by '30: Thirty Key Sustainability Plays Through 2030, and thereafter endorsed the same to the Board for final approval.