Board of Directors

JAIME AUGUSTO ZOBEL DE AYALA

Filipino, 60
Executive Director, Chairman, and Chief Executive Officer

Date of Appointment

Director of Ayala Corporation since May 1987

Length of Service (As of 31 December 2019)

32 years

Academic/Professional Qualification

• B.A. in Economics (Cum Laude) from Harvard College in 1981
• MBA at Harvard Graduate School of Business Administration in 1987
• Chairman and CEO of Ayala Corporation since April 2006

Present Directorship(s)/Position(s)
Other Publicly Listed Companies – within Ayala Group:

• Chairman of Globe Telecom, Inc., Integrated Micro-Electronics, Inc. and Bank of the Philippine Islands
• Vice Chairman of Ayala Land, Inc., Manila Water Company, Inc. and AC Energy Philippines, Inc.

Other Non-Listed Companies – within Ayala Group:

• Chairman of Ayala Retirement Fund Holdings, Inc., AC Industrial Technology Holdings, Inc., AC Ventures Holding Corp., AC Infrastructure Holdings Corporation and Asiacom Philippines, Inc.
• Co-Chairman of Ayala Foundation, Inc. and Ayala Group Club, Inc.
• Director of Alabang Commercial Corporation, Ayala International Pte. Ltd., AC Energy, Inc., Ayala Healthcare Holdings, Inc., Light Rail Manila Holdings, Inc. and AG Holdings Ltd.

Other Non-Listed Companies/Organizations – outside Ayala Group:

• Member of various business and socio-civic organizations in the Philippines and abroad, including the JP Morgan International Council, JP Morgan Asia Pacific Council and Mitsubishi Corporation International Advisory Council
• Member of the Board of the Singapore Management University and Eisenhower Fellowships
• Member of various advisory boards of Harvard University, including the Global Advisory Council, HBS Board of Dean’s Advisors, and HBS Asia-Pacific Advisory Board (Chairman)
• Chairman Emeritus of the Asia Business Council and Chairman of Endeavor Philippines
• Member of the Global Board of Adviser of the Council on Foreign Relations
• Co-Vice Chairman of the Makati Business Club

ANTONIO JOSE U. PERIQUET

Filipino, 58
Independent Director

Date of Appointment

Director of Ayala Corporation since September 2010

Length of Service (As of 31 December 2019)

9 years as Director
7 years as Independent Director (reckoned from 2012, in compliance with SEC Memorandum Circular No. 19, Series of 2016)

Academic/Professional Qualification

• AB Economics from Ateneo de Manila University in 1982
• Masters of Science in Economics at the Oxford University, UK in 1988
• MBA at University of Virginia, USA in 1990
• Director of DBP Insurance Brokerage from 2010 to 2012
• Chairman of Deutsche Regis Partners from 1999 to August 2010
• Awarded as Best Strategist from 2003 to 2010 and as Best Analyst in 2009 to 2010 by the Fund Managers Association of the Philippines
• Honorary Investment Adviser to the British Government from 2016 to 2017

Present Directorship(s)/Position(s)
Other Publicly Listed Companies – within Ayala Group:

• Independent Director of the Bank of the Philippine Islands

Other Publicly Listed Company – outside Ayala Group:

• Independent Director of ABS-CBN Corporation, DMCI Holdings, The Max’s Group of Companies, Semirara Mining and Power Corporation and The Philippine Seven Corporation

Other Non-Listed Companies – within Ayala Group:

• Chairman of BPI Asset Management and Trust Corporation

Other Non-Listed Companies/Organizations – outside Ayala Group:

• Chairman of Campden Hill Group, Inc.
• Independent Director of Albizia ASEAN Tenggara Fund
• Trustee of Lyceum of the Philippines University
• Member of the Dean’s Global Advisory Council at the University of Virginia’s Darden School of Business

FERNANDO ZOBEL DE AYALA

Filipino, 59
Executive Director, Vice Chairman, President, and Chief Operating Officer

Date of Appointment

Director of Ayala Corporation since May 1994

Length of Service (As of 31 December 2019)

25 years

Academic/Professional Qualification

• B.A. Liberal Arts from Harvard College in 1982
• CIM from INSEAD, France in 1993
• President and Chief Operating Officer of Ayala Corporation since April 2006

Present Directorship(s)/Position(s)
Other Publicly Listed Companies – within Ayala Group:

• Chairman of Ayala Land, Inc., Manila Water Company, Inc., and AC Energy Philippines, Inc.
• Director of Bank of the Philippine Islands, Globe Telecom, Inc. and Integrated Micro- Electronics, Inc.

Other Publicly Listed Company – outside Ayala Group:

• Independent Director of Pilipinas Shell Petroleum Corporation

Other Non-Listed Companies – within Ayala Group:

• Chairman of AC International Finance Ltd., ALI Eton Property Development Corporation, Liontide Holdings, Inc., AC Energy, Inc., Ayala Healthcare Holdings, Inc., Automobile Central Enterprise, Inc., Alabang Commercial Corporation, Accendo Commercial Corp. and Hero Foundation, Inc.
• Co- Chairman of Ayala Foundation, Inc. and Ayala Group Club, Inc.
• Vice-Chairman of AC Industrial Technology Holdings, Inc., Ceci Realty Inc., Fort Bonifacio Development Corporation, Bonifacio Land Corporation, Emerging City Holdings, Inc., Columbus Holdings, Inc., Berkshires Holdings, Inc. AKL Properties, Inc., AC Ventures Holdings Corp., and Bonifacio Art Foundation, Inc.
• Director of LiveIt Investments, Ltd., AG Holdings Ltd., AC Infrastructure Holdings Corporation, Asiacom Philippines, Inc., Ayala Retirement Fund Holdings, Inc.

Other Non-Listed Companies/Organizations – outside Ayala Group:

• Director of Honda Cars Philippines, Inc., Isuzu Philippines Corporation, and Manila Peninsula
• Member of the Board of INSEAD Business School and Georgetown University
• Member of the International Advisory Board of Tikehau Capital and Hispanic Society Museum & Library International Advisory Council
• Vice Chairman of the Philippine-Singapore Business Council
• Member of the World Presidents’ Organization and Chief Executives Organization
• Chairman of Habitat for Humanity International’s Asia-Pacific Capital Campaign Steering Committee
• Trustee of Caritas Manila, Pilipinas Shell Foundation, and the National Museum

RAMON R. DEL ROSARIO, JR.

Filipino, 75
Independent Director

Date of Appointment

Director of Ayala Corporation since April 2010

Length of Service (As of 31 December 2019)

9 years as Director
7 years as Independent Director (reckoned from 2012, in compliance with SEC Memorandum Circular No. 19, Series of 2016)

Academic/Professional Qualification

• BSC-Accounting and AB Social Sciences (Magna cum Laude) from De La Salle College in 1967
• MBA at Harvard Business School in 1969
• Managed Phinma since 2002 and brings with him a wealth of experience in leading a diversified conglomerate

Present Directorship(s)/Position(s)
Other Publicly Listed Companies – outside Ayala Group:

• President and Chief Executive Officer of Phinma Corporation

Other Non-Listed Companies – outside Ayala Group:

• President and Chief Executive Officer of Philippine Investment Management, Inc.
• Chairman of PHINMA Education Holdings, Inc., PHINMA Araullo University, PHINMA University of Iloilo, PHINMA University of Pangasinan, PHINMA Cagayan de Oro College, Southwestern University PHINMA, PHINMA St. Jude College, United Pulp and Paper Co., Inc., PHINMA Microtel Hotels, Inc., PHINMA Hospitality, Inc., and Philippine Business for Education
• Vice-Chairman of Phinma Foundation, Inc., Phinma Property Holdings Corp., Caritas Manila and Philippine Business for Social Progress
• Director of Union Galvasteel Corp. and Philcement Corp.
• Trustee of Ramon Magsaysay Award Foundation and Makati Business Club

DELFIN L. LAZARO

Filipino, 73
Non-Executive Director

Date of Appointment

Director of Ayala Corporation since January 2007

Length of Service (As of 31 December 2019)

13 years

Academic/Professional Qualification

• BS Metallurgical Engineering from University of the Philippines in 1967
• MBA (with Distinction) at Harvard Graduate School of Business in 1971

Present Directorship(s)/Position(s)
Other Publicly Listed Companies – within Ayala Group:

• Director of Ayala Land, Inc., Integrated Micro-Electronics, Inc., Manila Water Company, Inc., and Globe Telecom, Inc.

Other Non-Listed Companies – within Ayala Group:

• Chairman and President of A.C.S.T. Business Holdings, Inc.
• Vice Chairman and President of Asiacom Philippines, Inc.
• Director of AC Industrial Technology Holdings, Inc., AYC Holdings, Ltd., AC International Finance, Ltd., and Purefoods International Limited

Other Non-Listed Companies/Organizations – outside Ayala Group:

• Chairman of Atlas Fertilizer & Chemicals Inc.
• Director of Probe Productions, Inc.

KEIICHI MATSUNAGA

Japanese, 55
Non-Executive Director

Date of Appointment

Director of Ayala Corporation since April 2017

Length of Service (As of 31 December 2019)

3 years

Academic/Professional Qualification

• Graduate from the Faculty of Law at Waseda University in 1988
• Connected with Mitsubishi Corporation for over 30 years in various leadership positions

Present Directorship(s)/Position(s)
Other Publicly Listed Companies – within Ayala Group:

• Director of Ayala Land, Inc., Integrated Micro-Electronics, Inc., Manila Water Company, Inc., and Globe Telecom, Inc.

Other Non-Listed Companies – within Ayala Group:

• Director of Portico Land Corp.

Other Non-Listed Companies/Organizations – outside Ayala Group:

• General Manager of Mitsubishi Corporation Manila Branch
• Chairman of International Elevator & Equipment Inc.
• President of MC Diamond Realty Investment Phils., MC Oranbo Investment, MC Cavite Holdings, Inc., FMT Kalayaan, Inc., and Japanese Chamber of Commerce & Industry of the Philippines (JCCIPI)
• Director of Century City Development II Corporation (CCDC II), Isuzu Philippines Corporation, Kepco Ilijan Corporation, and The Japanese Association Manila, Inc. (JAMI)

XAVIER P. LOINAZ

Filipino, 76
Lead Independent Director

Date of Appointment

Director of Ayala Corporation since April 2009
Lead Independent Director of Ayala Corporation since April 2017

Length of Service (As of 31 December 2019)

10 years as Director
7 years as Independent Director (reckoned from 2012, in compliance with SEC Memorandum Circular No. 19, Series of 2016)
3 years as Lead Independent Director

Academic/Professional Qualification

• AB Economics degree from Ateneo de Manila University in 1963
• MBA-Finance at Wharton School, University of Pennsylvania in 1965
• President of the Bank of the Philippine Islands from 1982 to 2004
• President of Bankers Association of the Philippines from 1989 to 1991

Present Directorship(s)/Position(s)
Other Publicly Listed Companies – within Ayala Group:

• Independent Director of the Bank of the Philippine Islands

Other Non-Listed Companies – within Ayala Group:

• Independent Director of BPI Family Savings Bank, Inc., and BPI/MS Insurance Corporation

Other Non-Listed Companies/Organizations – outside Ayala Group:

• Trustee of E. Zobel Foundation
• Chairman of Alay Kapwa Kilusan Pangkalusugan and XPL Manitou Properties, Inc.
• Vice Chairman of XPL MTJL Properties, Inc.

Ayala’s Board of Directors leads the company’s governance system by providing active management oversight, encouraging a culture of trust, openness, and constructive dissent, and ensuring individual accountability. In exercising its powers and duties, the Board always takes into consideration the best interest of the company, its shareholders, and other stakeholders. Annually, it leads the review of the company’s vision and mission, revisits and approves the group’s corporate strategy and performance objectives, and monitors its implementation. It oversees the business affairs and is accountable to the shareholders for the long-term performance of the company. It meets regularly and allots time to discuss strategic issues with the Ayala Group Management Committee to gain insights into each specific business area. The Board’s roles and responsibilities are formalized in its Charter found in the company website.

2019 Board Accomplishments

1. The Board reviewed and affirmed the appropriateness of Ayala’s vision and
mission statement.
2. The Board reviewed, monitored and oversaw the implementation of corporate strategy.
3. The Board reviewed and ensured the adequacy of the company’s internal control mechanisms
and risk management process for good governance, and the proper implementation of the Code of Conduct and Ethics.
4. The Board reviewed and affirmed the true and fair representation of the annual financial statements, for fiscal year 2019.

BOARD COMPOSITION

The structure, size, and composition of the Board are annually reviewed and monitored by the Corporate Governance and Nomination Committee ensuring an appropriate mix of non-executive, independent and executive directors. The current composition is sufficiently diverse in thinking, characterized by a combination of knowledge, experience, and expertise to guide management as it addresses issues, new challenges and market opportunities facing the company. Moreover, none of the directors have worked for Ayala’s external auditing firm within the three years immediately preceding the date of their election or appointment.

Ayala’s Board at a Glance

• Number of Directors: 7 Directors
• Chairman: Jaime Augusto Zobel de Ayala
• Vice-Chairman: Fernando Zobel de Ayala
• Lead Independent Director: Xavier P. Loinaz
• Expertise/Background: economics, finance, accounting, business, contract, commercial, and international law, including engagements in social and environmental activities
• Director Term of Office: 1 year
• Percentage of non-executive and independent directors: 71 percent
• Independent directors owning more than 2 percent of outstanding capital stock: None

Board Diversity Policy

Ayala recognizes the value of having a Board composed of qualified and dedicated individuals with a diverse mix of expertise, experience, skills and backgrounds. As such, Ayala has adopted a board diversity policy that encourages the selection of an appropriate mix of competent directors. Diversity includes business experience, age, and gender.
With respect to gender, the Board shall strive to be composed of at least 30 percent female directors or at least two (2) female directors, whichever is lower, by 2025.

CHAIRMAN AND VICE CHAIRMAN

The Chairman leads and drives the effectiveness of the Board, both inside and outside the boardroom by promoting active engagement and open discussion among the directors. The Chairman also provides guidance to the board through providing clear advice on strategy to steer the transformation of the business. In the absence of the Chairman, the Vice Chairman shall succeed the duties of the Chairman.

The responsibilities of the Chairman and the Board have been increasingly challenging due to the changing and evolving expectations by the various stakeholders of the company. The expectations are in the exercise of good corporate governance practices, implementation of effective risk management, and compliance with relevant laws and regulations.

The positions of Chairman of the Board and CEO are currently held by the same person. The company’s corporate governance principles, which include clear and well-understood roles and responsibilities, as well as a culture of open communication with the CEO and senior management, enable the Board to maintain independent reviews and quality discussions at meetings.

NON-EXECUTIVE DIRECTORS AND INDEPENDENT DIRECTORS

Non-executive directors (NEDs) and independent directors (IDs) make up more than 70 percent of the Board’s membership. The role of the NEDs and IDs is to exercise independent judgment, ensure the continuing soundness, effectiveness and adequacy of the company’s control environment, and act in the best interest of the company, the stockholders and the stakeholders considering transparency, accountability and fairness in all activities.

For its IDs, Ayala has set a term limit of nine years in accordance with the rules set by the SEC. As of 2019, none of the independent directors have served the company for more than nine years, reckoning from 2012, in compliance with SEC Memorandum Circular No. 19, series of 2016.

Periodic meetings are held by the NEDs and IDs without the presence of executive directors. In 2019, the NEDs and IDs had a meeting held on July 16, 2019 chaired by the Lead Independent Director, Xavier P. Loinaz. The CFO was invited as a resource person. Discussions centered on how the Code of Conduct and Ethics is being implemented and how compliance with it is being monitored, whistleblower reports involving certain companies within the group, the performance of the Chief Executive Officer and the need to periodically review the succession plans of the operating subsidiaries.

LEAD INDEPENDENT DIRECTOR

As mandated by the company’s Revised Corporate Governance Manual, a lead independent director is appointed to further ensure the exercise of independent judgment by the board, particularly since the Chairman is not independent of Management.

The Lead Independent Director’s role, among others, is to act as an intermediary between the Chairman of the Board and the other Directors, when needed; to convene and lead the periodic meetings of NEDs and IDs with the external auditor and heads of internal audit, compliance and risk management, as needed; and contribute to the performance evaluation of the Chairman of the Board.

BOARD PERFORMANCE

The Board devotes ample time and attention to fulfill its duties and responsibilities. At the start of the year, the calendar of activities for the Board and Committees are established and approved. Each fiscal year, the Board meets at least six times, with the schedule of Board meetings determined before the start of each financial year. As stated in the Board Charter, the presence of at least two-thirds of the number of directors constitutes a quorum for the transaction of business.

The board meeting schedule is monitored by the Corporate Secretary to ensure that the materials are adequate and made available at least five working days in advance of the scheduled meeting to allow the Board enough time to prepare and make informed decisions. The Board agenda includes company’s and group’s operations and financial performance; updates on business, technological developments and the regulatory environment; and reports of the different Board Committees. These reports provide the Board with critical information on key issues, current trends, challenges and opportunities in the business and developments that may have a significant impact on the Ayala group of companies.

Discussions during Board meetings are open, with independent views given due consideration. In accordance with the company policy, Board members are required to abstain from participating in discussions on an agenda item in which they may have a conflict of interest.

The details of the Directors’ attendance and number of Board meetings held in 2019 are shown on the next page. All the Board members were present during the 2019 Annual Stockholders’ Meeting.

BOARD AND BOARD COMMITTEE MEMBERSHIP STOCKHOLDERS, BOARD, BOARD COMMITTEE MEETINGS, AND DIRECTORS’ ATTENDANCE FOR THE YEAR ENDED DECEMBER 31, 2019

Performance Assessment

Annually, the Board undergoes a formal assessment process to review and evaluate the performance of the Board, its Committees, and its individual members. The purpose of the assessment is to measure the effectiveness of the company’s governance practices and identify areas for improvement; and to adopt new methodologies towards further strengthening the company’s corporate governance standards. Once every three years, an independent consultant will be appointed to assist in the evaluation process of the Board. In 2019, AON was appointed as the independent consultant to assist in the board assessment exercise.

Each of the directors was requested to complete a self-assessment form which includes criteria such as: (1) structure of the Board, (2) shareholder benefits, (3) fulfillment of the Board’s key responsibilities, (4) oversight function, (5) effectiveness of the Board’s processes and meetings, (6) quality of the Board-Management relationship, (7) corporate ethics, and (8) performance evaluation.

The results of the self-assessment survey, including the comments of the directors, were compiled by the Chief Compliance Officer and reported during the Board meeting immediately following the completion of the survey.

TRAINING OF DIRECTORS

Ayala recognizes the value of providing relevant trainings to its directors and has set aside an annual budget to allow them to attend continuing professional development programs, applicable courses, conferences and seminars.

It is the policy of the company that all directors attend at least a four-hour annual continuing training program on corporate governance. Also, all new directors must undergo at the minimum an eight-hour orientation program on the company’s business and structure, vision and mission, business strategy, Governance Codes and Policies, Articles, By-Laws, Corporate Governance Manual, Board and Committee Charters, SEC-mandated topics on governance matters and other subjects essential for the effective performance of their duties and responsibilities. Each year, the Chief Compliance Officer ensures all directors undergo the necessary trainings.

As a group-wide initiative, a Corporate Governance and Risk Management Summit has been held annually since 2014. The Summit serves as a venue for collaboration, promotes the importance of strengthening the company’s corporate governance structures, and acts as a continuing education program for the Board, CEOs, and senior management. For 2019, the first ever Integrated Corporate Governance, Risk Management and Sustainability Summit with the theme “The Board’s Agenda: Sustainability Shapes Corporate Governance and Risk Management” was held on August 9, 2019 in recognition of the interconnectedness of the three disciplines in ensuring responsible business growth and value creation. The Summit’s aim was to increase awareness that integrating sustainability in Ayala’s core strategies and governance framework allows for better identification, mitigation and management of risks and improvement of governance practices and procedures.

In 2019, all but one of the directors and senior management met the SEC requirement to undertake corporate governance (CG) training. This is through participation in the Integrated Corporate Governance, Risk Management and Sustainability Summit and attendance in other CG trainings administered by either the Good Governance Advocates & Practitioners of the Philippines (GGAPP) or SGV & Co.

For the past six years, Ayala has partnered with the Institute of Corporate Directors (ICD) and continuously supported its advocacy to promote professional directorship in line with global principles. For the year, Ayala has sponsored ICD’s programs such as the Distinguished Corporate Governance Speaker Series.

DIRECTOR COMPENSATION

The Personnel and Compensation Committee recommends to the Board remuneration packages for directors, ensuring that compensation is consistent with the company’s culture, strategy, and control environment, and aligned with the long-term interests of the company and its stakeholders. Total remuneration or changes thereto are approved by the stockholders during the annual stockholders’ meeting.

Ayala sponsored Institute of Corporate Directors’ Distinguished Corporate Governance Speaker Series.

Executive Directors Remuneration

Ayala’s CEO and COO, Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala, respectively, as executive directors, do not receive remuneration for attending Board meetings nor the fixed retainer fee for Board of Directors.

Non-Executive and Independent Directors Remuneration

Only NEDs and IDs receive director fees. The existing remuneration framework for the NEDs and IDs adopted by the company consists of a fixed retainer fee and meeting fees. The fee structure is indicated in the table below.

BOARD COMMITTEES

The Board Committees are established to allow the Board to focus on specific functions, assist the Board in the optimal performance of its roles and responsibilities and to aid in promoting good governance. The rights and responsibilities of each Committee delegated by the Board are defined in the specific Committee Charters duly approved by the Board, all of which are available on the company website.

Executive Committee

The Executive Committee is mandated to exercise the powers and perform the duties of the Board within the authority granted to it. It acts by majority vote of all its members during the intervening period between scheduled Board meetings.

Finance Committee

The Finance Committee oversees, reviews, and evaluates the financial affairs of the company. The Committee discussed, deliberated on and approved various transactions in 2019.

Corporate Governance and Nomination Committee

The Corporate Governance and Nomination Committee is tasked with ensuring that good corporate governance principles and practices are complied with and observed by the company. This includes the adoption of an effective Board process in the nomination, election, or replacement of Board members and the review of the succession plans for members of the Board and senior executives. The Committee strives to ensure that the Board composition allows it to exercise effective decision-making powers by maintaininmg a suitable number of independent directors. The Committee also makes sure that the Board is comprised of individuals whose background, skills, experience and personal characteristics meet the needs of the company and is aligned the company’s strategic direction, as evidenced by the board skills matrix found in the next page.

Annually and as necessary (i.e. upon vacancy of position or when additional directors are required), the Committee recommends to the Board qualified individuals for nomination and election as directors based on the established criteria to ensure sufficient diversity in the Board and aligned with the company’s vision, mission, strategic directions, its By-Laws, Revised Manual of Corporate Governance, and the rules of the SEC. For this purpose, the Committee may make use of professional search firms or other external sources of candidates to search for qualified candidates to the Board.

FEE STRUCTURE AND DIRECTOR REMUNERATION

Audit Committee

The Audit Committee oversees matters relating to the financial statements and financial reporting process, external auditors, internal auditors, internal control, and compliance with applicable legal and regulatory requirements.

Risk Management and Related Party Transactions Committee

The Risk Management and Related Party Transactions Committee is responsible for oversight of the company’s enterprise risk management system. The Committee ensures that management maintains a sound risk management framework and internal control system to mitigate material risk exposures identified by the company. Another responsibility of the Committee is to review all material RPTs for endorsement to the Board to ensure that these are at arm’s length, the terms are fair, and they will inure to the best interest of the company, its subsidiaries or affiliates, and the shareholders.

Personnel and Compensation Committee

The Personnel and Compensation Committee is responsible for establishing a formal and transparent procedure for the development of a policy on executive remuneration and for fixing the remuneration packages of corporate officers and directors, ensuring that compensation is consistent with the company’s culture, strategy, and control environment; and is aligned with the long-term interests of the company and its stakeholders,
while remaining competitive against the market.
The Committee is guided by the objective of ensuring that the level of compensation should fairly pay for the work required, considering the company’s size and scope.

BOARD SKILLS MATRIX
Directors as of December 31, 2019