The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company. Show Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. Corporate governance is therefore about what the board of a company does and how it sets the values of the company, and it is to be distinguished from the day to day operational management of the company by full-time executives. In the UK for listed companies corporate governance it is part of the legal system as the latest UK Corporate Governance Code applies to accounting periods beginning on or after 1 January 2019 and,, applies to all companies with a premium listing of equity shares regardless of whether they are incorporated in the UK or elsewhere. But good governance can have wider impacts to the non listed sector because it is fundamentally about improving transparency and accountability within existing systems. One of the interesting developments in the last few years has been the way in which the ‘corporate’ governance label has been used to describe governance and accountability issues beyond the corporate sector. This can be confusing and misleading as UK Corporate Governance has been built and developed to deal with the governance of listed company entities and not designed to cover all organisational types that may have different accountability structures. Meralco’s 118th year of unparalleled service is a testament to the Company’s relentless dedication to serve all its stakeholders. After all, no company can thrive for more than a century of existence if it runs its business by looking out only for its own welfare. A company, which attends to some great demand and strives to provide great service, must also be dedicated in energizing its stakeholder service.
A. Shareholders Meralco recognizes its responsibility to protect its shareholders’ rights by creating value and ensuring sustainable growth in business.
Right to information Meralco upholds the rights of its shareholders to obtain relevant information about the Company in a timely and regular basis. Meralco’s financial performance and prospects are regularly reported to the SEC and PSE. These reports are immediately made public through press releases and postings in the Meralco’s website.
Investors’ briefings and teleconferences are held quarterly, where equity and credit analysts of both local and foreign-based institutions are invited. Analysts who are unable to attend in person participate through a teleconference facility with a playback feature available until the following day of the meeting. Members of senior Management make themselves available for meetings with institutional investors through Company visits, teleconferences, briefings and attendance in local and international investor conferences.
Press/media briefings are likewise held regularly to report on Meralco’s operating and financial results to the various representatives of media, particularly from the television, print and wire agencies. Such briefings are venues for Management to answer questions and clarify issues prior to the release of information to the public. Shareholders and investors are provided with adequate facilities to communicate with Meralco through telephone, mail, electronic mail, and website, www.meralco.com.ph. The Investor Relations Office supervises the investors’ briefings and teleconference, and attends to institutional investors’ needs. Stockholder Affairs Office attends to the inquiries and other concerns of shareholders, including the distribution of Notice and Agenda of the Annual Stockholders Meeting, or ASM, at least 28 working days before the said meeting. Right to Dividends Meralco also adheres to its commitment to maintain a fair and competitive return to its investors. The Company has a dividend policy approved by the Board which was ratified by the shareholders in 2010. The policy provides for payment of regular cash dividend equivalent to 50% of the (audited) consolidated core earnings for the year with a “look-back” basis, which allows the Company to pay special dividends beyond 50% of the consolidated core earnings for the year, subject to the availability of unrestricted retained earnings in accordance with the guidelines of the SEC. The details of the cash dividend pay-outs are included in Notes to the Audited Consolidated Financial Statements, found on the Section on Equity. Following are the cash dividends declared by the Board on common shares for 2021:
Declaration Date Record Date Payable Date Rate per Share March 1, 2021 March 30, 2021 April 26, 2021 PhP 7.824 July 26, 2021 August 23, 2021 September 15, 2021 PhP 5.057
Right to Participate in Decisions We uphold the rights of all shareholders, including the minority shareholders, to participate in:
Right to Vote and Participate Effectively
Disclosure and Release of Notice to ASM It is the Company’s policy to encourage shareholders, including institutional stockholders and minority stockholders, to attend the Annual Stockholders Meeting or ASM. To provide shareholders enough time to examine the Company’s information, the ASM Notice was posted on the Company’s website on January 25, 2021. The Definitive Information Statement (DIS) was distributed to the shareholders starting April 27, 2021, 28 days prior to the ASM date of May 25, 2021. Similar to all Company notices and circulars, the ASM Notice is written and published in English. The 2021 ASM was held on Tuesday, May 25, 2021, at 10:00 AM at the Meralco Theater, Lopez Building, Ortigas Avenue, Barangay Ugong, Pasig City. In light of the COVID-19 pandemic, the Company conducted its virtual ASM via live broadcast of the proceedings through SERVE. Stockholders were given opportunity to propound questions and raise concerns to the Board during the meeting. As in the previous years, the Company facilitated participation of stockholders who cannot attend virtually by enclosing proxy forms in the ASM Notice where they can indicate their votes on matters that are taken up during the ASM. Shareholders can download the proxy forms together with details on how to appoint a proxy from the Company’s website. The Company granted all stockholders, including minority stockholders, the right to nominate directors and propose or inquire on agenda items. The “Call for Nominations” was posted on the Company’s website on January 25, 2021 for submission of proposed agenda and nomination of qualified candidates on or before March 5, 2021. The agenda and nominees were approved by the Board during its meeting on January 25, 2021 and March 29, 2021, respectively.
Voting Procedures The Corporate Secretary reported a quorum with the attendance of stockholders who own or hold a total of 903,195,366 shares or approximately 80.13% of the total issued and outstanding shares of the Company. An electronic system facilitated the registration and vote tabulation to ensure accuracy and reliability of information. SERVE was also enhanced to allow the stockholders to attend and actively participate via remote communication and to cast their votes for the agenda items online.
The Corporate Secretary explained the vote tabulation procedures to the shareholders and stated that all shareholders were entitled to one vote for one share. Representatives from Reyes Tacandong & Co., an independent third party, validated the voting results for each agenda item. The Company also allowed shareholders to freely express their views and raise their questions during the ASM through the SERVE portal.
The Chairman of the Board, Chairman of the AuditCom, Chairman of the RLDC, Chairman of the Nom&Gov, Chairman of the Finance Committee, the Board, President and CEO, Chief Finance Officer (CFO), Corporate Secretary, other officers of the Company, and its external auditor attended the ASM to present the performance results of the Company and respond to any question from the shareholders relevant thereto. The appropriate meeting procedures and guidelines were followed before, during and after the ASM.
The Company posted the resolutions approved during the ASM on its website the following day so that non-attending shareholders may be immediately informed.
Dividend Policy The Company believes that the major responsibility of the BOD is to optimize the long-term value of the Company, and ensures that all shareholders are given their fair share in the benefits arising from such value.
The Company’s dividend policy, as approved by the Board and ratified by the shareholders during the May 25, 2010 ASM, calls for the payment of regular cash dividends equivalent to 50% of core earnings for the year with a “look-back” basis, which allows the Company to pay special dividends beyond 50% of the core earnings for the year, relative to availability of unrestricted retained earnings and cash, in accordance with the guidelines of the SEC.
Alternative Dispute Resolution The Board adopts and makes available at the option of a shareholder, an established alternative dispute resolution (ADR) mechanism to resolve intra-corporate disputes in an amicable and effective manner as provided in the Revised Manual of Corporate Governance. Accordingly, in resolving intra-corporate disputes between the Company and its stockholders, the Company may resort to alternative modes of dispute resolution as may be agreed upon with the adverse party, such as but not limited to the following:
B. Employees Meralco is committed to the development and welfare of its employees. As the Company sustains its efforts in building a high-performance culture to fully respond to the requirements of the new business environment, employees are continuously trained and developed to enable them to achieve excellent performance founded on our corporate values. Career development programs are implemented to ensure professional growth through skills and job enrichment opportunities, learning and development programs, performance management and promotions systems. Employees are compensated based on performance and over-all qualifications and market competitiveness. Adequate provisions for medical, health and other essential benefits; and workplace safety are provided to promote employee welfare and well-being. Uprightness and impartiality are observed in conflict resolution. HR Programs for our employees are continuously reviewed and enhanced to ensure their over-all effectiveness and responsiveness.
The Company is further committed in sustaining and/or further enhancing the high level of engagement of employees. Guided by the results of an employee engagement survey conducted, focused and deliberate initiatives are undertaken to help ensure employees job satisfaction and motivation. Employee communication is strengthened to keep employees well-informed on significant developments. Employees are likewise encouraged to give feedback and suggestions to Management to further improve corporate and operational performance, promoting employee accountability and empowerment. Health and Safety Metrics218.74 KBDownload PDFTraining Metrics198.62 KBDownload PDF C. Subsidiaries
Meralco continues to strengthen the good governance practice of its subsidiaries by strongly advocating the need for each subsidiary to adopt its own Manual of Corporate Governance and Code of Ethics.
D. Community (Corporate Social Responsibility) Meralco continues to live up to its commitment as a partner in building energized and strong communities through various corporate social responsibility programs under the stewardship of One Meralco Foundation, Inc. (OMF).
Meralco seriously considers the impact of business decisions on the interests of its shareholders and other stakeholders. The Declaration of Corporate Principle of the Company’s Revised Manual of Corporate Governance specifically mentions: “The Company…uphold(s) an ethical culture that will protect and promote the best interest of the Company for the common benefit of the Company’s stockholders and other stakeholders.” The Company also protects and maintains good relations with its suppliers and creditors based on mutual respect and benefit. The Company strives to foster long-term stability, direct and open relations, and continuous development with suppliers to ensure quality, competitiveness, process efficiency and performance reliability; foster governance principles in all of its business dealings with them; and seek, encourage and prefer suppliers whose business practices respect human dignity and the environment.
Suppliers/Contractors
More details on the Company’s bidding, technical and commercial evaluation and awarding procedures are available in www.meralco.com.ph/for-suppliers/vendor-accreditation.
Creditors The Company faithfully complies with all loan agreements with creditors. It ensures timely payment of its loans and efficiently operates its business to assure creditors of the Company’s sound financial standing and loan payment capabilities. The rights of creditors are protected by public disclosures of material information such as results of operations, systems of internal controls and regular assessment of risks to compliance with loan covenants and bonds. Periodic reports are made by the Company of its financial position through the submission of its quarterly and latest audited financial statements. The Company also conducts regular financial and operating results briefings.
|
