Board Committees

Board Committees

The Board may create such committees (each a “Board committee”) as it may deem necessary to support it in the performance of its functions and in accordance with the By-Laws and to aid in good governance. The Board may delegate part of its rights and responsibilities to any of its committees. The committees shall be composed of Board members specifically chosen for their particular background and areas of expertise that will allow them to adequately perform the functions assigned to their committee. The rights and responsibilities of each Board committee may be defined in greater detail in specific committee charters duly approved by the Board.

The Board adopts, for each Board committee a charter providing, among others, the composition of the Board Committee, the qualifications of the members, the powers, duties and responsibilities of the Board Committee and the rules governing the exercise of those powers or performance of the duties and responsibilities.

The Board constitutes an Executive Committee, an Audit Committee, a Risk Committee, a Nomination Committee, a Personnel and Compensation Committee, a Related Party Transactions Review Committee, a Sustainability Committee and an Inspector of Proxies and Ballots Committee.

To view the Board of Directors Charter, click on the link below:

ALI Board of Directors Charter

Executive Committee

The Board may appoint from among its members an Executive Committee composed of not less than three (3) members, a majority of whom shall be citizens of the Philippines, and shall designate one of such members as Chairman of the Executive Committee.

The Executive Committee has to be composed in such a way that it possesses, as a group, the necessary knowledge, skills and experience required to properly perform its duties. The Executive Committee shall regularly review its composition, taking into account the evolving
requirements of the Company, and best practices in corporate governance.

The Executive Committee, in accordance with the authority granted by the Board, or during the absence of the Board, shall act on a minimum quorum of at least two-thirds (2/3) of its members on such specific matters within the competence of the Board of Directors as may from time to time be delegated to the Executive Committee in accordance with the Corporation’s By- Laws, except with respect to:

i. approval of any action for which shareholders’ approval is also required; filling of vacancies in the Board or in the Executive Committee;
ii. the amendment or repeal of By-Laws or the adoption of new By-Laws;
iii. the amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable;
iv. distribution of cash dividends; and
v. the exercise of powers delegated by the Board exclusively to other committees, if any.

An act of the Executive Committee which is within the scope of its powers shall not require ratification or approval for its validity and effectivity, provided however that the Board of Directors may at any time enlarge or redefine the powers of the Executive Committee. The Executive Committee shall perform such other functions as may be properly delegated to it by the Board. The Executive Committee shall be guided by the Company’s mission and vision in the fulfillment of its functions.

To view the Executive Committee Charter, click on the link below:

ALI Executive Committee Charter

Audit Committee

The Committee consists of three (3) directors entirely non-executive, majority of whom are independent directors. An independent director is the chair of the Committee and is responsible for ensuring the effective interaction among Committee members and with Management and the internal and independent auditors. Each member has an adequate understanding of accounting and auditing in general and of the Corporation’s financial management systems and environment in particular. At least one (1) member has an auditing experience and accounting expertise.

The Committee supports the corporate governance process through the provision of checks and balances. Specifically, it shall be responsible for the following:

Financial Reporting

i. Reviewing the financial statements and all related disclosures and reports certified by the Chief Financial Officer and released to the public and/or submitted to the SEC and for compliance with both the internal financial management handbook and pertinent accounting standards, including legal and regulatory requirements.

ii. Reviewing the quarterly, half-year and annual financial statements before submission to the Board, focusing on changes in accounting policies and practices, major judgmental areas, significant adjustments resulting from the audit, going concern assumptions, compliance with accounting standards, tax, legal, and stock exchange requirements.

iii. Reviewing and approving management representation letter before submission to the independent auditor.

iv. Ensuring that a transparent financial management system, supported by a Procedures and Policies Handbook that will be used by the entire organization is established, to ensure the integrity of internal control activities throughout the Corporation.

v. Elevating to international standards the accounting and auditing processes, practices and methodologies.

vi. Ensuring that actions and measures, in case error or fraud is found in the financial statements and related disclosures, are in place and followed.

vii. Reviewing unusual or complex transactions including all related party transactions.

viii. Communicating with legal counsel covering litigation, claims, contingencies or other significant legal issues that impact the financial statements.

Internal Audit

i. Reviewing and approving the Internal Audit Charter and subsequent revisions thereto for approval of the Board. The Internal Audit Charter shall be periodically reviewed to ensure alignment with the International Standards for the Professional Practice of Internal Auditing (ISPPIA).

ii. Setting up the Internal Audit Division, including the appointment of the Chief Audit Executive (CAE). The Committee shall establish and identify the reporting line of the CAE so that the reporting levels allow the internal audit activity to fulfill its responsibilities. The CAE shall report directly to the Committee functionally. The Committee, having appointed the CAE, shall also concur in his/her replacement, re-assignment or dismissal. The Committee shall set up the qualification criteria for internal auditors.

iii. Ensuring that the Internal Auditors have free and full access to all the Corporation’s records, properties and personnel relevant to and required by their function and that the Internal Audit Division shall be free from interference in determining its scope, performing its work and communicating its results.

iv. Approving the Annual Internal Audit Work Plan and all deviations therefrom, ensuring that the audit resources are reasonably allocated to the areas of highest risk.

v. Reviewing reports of the Internal Auditors and regulatory agencies, where applicable, ensuring that management is taking appropriate corrective actions in a timely manner, including addressing internal control and compliance issues.

vi. Reviewing Internal Audit Division’s periodic reports and the Internal Audit Annual Report. Periodic reports shall highlight the status of projects in accordance with the audit plan approved by the Committee, as well as any unplanned projects. Such reports shall include a summary of key findings and recommendations,including the status of implementation. The Annual Report shall discuss the Internal Audit Division’s activities and performance relative to the audit plans and strategies approved by the Committee.

vii. Conducting separate meetings with the CAE to discuss any matter that the Committee or the auditors may deem necessary to be discussed privately.

viii. Providing inputs on the performance of the Internal Audit Division and communicating or discussing such inputs with the Chief Finance Officer (CFO) who shall then translate these into a performance appraisal applicable to the CAE and the Internal Auditors taken as a whole.

ix. Instituting special investigations as necessary, and if appropriate, hiring special counsel or experts to provide the necessary assistance.

x. Reviewing evaluation of compliance with the Code of Conduct for management.

External Audit

i. Recommending the appointment and removal of the Independent Auditors and the fixing of their remuneration to the Board. The Committee shall conduct an assessment of independence and professional qualifications and competence of the independent auditor and ensure that a rotation process is observed in the engagement of independent auditor.

ii. Reviewing and pre-approving the Independent Auditor’s plans one (1) month before the conduct of external audit to understand the basis for their risk assessment and financial statement materiality, including the scope and frequency of the audit. In this regard, the Committee shall discuss with the Independent Auditors, before the audit commences, the nature and scope of the audit, and ensure cooperation when more than one professional service firm is needed. In  addition, the Committee shall review compliance of independent auditor with auditing standards.

iii. Monitoring the coordination of efforts between the independent and internal auditors.

iv. Reviewing the reports of the Independent Auditors and regulatory agencies, where applicable, and ensuring that management is taking appropriate corrective actions in a timely manner, including addressing control, governance and compliance issues.

v. Conducting a separate meeting in executive session, with the Independent Auditors to discuss any matter that the Committee or Independent Auditors believe should be discussed privately, including the results of the audit, year-end financial statements, the quality of management, financial and accounting controls.

vi. Reviewing and approving the proportion of audit versus non-audit work both in relation to their significance to the Independent Auditor and in relation to the Corporation’s year-end financial statements, and total expenditure on consultancy, to ensure that non audit work will not be in conflict with the audit functions of the Independent Auditor. The amount of both audit and non-audit work of Independent Auditors shall be disclosed in the annual report.

vii. Ensuring that there is a process in place for understanding disagreements between the independent auditor and the management of the Corporation.

To view the Audit Committee Charter, click on the link below:

ALI Audit Committee Charter

Board Risk Oversight Committee

The Committee is composed of three (3) members, at least one of whom is an independent director who is the Chairman. Each member possesses an adequate understanding of the management, assessment and mitigation of risks to which the Corporation is or may be exposed to.

The Committee shall have the following authority, roles and responsibilities:

i. Ensure that an overall set of risk management policies and procedures exist for the Corporation.

ii. Review the adequacy of the Corporation’s risk management framework / process.

iii. Review the results of the annual risk assessment done by the Chief Risk Officer(CRO), including the risks identified and their impact or potential impact on the Corporation’s business and the corresponding measures to address such risks.

iv. Evaluate the risk assessment report submitted by the CRO on a periodic basis, which may include existing and emerging risks faced by the Corporation and/or its subsidiaries as well as the risk mitigation strategies and action plans adopted by Management.

v. Monitor the risk management activities of the Corporation and evaluate the effectiveness of the risk mitigation strategies and action plans, with the assistance of the internal auditors. This includes ensuring that the Corporation maintains a framework for fraud prevention and detection (i.e. whistleblower Program) and plans for business continuity (i.e. Business Continuity Plan)

vi. Meet periodically with Management to discuss the Committee’s observations and evaluation on its risk management activities.

To view the ALI Risk Committee Charter, click on the link below:

ALI Board Risk Oversight Committee Charter

Corporate Governance and Nomination Committee

The Committee is composed of at least three (3) members and as far as practicable, with independent directors as majority.

Members of Nomination Committee

The Committee has the following powers, duties and responsibilities:

i. Establish and maintain a process to ensure that all candidates/nominees to be nominated for election as directors at the Annual Stockholders’ Meeting are qualified in accordance with the By-laws, Manual of Corporate Governance and relevant laws, rules and regulations and possess none of the disqualifications stated in the Corporation’s Revised Code of Corporate Governance.

ii. Encourage the selection of a mix of competent directors, each of whom can add value and contribute independent judgment to the formulation of sound corporate strategies and policies. In the selection of candidates, the objectives set by the Board regarding its composition are to be seriously considered, as well as the required knowledge, abilities and experience needed to successfully manage the Corporation. Careful attention is given to ensure that there is independence and diversity, and appropriate representation of women in
the Board, subject to the possession of the knowledge, abilities and experience determined by the Board as necessary for the Board to properly perform its functions.

iii. Review and evaluate the qualifications of persons nominated to positions in the Corporation which require appointment by the Board, and provide guidance and advice as necessary for the appointments of persons nominated to other positions.

iv. Review and disclose succession plans for members of the Board, and officers for the position of Group Directors to the President/CEO.

v. Provide assessment of the Board’s effectiveness in directing the process of renewing and replacing Board members and in appointing officers or advisors and develop, update as necessary and recommend to the Board policies for considering nominees for directors, officers or advisors.

vi. Discharge any other duties and responsibilities delegated to the Committee by the Board from time to time. The Committee shall be guided by the Corporation’s mission and vision in the fulfillment of its functions.

Process and Criteria for Nominations to the Board

The Committee shall observe the following process and criteria in receiving and evaluating nominations to the Board in line with the Corporation’s strategic directions:

1. Receive all written nominations to the Board submitted by stockholders at least thirty (30) business days before the date of the next annualmeeting of the stockholders.

2. Review and evaluate the qualifications of all those nominated in accordance with the following criteria:

(a) ownership of at least one (1) share of stock of the Corporation standing in his name in the books of the Corporation;

(b) a college degree or its equivalent or adequate competence and understanding of the fundamentals of doing business or sufficient experience and competence in managing a business to substitute for such formal education;

(c) relevant qualification, such as previous business experience, membership in good standing in relevant industry, and membership in business or professional organizations;

(d) integrity, probity, diligence and assiduousness in the performance of his functions;

(e) directorships in other companies, taking into account the following factors:

(i) the nature of the business of the Corporation;
(ii) the number of directorships in other companies;
(iii) any possible conflict of interest; and
(iv) the age of the director;

(f ) for independent directors, beneficial equity ownership in the Corporation or in its related companies, which must not exceed two (2) percent and;

(g) the term limit set for independent directors under applicable laws, rules and regulations.

The Committee may consider and recommend to the Board other qualifications for directors, including independence criteria or standards for independent directors, which are aligned with the Corporation’s vision, mission and corporate strategy that are now or may hereafter be provided in relevant laws or any amendments thereto.

The Committee may likewise identify and recommend qualified individuals for nomination and election to the Board. For this purpose, the Committee shall make use of professional search firms or other external sources of candidates to search for qualified candidates to the Board.

To view the ALI Nomination Committee Charter, click on the link below:

ALI Corporate Governance and Nomination Committee Charter

Personnel and Compensation Committee

The Personnel and Compensation Committee is composed of at least three (3) members, and as far as practicable, with majority as independent directors. The Chairman of the Committee is an independent director.

The Personnel and Compensation Committee shall have the following powers, duties and responsibilities:

i. Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of corporate officers and directors, and provide oversight over remuneration of senior management and other key personnel ensuring that compensation is consistent with the Corporation’s culture, strategy and control environment.

ii. Designate the amount of remuneration, which shall be in a sufficient level to attract and retain directors and officers who are needed to run the Corporation successfully.

iii. Establish a formal and transparent procedure for developing a policy on remuneration packages of individual directors, if any, and officers, which policy shall disallow independent directors from receiving options, performance shares and bonuses.

iv. Develop a Full Business Interest Disclosure as part of the pre-employment requirements for all incoming officers, which among others compel all officers to declare under the penalty of perjury all their existing business interests or shareholdings that may directly or indirectly conflict in their performance of duties once hired.

v. Provide for the Corporation’s annual reports, information and proxy statements a clear, concise and understandable disclosure of compensation of its executive officers for the previous fiscal year and the ensuing year.

vi. Review and recommend changes to the existing Human Resources Development or Personnel Handbook, to strengthen provisions of conflict of interest, salaries and benefits policies, promotion and career advancement directives and compliance of personnel concerned with all statutory requirements that must be periodically met in their respective posts.

vii. Provide for the Corporation’s annual report the fee structure of non-executive directors, and ensure that independent directors are not entitled to receive options, performance shares and bonuses.

viii. Ensure that the Corporation’s compensation policy is competitive and aligns the long term interests of the corporate officers and directors with those of the Corporation.

ix. Ensure that executive compensation is based on a fair and transparent performance evaluation process.

No member of the Personnel and Compensation Committee will act to fix his or her own compensation except for uniform compensation to directors for their services as a director.

To view the ALI Personnel and Compensation Committee Charter, click on the link below:

ALI Personnel and Compensation Committee

Related Party Transactions (RPT) Review Committee (Approved by the Board on Nov 29, 2015)

The Committee consists of three (3) independent non-executive directors. The Committee Chair shall be responsible for ensuring the effective interaction among Committee members and with Compliance Office and the Management.

The Committee shall be responsible for the following:
i. Assist the Board in assessing material agreements of any kind with a related party in determining whether to approve, ratify, disapprove or reject a RPT.

ii. The Committee shall take into account whether the RPT is entered into on terms no less favorable to the Corporation than terms generally available to an unaffiliated third party under the same or similar circumstances.

iii. For transaction involving sale of Corporation assets, review results of the appraisal, valuation methodology used as well as alternative approaches to valuation.

iv. Review all information provided by Management, including all relevant facts and circumstances.

v. Require adequate and accurate information from Management.

vi. Review adequacy of Management’s monitoring and reporting systems of RPTs.

vii. Annually review the Committee’s own performance.

To view the RPT Review Committee Charter, click on the link below:

ALI RPT Review Committee Charter

Sustainability Committee

The Committee is composed of at least three (3) members as determined by the Board. The Committee is composed in such a way that it possesses, as a group, the necessary knowledge, skills and experience required to properly perform its duties.

The Company recognizes sustainable development as the foundation for a high-performing, successful and forward-looking business. It adopts the Brundtland Report’s definition of “sustainable development” as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Ayala Land seeks to embed a conscious understanding of economic, social and environmental interdependencies to create long term value for its stakeholders.

The Sustainability Committee has the following powers, duties and responsibilities:

i. Provide oversight, identify and assess significant social, ethical and environmental interdependencies that might impact on the long-term business objective of Ayala Land to be recognized as a responsible and sustainable Corporation in the property sector.

ii. Guide policy-making in the Corporation’s sustainability program and ensure full Corporation support and alignment with the Ayala Group of Companies’ commitment to sustainable development.

iii. Regularly monitor new and innovative technologies, processes and practices that will permit the Corporation to attain sustainable growth.

iv. Regularly review both current and proposed partnerships and relationships with stakeholders that support the Corporation’s sustainable growth.

v. Regularly evaluate the Corporation’s communication and marketing strategies related to sustainable growth.

vi. Review the sustainability-related content of the Corporation’s annual report prior to its issuance.

To view the ALI Sustainability Committee Charter, click on link below:

ALI Sustainability Committee Charter

Inspector of Proxies and Ballots Committee (Approved by the Board on Apr 06, 2015)

The Committee is composed of (3) persons which are empowered to pass on the validity of proxies. The Committee shall be guided by existing laws, and rules and regulations of the Commission regarding proxies. The term of office of the Committee members shall be fixed by the Board of Directors. In the event of vacancy in the Committee membership, the Board of Directors may appoint another member to such vacancy.

The Committee shall have the following particular duties and responsibilities:

• At least five (5) working days prior to the date of the stockholders’ meeting, the Committee shall perform the validation of the proxies submitted by stockholders. The Committee shall only consider proxies submitted not later than seven (7) working days prior to the date of the stockholders’ meeting. The Committee shall prepare a summary of the valid and invalidated proxies to be submitted to the Office of the Corporate Secretary, together with the proxies.
• Validation, counting and tabulation of votes cast at the Corporation’s stockholders’ meeting
• Perform such other duties and functions as may be delegated by the Board from time to time

The Committee shall be guided by applicable laws, the By-laws and the rules and regulations of the SEC regarding proxies under SEC Rule 20, Section 20 of the Securities Regulation Code of the Philippines.