2016 ANNUAL REPORT
The Compensation and Remuneration Committee is composed of the Chairman of the Board and two (2) members, one (1) of whom shall be an Independent Director. The chairman of the committee is Independent Director Tony Tan Caktiong, and its members are Directors Federico R. Lopez and Peter D. Garrucho, Jr.
Pursuant to the Compensation and Remuneration Committee Charter, the committee has the principal function of studying and recommending an appropriate compensation and/or reward system. It shall exercise powers and functions over the compensation and remuneration of the corporate officers other than the Chairman, whose compensation and remuneration shall be determined by the President and two (2) Directors, one of whom shall be an Independent Director. The committee shall establish a policy on remuneration of Directors and officers to ensure that their compensation is consistent with the Corporation’s culture, strategy, and the business environment in which it operates. Further, it is tasked to review the Corporation’s human resources development or personnel handbook in order to strengthen provisions on conflict of interest, policies on salaries and benefits, and directives on promotion and career advancement.
The Audit Committee is composed of four (4) members, three (3) of whom are Independent Directors. The committee is headed by Independent Director Jaime I. Ayala, with Director Peter D. Garrucho, Jr. and Independent Directors Tony Tan Caktiong and Cielito F. Habito as members.
Under the provisions of the Audit Committee Charter, the committee’s primary function is to assist the Board of Directors in fulfilling its oversight responsibilities for financial reporting, internal control systems, internal audit activities, compliance with key regulatory requirements, and enforcement of the Corporate Code of Conduct.
Among the Audit Committee’s other functions are monitoring and evaluating the Company’s internal control systems, which include the Company’s financial reporting control and information technology security. The Committee likewise recommends the appointment of the Company’s external auditor and ensures that the Company has an effective internal auditing system. To this end, the Committee is in charge of reviewing reports of the Company’s internal and external auditors and taking corrective action when necessary. The Committee is likewise tasked to review any unusual or complex transaction, and review the accuracy of disclosures of material information including subsequent events and related party transactions.
The Risk Management Committee was created by the Board of Directors in March 2010. The Risk Management Committee Charter provides that the committee shall be composed of at least three (3) members from the Board of Directors. In May 2013, the Board of Directors decided to elect an additional Director to sit on the committee, bringing its current Board membership to four (4) Directors. Independent Directors comprise 50.0 percent of the committee’s membership.
The committee is chaired by Director Peter D. Garrucho, Jr. with Director Francis Giles B. Puno and Independent Directors Jaime I. Ayala and Cielito F. Habito as members.
The committee assists the Board of Directors in its oversight responsibility over the management’s activities in managing physical, financial, operational, labor, legal, security, environmental, and other risks of the Corporation. It plays a vital oversight role and serves as an important liaison to the Board. Under its charter, the committee shall have the duty and responsibility to provide guidance to the management through the establishment of the Company’s risk management philosophy and risk appetite. It shall likewise approve the Company’s risk management policy and processes and any revision thereto. The Committee shall also communicate to key stakeholders the status of strategic and critical risks, and require periodic reports from the management to confirm that the risk management system of the Company is operating correctly and consistently with its objectives.