THE BOARD OF DIRECTORS
Manila Water prides itself with its Board of Directors (the “Board”), composed of highly competent individuals who are well-recognized in their respective fields and in the business community.
The Board provides a clear vision towards the formulation of sound corporate strategies, and oversees the systemization, improvement and upholding of transparency in governance. The Board provides guidance in achieving fairness and accountability in all major dealings of the Company, with the objective of protecting the interests of all stakeholders.
The Company values the inputs and opinions of each Director, ensuring that a Director shall not be discriminated upon by reason of gender, age, ethnicity, or political, religious or cultural beliefs. Towards this end, the Board has adopted a policy of diversity in gender, age and ethnicity, as well as religious, political or cultural background. Through this policy, the Board encourages the shareholders of the Company to nominate and select individuals who will promote diversity in the membership of the Board.
The Board has eleven members who are elected by the stockholders during the annual stockholders' meeting. All nominations to the Board are undertaken in accordance with the By-Laws of the Corporation.
Upon receipt of all nominations, the Nomination Committee convenes to evaluate the qualifications of nominees for election to the Board. In evaluating the nominations, the Nomination Committee adheres to the criteria for selection and the qualifications of directors set forth in the Manual of Corporate Governance (the “Manual”), the Charter of the Board of Directors, the Charter of the Board Committees, and those under existing laws, rules, and regulations.
After its deliberation, the Nomination Committee issues a resolution endorsing the election of the qualified nominees at the annual stockholders' meeting. The members of the Board so elected at the annual stockholders' meeting hold office for one year, and until their successors have been elected and qualified in accordance with the By-Laws.
The elected members of the Board are mandated to oversee the management of the Company, and, in the performance of their duties, must exercise their best and unbiased judgment to protect and promote the interest of the Company and its shareholders.
Roles and Responsibilities
In order to strengthen the participation of the Board and its Committees in the enhancement of corporate governance practices of the Company, the Board is guided by its own charter. Specifically, the Charter of the Board:
- sets out the specific functions of the Chairman of the Board and the President, emphasizing their separate roles and responsibilities;
- imposes limitations on directorships in publicly listed companies, institutionalizes the performance evaluation of the Board, the Board Committees, and the President;
- provides for increased quorum, from simple majority, to 2/3 of the number of directors fixed in the Articles of Incorporation; and
- requires the Board to conduct an annual review of the mission and vision of the Company.
In compliance with the requirements of the law, the Company’s Manual, and the rules and regulations of the Securities and Exchange Commission (SEC), the Company has four independent directors as members of the Board. A director is considered independent if he holds no interests or relationships with the Company that may hinder his independence from the Company or its management, or would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Company also fully subscribes to the requirements of independence under existing laws, rules and regulations.
THE BOARD COMMITTEES
The Board is supported by several committees, namely: the Executive Committee, Audit and Governance Committee, Nomination Committee, Remuneration Committee, Risk Committee, and the Committee of Inspectors of Ballots and Proxies. These committees are required to report to the Board a summary of the actions taken on matters submitted to them for consideration. Each of the Board Committees has its own charter that provides guidance on the manner by which its members and the committees should exercise their functions and mandates.
The Executive Committee
- Composed of five directors as members
- Acts by majority vote of all its members and is authorized to act and shall act on matters within the competence of the Board, except those with respect to:
- Approval of any action for which shareholders’ approval is also required
- Filling of vacancies in the Board
- Amendment or repeal of the By-Laws or the adoption of new By-Laws
- Amendment or repeal of any resolution of the Board, which by its express terms is not so amendable or repealable
- Distribution of dividends to shareholders
- Meets as needed and performs such other functions as may be properly delegated to it by the Board
- Held three meetings in 2015
The Audit and Governance Committee
- Composed of four directors (three of whom are independent) and is required to be chaired by an independent director
- Provides the check and balance mechanism and is expected to bring positive results in supervising and supporting the management of the Company, with the following duties:
- Responsible for ensuring the development of, compliance with, and periodic review of corporate governance and financial reporting policies and practices of the Company
- Recommends the appointment of the Company’s external auditors and the Chief Audit Executive
- Provides concurrence to the replacement, re-assignment or dismissal of the Chief Audit Executive to ensure that the external and internal auditors will function and operate independently of the management as required of their function
- Meets at least every quarter and before the quarterly Board meetings and when needed
- Held six meetings in 2015
All members of the Audit and Governance Committee are required to possess adequate understanding of accounting and auditing principles in general and of the Company’s financial management systems and environment, in particular. Mr. Jaime C. Laya, an independent director and a member of the Audit and Governance Committee, is a Certified Public Accountant.
The Related Party Transactions Committee
- Considered by the Board as a subset of the Audit and Governance Committee, and is composed of all the three independent directors of the Audit and Governance Committee
- Primarily tasked with the duty of enforcing and implementing the Related Party Transactions Policy of the Company, with respect to material related party transactions
The Nomination Committee
- Composed of four directors, three of whom are independent, and under its own Charter is required to be chaired by an independent director
- Tasked to install and maintain an evaluation process to ensure that all directors to be nominated to the Board during the annual stockholders' meeting have all the qualifications and none of the disqualifications stated in the Manual, the Charter of the Board and the Committees, and the under existing laws and regulations
- Undertakes the process of identifying the quality of directors consistent with the Company’s strategic directions, and which have the competence and professional background that will enable them to perform their duties as directors of Manila Water
- Tasked to evaluate the qualifications of all officers nominated to positions in the Company which are appointed by, or required to be appointed by the Board
- Held two meetings in 2015
The Remuneration Committee
- Composed of four members, three of whom are independent, and under its own Charter is required to be chaired by an independent director
- Tasked with the duty to determine and approve all matters relating to the remuneration and benefits of the Company’s directors and key officers
- Continuously evaluates and recommends for Board approval, pertinent guidelines on executive and employee compensation, including non-monetary remuneration
- Held two meetings in 2015
The Risk Committee
- Composed of four members, majority of whom are independent directors, and is required to be chaired by an independent director
- Tasked to provide assistance in fulfilling the Board’s oversight responsibilities in relation to risk governance in Manila Water, which includes ensuring that Management maintains a sound and responsive risk management system across the organization
- Established separately from the Audit and Governance Committee in order to further enhance governance on risk matters and align with the best practices in risk management
- Supported by the Enterprise Risk and Insurance Management Department in the performance of its functions
- Held two meetings in 2015
The Committee of Inspectors of Ballots and Proxies
- Membership consists of the Internal Audit Head, the Chief Legal Counsel and a representative of the external auditor of the Company
- Carries the mandate to validate proxies issued by the stockholders and to determine if the same are in accordance with existing laws, rules, and regulations prior to the Annual Stockholders’ Meeting
- Default inspector of ballots and tabulator of votes during the Annual Stockholders’ Meeting, and as such, is required to coordinate closely with the Office of the Corporate Secretary and the independent validator of votes appointed for the purpose
Under the Charter of the Board, the Board institutionalized a policy of holding at least six meetings in a year. These include the organizational meeting of the Board which is held immediately after the annual stockholders’ meeting. Under the By-Laws, special meetings may be called by the Chairman, Vice Chairman, President or at the instance of a majority of the members of the Board. To promote transparency, the Board has a policy of requiring the presence of at least one independent director in all its meetings. In the past eleven years, the Board has not conducted a meeting without the presence of at least one independent director.
Under the Manual, a director’s absence or non-participation for whatever reason in more than fifty percent of all meetings, both regular and special, in a year is a ground for temporary disqualification in the succeeding election.