GRP 4 F2F MERALCO

DR. YANGA'S COLLEGES, INC.
College of Business Administration
Manila Electric Company (MERALCO)

Corporate Governance and Corporate Social Responsibility Review
Submitted to:
Mr. Bryan A. Bernabe
Submitted by:
Alfonso, Giana
Adriano, Lui Angelo
Blancia, Lealie
Dizon, Rhia Mae
Dionisio, Nestle Jane Grace
Fedencio, Rhona Mae
Gutierrez, Jimuel
Lampa, Arabella
Marquez, Edward
Pibte, Anariza
BSBA Group 4 (F2F)
May 26, 2022

Contents
Chapter 1: Introduction and Background .................................................................................... 1
Introduction ............................................................................................................................ 1
Background of the company ................................................................................................... 1
Short History ....................................................................................................................... 1
MERALCO as a Public Listed Company ............................................................................. 3
Products and services they offered ..................................................................................... 3
Competitors ........................................................................................................................ 3
Slogan ................................................................................................................................ 4
Their Vision, Mission and Values ........................................................................................ 4
Chapter 2: Corporate Governance ............................................................................................. 6
Structure of Governance ........................................................................................................ 6
Board of Directors of Manila Electric Company (MERALCO) .................................................. 7
Chairman of the Board ........................................................................................................ 8
Lead Independent Director .................................................................................................. 8
Board Charter ..................................................................................................................... 8
Board of Committees .............................................................................................................14
Executive Committee (ExCom) ..........................................................................................14
Nomination and Governance Committee (Nom&Gov) ........................................................14
Audit Committee (AuditCom)..............................................................................................15
Risk Management Committee (RMC) .................................................................................16
Remuneration and Leadership Development Committee (RLDC) ......................................17
Finance Committee (FinCom) ............................................................................................17
Related Party Transactions Committee (RPT Comm) ........................................................17
Sustainability Committee....................................................................................................18
Corporate Secretary ..............................................................................................................19
Compliance Officer ................................................................................................................19
The Corporate Governance and Compliance Office & Corporate Governance Office ............20
Management Teams and Executives .....................................................................................20
President and CEO................................................................................................................21
Manager’s role and duties .....................................................................................................21
Designations ......................................................................................................................21
Performance Evaluation and Fair compensation ................................................................22
Plans for Succession .........................................................................................................22
Stock/Shareholders ...............................................................................................................23
MERALCO’s Shareholding Structure .................................................................................23
Meetings ............................................................................................................................24
Shares and Their Transfers................................................................................................24
Shareholder’s rights ...........................................................................................................25
Stakeholders .........................................................................................................................26
Stakeholder’s Rights ..........................................................................................................26
Legal and Regulatory ............................................................................................................29
By Laws .............................................................................................................................29
Articles of Incorporations....................................................................................................30
Board Director and Committees Charter ............................................................................30
Disclosure and Transparency ................................................................................................31
Supply of Information .........................................................................................................31
Disclosure and Transparency.............................................................................................31
Information Security Governance and Data Privacy ...........................................................31
MERALCO Data Privacy Office ..........................................................................................32
Confidentiality of Information and Proper Use of Property ..................................................32
Communication and Disclosure..........................................................................................33
Business Policies and Programs ...........................................................................................33
Code of Ethics ...................................................................................................................33
Revised Manual of Corporate Governance Structure of Governance .................................36
Other Policies ....................................................................................................................37
Programs ...........................................................................................................................39
Chapter 3: Corporate Social Responsibility ...............................................................................40
Chapter 4: Conclusion and Recommendation ...........................................................................43
Conclusion ............................................................................................................................43
Recommendation ..................................................................................................................48
Insights ..................................................................................................................................50
References: ..............................................................................................................................52
Contribution per member ..........................................................................................................55
1
Chapter 1: Introduction and Background
Introduction
Electricity has become one of the necessities of a person ever since the world transformed
into a modernized society. It contributes to the advancement of technologies. It also assists
people in making their lives more convenient and productive. In the contemporary era, as society
gradually integrates itself into the digital environment, humans likewise improve their
intelligence and enhance their skills.
Since electricity became a prerequisite, some businesses have been established because of this.
In the corporate world, it is an undeniably huge advantage if the offered product or service of a
company is one of the basic needs of a community since there will always be a demand unless
there are competitors or other firms that have the same type of offered services. Since such is
frequently the case, analysts measure and examine specific factors to determine which firm is the
finest or operating effectively and efficiently, and one of those factors is the corporation's
governance.
Manila Electric Company or also known as MERALCO is part of the publicly listed corporations
that became the largest private-sector electric distribution utility company in the Philippines.
Almost all Filipinos are familiar with this company since there are 36 cities and 75
municipalities that are included in their services and its franchise area is approximately 9,685
km2 which represents only 3% of the Philippines' Geographical area but it produces half of the
country’s electricity. This year 2022, MERALCO will mark its 119 years of service by being
committed to providing safe and affordable energy to its customers. The mentioned statistics and
information are the reasons why MERALCO was chosen as a company to review its governance.
The purpose of this review is to examine the corporate governance of Manila Electric Company
(MERALCO) and to identify key criteria of good governance within the organization. The
students also intend to study the structure of governance, the legal and regulatory aspects, the
processes in monitoring, the scope of control, risk and performance management, disclosure and
transparency, and finally, the business’ policies and programs. Lastly, the students aim to
determine and analyze the company's Corporate Social Responsibilities initiatives as well as
their impacts on the stakeholders of the business.
Background of the company
Short History
Based on the article in Funding Universe, La Electricista, which began selling electricity
to residential customers in 1892, was responsible for bringing electricity to Manila. With the
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installation of a new power plant in 1895, La Electricista had 3,000 clients by the turn of the
century. The Philippines' young government sought bids in 1903 to operate Manila's electric
tramway and supply energy to the city and its outskirts. The bid was won by Charles M. Swift, a
Detroit industrialist who founded The Manila Electric Railroad and Light Company, or
MERALCO.
According on the official site of MERALCO, in their history timeline, the company was
purchased from its American owners in 1961 by a group of Filipino investors led by entrepreneur
Eugenio Lopez Sr., making it the first major American corporation to be 'Filipinized.' Over the
next decade, the new Filipino management built electric-generating and distributing facilities at
an unprecedented pace to meet the burgeoning needs of its franchise area. This was
accomplished through the trust of international credit institutions such as the US Export-Import
Bank, the Japanese Export-Import Bank, the International Finance Corporation (IFC), the
Kreditanstalt fur Wiederaufbau (KFW), and other banks, insurance companies, and major
American, German, and Japanese suppliers
MERALCO was the Philippines' first billion-peso firm in 1969. This was made even more
remarkable by the fact that the majority of it was accomplished without the use of government
guarantees. As a matter of policy, the Philippine government-owned all major generating
facilities in 1970. MERALCO sold its generating units to National Power Corporation and
focused on electric distribution. Indeed, MERALCO's franchise area was tripled in the first half
of the 1980s, from 2,678 square kilometers to 9,337 square kilometers, owing to provincial
consumers’ preference for MERALCO’s rates and services above all others.
Despite its continuing prominence as one of the oldest and largest Philippine corporations, much
of MERALCO's management in 1995 was focused on enabling the company to quickly adapt to
the changing structures and surroundings in which it operates. Customer satisfaction, world-class
efficiency and productivity, performance-driven rewards, good corporate citizenship, transparent
good governance, and process, organizational, and human resource development in the direction
of these values have all been promoted under various names and slogans, including TQM, re-
engineering, and the MERALCO Transformation Program.
Finally, the Manila Electric Company concluded huge stock transactions with two other big
Philippine conglomerates, the PLDT and San Miguel groups, in 2009. These cooperative efforts
resulted in new, expanded, and more cost-effective services, as well as increased commercial
opportunities and cost savings.
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MERALCO as a Public Listed Company
The Philippine Stock Exchange lists MERALCO. On January 8, 1992, it became a

publicly listed corporation on the Philippine stock exchange. MERALCO's stock celebrated its
25th year of trading on the Philippine Stock Exchange (PSE) with a small ceremony on January
10. Following an initial public offering in late 1991, the shares were initially traded on the
Manila and Makati Stock Exchanges on Jan. 8, 1992.
Products and services they offered
MERALCO is the Philippines' largest corporate electric power distribution utility,

supplying 36 cities and 75 municipalities. They were in their 119th year in the industry as of
2022. MERALCO was able to deliver great service and affordable electric power to seven
million clients throughout a franchise area of 9,685 km2. They are composed of 56 branches in
the Philippines. MERALCO offers products and services to the client depending on the three
categories namely residential customers, Biz partners, and corporate partners. For the residential
customers, MERALCO provides Electric Service, Billing & Payment, Bright Ideas, News &
Advisories Help, and support. MERALCO’s Biz partners offer Power consult, Power match, and
Power gain. They also offer solutions such as Peak / Off-peak programs and net metering.
Programs such as Private electrical contractors certified by MERALCO, Power Ideas, and Power
Up are included. MERALCO’s corporate partners provide products Including Peak/ Off-Peak
Program and net metering service. Services such as Power Consult, Power Profile, and Energy
Service are also included. They also have various Programs namely MERALCO Golf Cup,
Power Club Magazine, Power Up, and Power Ideas.
Competitors
Competitors, like many other business sectors, cannot be ignored because they are an
integral part of claiming that your company will prosper.
Some of MERALCO's competitors in line with the field of business offering essential electricity
in the Philippines are the following:
 NGCP (National Grid Corporation of the Philippines) is a system operator and

transmission service provider. It provides transmission system, tower, and substation
operations and maintenance, planning, and engineering services. NGCP is headquartered
in Quezon City, Philippines, and has one office nationwide. Henry Sy the Vice Chairman
of the Board, and Robert Coyiuto Jr., respectively the Co-Vice Chairman are the majority
stockholders of this industry they control the company henceforth they are responsible for
operating, maintaining, and growing the country's energy supply grid (Craft, n.d.).
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 The largest solar company in the Philippines is Solar Philippines. It has a generating
capacity of 300 MW and a land area that has 10,000 hectares conducive for solar farms. It
was founded by Leandro L. Leviste in 2013 and has been creating a path toward a
renewable future by embarking on utility-scale solar farms that can provide an extra
supply of electricity for the Luzon grid to effectively increase the efficiency of various
clients and communities (Solar Philippines, n.d).
 DECORP (Dagupan Electric Corporation) is a privately held company that distributes

power. Congress granted it an exclusive franchise to run an electric light and power
system in the cities and municipalities of Dagupan, Calasiao, San Fabian, and
Sta.Barbara, Manaoag, San Jacinto,Bolingit including San Carlos City's Barangays Cruz,
all in the province of Pangasinan. It has a franchise population of 574,359 with a
franchise area of 349 square kilometers ( Dagupan Electric Corporation, n. d.)
 Pangasinan Electric Company (PANELCO I) have an exclusive franchise for operating

power services and electric light that includes the cities of Alaminos, Bani, Anda,
Burgos , Bolinao, Infanta , Dasol and Mabini All in the Province of Pangasinan
(Pangasinan I Electric Cooperative, n. d.).
Slogan
"Ang Liwanag ng bukas" (the future is bright), MERALCO's brand motto, now has a
better bond with the clients it represents. The increase of MERALCO’s core income by 13%
based on the article written by Yang (2022) in PhilStar Global, is only proof that many Filipino
still believes that they can provide what the consumers need, especially while most of us are
working at home. The tagline can be assessed by the connotation and denotation, for the
denotation as per Merriam Webster it can be radiant with happiness, and for the connotation,
positive future, a future which is likely to be successful.
Their Vision, Mission and Values
The Board of Directors has been given the responsibility of increasing stockholder value
by ensuring the long-term development of the Company, as well as maintaining its level of
competitiveness and profitability, in a manner that is compatible with the Company's vision,
mission, and corporate values.
The Board of Directors of the Company has been mandated by the Company's Revised Manual
of Corporate Governance (MCG) to draft and conduct an annual review of the Company's vision
and mission statement, strategic objectives, key policies, and the mechanism for performance
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evaluation of the Board and Management, primarily the President and Chief Executive Officer
(CEO).
MERALCO envisions being a world-class provider of energy solutions, supplying power to the
nation and to its people, today and for next generations.
Its mission is to provide the best, most reliable, affordable, excellent, and sustainable value
energy solutions and services to its consumers.
In order to achieve their mission and vision, MERALCO strictly upholds and promotes their core
values of Excellence, Customer Centricity, Sustainability, Integrity, Innovation, Malasakit, and
Bayanihan.
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Chapter 2: Corporate Governance
Structure of Governance
Photo retrieved from official website of MERALCO

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Board of Directors of Manila Electric Company (MERALCO)
The main role of the Board in a corporation or organization is to govern and provide a
direction for the company. It is their responsibility to represent and protect the shareholder’s
interest. It is part of their duties to perform major decisions for the benefit of the whole firm.
Executive Director:
Ray C. Espinosa
Non-executive Directors: Independent Directors:
Manuel V. Pangilinan Pedro Emilio O. Roxas

Lance Y. Gokongwei Artemio V. Panganiban
James L. Go Lydia B. Echauz
Jose Ma. K. Lim
Elpidio L. Ibañez
Anabelle L. Chua
Victorico P. Vargas
Frederick D. Go
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Chairman of the Board
Manuel Velez Pangilinan
To improve the Board's integrity, the Chairman of the Board is separated from the
President and CEO. Every position has different and distinct functions and responsibilities,
according to MERALCO's updated By-Laws and Revised Manual of Corporate Governance. Mr.
Manuel V. Pangilinan, Chairman of the Board, represents the interests of all shareholders and
stakeholders and oversees the effectiveness of the Board and its directors. He promotes excellent
ethical governance standards for directors, executives, and workers to emulate and support.
Lead Independent Director
Artemio V. Panganiban
As MERALCO stated, an independent director is someone who is not involved in any

commercial or other relationship that may fairly be construed as interfering with his exercise of
independent judgment. Since 2012, independent directors normally served for a maximum of
nine years while guaranteeing that shareholders' legal ability to vote and be voted directors is
maintained. If the company wants to keep an independent director who has been on the board for
nine years or more, it must offer compelling reasons and notifies stockholders at the annual
gathering.
If the Chairman of the Board is not independent and the Chairman of the Board and Chief
Executive Officer are the same person, Section 4.4 of MERALCO's Revised Manual of
Corporate Governance specifies that the Board should consider designating a lead director
among the independent directors. The appointment of a Lead Independent Director should be
supported and authorized by the Board of Directors.
Chief Justice Artemio V. Panganiban will serve as the Lead Independent Director, functioning
only as a liaison between the Chairman and the other directors as needed. In addition, he is
responsible for calling and chairing a meeting of the non-executive directors, as well as
contributing to the Chairman's performance evaluation. According to MERALCO, in the absence
of the Chairman, the Lead Independent Director does not function as Chairman; that duty has
been transferred to the Vice-Chairman.
Board Charter
MERALCO's Board of Directors' purposes, authority, functions, and obligations are

outlined in the Board Charter. It also specifies the legal structure and processes that must be
followed.
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The Charter covers the following:
Qualifications
The first and most important requirement of the Company to be a director, he/she must
own at least one share of the corporation's capital stock. The requirements must be met and must
have no flaws. The Nomination and Governance Committee may propose recommendations of
Directors if needed.
To be qualified as a MERALCO Director, he or she must have the competencies to effectively

carry out his or her duties as a director, as well as strong integrity, trustworthiness, a strong
commitment to legal and moral values, and a working knowledge of business in general and the
Company's industry in particular.
Disqualifications (Section 7, Article I, MCG)
A director may be disqualified temporarily or permanently as stated in MERALCO’s Board

Charter and Revised Manual Corporate Governance.
Permanent Disqualification (Section 7.1, Article I, MCG)
Any individual condemned or adjudicated guilty of any of the charges or crimes such as
moral turpitude, fraud, embezzlement, theft, counterfeiting, misappropriation, forgery, bribery,
false affirmation, perjury, or other fraudulent activities is automatically disqualified for a
position on the board of directors permanently.
The individual is also disqualified if he or she has been declared bankrupt by a court and is the
subject of a securities and banking-related investigation. The SEC or another court or
administrative body makes an order rejecting, rescinding, or suspending any registration, license,
or permission issued to him under the Corporations Code, the Securities Regulation Code, or any
other applicable law.
Temporary Disqualification (Section 7.2, Article I, MCG)
A director will be disqualified from running for office if he fails to properly declare his
corporate interests as obliged by law, and if the disqualification extends to his tenure on the
board or any 12-month period within that time. Finally, he/she will be removed temporarily if the
director denies any involvement in the reason of his detention.
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To be legitimate and effective, a temporary disqualification of a director recommended by the

Nomination and Governance Committee must be approved by the Board. A temporarily
disqualified director must take action to fix or amend the error within 60 business days, or the
disqualification will become permanent.
Duties and Responsibilities
The office of a director is one of trust and confidence. Transparency, accountability,

integrity, and must show in his/her action. It is the Board's job to ensure the Company's long-
term success, and maintain its competitiveness and profitability in the best interests of the
company Stockholders, employees, consumers, and other stakeholders are among the company's
stakeholders. The Board is also responsible for establishing the Company's vision, purpose, and
strategic goals as well as managing its operations.
The specific duties and functions of the Board are the following:
 Adopt a selection system that values diversity and ensures a varied workforce, regardless
of gender, race, ethnicity, or national origin;.
 Oversee the formulation and implementation of strong strategic strategies, as well as
compensation and professional development programs.
 Ensure that the Company adheres to all applicable laws, rules, and guidelines for best
business practices.
 Determine the stakeholders in the community in which the company operates and
determine who oversees Management's actions and is directly influenced by them;
 Adopt a check-and-balance system inside the Board of Directors that is frequently
evaluated for efficiency;
 Ensure that corporate risk management is in order.
 Due diligence concerns include identifying and monitoring key risk areas and
performance indicators.
 Determine if the Company has suitable policies and processes in place in accordance with
the Revised Manual and applicable laws and regulations, such as conflict of interest and
related regulatory transactions between parties.
 Establish any Board Committees that the Board deems necessary to assist the Board in
carrying out its objectives and duties.
 If required, the Board of Directors may consider instituting a new procedure for resolving
differences and conflicts between the Company and its investors; and Consider
developing and implementing a company-wide plan for changing or replacing the
company's internal conflict resolution mechanism.
 Maintain Board authority within the institution's authorities as defined in the Articles of
Incorporation, Bylaws, and applicable laws, rules, and regulations.
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Composition
The board of directors of Manila Electric Company (MERALCO) consists of 11 people.

In accordance with the Company's Articles of Incorporation and By-Laws, directors must be
chosen by stockholders at a regular or special meeting. To maintain a system of checks and
balances in place, a majority of non-executive directors, as well as at least two or an ideal
number of independent directors, must be on the Board of Directors.
Board Diversity
As stated by the company, for the assurance that the board comprises people who have
excellent competencies, expertise, and experience in the business industry, which is significant
for critical discussion and promotion of a balanced decision for the attainment of the company’s
strategic objectives and sustainable development, the board adopted a Board Diversity Policy. It
is a policy that enables the Company to form a diversified Board of Directors. Their academic,
professional, and business experience, as well as gender, age, and other statutory criteria, are
important considerations, but the mentioned factors will also not be a hindrance to being part of
the board. The ultimate composition of the board will be based on the performance and quality
contribution of the selected directors to the Company.
Nomination and Election
The Company’s Board adopts a comprehensive and transparent board nomination and
election policy outlining how it handles nominations from minority shareholders and assesses the
qualities of submitted individuals. Candidates for board directorship go through a nomination
and review process that takes into account the requirements and disqualifications outlined in the
Board Charter
It is The Committee on Nomination and Governance that was assigned to handle and manage the
nomination process for the Board of Directors. It is their task to identify and formally recognize
the candidates for election as directors/independent directors nominated by the stockholders. The
Committee must also assess each candidate and check if they meet all the qualifications for
directorship. They will decide on independent director nominees whether the nominees meet the
criteria for independence set forth in the Corporate Governance Manual, By-Laws, and Other
Documents policy, law, or regulation that applies. External sources may be used in its search for
potential nominees. Lastly, before the election, they must compile and submit the recommended
list of final nominees to the Board of Directors at least 45 days prior to the Annual Stockholders'
Meeting.
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Vacancies
If the position of a specific director becomes vacant as a consequence of death,

disqualification, resignation, or other removals, the majority of all remaining directors as well as
stockholders of the Company may fill the vacancy by nominating and electing a new director at
any meeting or adjourned meeting. They may also decide if they will fill the vacant position or
not.
Retirement
According to the MERALCO’s approved philosophy and financial plan, the Company's
overall performance management, compensation, retirement, and leadership development
policies and programs are handles and develops by the Committee of Remuneration and
Leadership Development while it is Board’s duty to establish a policy on director and key officer
related to their retirement.
Meetings
Monthly meetings and special Board meetings are being held by MERALCO's Board of
Directors. During meeting they have agendas including updates of performances in operational
and financial aspects of the Company reported by committees, executives and officer.
Discussions are also open, and independent perspectives are taken into account.
If all of the directors are present, meetings can be conducted at any time and place without
notice, or if those who did not attend waive a written notice before or after the meeting, and since
there is a Pandemic, MERALCO conducts Board meetings through teleconferencing or
videoconferencing. They ensure that they are in accordance with the Memorandum Circular No.
6, Series of 2020 on Guidelines for Attendance and Participation via Teleconferencing,
Videoconferencing, and Other Remote or Electronic Means of Communication, as well as the
guidelines established in SEC Memorandum Circular No. 15, Series of 2001.
Compensation/Remuneration
Every director of Manila Electric Company (MERALCO) is eligible to receive a stipend

for attending special or regular Board of Directors and Board Committee meetings. They may
also earn additional remuneration in the form of a set retainer, bonus, stock grant, or a
combination of the two; nevertheless, the entire value of the compensation, regardless of form,
must not exceed or surpass one percent of the company's before-tax income. Furthermore, no
director votes on his/her remuneration. Directors will only be compensated if the stockholders
have approved the action or if it is covered in the Company's By-Laws.
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Assessment to the Board
Evaluations are undertaken on a regular, collective, and individual basis to examine the
performance and responsibility of MERALCO's Board, committee structures and processes, as
well as the President and CEO's leadership, working relationships with the Board, management,
and communication. During their evaluations, Board members were given the opportunity to
provide comments and opinions, as well as identify special problems of interest regarding their
performance or other elements of the company's operation. According to the MERALCO’s
Manual of Corporate Governance, the evaluation may be accompanied by an external facilitator,
who can be any independent third party designated by the Board.
Board Self-Assessment, General Board Committee Performance Assessment, Board Committee

Self-Assessment, and President and CEO Performance Assessment were completed by the
directors, along with associated evaluation criteria. The assessment forms were then forwarded to
the Corporate Governance Office, which gathered and analyzed the responses on a one-to-five
grading system, with five being the highest.
Plans for Succession
According to MERALCO, a successful succession plan for senior executives and

management is overseen and implemented by the Board of Directors. Providing direction and
guidance to the management and executive regarding succession is the duty of Remuneration and
Leadership Development Committee (RLDC). It is also their duty, together with Human
Resource head, to properly execute the strategy for succession planning, leadership development,
and talent management. Lastly, it is HR head’s responsibility to ensure that there are enough
candidates for the roles of President and CEO, senior management, middle management, and
first-line management by developing and implementing methods and procedures.
Orientation and Continuing Learning
In accordance with the Board Charter, the Board of Directors ensures that the Company
is compliant to the laws and good governance practices; the Board of Directors established a
policy. Directors and key officers are required to attend orientations in order to understand their
roles and responsibilities. They are also encourage to attend trainings including an annual CG
training with SEC-Accredited providers to keep them up to date on the latest developments in
corporate governance regulatory.
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Board of Committees
From the Section 9, Article 1, MCG it states that The Board of Directors of Manila
Electric Company established a Board of Committees to assist in ensuring compliance in strong
corporate governance principles. They are also tasked to appoint the members of such
committees on an annual basis. All established committees must have Committee Charters
outlining their respective aims, memberships, structures, activities, reporting processes,
resources, and other pertinent information. The Committees' performance should be measured
against the Charters' standards.
Executive Committee (ExCom)
The Executive Committee shall have all of the authority of the Board of Directors in the
management of the company's business and affairs between board meetings and shall have the
authority to authorize the company's seal to be affixed to all papers that may require it, subject to
the limitations set forth in 35th Section of the Corporation Code. The Executive Committee's
action shall be decisive evidence that the Board of Directors took that action. The Executive
Committee is composed of five Directors and one of them is Artemio V. Panganiban an
Independent Director. The other four directors include Manuel V. Pangilinan, Lance Y.
Gokongwei, James L. Go and Jose Ma. K. Lim.
Nomination and Governance Committee (Nom&Gov)
The responsibility of Nomination and Governance Committee is to evaluate the effectiveness of

director independence, establishing a system for performance review of the Board and
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Management, providing programs for continuing education of the Board and improving the
processes and organization of the Board.
One of the most important roles of the mentioned committee is to aid the Board in assessing
qualified nominees for election for the position of directorship as mentioned on the Nomination
and Election part under the Board of Directors. The process entails identifying, reviewing, and
recommending possible candidates to the Board for consideration.
The Nomination and Governance Committee is composed of six Directors and one of them is
Frederick D. Go, an independent director as their chairman. The other five directors are Pedro
Emilion O. Roxas, Lydia B. Echauz, Anabele L. Chua, James L. Go and Jose Ma. K. Lim.
Audit Committee (AuditCom)
The primary purpose of the Audit Committee is to assist the Board of Directors of
MERALCO in carrying out their responsibilities for overseeing the financial reporting process,
internal controls, internal and external audit processes and compliance with laws and regulations.
Audit Committee has the power to review the findings of the financial statement audit and the
evaluation of internal accounting controls with management and external auditors. In addition,
they review and evaluate procedures and criteria for the selection, appointment, annual
performance evaluation, and, if necessary, termination of external auditors' services. Lastly, they
can also recommend to the Board for approval the appointment, reappointment, or removal of
external auditors, as duly accredited by the SEC and ratified by the shareholders.
The lead independent director who is not the Chairman of the Board or any other committee
chairs the Audit Committee. All members have relevant professional skills, expertise and
experience in business, management, finance, accounting, and, law.
The Audit Committee is composed of three independent directors, and four non-executive
directors namely, Artemio V. Panganiban, Lydia B. Echauz, Pedro Emilio O. Roxas, Anabelle L.
Chua, Frederick D. Go, James L. Go, and Jose Ma. K. Lim
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MERALCO’s Internal Audit
Internal audit's mission at MERALCO is to provide independent, objective assurance and

consulting services that are designed to add value and improve the operation of MERALCO,
subsidiaries, and affiliates by providing new insights and by bringing a systematic, disciplined,
and risk-based approach to evaluate and improve the effectiveness of risk management, control,
and governance processes.
Internal Audit uses a risk-based audit methodology to develop an annual audit plan and strategy
that is aligned with the Group's core initiatives and risks. MERALCO’s Internal Audit reports to
the AuditCom the findings of audit engagements involving different units of the Company and
its subsidiaries, as well as particular areas of concern indicated by Management. Certified Public
Accountants, Certified Internal Auditors, Chartered Management Accountants, Registered
Electrical Engineers, and those with Certification in Control Self-Assessment and Certification in
Risk are among the internal auditors.
Risk Management Committee (RMC)
The Risk Management Committee is in charge of ensuring the functionality and efficacy
of the company's Enterprise-Wide Risk Management (EWRM) system. The Committee's role is
to support the Board of Directors in ensuring that an effective risk management approach is in
place so that well-informed decisions can be made after taking into account the risks involved.
This RMC consists of two independent directors and four non-executive directors namely, James
L. Go, Jose Ma. K. Lim, Anabelle L. Chua, Frederick D. Go, Pedro Emilio O. Roxas, and
Artemio V. Panganiban.
Enterprise-Wide Risk Management
MERALCO’s Enterprise Risk Management (ERM) is responsible in tracking and

managing the company's risks and opportunities in order to produce and protect the value of
company. They build risk governance structures and implement effective processes for managing
existing and future risks, as well as improving the ability to take on more risks associated with
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new growth prospects. It is anchored in the company's culture, included in corporation’s plans
and processes, and connected to MERALCO’s goal and objectives
Remuneration and Leadership Development Committee (RLDC)
In accordance with the company's bylaws, this division shall help and advise the Board of
Directors on the Company's compensation, retirement, and various benefits, as well as leadership
development, and also on executives with the rank of Assistant Vice President and above. It will
also aid the Board of Directors in determining suitable remuneration for the Board of Directors.
This RLDC consist four directors. The one member is an independent director, namely, Manuel
V. Pangilinan, Lance Y. Gokongwei, Victorico P. Vargas, and Pedro Emilio O. Roxas.
Finance Committee (FinCom)
The Company's financial policies, strategy, and capital structure are all managed by the
Finance Committee, which is also responsible for the dividend policy, acquisitions and
dispositions of investments in companies, businesses, or projects, treasury management, tax
strategy and compliance, and financing proposals. Furthermore, it recommends to the Board, if
deemed appropriate, actions within its given power for approval.
The FinCom is made up of six directors, one of whom is an independent director, namely Lance
Y. Gokongwei, James L. Go, Anabelle L. Chua, Victorico P. Vargas, Pedro Emilio O. Roxas,
and Lydia B. Echauz.
Related Party Transactions Committee (RPT Comm)

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The Related Party Transactions (RPT) Committee monitors and handles the Related Party
Transactions that are significant to the Firm. It is their role to check if the RPTs could benefit the
Company and its shareholders, and make sure that all of the Company's RPTs are done in a fair
way that doesn't favor anyone.
It is their duty to perform ongoing evaluation of current relationships between and among firms
and counterparties to guarantee that all related parties are continuously identified, RPTs are
monitored, and subsequent modifications in relationships with counterparties are noted.
Moreover, they ensure that adequate disclosure is made and/or details are provided to regulating
and supervising authorities regarding the company's RPT exposures. Lastly, the committee
monitors the system for identifying, monitoring, measuring, regulating, and reporting RPTs, as
well as a regular evaluation of RPT rules and procedures.
There are two independent directors among the RPTCom's six directors, James L. Go, Jose Ma.
K. Lim, Anabelle L. Chua, Frederick D. Go, Pedro Emilio O. Roxas, and Artemio V.
Panganiban.
Sustainability Committee
The Sustainability Committee is in charge of overseeing Manila Electric Company and its
affiliates' strategic plan, framework, policies, and programs, as well as the Company's
environmental, social, and economic performance in relation to the United Nations Sustainable
Development Goals, with the goal of providing long-term value to its stakeholders.
Overseeing the strategic plan, framework, policies, and programs of Manila Electric Company
and its affiliates, is the role and responsibility of the Sustainability Committee. It is also their
duty to supervise the environmental, social, and economic performance of the firm to provide
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long-term value to its stakeholders in relation to the United Nations Sustainable Development
Goals.
The SC is made up of five directors, one of whom is an independent director, namely Manuel V.
Pangilinan, Lance Y. Gokongwei, Jose Ma. K. Lim, Frederick D. Go, and Pedro Emilio O.
Roxas,
Corporate Secretary
Atty. Simeon Ken R. Ferrer
Under the supervision of the Chairman of the Board, the Corporate Secretary is in
accountable for ensuring that adequate information is provided to the management, Committees,
and Board of Directors. Part of their responsibilities include assisting the Board in carrying out
its duties, such as ensuring that all board procedures, standards, and regulatory requirements are
faithfully abided, submitting necessary documentation and disclosures to the SEC, PSE, PDEx,
and other regulatory agencies, and organizing orientation programs for new board members
regarding the operational and structure of organization in MERALCO.
Compliance Officer
Atty. William S. Pamintuan
The Compliance Officer and Senior Vice President of the Company, Atty. William S.
Pamintuan is in charge of monitoring, reviewing, evaluating, and ensuring that the corporation,
its officers, and directors are in compliance with all applicable laws, rules, and regulations, as
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well as all regulatory agency governance issuances. He also informs the Board on any violations
of the stated rules and proposes suitable disciplinary action. It is also his responsibility to verify
the integrity and accuracy of all regulatory documentation submissions. Finally, in compliance
with the Code of Corporate Governance for Publicly-Listed Companies, the Compliance Officer
participates in corporate governance training on a regular basis.
The Corporate Governance and Compliance Office & Corporate Governance Office
In 2014, MERALCO established the Corporate Governance and Compliance Office to

assist Atty. William S. Pamintuan to his role as a Compliance Officer. On March 16, 2010, the
business also established the Corporate Governance Office (CGO) to prove that the company is
committed in achieving corporate governance excellence. CGO ensures that they are
independent, impartial and making decisions objectively in compliance with established
procedures and to maintain independence, through Nomination and Governance Committee; they
make sure to report to the Board and to administer to Management within its current structure.
Some of their responsibilities are the following:
 Developing and/or modifying systems and policies in compliance with the Board's
directions.
 Policies, guidelines, and procedures are evaluated, reviewed, identified, prioritized, and
created/modified.
 The Corporate Governance monitoring systems, process controls, and rewards/sanctions
system are all evaluated, reviewed, and modified.
 Ensure that they monitor and report the Corporate Governance performance
 Ensures that MERALCO is compliant with the Philippine Stock Exchange, Securities and
Exchange Commission, and Philippine Dealing and Exchange Corporation's disclosure
and other requirements.
 Compliance procedures and systems for the company are designed, analyzed, and
reviewed.
Management Teams and Executives
MERALCO’s Board of Directors is largely responsible for selecting management. A

Management is made up of corporate officials and executives, led by the President and CEO who
represents management. The Management guarantees that the Company's and its subsidiaries'
principal policies and instructions are followed. During regular Board meetings or extraordinary
meetings, it reports to the Board.
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President and CEO
Ray C. Espinosa - President and Chief Executive Officer (CEO)
The CEO is in charge of the company's overall direction, including managing the
company's strategic direction, creating goals and objectives, and ensuring that they are met. The
CEO has overall responsibility for all firm departments and operations, ensuring that they are all
functioning together successfully and under budget. Communicates and implements the
company's vision, purpose, values, and overall strategy, as well as any organizational or
stakeholder change that may be required. In accordance with the strategic strategy, it oversees
the corporation's operations and manages people and financial resources. It also serves as a
connection between internal operations and external stakeholders, ensuring that resources are
properly balanced.
The list of other officers is disclosed in their official site.
Manager’s role and duties
Management is in charge of building a network of procedures with the goal of overseeing the
company's operations in a way that gives the Board of Directors with reasonable certainty that:
Internally and externally released data and information is accurate, reliable, and timely.
Directors, officials, and workers follow the organization's rules, standards, plans, and procedures,
as well as any applicable laws and regulations.
Loss, fraud, abuse, and damage to the organization's resources are appropriately protected;
Quality business procedures and continual improvement are stressed; and resources are obtained
and used profitably.
Plans, programs, goals, and objectives of the organization are met.
Designations
The Board of Directors annually appoints a Chairman and Vice Chairman of the Board of
Directors, a President, one or more Vice Presidents, a Treasurer, and a Secretary, and may from
time to time appoint Assistant Treasurers, Assistant Secretaries, and such other officers and
agents as they deem proper, at their first meeting. It is required that the President and Chairman
of the Board of Directors must both be directors while other executives are not required to be
shareholders. A Vice President may also be the Treasurer. The Secretary must be a Republic of
the Philippines resident and citizen. It is stated under MERALCO By-laws that every officer
shall serve at the discretion of the Board of Directors, and the Board of Directors shall fill any
vacancies among such officers that may arise.
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Performance Evaluation and Fair compensation
MERALCO employs quantifiable benchmarks to link the executive directors' and senior
executives' performance-based pay with long-term interests, such as deferred incentives. The
accomplishment of the Company's Goals and Initiatives (GAINs) indicators is used to evaluate
Management's yearly performance. Officers and workers are rewarded according to company,
team, and individual performance in order to assist the company meet its goals and objectives.
Plans for Succession
The Remuneration and Leadership Development Committee (RLDC) is in charge of

giving broad guidance and direction on succession planning and leadership development to the
President, CEO, and Senior Management. Working closely with the director of Human
Resources, the Committee guides the strategy for succession planning, leadership development,
and talent management. MERALCO’s Human Resources (HR) strategy places an emphasis on
Talent Management and Succession Planning Programs. The evaluation of talent at the Senior
Management level and at other levels within the organization is an important aspect of the
succession planning process. It comprises serious and in-depth management discussions and
debates regarding critical talent ambitions, competencies, areas for development, and challenges.
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Stock/Shareholders
MERALCO’s Shareholding Structure

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Meetings
The Board sets dates for meetings once a year, meets once a month, and has special
meetings as needed. The SEC gave Manila Electric Company the right to set its own meeting
rules on September 6, 2010. This was because the law had been changed and the SEC had
approved it.
Before the Annual and Special Shareholders' Meeting, shareholders can suggest meetings and
agenda items using the Revised Manual of Corporate Governance. Every year, the annual
meeting of stockholders will be held on the last Tuesday of May at the company's main office or
at another place in Metro Manila that the Board of Directors decides. Depending on the caller's
credentials, special meetings will be set up at the company's main office or at another place in
Metro Manila.
The Corporate Compliance Office is in charge of making sure that shareholders stay involved
with the company after the Annual Stockholders' Meeting is over. This is done by giving
shareholders easy-to-use channels through which they can get important information about their
shares in a timely, accurate, and fair way. These channels can also be used to send complaints
about their shares.
The Board of Directors looks at important projects, policy decisions, annual budgets, large
investment funds, and major business reorganizations in good faith, with all necessary care and
attention, and with an eye on the company's best interests. At every meeting of stockholders,
every stockholder who is allowed to vote gets one vote. This vote can be made in person, in
writing, or by a lawyer. Even if there isn't a quorum, stockholders who are there in person or by
proxy at the time and place of a meeting can still vote.
The notice of a special meeting must briefly explain why the meeting is being held, and unless
the law says otherwise, no other business can be done at that meeting. Still, if all of the
stockholders who are allowed to vote at an annual or special meeting send written notice of the
meeting in person, through an attorney, or through a proxy, the meeting will be held and any
corporate action will be taken. A notice of a meeting doesn't have to be in the newspaper.
Shares and Their Transfers
MERALCO promotes the interests of all of its stakeholders by applying accountability

and establishing procedure that allows them to connect with them and claim compensation if
their rights are violated. Shareholders are given ample opportunities to exercise their rights and
interact with the company in order to resolve shareholder issues.
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Subscribers to shares of stock won't have to pay interest on their unpaid subscription until they've
been asked to pay and really haven't. Each holder of shares of stock will get a stock certificate
signed by the President and the Secretary or Assistant Secretary of the company. This will show
the type and number of shares that the holder owns. Shares can only be moved on the books of
the company when the certificate or certificates for those shares are turned in with the correct
markings.
Every stockholder and transfer, as well as every attorney or proxy for a stockholder, must give
the Secretary an address at which he can be mailed or served notice of meetings and other
notices sent to him by any official of the company. If he doesn't do this, notices can be sent to
him either at his last known address or at the office of the company in Metro Manila. If a
certificate or certificates of the company have been lost or destroyed, the Board of Directors can
ask for new ones to be made. But the person who lost the certificate or certificates has to pay a
bond to the company first. The bond must have enough surety to pay the Board of Directors the
value of the lost certificate, which is the same amount as the bond.
Shareholder’s rights
The SEC and PSE are always kept up to date on the latest information regarding the
financial performance of MERALCO and its future objectives. Members of senior management
make themselves available for meetings with institutional investors through company visits,
teleconferences, briefings, and conferences. Press/media briefings are likewise held regularly to
report on operating and financial results to the media.
MERALCO remains committed to providing a fair and competitive return to its investors. The
Board of Directors has approved a dividend policy, which was confirmed by shareholders in
2010. The Company's dividend policy directs the payment of regular cash dividends equal to 50
percent of core earnings for the year on a "look-back" basis, which allows the Company to pay
special dividends of up to 50 percent of core earnings for the year, subject to the availability of
unregulated retained earnings and cash, according to the Securities and Exchange Commission's
guidelines. The Notes to the Audited Consolidated Financial Statements contain information
about cash dividend payments.
The company is committed to upholding the rights of all shareholders, including those who own
minority shares, to participate in alterations or revisions made to the Articles of Incorporation or
Bylaws of the company. Absentee voting, also known as proxy voting, is when a person votes on
an issue without physically being present.
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Stakeholders
Stakeholder’s Rights
Stakeholders are people or groups of people that can be affected by the decisions of a
company. These are also the people who will be affected by the outcome of a project or
commercial venture. Stakeholders are critical because their responses, feedback, or opinions on a
particular project can have an impact on the firm. Stakeholders have their own rights to protect
themselves from the unethical conduct or detrimental intentions of a company. Thus, identifying
and managing the corporation's stakeholders is a crucial component of running the firm. They
must acknowledge and respect their stakeholders' rights and ensure that their plans will have a
beneficial impact on them in order to acquire their trust and support and ensure the success of
their project.
Aside from Investors or Shareholders, some of MERALCO’s Key Stakeholders are the
following:
Customers
According to them, providing exceptional service and fair treatment to all clients, as well
as thorough and correct information, is part of their business guidelines that must be applied and
followed. Thus, in terms of services, they ensure that they provide quality and customized
assistance to their customers who are in their homes, operating micro-businesses, small and
medium enterprises as well as to corporate business groups. They also systematize customer-
related policies and work practices.
In regards to their rights of information, MERALCO makes available to the public information
about the services and prices that influence consumers, such as the monthly MERALCO
Advisory. They also report key operational plans. Through events such as MERALCO
Luminaries, they host customer appreciation at least once a year. Additionally, in accordance
with ERC Resolution No. 42, series of 2006, they even established a Consumer Welfare Desk
(CWD) at their business centers and a Customer Assistance Office (CAO) at the Energy
Regulatory Commission (ERC), both staffed by qualified CWD personnel in order to properly
provide excellent service. They also implement a variety of customer-pleasing activities, as well
as payment methods such as the Automatic Debit Arrangement program and the Interruptible
Load program.
Likewise, since safety and a healthy environment is part of consumer rights as mentioned by the
Department of Trade and Industries (DTI), the company promotes safety through implementing
programs to raise safety awareness and practices among all stakeholders including customers.
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They also check their compliance with all applicable safety and environmental requirements and
monitor the general public's welfare and safety. MERALCO also provides awards to individuals,
organizations, and enterprises that demonstrate excellence in the practice of electrical safety and
the promotion of worker safety.
Lastly, for continuous improvement, they conduct surveys with their customers to measure their
level of satisfaction in regards to their service.
Suppliers
Info Entrepreneurs Organization defined the supplier as an individual, company, or other

entity that offers something that another person, firm, or entity needs. Suppliers can be a great
asset to the company if it supplies high-quality but low-priced products. Suppliers and the firm
where it supplies must maintain a good business relationship in order to maintain the smooth
operation of the business thus, they must respect each other’s rights and perform their duties and
responsibilities appropriately according to their agreements in their contracts.
Through the Suppliers' Business Conduct Policy and the Vendor Accreditation Program,
MERALCO adheres to a well-defined and transparent procurement and supplier selection
procedure. It makes certain that the requirements of its procurement contracts are carefully
adhered to. The programs covered that only officially recognized suppliers are eligible to
compete in bids and prizes and purchases are conducted through competitive bidding, in which
the technical and commercial needs are examined simultaneously. It also made clear that
suppliers must provide the appropriate information in the Suppliers' Business Conduct
Commitment Form and must also follow specific corporate governance standards and commit to
applying these standards to their offices and staff.
Subsidiaries
MERALCO continues to develop its subsidiaries' corporate governance practices by

vigorously advocating for each company to adopt its own Manual of Corporate Governance and
Code of Ethics. The Subsidiary Management Policy remains the reference for founding and
operating subsidiaries in accordance with the criteria and concepts inherent in the Revised
Manual of Corporate Governance, the Code of Ethics, and existing laws, rules, and regulations.
Creditors
As defined by Chen (2020) in his article in Investopedia, a creditor is an individual or

organization that permits other people or firms to borrow money that will be repaid later. In the
Philippines, lenders are protected by Republic Act 386 (Civil Code). Under Section 4 Confusion
and Mergers Rights Article 1204, it stated that the creditor shall be entitled to indemnity for
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losses if, due to the fault of the debtor, all of the things that are alternatively the object of the
duty have been lost, or fulfillment with the obligation has become impossible (Berger, 2019).
Lenders and debtors make legal contracts or agreements that contain information, conditions, and
responsibilities to also ensure that the rights of both parties are protected.
MERALCO claims to be in line with its creditors' loan arrangements. To assure creditors of the
Company's good financial status and loan payment capabilities, the company ensures that its
financial obligations are paid on time and that the firm is efficiently operating. Creditors' rights
are protected through public disclosures of material information such as operating results,
internal control systems, and periodical risk assessments of loan covenants and bonds. The
Company provides periodic reports on its financial situation by submitting its quarterly and most
recent audited financial statements. In addition, the company holds regular operational and
financial results conferences.
Employees
As stated in Official Gazette, according to the law, there must be no discrimination when
it comes to working opportunities, every employee must be guaranteed job stability, and all
hours spent by an employee must be compensated. Following six (6) days of work, the employer
should organize a 24-hour day off in consultation with the employees. There must be also wages
paid directly (in cash or through banks) to employees in exchange for the services they provide
to their employers. It is also a requirement to give workers all types of on-the-job protection
against harm or death since it is the employees' right to work in a safe environment. Employers
must also respect the privacy of their employees. These are the published a list of Basic Rights to
which all workers are entitled according to the Bureau of Working Conditions, under the
Department of Labor and Employment.
Based on MERALCO’s report on their official site, employees are paid based on their job
performance, credentials, and competitive edge. In dispute resolution, integrity and fairness are
also observed. Necessary arrangements for medical, health, and other vital benefits, as well as
safe working conditions, are provided to enhance employee welfare and well-being.
Communication is also improved in order to keep staff aware of key developments. MERALCO
encouraged their employees to provide comments and suggestions to Management in order to
improve corporate and operational performance in the company, hence encouraging employee
accountability and empowerment.
Targeted and intentional activities are implemented to assist and assure employee productivity
and job satisfaction. Their programs are all anchored to their values and based on the employee
engagement survey. Their employees are constantly coached and developed to achieve
exceptional results based on their business principles. Employee program implementation has
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remained their primary priority as MERALCO strives to maintain a high standard of labor
productivity and engagement. Career development programs are designed to assure professional
advancement through skill and job enrichment opportunities, learning and development
programs, performance management, and promotion methods.
Lastly, Human Resource programs for personnel are examined and improved on a regular basis
to ensure their overall efficacy and responsiveness.
Community
Since community is also affected when the Company made big decisions, MERALCO ensure
that they are committed in helping the community through corporate social responsibility
initiatives under One MERALCO Foundation.
The specific policies and programs that protect and support the rights of stakeholders, as well as
the whole corporation, are explained in detail in the Business Policies and Programs part
Legal and Regulatory
By Laws
By-Laws contain regulations that must be followed in order to properly control

operations of the whole company.
The other parts are already discussed thus, the following are some of the important contents of
the said document:
Contracts and Obligations
According to article IV, section I, Without the consent of the board of directors, no
agreement, contract, or obligation involving the payment of money or the company's credit or
responsibility may be entered into, save by an officer or agent specifically authorized by the
board of directors
Indemnification
According to Article VIII, it says that if each of the directors or officers die suddenly
whether it is inside or outside of the company, their legal representatives shall be indemnified or
they will be compensated by the company but this needs to be approved from the jurisdiction and
the court will determine how much it needs to compensate and same with if the directors or
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offices did something against to the will of the corporation he/she needs to compensate the
company.
Articles of Incorporations
Articles of incorporation are a collection of legal documents filed with a government

agency to officially establish the formation of a company (Kenton, 2020).
The Manila Electric Company is majority Filipino nationals, and they have voluntarily come
together for the aim of forming a company under Philippine law. With these they certify the
following amendments:
 Name of the Corporation which is “Manila Electric Company”

 The purpose of the corporation which is to engage in the production of light, heat, and
power all over the country.
 The location of corporation's main office which is in Pasig City, Metro Manila,
Philippines
 The list of names and residence of the Incorporators of MERALCO. J.C. Rockwell, D.M
Shaw, R.W. Spofford, James Ross, and J.G. Lawrence all of them reside in Manila, P.I.
 The number of directors of the said corporation which is eleven, and the names and
addresses of the directors who will serve until their replacements are elected and
qualified in accordance with the By-Laws are as follows: J.C. Rockwell, D.M Shaw,
R.W. Spofford, James Ross, and J.G. Lawrence all of them reside in Manila, P.I.
 The said amount of capital stock and the following persons have subscribed for the
numbers of shares.
 The following persons who have paid on the shares of capital stock.
 The elected treasurer of the corporation to act as such until his/her successor is duly
elected and qualified in accordance with the by-laws, also it covers the role of the
treasurer of the corporation.
Board Director and Committees Charter
Board Charter is made because it sets forth the Company's purposes, authority, duties and
responsibilities, structure, and procedures in accordance with Securities and Exchange
Commission or SEC Memorandum Circular No.19, Series of 2016, also known as the Revised
Code of Corporate Governance for Publicly Listed Companies, which was issued on November
22, 2016. It contains the composition of the Boards which are inclined to Article 6, AOI; Section
1, Article II, By-laws; Section 1.1, Article I, MCG. There is also Board Diversity in which relies
on the Board Diversity Policy to select qualified nominees for the positions. There are also
Independent Directors and Lead ID that are there so that there wouldn’t be biases. As for the
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Board Committees it relies on the Article I, Section 9, MCG in which they are the one who
ensures that everyone is doing the good governance practices.
Disclosure and Transparency
Supply of Information
According to MERALCO’s Revised Manual Corporate Governance, all directors should

be given a complete, appropriate, and timely information regarding about the covered of meeting
topics to help them do their jobs. Their management must provide timely and accurate
information to the board in particular situation if the Management's information is insufficient,
rapidly the Board will make further queries to the concerned parties which will insist completely
and immediately. And for professional assistance within board regulations it is either
individually or by group, any of them may seek help. Each director must get a full agenda and
board materials before each meeting. For the supply of information, Corporate Secretary are the
one who’s task to keeps full Board minutes of each session, in which the directors can
excessively view during office hours.
Disclosure and Transparency
The Board of Directors establishes corporate disclosure policies and procedures to

provide shareholders and other stakeholders with an accurate and complete view of a company's
financial condition. For the benefit of the company, they seek to implement a policy requiring all
directors and officials to disclose and report their knowledge. In accordance with this, they must
notify the Compliance Officer within three business days of any transactions involving the
company's shares before the meeting. Each board member's expertise, qualifications, and any
potential conflicts of interest that could impact their decision-making must be disclosed so that
senior executives can evaluate them. The Board is responsible for establishing a transparent
policy for the dissemination of non-financial information that focuses on the economic,
environmental, social, and governance (EESG) issues that contribute to the sustainability of its
operations.
Information Security Governance and Data Privacy
Information Security Governance secures information assets and critical infrastructure

from security threats to assure availability, integrity, confidentiality, privacy, safety, and
reliability. Their company is governed by the Information Security Policy Manual and by the use
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of a well-defined Information Security Management System. This system's goals are to establish
clear roles and responsibilities from management to asset controllers and users for protecting the
given information, in addition to provide a reasonable security assurance to support business
objectives through secure technologies, regulatory compliance, and defined security maturity for
energy utilities, and also to provide guidance in implementing security controls to manage
security risks.
MERALCO is committed to ensuring that all personal data collected from customers, employees,
vendors, shareholders, visitors, and other third parties are processed in accordance with the
general principles of transparency or legitimate purpose to ensure data confidentiality, integrity,
and availability.
The Company adopted a Data Privacy Manual in 2017 to outline the company's data privacy and
protection practices and the roles and responsibilities of different business units in the planning,
implementation, monitoring, and continuous improvement of the data privacy management
framework.
MERALCO Data Privacy Office
Vision
To develop data protection efforts that are not only valuable but also dynamic, so it can
contribute immensely to an improved One MERALCO.
Mission
Their objective is to promote a culture of privacy to benefit all of their stakeholders. This will be
done through protecting their data privacy, being honest and accountable, and providing relevant
knowledge.
Goals
The goal of MERALCO data privacy office is to establish a culture of compliance through data
privacy awareness, maximizing their ability to address underlying problems and prevent human
error-related privacy breaches. They also aim to reduce the inconvenience; all business divisions
will develop data privacy programs and committing to enhance local and international privacy
regulations compliance.
Confidentiality of Information and Proper Use of Property

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Confidential data is a precious asset that must be protected. MERALCO will not take
unfair advantage of material non-public information by trading in their Company's securities
while in possession of it. By virtue of their office, they safeguard the integrity of all information,
data, books, records, files, and other documents given to them by their firm. Nonpublic
information that might be useful to rivals or damaging to MERALCO if exposed is considered
confidential information. This secrecy duty will continue to apply even if they leave MERALCO
owing to retirement, resignation, termination, end of term of office, contract expiration or
termination, or any other reason. Other companies' sensitive and proprietary information is
respected and protected by the firm.
Communication and Disclosure
Foremost, MERALCO ensure that the materials of, and disclosures in, reports and
documents filed with, or submitted to, the Securities and Exchange Commission, the Energy
Regulatory Commission, other government agencies or regulators, and all other Company public
communications are unbiased, factual, prompt, and comprehensible. Secondly, the firm must
comply with their Company's disclosure standards that requires all of its directors and officials to
report any acquisition, disposition, or change in their beneficial ownership of MERALCO shares
to the Philippine Stock Exchange within two trading days of the occurrence, and not
intentionally misrepresent facts or information about their Company to anyone, whether inside or
outside their Company. Moreover, MERALCO develops open lines of communication with all of
their stakeholders and provides appropriate disclosures about their business goals, objectives,
policies, financial positions, transactions with linked parties, and prospects. Lastly, Employees
are encouraged to actively engage in conversations and to bring up any real work-related
problem or issue.
Business Policies and Programs
MERALCO established policies in accordance to the law in order to protect the rights of
the company as well as its stakeholders. They also created programs that could help the company
to boost and promote good corporate governance.
Code of Ethics
The code of ethics of MERALCO covers various regulations and ethical standards that
must be observed and are anchored to the corporate's core values which are fairness,
accountability, integrity, and transparency to ensure the preservation and promotion of ethical
standards among all employees, directors, and officers. It provides a guide for them to
understand how to conduct themselves in their decisions, transactions, and interactions while
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carrying out their specific roles and obligations in accordance with these corporate standards
principles.
Conflict of Interest
MERALCO strives to operate in the best interests of the company and avoids acts,
events, or connections that might obstruct its ability to carry out its duties in the best interests of
the company, or even give the impression of a conflict of interest.
When a director's personal interests, employee or officer engagement, or the appearance of

interfering in any way with the company's overall look, a conflict of interest might occur. It can
also happen when an employee, official, or director makes a judgment or has personal interests
that make it impossible for them to perform their job efficiently and objectively.
The following are the situations where conflict of interest may arise.
Corporate opportunity: The firm does not take advantage of opportunities to use its property,
information, and influence for personal benefit to cause a conflict with the company or act
against the company's best interests.
In relationships, the Company avoids any real or perceived conflict of interest, as well as any
major transaction or relationship that may reasonably be anticipated to cause one. Personal
considerations and/or connections do not influence business choices, which might interfere with
the exercise of independent judgment and impact the Company's interests in the fulfillment of its
obligations to the Company.
Gifts, the company does not allow accepting or soliciting of gifts in whatever kind from any third
party or entity, it can be directly or indirectly, in return for any act, omission, or transaction of
the company that is beneficial to a third party or entity with existing or planned business dealings
with the company.
Outside investments, the Board refrains from participating in (or influencing) Company
decisions concerning business transactions with entities with which they have a personal
relationship or a significant financial interest.
Outside employment, the company avoids actions and interests that might have a major impact
on the Firm's aim or effective performance of its duties and obligations, or that provide a
scenario that could compete or go against the company's interests. There is a conflict of interest
when a director, officer, or employee gets employed by or has a consultancy arrangement with a
competitor. Another example is when a Company director, officer, or employee serves as a
director, manager, or member of a competing company's board of directors.
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MERALCO strictly monitors all of this in order to avoid any conflict of interest.
Risk Management and Internal Control
MERALCO recognizes that risk mitigation and internal control mechanisms are enablers
of the Firm's effective governance. The Company's organizations, procedures, and application
systems are designed to provide checks and balances. Risk is tracked and managed in the
fulfillment of the Company's promises to stakeholders. Risk monitoring and reporting is
integrated into the company's performance reporting at all levels. The organization selects
process owners to assess the risks of different processes, devise and execute relevant controls
and procedures to manage the risks. The corporation ensures that internal organizational and
procedural controls are in place to support the activities of the various groups within our
company.
Shareholder and Investor Relations
MERALCO values and protects the shareholders' interests, including their entitlement to a
reasonable return on their investment. The company limits or reduces risk-taking in this aspect so
as not to compromise shareholder value. The organization comprehensively assesses and
manages the risks associated with the Company's plans, acquisitions, operations, goods, services,
and other commercial ventures, and it adopts strategies, actions, choices, and transactions aimed
at creating shareholder value. The organization also makes sure that external auditors conduct an
independent audit of the Company's financial statements. The company keeps full and accurate
books of accounts and records in line with applicable legal requirements and widely recognized
accounting principles and standards. The firm will assess the sufficiency and efficacy of the
financial reporting, governance, operations, and information systems, including the dependability
and integrity of financial and operational data, as well as the effectiveness and efficiency of
operations.
Government and Regulatory Relations
According to them, they avoids any behavior that may be considered as directorial,
indirect bribery and corruption of government officials, as defined by law, to ease any
transaction or obtain any perceived or actual favor or benefit. The Firm preserves the right of all
legal rights that have been granted. All administrative, judicial, and other available remedies are
being used and lastly, that the group works with the regulators to lobby for change and reform
within the legal framework.
Implementation and Monitoring

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The Corporate Governance Office at the company is responsible for putting in place and
monitoring corporate governance policies, the organization and specification of the method by
which such policies are implemented and monitored.
Each director, officer, or employee is urged to seek advice from the Corporate Governance
Office or the relevant offices when in dispute regarding the best course of action in a specific
case relating to a subject matter of their code. They are also are required to report any observed
violations and to communicate them to their respective supervisors and immediate Heads, or, as
applicable, to the Corporate Governance Office. On the other hand, anyone who attempts to hide
or impede the investigation of any infraction of this Code would face fines from the company.
The Company also stated in the document that they will investigate any reports of suspected
code violations. As for the investigation of allegations, the organization takes confidentiality and
due process very seriously. Employees who are underutilized prior to any final decision of the
firm, any investigation for potential violation of their code will have an opportunity to be heard.
It is also required for their employees to sign an acknowledgment form stating that they have
read their corporate’s code and agree to follow the behavioral standards and norms outlined in it
and failure to read and confirm knowledge of this is not a reason for their noncompliance.
Revised Manual of Corporate Governance Structure of Governance
Revised Manual of Corporate Governance Structure of Governance comprises rules and

way of governance that is anchored to the corporate’s principles of fairness, accountability,
integrity, transparency, and honesty (F.A.I.T.H). MERALCO believes that these are the values
that it must uphold in order to achieve its vision, mission, and goals. It spelled out the policies
and procedures that must be followed, rights that must be respected and protected, roles and
responsibilities of directors, committees, and officers that must be performed and the
consequences for not complying with the manual. The Revised Manual of Corporate Governance
Structure of Governance is in accordance with the SEC Code of Corporate Governance as
outlined in SEC Memorandum Circulars No. 2 Series of 2002, No. 6 Series of 2009, No. 9 Series
of 2014, and No. 19 Series of 2016. On April 24, 2017, the Revised Manual of Corporate
Governance was modified and filed with the SEC.
The following are some of the important sections in the revised manual:
Communication and Training Process

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It stated that the directors and executives are entrusted with ensuring that this Revised
Manual is thoroughly distributed to all workers and relevant third parties, as well as enforcing
compliance in the process. Additionally, a suitable number of printed copies of this Revised
Manual must be generated and distributed to each department of the Company. Lastly, funds will
be provided by the MERALCO for the purpose of organizing an orientation session or workshop
to operationalize the Revised Manual.
Governance Rating System
It further stated that in order to assess the effectiveness of the Board and Management,
MERALCO's Board members must create an evaluation system in accordance with the criteria
outlined in the Revised Manual and other good corporate governance standards and regulations.
Penalties for Non-Compliance with Revised Manual
The Compliance Officer will be specifically entrusted with verifying compliance with the
Revised Manual. Following a proper investigation, notification, and hearing, the Compliance
Officer shall determine and recommend to the Board the execution of appropriate disciplinary
measures on the culpable parties, as well as the implementation of actions to avoid repetition of
the breach.
Other Policies
Aside from the policies that are already mentioned in the former parts of this review,
there are also other policies that have been implemented and must be followed by the employees
of MERALCO. These are the following:
Related Party Transactions Policy
It ensures that the MERALCO's transactions with its linked parties take place in an open
and unconstrained market, between willing parties who are aware and informed, and who
function autonomously of and without respect for any relationship with one another.
Material/significant RPTs must be evaluated by the Related Party Transaction Committee and its
Review Team to determine whether they are in the best interests of the Company.
Internal Policy on Unstructured Disclosures
MERALCO, as a publicly traded corporation, is obligated by law to promptly notify the

occurrence of any major transaction or event that could significantly influence its share price.
Events requiring immediate disclosure should be disclosed within 10 minutes of receiving
material information or the happening or occurrence of said operation.
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Insider Trading Policy
On July 16, 2010, the Company issued and enforced its Blackout Period/Restriction on
Share Trading (or Policy) to guide the Company's and its subsidiaries' directors, officers'
employees, and their associates in the trading of MERALCO shares. In the interest of Corporate
Governance and disclosure, this policy governs share trading by Company executives, officials,
and employees who have access to undisclosed information regarding to the Company's financial
and operating performance. It is in accordance with the Insider Trading restrictions outlined in
the Philippines' Securities Regulations Code (SRC) or Republic Act No. 8799.
“Be Right” Communication and Whistleblowing Policy
Its purpose is to encourage responsible and free engagement between management and its
employees. This will open up channels of communication not just for Management to
communicate orders, but also for employees to freely and openly voice their views and concerns
to Management. Similarly, MERALCO encourages the disclosure of misdemeanors or misdeeds
that may be detrimental to the Company and its reputation. There is program made for this called
E-report mo and E-suggest mo. It is their responsibility to preserve the Company's interests while
also protecting the rights of their employees.
Social Media Policy
It specifies the Company's rules for the use of online communication platforms or social
media in order to protect the Company's and its stakeholders' interests.
Suppliers' Business Conduct Policy
According to the document, MERALCO selects Suppliers who adhere to the same
corporate governance standards and business principles. The Supplier's business practices were
established. It is a general guide for the right conduct and behavior required of MERALCO
Suppliers. The policy addresses environmental and health safety, ethics, asset utilization, and
product and service standards.
Management Control Policy
This policy describes management's, internal audit's, and the Audit and Risk Management
Committee's duties and responsibilities in relation to controls over the organization's
performance. It also defines accountability for checks and balances system and underlines the
significance of internal control systems. Internal control is an essential component of
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MERALCO's governance and risk management systems thus it must be monitored and
controlled strictly.
Anti-Bribery and Corruption Policy
As defined by Transparency International UK organization, bribery is an act of offering,

accepting, or soliciting a benefit as an inducement for unlawful, unethical, or deceptive behavior.
Cash presents, loans, fees, incentives, or other perks can all be used as inducements.
In MERALCO, they are prohibited to accept any kinds of gifts directly or indirectly from another
person or entity for it could be used as a mean to acquire favorable consideration in any act,
omission, or transaction. It is stated under the Revised Code of Ethics.
According to the corporation, Directors, Officers, and Employees must avoid putting themselves
in positions or acting in ways that could jeopardize the Company's performance of its
commitments and responsibilities. They may face sanctions or penalties if they do not follow this
policy. When gift solicitation and acceptance cannot be avoided, such circumstances should be
handled in accordance with the principles and procedures described in this policy.
Programs
Be Right Brand of Governance
Be Right Brand of Governance Is a Challenge to every employee of the company to

develop one’s character to embody the core principle of corporate governance. Under this Brand
of Governance is the “Be Right” Communication Policy that promotes open lines of
communication between the management and employees. The policy consists of two programs
which are the E-SUGGEST MO or the Employees Suggestions and the E-REPORT MO or the
Whistleblowing policy
HRExpress
HRExpress is an Online platform used to ensure compliance with the corporate

governance policies. The Usage of HRExpress is to signify Commitment to Corporate
Governance, submit their Conflict of Interest Disclosure and Full Business Interest Disclosure
forms, and disclose gifts or tokens received through the Gift Registry.
On-site Programs
On-site Programs conducts site visits, meetings, and roadshow. These programs were set
up in an innovative way featuring videos and interactive learning session to re-orient and
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empowers all the employees to continuously apply the core corporate governance principles in
the workplace.
Creative Media
Creative Media is the usage of different channels for publishing communication materials
on corporate governance Like SMS, Computer Desktop Wallpapers, employee time capture
devices, Office Memoranda, MERALCO Spark, the company's official publication, and E-mail
blasts, to allow CGO to reach all members of the organization who belong to different age
groups.
Chapter 3: Corporate Social Responsibility
One MERALCO Foundation is in charge of the Corporate Social Responsibility

initiatives of MERALCO. This foundation's primary objective is to cultivate CSR programs in
collaboration with their subordinate companies, the government, and other business shareholders
in order to provide sustainable and observable initiatives. They have several actions and in
particular situations, they’re not only focusing on a specific group of people though they extend
their hands to other stakeholders.
The Community Electrification
It includes household and school electrification in cooperation with Local Government Units
(LGUs), Non-Government Organizations (NGOs), and other community institutions. One of
their CSR programs is the Community Electrification. This advocacy sector offers sustainable
electrification alternatives through efficient shared programs. As a result, the teachers in off grid
fur-flung schools were able to implement blended learning and they were able to harness
electricity for a sustainable future. The partnership with the Armed Forces of the
Philippines(AFP)also Brought Solar powered electricity to the Northernmost Islands in the
Philippines.
their beneficiaries are:
 Informal settlers in certain public lands or private properties

 Portions of resettlement areas (residing along the Pasig River)
 Isolated settlements
 Households unable to satisfy legal standards for power hookups
 Off-grid public schools in remote island and mountain villages
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OMF’s Youth and Sports Advocacy programs
One MERALCO Foundation believes in young people as they become future leaders. By
engaging youth in academic achievement, athletics, and values formation, the foundation seeks
to help them become self-sufficient, productive citizens. They have a lot of program structure
focusing on different passions of the youth.
 MERALCO Chess Campus Tour Workshop – This initiative, made possible by the
MERALCO Chess Club, trained over 1,000 boys and girls in 2015.
 MERALCO Basketboys-Since 2011, the initiative has trained 2,000 underprivileged boys
and girls.
 MVP Academic Achievement Awards (MVP AAA)-MERALCO Group workers'
children with educational expenses.
 Support to Scholarship Programs-The La Salle Foundation's scholarship program has
supported out-of-school-youth and underserved adults.
Grassroots Partnerships
OMF continues to support local government and barangays in health, sanitation, environmental
preservation, sports, and education. Through the Grassroots Partnerships program, the foundation
is able to improve public safety, teach residents how to be good stewards, and help communities
grow and improve.In line with the MERALCO AND PSF collaboration they also Donated trucks
and rescue boats to Armed Forces of the Philippines (AFP) that helped them increase their
capacity for conducting humanitarian operations.
Emergency and Preparedness Program
One MERALCO Foundation's Emergency Preparedness and Disaster Response projects include
relief operations, restoration and community rehabilitation. One MERALCO Foundation aided
homeless people and provided PPEs for Front liners during the Enhanced community quarantine
and Communities that were affected by typhoons received relief. Also, Manila Electric Company
(MERALCO) and PLDT-Smart Foundation(PSF) conducted a collaboration and set up a pop-up
molecular laboratory at the East Avenue Medical center(EAMC) in Quezon City and it allowed
the constrained laboratory that was designated as a Covid-19 care facility to conduct its own
reverse-transcription polymerase chain reaction (RT-PCR) tests. They also donated 45 million
worth of medical equipment that resulted in an increased capacity in handling COVID-19.
Environmental Stewardship
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The One MERALCO Foundation works with employee volunteers and local farmers to save the
Philippines' forests, which are getting smaller over time.A 107-hectare farm can be found in Sitio
Malapad na Parang, which is located in Sierra Madre, Brgy. Sibul, San Miguel, Bulacan. This
farm has been providing approximately 48 local farmers and their families with a reliable source
of income for many years. Local farmers here cultivate and harvest organic Moringa, which is
referred to as "Malunggay" in the native Malunggay language. After that, the Moringa is
processed into tea of an exportable quality, which results in a greater price for the farmers' crops.
They are hired as regular employees, paid an amount that is greater than the current minimum
wage, and provided with decent housing, medical care, and educational opportunities for their
children in exchange for working on the farm. In addition the intervention resulted in a
significant rise in the farm's output, which made it feasible to engage additional farmers and
provide assistance to a greater number of households. In many different ways, the development
of using methods that are beneficial for the environment can help our planet breathe in a more
manageable manner.
Employee Volunteerism
One MERALCO Foundation has encouraged a lot of MERALCO employees to participate

through the Makabayan Volunteerism Program (MVP). they encourage their employees to
become more Compassionate in helping other people. Cecilio Castro, team head of the Metering
Services section of the MERALCO Plaridel Sector in Bulacan, enjoys extending his hand to
assist others. Castro has participated in several outreach activities for childcare facilities over his
22 years with MERALCO, particularly those staged around the Christmas season. According to
Castro, Volunteering is one way for him to share his time and capabilities to communities who
need assistance the most.
One for trees
OMF's "One for Trees" program plants 700 mangroves along Brgy's coast Tibaguin, Hagonoy,
Bulacan; it is one of the low-lying areas and a flood-prone location. In support of MERALCO's
objective to be a sustainable energy provider. OMF initiated a program in 2019 to recover
damaged ecosystems through reforestation, specifically by planting at least 3 million trees in
protected zones during the next six years. The Foundation knows that planting trees is just the
beginning of the reforestation, this is insufficient. Maintenance and frequent monitoring are vital
to the program's effectiveness, and they can only be conducted efficiently by including nearby
communities. Green Earth also wanted to diversify its crops to secure farmers' year-round
income in addition trees protect crops from typhoons, landslides, and high heat, and they keep
moisture in the soil during dry seasons. Under a cooperation with another firm, the Foundation
funds nurseries and rainwater collection tanks, planting seedlings at the right time, and
monitoring the trees. "One for Trees" considers all three sustainability pillars. Trees absorb
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excess carbon, stabilize and moisten the soil, and provide a home for an ecosystem to thrive.
Farmers guarantee that the trees are cared for by able hands. It feeds their family during the off-
season. Monitoring ensures excellent governance and mutual and equitable collaboration
benefits.
Impacts
 One MERALCO Foundation aided homeless people and provided PPEs for Front liners
during the Enhanced community quarantine.
 Communities that were affected by typhoons received relief.
 Employee Volunteerism encouraged MERALCO's employees to become more
Compassionate in helping other people.
 As a result of community electrification of One MERALCO Foundation, teachers in off
grid fur-flung schools were able to implement blended learning and they were able to
harness electricity for a sustainable future.
 Manila Electric Company (MERALCO) and PLDT-Smart Foundation(PSF) conducted a
collaboration and set up a pop-up molecular laboratory at the East Avenue Medical
center(EAMC) in Quezon City and it allowed the constrained laboratory that was
designated as a Covid-19 care facility to conduct its own reverse-transcription
polymerase chain reaction (RT-PCR) tests
 MERALCO AND PSF collaboration also Donated Trucks and Rescue boats to Armed
Forces of the Philippines (AFP) that helped them increase their capacity for conducting
humanitarian operations.
 The partnership with the Armed forces of the Philippines(AFP)also Brought Solar
powered electricity to the Northernmost Islands in the Philippines.
 They also donated 45 million worth of medical equipment that resulted in an increased
capacity in handling COVID-19.
 The Energy Education Program has provided people with knowledge in efficient and
responsible use of valuable energy sources.
 They also conducted a Youth and Sports program that encourages youths to engage in
academic excellence, sports, and values and become self-sufficient as they reach their full
potential and become productive citizens of the country.
Chapter 4: Conclusion and Recommendation

Conclusion
Corporate Governance
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The Manila Electric Company's governance structure, as published on its official

website, clearly explains the duties, responsibilities, extent of power, and control of the Board of
Directors, Committees, executives, and officers. They described the company's management,
processes, procedures, and systems from an operational and financial standpoint. They also
explain their policies, laws, and programs, which they firmly enforce and are based on their
corporate principles of fairness, accountability, integrity, transparency, and honesty (F.A.I.T.H).
MERALCO also stated its mission, vision, and fundamental principles, which must be applied
consistently in order for the company to become what they envision.
MERALCO strives for strong corporate governance since it would help the company last longer
and lead to growth and success; hence, they truly assure that the firm acts in compliance with
government rules, notably the Revised Corporation Code of the Philippines. Based on the
authors' comparison of the information acquired on MERALCO's official website and the
regulations indicated in the Corporation Code, it is decided that the Manila Electric Company is
excellent in complying with the law.
Some of the regulations they abide are the following:
SEC. 10. Number and Qualifications of Incorporators
There is no minimum number of Incorporators however, the maximum number is 15, and based
on their document, the number of their Incorporators is 5 who also own stocks.
SEC. 13. Contents of the Articles of Incorporation
In their document, it contains the name of the corporation, the specific purpose why the
corporation was formed, the place of their main office which must be within the Philippines, the
names, nationalities, and residence addresses of the incorporators; the number of directors,
which shall not be more than fifteen, number of shares into which it is divided, the par value of
each, names, nationalities, and residence addresses of the original subscribers, amount
subscribed and paid by each on the subscription.
SEC. 17. Corporate Name
Its corporate name which is Manila Electric Company or also known as MERALCO is unique,
distinguishable, and is not the same as other registered company names.
SEC. 22. The Board of Directors or Trustees of a Corporation; Qualification and Term.
The Board of Directors in MERALCO composes of eleven members. One executive, 3
independent which is also twenty percent of the board as required by the law, and the rest are
non-executives. All of them also hold stock or shares in the company.
SEC. 23. Election of Directors or Trustees.

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As stated in the Nomination and Election process under Board Charter, the stockholders have
the right to nominate a candidate for directorship.
SEC. 24. Corporate Officers.
Their President, Ray C. Espinosa is also a director, and Atty. Simeon Ken R. Ferrer, the
corporate secretary, is a citizen and resident of the Philippines.
SEC. 29. Compensation of Directors or Trustees.
The Board of Directors in MERALCO is not allowed to decide or participate in the determination
of their per diems or compensation
SEC. 34. Executive, Management, and Other Special Committees.
In their document, it contains the name of the corporation, the specific purpose why the
corporation was formed, the place of their main office which must be within the Philippines, the
names, nationalities, and residence addresses of the incorporators; the number of directors,
which shall not be more than fifteen, number of shares into which it is divided, the par value of
each, names, nationalities, and residence. As required by law, an executive committee must
compose of at least three directors. MERALCO, they have five members on Executive
Committee. They also formed other committees such as the Nomination and Governance
Committee, Audit Committee, Risk Management Committee, Remuneration and Leadership
Development Committee, Finance Committee, Related Party Transactions Committee, and
Sustainability Committee that have different roles and responsibilities.
SEC. 35. Corporate Powers and Capacity.
They perform Corporate Social Responsibility initiatives that are also related to their offered
products and services. It also established pension, retirement, and other plans for the benefit of
its directors, trustees, officers, and employees
SEC. 42. Power to Declare Dividends.
They declared dividends and followed the dividend policy.
SEC. 43. Power to Enter into Management Contract.
Under By-Laws, Article IV, Section I, the Contract and Obligation states that without the consent
of the board of directors, no agreement, contract, or obligation involving the payment of money
or the company's credit or responsibility may be entered into, save by an officer or agent
specifically authorized by the board of directors
SEC. 45. Adoption of Bylaws.

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MERALCO is adopting Bylaws
SEC. 46. Contents of Bylaws.
By-Laws contain regulations, required processes, duties, and responsibilities related to directors
and stockholders, that must be followed in order to properly control the operations of the whole
company.
SEC. 47. Amendment to Bylaws.
They made an amendment on September 6, 2010, approved by SEC.
SEC. 48. Kinds of Meetings.
They perform regular and special meetings depending on their agenda.
SEC. 49. Regular and Special Meetings of Stockholders or Members.
According to the Revised Corporation Code, the annual meeting must hold on any date after
April 15. Every Last Tuesday of May is the annual meeting of MERALCO’s stockholders and
directors.
SEC. 62. Certificate of Stock and Transfer of Shares.
As stated in MERALCO’s By-laws, each holder of shares of stock will get a stock certificate
signed by the President and the Secretary or Assistant Secretary of the company. This will show
the type and number of shares that the holder owns.
Due to the Excellency in corporate governance of MERALCO, Based on the 2019 ASEAN
Corporate Governance Scorecard regional assessment, MERALCO received the ASEAN Asset
Class Award given by the ASEAN Capital Markets Forum. The company received again the
same award last 2021. MERALCO was also awarded Three Golden Arrows by the Institute of
Corporate Directors in the 2019 regional assessment for its outstanding governance structure,
programs, and practices.
However, despite these awards and compliance with the law, there are certain areas that
MERALCO did not manage to follow and could be the reason why the company did not
recognize as the ASEAN Top 20 Philippine Publicly Listed Corporation Awardee and is not
included in the Top 3 Philippine PLCs in Securities and Exchange Commission and Institute of
Corporate Directors Award.
Based on their Integrated Annual Corporate Governance report and ASEAN Corporate
Governance Scorecard – Self Assessment in 2020, most of their non-compliance areas are
about the composition of the Board of Directors and Committees. It is a tool to measure the
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governance of a company. It contains questions about the company, guiding references of the
question, source of proof if it is compliant, and explanations if it is non-compliant.
The Scorecard suggests the following:
 Half of the members of the Board should be an Independent Director

 There should be a female independent director
 There should be a limitation in accepting the position of directorship if he/she is also a
director in other firms.
 The Chairman of the Board must be an independent director
 The majority of the members of the committee especially the Nominating, Remuneration,
and Audit should be independent directors
Based on MERALCO’s explanation, Even though they did not meet the criteria for the
composition of the board, most of its Directors are non-executive and are still able to make
unbiased, objective, and independent decisions for the Company. Same with the composition of
the committee, the majority of the members of the committee are non-executive and the
chairman is an independent director. When it comes to the Chairman of the Board, MERALCO
chose an individual based on his/her potential contribution, performance, and qualities and not
just if he or she is an independent director.
In terms of incorporating the board with a female director, they already made a solution for it. As
of now, the independent female director is Lydia B. Echauz.
Lastly, in regard to limiting a director in Board seats, the company stated that even though they
did not limit them, they make sure that the director will still be able to perform their duties and
responsibilities by sending notice early and prior to the meeting.
In a conclusion, Manila Electric Company is still aiming to be more and better with its corporate
governance. They strive and ensure that there is fairness, and impartiality in terms of making
big decisions for the company. They also make sure that the Board of Directors, Committees,
executives, and other officers are accountable for their actions and performing their
responsibilities appropriately, especially towards the Company’s key stakeholders. Furthermore,
aside from abiding by the law, MERALCO sets ethical standards that promote integrity,
transparency, and honesty for they believe that it will lead them towards their vision, to empower
the nation, the world, and the future generation.
Corporate Social Responsibility
Through their CSR initiatives the one MERALCO Foundation did their part to help the everyone
by providing electricity to the people who live in the mountains, giving scholarships to the
students, etc. also in this Environment they also contributed in maintaining the trees and giving
advisory to the consumers in saving energy in that, the MERALCO proved that their company is
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not just into making success on their own but also they giving back to others and wanting
everyone to be successful too. MERALCO aspires to be a company that has a deep and
meaningful purpose, a purpose that is beyond earning profit it is none other than bringing a light
of hope not just only to their stakeholders but also to the future generation who are soon leading
this country and make this nation a safe place for everyone and as what their slogan trying to
imply to us, the “maliwanag ang bukas” wants every filipino’s especially those students to
realize that there is hope and a bright future that awaits for everyone and by that this company
became a bridge towards that future.
Recommendation
Corporate Governance
 Continue to innovate, promote, and implement a culture of open communication between

employees and managers. Improve employee communication channels to make it easier
for them to speak with one another. They will have problems working together on
projects and getting things done on schedule if they can't communicate effectively within
their team. Employees should feel free to approach their bosses with complaints,
questions, or recommendations. Managers should embrace these encounters and be
willing to listen to their employees' suggestions. Managers should also set aside time
during their day to meet with workers one-on-one to understand what is working well for
them and where they may need some assistance.
This will aid in the creation of a pleasant work atmosphere in which employees feel
valued and appreciated for their efforts, resulting in increased productivity.
 Employees are exposed to a variety of pressures and challenges at work, which can have
a detrimental influence on their mental health. As a result, stress, anxiety, sadness, and
other mental diseases may become more prevalent. Employers should think about how
they might support their workers' mental health at work. MERALCO may undertake
stress management training sessions or provide onsite counseling services in order to
improve staff well-being. MERALCO should first determine their demands. This
involves determining the sort of assistance they require and how frequently they require
it.
They can begin to identify a solution after these needs have been established. Individual
counseling, group therapy sessions, and even telemedicine alternatives are among the
numerous forms of mental health treatments accessible.
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 MERALCO Corporation should implement the ASEAN Corporate Governance

Scorecard in order to effectively serve the interests of its shareholders and board.
According to the scorecard, a business's board should include at least 50% independent
directors
This is significant because it guarantees that firm personnel do not exert excessive
influence over board decisions. It also guarantees that decisions are made in the best
interests of all shareholders, rather than simply a few with close ties to management.
 A director with too many board seats will be unable to devote adequate time to each firm
for which they are accountable. This might lead to erroneous decisions and make it
difficult for them to effectively represent their constituents.
When directors are obliged to vote on topics that may benefit or harm other firms they
serve on the board of, it creates a conflict of interest. If a director serves on numerous
boards but only one of them needs them to vote on topics affecting another firm under
their jurisdiction, the other company's shareholders get an unfair benefit.
Thus, it is recommended that MERALCO should set a standard limit of board seats that
can be handled by directors specifically on Independent and Non-Executive Directors in
case they also have directorship on the different companies so they can focus more on
their works.
 The researchers propose that the Manila Electric Company continue to rigorously check
their compliance with government rules because the company has already developed
strong corporate governance. They might also develop more initiatives to help employees
improve their productivity and job satisfaction. They might also establish additional
measures, such as ensuring that all personnel are taught in ethics. This training should be
led by an ethical expert and address issues including what constitutes unethical behavior,
how to avoid engaging in unethical behavior, and how to report unethical activity if it
occurs. Another option for a firm to promote its ethical standards and values, is to
provide training to all workers on how to appropriately address instances where they feel
someone else has participated in unethical behavior at work.
Corporate Social Responsibility
Nature is constantly being destroyed, primarily as a result of human waste. As nature

deteriorates, living creatures such as plants and animals face extinction. Human waste has been a
major environmental issue for many years. With tons of trash produced and collected every day,
50
it has become difficult for communities to manage its increasing volume and how it is properly
disposed and segregated.
In order to help nature recover, MERALCO encourages their employees to adopt more
sustainable habits and the use of reusable materials. MERALCO Banned the use of single use
plastics in all their network operating sectors and corporate offices. It is recommended that
MERALCO encourages not just their employees but also the communities and people within
their reach to engage in recycling, proper waste segregation and disposal. They may also provide
communities with assistance in proper waste management including providing trash cans for
proper waste segregation.
Carbon emissions have a tremendous impact on the world since they are the greenhouse gas with
the greatest amounts of emissions in the atmosphere. This, of course, contributes to global
warming and, eventually, climate change. In order to minimize the carbon emissions,
MERALCO adheres to the Department of Energy's Renewable Portfolio Standards and has
pledged to obtain 1,500 MW of power from renewable sources over the next five years. If it is
possible, MERALCO must continue to improve their transition to renewable energy and do more
than they are required to, in order to prevent the rapid increase of global warming.
It is recommended that MERALCO maintain its commitment in maintaining the advancement of

the lives of people and be able to aid more communities through effective, meaningful, and long-
term corporate social responsibility (CSR) programs.
Insights
As a business student, the group realizes the challenge of governing a large corporation
especially if it is a public listed company. It takes a lot of effort and great responsibility to
monitor and operate the whole company. The group also realized the importance of promoting
good governance. It leads the company towards innovation, development and growth. An
organize system plus incorporating it with ethical actions and decisions and anchoring it to the
corporates principle, creates good image and reputation to the company.
The slogan, of MERALCO “Ang Liwanag ng Bukas” has two meanings. It states that the
company could be the next big energy or electricity supplier not just in the Philippines but in
world. The awards and recognition to their corporate governance that MERALCO have received
manifests how passionate they are to achieve what they envision for their company. The other
meaning of their slogan could also be more on about giving hope. They have also stated that they
want to empower the people. As a proof, they inspire and help others through their corporate
social responsibility initiatives.
51
By reviewing Manila Electric Company, the group learned that a company can be great if it
keeps complying with the law and strives to make the governance in the company excellent,
systematized and organized, however the company will be greater and remarkable if it also
promotes ethical principles and contributing to the welfare of society.
52
References:
Berger, K. P. (2019, January 28). Philippines Republic Act 386 (Civil Code). Trans-Lex.Org.
Retrieved May 19, 2022, from https://www.trans-lex.org/602450/_/philippines-republic-
act-386-/#head_19
Chen, J. (2020, July 30). Creditor. Investopedia. Retrieved May 19, 2022, from
https://www.investopedia.com/terms/c/creditor.asp
Department of Trade and Industries. (n.d.). Consumer Rights. Department of Trade and
Industries Philippines. Retrieved May 19, 2022, from
https://www.dti.gov.ph/archives/consumers-rights-and-
responsibilities/#:~:text=As%20consumers%2C%20we%20have%20eight,education%2C
%20and%20a%20healthy%20environment.
Embassy of the Philippines. (n.d.). Revised Corporation Code of the Philippines | Embassy of the
Philippines in Norway. Philembassy.No. Retrieved May 25, 2022, from
https://www.philembassy.no/doing-business/revised-corporation-code-of-the-
philippines#:%7E:text=Republic%20Act%2011232%2C%20or%20the,doing%20busines
s%20in%20the%20Philippines._
History of Manila Electric Company (MERALCO) – FundingUniverse. (n.d.). Funding Universe.
Retrieved May 25, 2022, from http://www.fundinguniverse.com/company-
histories/manila-electric-company-MERALCO-history/
Info Entrepreneurs. (n.d.). Manage your suppliers. Infoentrepreneurs.Org. Retrieved May 19,
2022, from https://www.infoentrepreneurs.org/en/guides/manage-your-
suppliers/#:%7E:text=A%20supplier%20is%20defined%20as,the%20success%20of%20
your%20business.
53
Kenton, W. (2020, October 25). Articles of Incorporation. Investopedia. Retrieved May 25,
2022, from https://www.investopedia.com/terms/a/articlesofincorporation.asp
Manila Electric Company. (n.d.-a). Board of Committees [Photograph]. MERALCO.
https://company.MERALCO.com.ph/corporate-governance/board-committees
Manila Electric Company. (n.d.-b). Corporate Governance in MERALCO. MERALCO.
Retrieved May 25, 2022, from https://company.MERALCO.com.ph/corporate-
governance/corporate-governance-in-
MERALCO?fbclid=IwAR2nFzEWiDJ6Ys9hzlZnUbWolM2vIZ1FL1TGKIgF-
Mvvl4DYWgjQ5Bwcg6k
Manila Electric Company. (n.d.-c). Governance Structure [Photograph]. MERALCO.
https://company.MERALCO.com.ph/corporate-governance/governance-structure
Official Gazette. (n.d.). Rights of employees | GOVPH. Official Gazette of the Republic of the
Philippines. Retrieved May 19, 2022, from
https://www.officialgazette.gov.ph/featured/rights-of-
employees/#:%7E:text=1.,relations%20between%20employees%20and%20employers.
One MERALCO Foundation Inc. (n.d.). Programs. OneMERALCOfoundation.Org. Retrieved
May 25, 2022, from https://www.oneMERALCOfoundation.org/category/our-programs/
Solar Philippines. (n.d.). About Us. Solarphilippines.Ph. Retrieved May 25, 2022, from
https://www.solarphilippines.ph/about-us/
Transparency International UK. (n.d.). 5. What is Bribery? | Anti-Bribery Guidance |
Transparency International. Antibriberyguidance.Org. Retrieved May 20, 2022, from
https://www.antibriberyguidance.org/guidance/5-what-bribery/guidance
54
PANELCO1. (n.d.). History of Panelco. Panelcoi.Com. Retrieved May 25, 2022, from
https://panelcoi.com/.
Department Of Energy. (n.d.). DAGUPAN ELECTRIC CORPORATION POWER SUPPLY
PROCUREMENT PLAN. Doe.Gov.Ph. Retrieved May 25, 2022, from
https://www.doe.gov.ph/sites/default/files/pdf/du_csp/2019-2028_DECORP_PSPP.pdf
Solar Philippines. (n.d.-a). About Us. Solarphilippines.Ph. Retrieved May 25, 2022, from
https://www.solarphilippines.ph/about-us/
National Grid Corporation of The Philippines. (n.d.). Company profile. Craft. Retrieved May 25,
2022, from https://craft.co/ngcp

55
Contribution per member
Alfonso, Gianna
- Chapter 4 (Impacts)
Adriano, Lui Angelo

- Chapter 2 ( Board of Directors, Internal Audit)
Blancia, Lealie
- None
Dizon, Rhia Mae

- Chapter 1: (Backgournd)
- Chapter 2: (Committees, Stockolders, Supply of Information, Disclosure and
Transparency, Information Security Governance and Data Privacy, MERALCO Data
Privacy Office)
- Chapter 3: (Impacts, Initiatives)
- Editor
Dionisio, Nestle Jane Grace

- Chapter 1: (Introduction)
- Chapter 2: (Board of Directors, Stakeholders, Revised MCG, Other Policies, Compliance
Officer, Corporate Governance and Compliance Office, The Corporate Governance
Office )
- Chapter 4: (CG Conclusion, Insights)
- Editor
- Arranged the Paper
Fedencio, Rhona Mae

- Chapter 2: (By-Laws, Committees, Articles on Incorporation)
- Chapter 4: (CSR Conclusion)
- Editor
Gutierrez, Jimuel
- Chapter 1: (Background)
- Chapter 2: (Board Charters, Code of Ethics)
- Chapter 4: (CSR Recommendation, Initiatives, Impacts)
- Editor
56
Lampa, Arabella
- Chapter 1: (Introduction, Background)
- Chapter 2: (Management Teams and Executives, Dividend Policy, Confidentiality of
Information and Proper Use of Property, Communication and Disclosure )
- Chapter 4: (CG Recommendation)
Marquez, Edward
- Chapater 2: (Corporate Secretary, Articles of Incorporations, Programs)
- Chapter 4: (CG Recommendation)
Pibte, Anariza
- Chapter 1: (Background)
- Chapter 2: (Supply of Information, Disclosure and Transparency, Initiative)
Additional Notes to Lealie Blancia
The group, especially the editor of the paper decided to not include her parts as a contribution to
the Final Paper since it is purely plagiarized content and manifests that she is not giving effort to
her part. The leader and editors approached and reminded her to revise her part, however, she did
not respond.

GRP 4 F2F MERALCO

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DR. YANGA'S COLLEGES, INC.

College of Business Administration

Manila Electric Company (MERALCO)

BSBA Group 4 (F2F)

May 26, 2022

Chapter 1: Introduction and Background

Background of the company

MERALCO as a Public Listed Company

The Philippine Stock Exchange lists MERALCO. On January 8, 1992, it became a

Products and services they offered

MERALCO is the Philippines' largest corporate electric power distribution utility,

 NGCP (National Grid Corporation of the Philippines) is a system operator and

 DECORP (Dagupan Electric Corporation) is a privately held company that distributes

 Pangasinan Electric Company (PANELCO I) have an exclusive franchise for operating

Their Vision, Mission and Values

Chapter 2: Corporate Governance

Photo retrieved from official website of MERALCO

Board of Directors of Manila Electric Company (MERALCO)

Photo retrieved from official website of MERALCO

Non-executive Directors: Independent Directors:

Manuel V. Pangilinan Pedro Emilio O. Roxas

Chairman of the Board

Manuel Velez Pangilinan

Lead Independent Director

As MERALCO stated, an independent director is someone who is not involved in any

MERALCO's Board of Directors' purposes, authority, functions, and obligations are

The Charter covers the following:

To be qualified as a MERALCO Director, he or she must have the competencies to effectively

Disqualifications (Section 7, Article I, MCG)

A director may be disqualified temporarily or permanently as stated in MERALCO’s Board

Permanent Disqualification (Section 7.1, Article I, MCG)

Temporary Disqualification (Section 7.2, Article I, MCG)

To be legitimate and effective, a temporary disqualification of a director recommended by the

Duties and Responsibilities

The office of a director is one of trust and confidence. Transparency, accountability,

The board of directors of Manila Electric Company (MERALCO) consists of 11 people.

Nomination and Election

If the position of a specific director becomes vacant as a consequence of death,

Every director of Manila Electric Company (MERALCO) is eligible to receive a stipend

Assessment to the Board

Board Self-Assessment, General Board Committee Performance Assessment, Board Committee

Plans for Succession

According to MERALCO, a successful succession plan for senior executives and

Orientation and Continuing Learning

Executive Committee (ExCom)

Photo retrieved from official website of MERALCO

Nomination and Governance Committee (Nom&Gov)

Photo retrieved from official website of MERALCO

The responsibility of Nomination and Governance Committee is to evaluate the effectiveness of

Audit Committee (AuditCom)

Photo retrieved from official website of MERALCO

MERALCO’s Internal Audit

Internal audit's mission at MERALCO is to provide independent, objective assurance and

Risk Management Committee (RMC)

Photo retrieved from official website of MERALCO

Enterprise-Wide Risk Management

MERALCO’s Enterprise Risk Management (ERM) is responsible in tracking and

Remuneration and Leadership Development Committee (RLDC)

Photo retrieved from official website of MERALCO

Finance Committee (FinCom)

Photo retrieved from official website of MERALCO

Related Party Transactions Committee (RPT Comm)

Photo retrieved from official website of MERALCO