Two Ayala firms submit to SEC corporate governance manual

Two Ayala firms — Ayala Corp. and Ayala Land Inc. — submitted to the Securities and Exchange Commission yesterday their own manual of corporate governance defining the specific responsibilities of their board of directors and officers in protecting the interests of minority shareholders.

The Ayala Group is the second biggest listed company that has so far complied with the SEC directive mandating all listed corporations, investment houses, stockbrokerage firms, pre-need plan firms, mutual fund firms, and other companies with secondary license from the SEC to submit their code of corporate governance not later than Sept. 1 this year.

Food and beverage giant San Miguel Corp. is the first publicly-listed firm that met the SEC requirement with the filing of its corporate governance manual last month.

Ayala president Jaime Augusto Zobel de Ayala II, together with Ayala senior managing director Mercedita Nolledo and managing director Renato Marzan, personally went to the SEC yesterday to file the holding firm’s corporate governance manual. The manual shall be effective on Jan. 1 next year.

"We are very supportive of what the SEC is trying to do. This is the time to measure up to global standards and I think this initiative of the SEC is crucial in priming our corporate sector and the rest of the economy for the demands of globalization. It’s actually all about building trust within the Ayala Group," Zobel told reporters.

Zobel said that most of these corporate governance practices had been adopted by the Ayala Group even before the SEC drafted its code of corporate governance.

Marzan said that with the adoption of the manual, Ayala Corp. and Ayala Land’s directors, management, officers and employees commit themselves to the principles and best practices of corporate governance and to safeguarding stakeholders’ rights as well as promoting shareholding participation in the corporate governance process.

He said the company has incorporated its vision and core values in the manual as a way of institutionalizing them.

Nolledo, for her part, said the manual has provisions on conflict of interests and has defined the duties of independent directors.

Based on its manual, AC is required to have at least one independent director who is neither an officer or employee of the company nor a nominee of a stockholder who owns more than 10 percent equity in the company.

Aside from his membership in the board, the independent director is required by the new code to chair the audit committee, and sit as a member of both the nomination and compensation committees which shall be created by the board.

Marzan said the company’s external auditor shall be rotated every five years or earlier and shall not render other non-audit work for the company which will be in conflict with its functions as external auditors.

He said Globe Telecoms Inc. will submit its own code of corporate governance on Friday.

Corporate governance refers to a system whereby shareholders, creditors and other stakeholders of a corporation ensure that management enhances the value of the corporation as it competes in an increasingly global market place.