Governance Structure

Board Committees

Audit Committee

The Audit Committee is composed of Mr. Frederick Y. Dy, (Independent Director) as Chairman, and Messrs. Takanori Fujimura and Fulgencio S. Factoran (Independent Director) as members. All of the members of the Audit Committee are financially literate. The Audit Committee reports to the Board and is required to meet at least once every three months.

Aside from overseeing the internal and external auditors of the Company, the Audit Committee is responsible for assisting the Board in its fiduciary responsibilities by providing an independent and objective assurance to the Management and shareholders of the continuous improvement of the risk management system, business operations, and the proper safeguarding and use of Companyresources and assets. The Audit Committee provides a general evaluation and assistance in the overall improvement of the risk management, control and governance processes.

The Board, upon the recommendation of the Audit Committee, appointed Maria Angela G. Villamor as the Company’s Chief Audit Executive and Vice President for Internal Audit.

The table below shows the attendance of the members of the Audit Committee at Committee meetings held in 2017:

BoardNameNo. of Meetings Held during this yearNo. of Meetings Attended%

Chairman

Frederick Y. Dy*

4

4

100%

Member

Fulgencio S. Factoran Jr.

4

4

100%

Member

Gerard H. Brimo

4

4

100%

Audit Committee Charter

Board Risk Oversight Committee

The Board Risk Oversight Committee is composed of Mr. Fulgencio S. Factoran, Jr., (Independent Director) as Chairman, and Messrs. Gerard H. Brimo and Frederick Y. Dy (Independent Director) as members. This Committee assists the Board in its oversight responsibility for the Company’s Enterprise Risk Management, and shall review the effectiveness of the risk management system. The Board Risk Oversight Committee reports to the Board and is required to meet at least once every three months.

The table below shows the attendance of the members of the Board Risk Oversight Committee during its meetings held in 2017:

BoardNameNo. of Meetings Held during this yearNo. of Meetings Attended%

Chairman

Fulgencio S. Factoran Jr.

4

4

100%

Member

Gerard H. Brimo

4

4

100%

Member

Frederick Y. Dy

4

4

100%

Corporate Governance Committee

The Corporate Governance Committee is composed of Mr. Manuel B. Zamora, Jr., as Chairman, and Messrs. Gerard H. Brimo and Frederick Y. Dy (Independent Director) as members. The Corporate Governance Committee reports to the Board and held two meetings in 2017, wherein all members were present.

The Corporate Governance Committee is responsible for ensuring compliance with and proper observance of corporate governance principles and practices; overseeing the implementation and periodic review of the Company’s corporate governance framework to ensure that it remains responsive to the Company’s size, complexity and business strategy; conducting an annual evaluation of the Board, its Committees and the Management of the Company; and developing and implementing action plans and programs to improve the performance of the Board, Committees, Directors and Officers. The Corporate Governance Committee also performs the functions previously assigned to the Compensation and Remuneration Committee. It is tasked to establish and maintain a formal and transparent procedure for developing policy on remuneration of Directors and Officers to ensure that their compensation is consistent with the Company’s culture, strategy and the business environment in which it operates. The Committee is also responsible for administering the Company’s stock option policies and plans, and for approving bonuses to all employees of the Company and its subsidiaries.

Nominations Committee

The Nomination Committee is composed of Mr. Manuel B. Zamora, Jr., as Chairman, and Mr. Fulgencio S. Factoran, Jr. (Independent Director) as member. Mr. Takeshi Kubota was the third member of the Committee until his resignation on November 6, 2017. He was replaced by Mr. Toru Higo who was appointed by the Board on March 14, 2018. The Nomination Committee reports to the Board and held one meeting in 2017, wherein all three members were present.

The Nomination Committee is responsible for setting qualification standards to facilitate the selection of potential nominees to Board seats and of all nominees to other positions in the Company requiring appointments by the Board, to provide shareholders with an independent and objective evaluation of, and assurance that, the members of its Board and the officers appointed by the Board are competent and will foster the Company’s longterm success and secure its competitiveness.

Related Party Transactions Committee

The Related Party Transactions Committee is composed of Mr. Takanori Fujimura as Chairman and Messrs. Frederick Y. Dy (Independent Director) and Fulgencio S. Factoran. Jr. (Independent Director), as members. The Related Party Transactions Committee is tasked with reviewing all material and related party transactions of the Company to ensure that such transactions are conducted on terms which are no more favorable than the terms of similar transactions with nonrelated parties under similar circumstances and that no corporate or business resources of the Company are misappropriated or misapplied. This Committee is also responsible for identifying potential or actual conflicts of interest and reputational risk issues that may arise from such related party transactions. The Related Party Transactions Committee shall further ensure that transactions between and among related parties are properly identified, monitored and reflected in reports to the Board and relevant regulatory authorities. The Committee is required to meet at least once a year. In 2017, the Committee had one meeting with all its members in attendance..

Executive Implementation

The Company’s Chairman and Chief Executive Officer (“CEO”) are held separately by unrelated individuals. The roles of Chairman and the CEO are assigned to Manuel B. Zamora Jr. and Gerard H. Brimo, respectively.

Chairman

The Chairman is responsible for the leadership of the Board. He ensures effective operation of the Board and its committees in conformity with the highest standards of corporate governance. He is accountable to the Board and acts as direct liaison between the Board and Management of the Company, through the CEO. He ensures that the Board works effectively and sets an agenda which is focused on strategy, performance and accountability, while taking into consideration recommendations of the Directors, CEO and Management. He sets the style and tone of Board discussions to promote constructive debate and effective decision making. He assures the availability of training opportunities to all Directors, including an orientation program for first-time Directors. He ensures that the Board performance is evaluated at least once a year.

President and CEO

The President and CEO provides the leadership for Management to develop and implement sound business strategies, plans, budgets and a system of internal controls. He ensures that the overall business and affairs of the Company are managed in a sound and prudent manner in accordance with the Company’s strategic plan and that business risks are identified and properly addressed. He also ensures that operational, financial and internal controls are adequate and effective in order to generate sound and reliable financial and operational information, to maximize the effectiveness and efficiency of operations, to safeguard Company assets and resources, and to comply with all laws, rules, regulations and contracts. The CEO, with the assistance of the rest of the Company’s Management, also has the responsibility to provide the Board with a balanced, understandable and accurate account of the Company’s performance, financial condition, results of operations and prospects on a regular basis. The CEO is the link between internal operations and external stakeholders.

Chief Risk Officer

Mr. Jose B. Anievas, Senior Vice President – Chief Operating Officer, has been appointed by the Board as the Chief Risk Officer (CRO) of the Company. The Chief Risk Officer supervises the Company’s Enterprise Risk Management System and spearheads its implementation, review and continuous improvement. He takes the lead in identifying key risk exposures relating to economic, environmental, social and governance factors that may affect the achievement of the Company’s strategic objectives, and in developing risk mitigation plans for such risks. He communicates the top risks and the status of implementation of the Company’s risk management strategies and action plans to the Board Risk Oversight Committee, and works with the President and CEO in updating and making recommendations to the Board Risk Oversight Committee.

Corporate Governance Officer

Mr. Emmanuel L. Samson, Senior Vice President – Chief Financial Officer, has been appointed by the Board as the Corporate Governance Officer. He is tasked with ensuring that corporate governance policies are disseminated, adopted throughout the organization and becomes an integral part of the Company’s culture. In addition, he also ensures that the necessary systems are in place to monitor compliance.

Compliance Officer

Atty. Georgina Carolina Y. Martinez, Vice President – Legal and Special Projects, has been appointed by the Board as the Chief Compliance Officer effective September 1, 2017. She replaced Atty. Jose Roderick F. Fernando who served as such until August 31, 2017. The Compliance Officer ensures the Company’s strict adherence to all laws, regulations, guidelines and specifications relevant to the business.

Corporate Secretary

Atty. Barbara Anne C. Migallos is the incumbent and duly qualified Corporate Secretary of the Company. She ensures that all Board procedures, rules and regulations are strictly followed. The Corporate Secretary is a lawyer with many years of experience in corporate law practice, including corporate secretarial work. She is also a professional lecturer in advanced securities regulation.

Auditors

Chief Audit

The Board, upon the recommendation of the Audit Committee, appointed Ms. Maria Angela G. Villamor as the Company’s Chief Audit Executive. The Chief Audit Executive is primarily tasked with evaluating the adequacy and effectiveness of the Company’s governance and operations, the reliability and integrity of financial information, the safeguarding of assets, and compliance with laws, rules and regulations.

External Auditor

The external auditor is appointed by the shareholders upon the recommendation of the Audit Committee, which reviews its qualifications, performance and independence. To ensure objectivity in the performance of its duties, the external auditor is subject to the rules on rotation and change (every five years for the engagement partner); general prohibitions on hiring of staff of the external auditor; and full and appropriate disclosure and prior approval by the Audit Committee of all audit and non-audit services and related fees. Approval of non-audit work by the external auditor is principally tested against the standard of whether such work will conflict with its role as an external auditor or would compromise its objectivity or independence.