About Ayala
Since 1834, we at Ayala have been the country’s long standing partner in its pursuit for
progress and nation building. We have been developing businesses that transform industries,
challenging the status quo, and bringing innovations here in the Philippines and abroad that
contribute to the nation’s social and economic agenda.
We constantly look for possibilities in the market to drive advancement. We see challenges
as opportunities and tackle problems differently. We explore new dynamic business models
and introduce pioneering products and services. We empower our leaders and employees to
take initiative and make an impact in everything we do.
Because no matter what business we enter, our goal isn’t just to succeed, but to reinvent the
way things work to change people’s lives for the better.
Mission
Anchored on values of integrity, long-term vision, empowering leadership, and with a strong
commitment to national development, Ayala fulfills its mission to ensure long-term
profitability and value creation. Ayala creates synergies as it builds mutually-beneficial
partnerships and alliances with those who share its philosophies and values.
Vision
We will be the most relevant, innovative and enduring Philippine-based business group,
enabling shared value and prosperity for the many stakeholders we serve.
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Ayala Corporation (AC) was founded in 1834, incorporated on January 23, 1968, and was listed on the Philippine Stock E
1976.
AC is the holding company of the Ayala Group of Companies, with principal business interests in real estate; financial serv
telecommunications; water; industrial technologies; power; infrastructure; healthcare; and technology ventures.
The significant subsidiaries of AC as of December 31, 2020 are Ayala Land, Inc., Manila Water Company, Inc., Integrated
Electronics, Inc., and AC Energy and Infrastructure Corporation.
Source: SEC Form 17-A (2020)
Security Information
Sector Holding Firms
Subsector Holding Firms
Corporate Life 50
Incorporation Date Jan 23, 1968
Number of Directors 7
Stockholders' Meeting as per By-Laws April - any day
Fiscal Year 12/31 (Month/Day)
External Auditor SyCip, Gorres, Velayo & Company
Transfer Agent Bank of the Philippine Islands Stock Transfer Agency
Contact Information
Business Address 34/F, Tower One and Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City
E-mail Address acquery@[Link]
Telephone Number (632) 7908-3000
Fax Number (632) 8848-5846
Website [Link]
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Ayala Corporation is the holding company of the Ayala group—one of the largest and most
diversified conglomerates in the Philippines. Since going public in 1976, Ayala has been
steadfast in its belief that good corporate governance plays a major role in the success of its
businesses.
Given the large scale of Ayala’s operations, its decision-making process has to be inclusive
and responsive to the needs of shareholders and address a wider base of interests. Thus, we
maximize good governance to refine prevailing business notions, challenge management
decisions, and ultimately guarantee that long-term considerations are prioritized over short-
term gains.
Toward these goals, Ayala has set in place a comprehensive set of oversight controls to put
management decisions in check and ensure that we conform to regulatory requirements and
global best practices. In addition to ensuring compliance with regulations, we have
spearheaded the development of governance summits and internal councils, supported
scholarly efforts on good governance and advanced shared value business models, and
voluntarily embedded global frameworks in our operations to support sustainable
development.
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Ayala continues to raise the bar of good governance by pursuing measures that bring up the
level of awareness and practices in the organization to help drive value creation and long-
term growth.
In compliance with the requirements of the Philippine Securities and Exchange Commission,
Ayala filed and made public its Annual Corporate Governance Report (ACGR) for the years
2012 to 2016 and its Integrated Annual Corporate Governance Report (I-ACGR) for the years
2017 to 202o.
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OVERALL RISK MANAGEMENT PHILOSOPHY OF THE COMPANY
Risk Management at Ayala: From Avoidance and Mitigation to Value Creation
Risk Management has become an increasingly important business driver and part of
successful corporate governance. By treating risk as intrinsic to the conduct of business, risk
management is elevated from an exercise in risk avoidance to an essential consideration in
every decision, initiative and activity. At Ayala, we ensure that our risk management system
has the right architecture, strategy, and protocols to support the risk management process.
We revisit these three key factors yearly to ensure that we have the right approach in
mitigating risks and maximizing opportunities.
Institutionalized in 2002, the Company has adopted an enterprise risk management (ERM)
framework that is continuously being enhanced and improved. The oversight for the
operationalization of Ayala’s risk management program rest with the Risk Management and
Related Party Transactions Committee, a Board-level Committee that provided transparency
and visibility into the corporate’s risk management practices. The Chief Risk Officer (CRO),
being a risk management advocate, reports to the Committee any improvement in the design,
implementation and maintenance of the enterprise risk management roadmap. The Group
Risk Management & Sustainability Unit supports the CRO in the execution of its
responsibilities and continues to align Ayala’s risk governance with Deloitte’s concept of risk
intelligent enterprise, espousing the best practice that goes beyond risk avoidance and
mitigation to utilize risk-calculated decision-making as a means to create value. It also
convenes the ERM Council, a group comprising the risk officers of Ayala business units, for
risk framework alignment, continuous risk process improvement, and other group projects.
On a semi-annual basis, the ERM Council provides the top risks of their respective
organization to the Group Management & Sustainability Unit for reporting to both the CRO
and the Risk Management and Related Party Transactions Committee.
Management committees also provide support to the CRO by ensuring the existence of a
structure at the operating level that will communicate and monitor key principal and emerging
risks. They also ensure that risks are discussed during project and investment meetings. As
risk owners, the business unit leaders are responsible for managing the risks they face in the
day-to-day operations within the established risk framework. They have the responsibility to
identify, measure, monitor, control and report on risks to the management. Finally, the
Internal Audit Unit provides an independent assurance on the adequacy, effectiveness, and
efficiency of the risk management process.
Every year, the corporate conducts an enterprise-wide risk assessment workshop to identify
emerging risks, evaluates its impact to the corporate and the business units, and prioritize
risks according to both impact and likelihood. For 2019, the Company assessed that key risk
exposures include brand and reputation, political and regulatory and business resiliency. The
company and the group have laid down the mitigation plans to address these exposures.
Board Review of the effectiveness of the risk management system
As set forth in its Charter approved by the Board of Directors, the Risk Management and
Related Party Transactions Committee has reviewed and assessed the adequacy and the
effectiveness of the Corporation’s enterprise risk management process:
The Committee has reviewed the following policies: enterprise risk management policy, related
party transactions policy and the business continuity management policy.
Thru the Chief Risk Officer, as supported by the Group Risk Management and Sustainability Unit,
the Committee has ascertained that an effective risk management process was in place and
that the risk management practices of the Company transcend mere compliance. The shift was
driven by the mindset that understands the interconnectedness and interdependency of risks
that require collaborative risk mitigation strategies. Silos were broken down through risk
assessment methodologies, such as the black swan approach, risk interaction mapping, bow tie
analysis and risk sensing.
With a deeper understanding of the sustainability megatrends, participants in the annual risk
assessment exercise identified emerging risks presumably caused by these trends, such as
climate change, which could interrupt business operations. In addition, the impact scale for risk
scoring was expanded to include the potential environmental impact of risk events to the
business operations and the communities where our businesses operate in.
The Committee has also noted management support as the Managing Directors made
themselves available to discuss their risk strategies and respond to queries raised by the
Committee.
Risk Maturity Assessment
In addition to the regular reports of the CRO thru the Group Risk Management and
Sustainability Unit, the Corporation has engaged Aon Risk Solutions to execute a group-wide
risk management maturity assessment, the first round of which was completed in 2015.
According to best practice, the assessment of the maturity of the risk management process
should be performed every two to three years.
The Aon Risk Maturity Index (RMI) is designed to capture and assess an organization’s risk
management practices and provide participants with immediate feedback in the form of a
Risk Maturity Rating and actionable steps for improvement. Aon has partnered with the
Wharton School of the University of Pennsylvania to develop the Index and conduct joint
research on the relationships between risk management practices and actual performance.
The Aon Risk Maturity Index contains questions on risk management processes, corporate
governance and risk understanding. The questions are based upon the ten characteristics of
an advanced risk management maturity:
Board-level understanding of and commitment to risk management as a critical factor for
decision-making and for driving value;
A senior-level executive who drives and facilitates key risk management processes and
development;
Transparency of risk communication;
A risk culture that encourages full engagement and accountability at all levels of the organization;
Identification of existing and emerging risks using internal and external data and information;
Participation of key stakeholders in risk management strategy development and policy setting;
Formal collection and incorporation of operational and financial risk information into decision-
making and governance processes;
Integration of risk management insights into human capital processes to drive sustainable
business performance;
Use of sophisticated quantification methods to understand risk and demonstrate added value
through risk management; and,
A move from focusing on risk avoidance and mitigation to leveraging risk and risk management
options that extract value.
Through this study, the Corporation and the Group evaluated the effectiveness of the
improvements implemented since 2015. Similarly, the Corporation’s ERM roadmap was
revised to address other potential areas for improvement.
RISK POLICY
For the Company
Risk Risk
Objective
Exposure Definition
Brand and The inability To maintain
reputation to maintain and improve
our stature as one of its core
a company of values, the
choice may strong Ayala
result in brand,
significant
difficulty in
creating
and/or
maximizing
value for all
stakeholders.
To ensure
The inability that the
to anticipate Corporation
changes in van adapt to
the political changes in
and regulatory the political
Political landscapes and
and may result in regulatory
regulatory the Group landscapes to
being unable continue its
to shield our long-term
profitability value creation
and brand process for all
value. its
stakeholders.
Being unable
to restore
normal To put
operations measures in
following place that will
natural/man- allow the
made disaster continuity of
and/or failure business
Business
of business operations
resiliency
contingency and swift
processes recovery
and systems following a
may cause natural or
significant man-made
revenue loss disaster.
and customer
trust.
For the Group
Risk
Risk
Management Objective
Exposure
Policy
To improve
the Group’s
The inability to ability to
anticipate anticipate
changes in the and adapt to
political and political and
regulatory regulatory
landscapes changes,
Political and
may result in which may
regulatory
the Group impact each
being unable business
to shield our unit’s
profitability business
and our brand models and
value. other value
creation
activities.
The inability to To ensure
align portfolio that the
management products and
strategy with services mix
business of each
Portfolio objectives business unit
management may result in will provide
the failure to the right
provide the balance of
right balance risk and
of risk and return to the
return. organization.
To ensure
that all
business
Failure and/or
units have
inefficient
efficient and
operational
effective
processes,
processes,
people and
Operational right talent
systems may
and
result in
appropriate
inability to
systems to
meet business
support the
objectives.
achievement
of business
objectives.
For Minority Shareholders
Risk to Minority Shareholders
The Company’s Related Party Transactions
policy that took effect last December 2014
ensures that the rights of the minority
shareholders are protected. The
Corporation established a mechanism to
ensure that related party transactions are at
arms-length, the terms are fair, and that
they inure to the best interest of the
Corporation and all of its shareholders. The
Corporation strictly monitored, reported,
and disclosed related party transactions as
well as inter-company transactions.
CONTROL SYSTEM SET UP
For the Company
Risk Risk Management
Risk Assessment and Control
Expos (Monitoring (Structures,
ure and Procedures,
Measurement Actions Taken)
Process)
Brand Scannin The
and g of Corporate
reputat local, Communic
ion regional ations Unit
and set up a
internati social
onal media plan
news that
Inclusio includes a
n of quarterly
social analysis of
media in social
the trends/sent
monitori iment and
ng of continuous
trends monitoring
of social
media
pages.
The same
unit is also
developing
a
Stakehold
er Plan,
including a
stakeholde
r mapping
and
engageme
nt
initiatives
to address
stakeholde
r issues.
The
Sustainabil
ity Team
collaborate
s with
community
partners
on areas
of
sustainabl
e
livelihood,
environme
ntal
protection,
children
and
women’s
health,
among
others.
Politica Continu The Ayala
l and ous Regulatory
regulat scannin Council
ory g of regularly
political identifies
and and
regulato monitors
ry new policy
landsca issues
pes across
Evaluati sectors
on of and
new industries
laws and makes
and recommen
regulatio dation to
ns on the Ayala
how Group
they Managem
ent
Committee
on how to
address
regulatory
issues.
The
Corporate
Services
could
Complianc
impact
e Unit of
the
Ayala
compani
Group Leg
es’
al handles
busines
regulatory
s
complianc
operatio
e.
ns
Set aside
political
connection
s of key
employees
in
formulating
business
strategy.
Busine Hazard Test the
ss monitori adequacy
resilien ng and
cy Annual effectivity
review of crisis
of crisis managem
manage ent and IT
ment, disaster
busines recovery
s plans on a
continuit regular
y and IT basis.
disaster Assess the
recovery effectivene
plans ss of
business
continuity
plans
through ta
bletop
testing or
simulation
exercise
every two
years.
Distribute
go-bags,
CPR kits
and other
paraphern
alia that
will help all
employees
to recover
from any
disaster.
Invest in a
comprehe
nsive
insurance
program
and
periodicall
y review
the
adequacy
of
insurance
coverage.
For the Group
Risk Risk
Assessment Management
Risk
and Control
Exposur (Monitoring (Structures,
e and Procedures,
Measurement Actions Taken)
Process)
Political Continu The Ayala
and ous Regulatory
regulator scannin Council ensures
y g of legal and
political regulatory
and compliance of
regulato
the Group, and
ry
periodically
landsca
pes discusses new
Evaluati regulations that
on of may affect the
new companies’
laws business
and operations.
regulati
ons on
how
they
could
impact
the
compani
es’
busines
s
operatio
ns
Portfolio Monthly Regular
manage monitori ly
ment ng of monitor
segmen busines
t s units’
perform perform
ance ance on
and how a
far they periodic
are from basis.
set The
targets Busines
End-of- s
year Develo
perform pment
ance Unit of
review all
per busines
busines s units
s unit conduct
Annual s early
monitori spotting
ng of of
Key opportu
Result nities
Area both
(KRA) within
scoreca existing
rd of the and
busines emergin
s units g
busines
ses.
Maintai
n
relation
ship
with
existing
partner
s and
proactiv
ely
identify
and
build
network
with
potentia
l
busines
s
partner
s and
investor
s.
The
Internal
Audit
Unit of
The busines
monitori s units
ng and provide
measur s
ement assuran
process ce on
Operatio es vary the
nal across soundn
industrie ess and
s and effectivi
busines ty of
s operatio
segmen nal
ts. policies
and
process
es in
place.
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Corporate Governance
Ayala Land is firmly committed to good corporate governance as a critical element in creating and
sustaining shareholder value while considering and balancing the interests of all our stakeholders. We
believe that adherence to the highest standards of corporate governance is integral to our creation of
shareholder value over the long term.
Ayala Land’s corporate governance practices are principally contained in our Articles of Incorporation and
By-laws. The company is in full compliance with the code of corporate governance and all listing rules of
the Philippine Stock Exchange (PSE) and regulations adopted by the Securities and Exchange
Commission (SEC) and the Philippine Dealing Exchange Commission (PDEx).
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