2014 Corporate Governance

EDC 2014 Performance Report
CORPORATE
GOVERNANCE
Since our incorporation in 1976 as a government-owned and controlled corporation, we, at EDC, have developed, synthesized and ingrained in our
corporate culture and environment the values and practices which helped solidify and sustain our current market leadership. We have established
long and meaningful alliances with all our stakeholders, including the communities in which we operate, by living up to our own brand of sound and
good corporate governance.
Corporate Governance Policy and Objectives
EDC’s Board of Directors, Officers, Executives and Employees are well aware of the crucial role that sound corporate governance plays in attaining
EDC’s corporate goals. As EDC continues to create value for the company and for its various stakeholders—the shareholders, our employees, our
creditors, our country and the community in which we operate—we remain steadfast in ensuring that our actions and decisions are aligned with our
corporate initiatives. We challenge ourselves time and again, to continuously seek ways to improve our standards while considering innovations to
level with international best practices. And we are persistent in observing responsible professional conduct and behavior to achieve more than just
mere compliance with existing laws, rules and regulations.
In transforming our business through the expansion of our sustainable energy projects from geothermal energy development into other clean and
renewable energy ventures and taking them to international shores, we will continue to sustain and strengthen our corporate governance initiatives
to ensure that our businesses will not only be fully compliant with existing laws, rules and regulations but will be carried out in a sound and efficient
manner and with the best interests of all our stakeholders in mind.
Even prior to the incorporation of the “stakeholder principle“ in EDC’s Manual on Corporate Governance (“CG Manual”), we have committed to
provide clean and renewable energy to present and future generations by adding value at every stage of our operations and protecting the interests
of all our stakeholders through exemplary good governance practices such as: the promotion of customer and investor interests, and environmental
stewardship, and employee development and community welfare activities. Thus, in full compliance with the corporate governances rules and
regulations of the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE), and in observance of the ASEAN Corporate
Governance Scorecard criteria, the EDC Board of Directors approved in July 15, 2014 the revisions to the CG Manual, formally incorporating the
stakeholder principle in corporate governance and expanding the scope of responsibility to all other stakeholders of the company.
The 2014 CG Activities of the Energy Development Corporation
For the year ending December 31, 2014, below are the Corporate Governance activities of EDC:
1. Rights of Shareholders
EDC takes the following measures to protect the rights of every shareholder:
• Basic Shareholder Rights. We, at EDC, equitably provide our shareholders, whether a holder of common or preferred shares, or owner of a
majority or minor stake, or a foreign or institutional investor, with basic stockholders’ rights recognized in the Corporation Code, including, among
others: voting rights, pre-emptive rights, appraisal rights, right to inspect corporate books and records, right to information, right to receive
dividends, right to participate and be adequately informed on decisions about fundamental corporate acts.
Our EDC Board is committed to uphold stockholders’ rights, remove impediments to the exercise thereof and allow possibilities of seeking
redress for violation of such rights. Likewise, we promote the exercise of stockholders’ voting rights and collective action towards the solution of
issues and concerns through appropriate mechanisms. We provide opportunities for stockholders to participate in major corporate decisions,
and this is manifested through sufficient notice and information on matters to be taken up during Stockholders’ Meetings, as reflected in our
Definitive Information Statement (SEC Form 20-IS). Outside of the Stockholders’ Meetings, appropriate mechanisms have also been installed
which allow our shareholders to give feedbacks or report their complaints, such as the Whistleblower Hotline, the “contact us” section in EDC’s
website (www.energy.com.ph) and through our Investor Relations Office.
In 2014, the shareholders approved the amendment to EDC’s Articles of Incorporation to include among the existing exceptions to the right of
pre-emption: (a) the issuance of preferred shares of any class and/or series; (b) the reissuance of common and/or preferred shares of any class
and/or series from Treasury, and (c) the issuance of common shares which the Board has resolved not to first offer to shareholders on a pro-rata
basis (“Non-Preemption Shares”); provided that the total of such Non–Preemption Shares, together with prior issuances of common shares which
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