With a strong tone from the top and guided by the best interest of the company, its shareholders and other stakeholders, Ayala’s Board of Directors ensures adherence to the core principles of fairness, responsibility, accountability, and transparency.

The Board’s roles and responsibilities are formalized in its Charter found in the company website. As in previous years, in 2021, the Board:

Reviewed and affirmed the appropriateness of Ayala’s vision and mission statements

Reviewed and approved Ayala’s corporate strategy and performance objectives, and monitored and oversaw their implementation

Reviewed and ensured the adequacy of Ayala’s internal control mechanisms and risk management process

Reviewed and assured the proper implementation of the Code of Conduct and Ethics

Reviewed and affirmed the true and fair representation of the annual financial statements for fiscal year 2020

In the exercise of its active oversight over management, the Board regularly meets with the Ayala Group Management Committee to discuss strategic issues.

BOARD COMPOSITION Ayala’s Board is composed of directorswith the right combination of background, skills, and experience that meets theneeds of the company and is aligned with the company’s strategic directions. The Corporate Governance and Nomination Committee determines the qualifications of nominees to the Board based on established criteria aligned with the company’s needs, strategic direction, by-laws and regulatory requirements. The company may makeuse of professional search firms or external sources of candidates to search for qualified individuals to serve in the company’s Board.

Board Diversity Policy In determining the right composition of the Board, Ayala places value on diversity of business experience, background, age, and gender. With respect to gender, the Board has set out a target to have at least 30 percent or two female directors by 2025. Ms. Rizalina G. Mantaring was elected as Ayala’s first female director in 2020 and was re-elected in 2021.

Ayala is set to meet this target with the nomination of Ms. Chua Sock Koong for election in the 2022 annual stockholders’ meeting, three years ahead of its timeline.

Chairman and Vice Chairman The Chairman of the Board is Mr. Jaime Augusto Zobel de Ayala while the Vice-Chairman is Mr. Fernando Zobel de Ayala.

The Chairman leads the Board in performing its oversight function and ensures the effectiveness of the Board. The Board Charter available on the company’s website provides more information on the responsibilities of the Chairman. In the absence of the Chairman, the Vice Chairman automatically assumes the role of Acting Chairman.

Lead Independent Director As the Chairman of Ayala is not an independent director, a lead independent director was appointed in line with recognized best corporate governance practices. As stated in the Board’s Charter, it is the lead independent director’s role, among others, to:

Act as intermediary between the Chairman and the other Directors, when the need arises

Convene and lead the periodic meetings of the non-executive directors (NEDs) and independent directors (IDs) with the external auditor and heads of the internal audit, compliance, and risk management, as needed

Contribute to the performance evaluation of the Chairman

In 2021, Mr. Antonio Jose U. Periquet was the Board’s Lead Independent Director.

Non-Executive Directors and Independent Directors Ayala’s Board is composed almost entirely of NEDs and IDs who ensure the continuing soundness, effectiveness and adequacy of the company’s internal controls as well as promote an atmosphere of independence and objectivity in the boardroom.

In compliance with SEC recommendations, Ayala prescribes a term limit of nine years for its IDs. However, as merited by his active participation, expert insights and proven track record in exercising independent and objective judgment, Mr. Periquet was duly elected by the stockholders during the 2021 annual stockholders’ meeting for his tenth and last year as independent director.

Under the chairmanship of Mr. Periquet as the lead independent director, the company’s NEDs and IDs had a meeting without the executive director present on 10 December 2021. The Chief Finance Officer and Chief Audit Executive were invited as resource persons and the discussion focused on performance assessment of newer business units and status of long-standing audit issues.

Board Performance Ayala prepares the calendar of activities for the Board and Committees, including the schedule of board meetings before the start of each financial year. For each fiscal year, the Board meets at least six times. The Corporate Secretary ensures that meeting materials, including the agenda of the meeting, are made available to the directors at least five working days before the scheduled meeting. The meeting agenda usually covers a discussion on the company and the group’s operations and financial performance, relevant updates on business, current trends and developments and the regulatory environment. Open and objective discussion on all agenda items is encouraged.

All of Ayala’s directors ensure that sufficient attention is given to their roles and responsibilities as evidenced by their complete attendance in all board and committee meetings as well as in the 2021 annual stockholders’ meeting. Meeting and attendance details are shown on the table below.

Board and Board Committee Membership and Attendance Stockholders, Board, and Board Committee meetings for the year ended December 31, 2021

Performance Assessment A formal assessment of the Board, its Committees, the individual members, and the CEO is conducted annually to evaluate the effectiveness of the company’s board and governance practices and to determine areas for improvement. Every three years, an independent consultant is appointed to assist in the Board evaluation process. Aon plc facilitated the 2020 board evaluation exercise.

In 2021, the directors accomplished a self-assessment questionnaire designed to gather data on board effectiveness, committee effectiveness, individual effectiveness, and President and CEO effectiveness.

The questionnaire covered the following areas: (1) Board Composition, (2) Board Roles and Functions, (3) Information Management, (4) Representation of Shareholders and ESG Factors, (5) Managing Company’s Performance, (6) Senior Executive’s Talent Management and Succession Planning, (7) Director Development and Management, (8) Risk Management and Internal Control, and (9) Corporate Governance Practices related to Strategy, Policy, Risk, Oversight, and Accountability. The results of the assessment were reported by the Chief Compliance Officer to the Board in the meeting immediately following the completion of the assessment process.

Training of Directors Ayala recognizes the importance of continuous director development and encourages directors to assess their training and developmental needs. An annual budget is allotted for training and professional development programs. The Chief Compliance Officer coordinates with the directors on the training requirements and ensures that each director has completed the necessary training for the year.

A training policy is in place requiring all directors to attend annually at least a four-hour training on corporate governance. The policy also requires all new directors to undergo an eight-hour orientation program on the company’s business and structure, vision and mission, business strategy, Governance Codes and Policies, Articles, By-Laws, Corporate Governance Manual, Board and Committee Charters, SEC-mandated topics on governance matters and other matters necessary for the effective performance of their duties and responsibilities.

In line with the training policy, Ayala annually conducts, in partnership with the Institute of Corporate Directors (ICD), an Integrated Corporate Governance, Risk Management and Sustainability Summit that serves as a continuing education program for the directors, CEOs and senior management across the group. The 2021 Summit was held virtually on October 21, 2021 with the theme “The Board’s Agenda: A Pathway to Recovery through ESG.” The Summit’s theme and sessions focused on key environmental, social and governance factors in forging the path towards recovery and long-term sustainability.

Attendance to the 2021 Summit and CG trainings administered by ICD constituted compliance of the company’s directors and senior management with the SEC requirement for an annual corporate governance (CG) training. ICD has been Ayala’s partner for the past eight years in advancing its advocacy to promote professional directorship aligned with global principles.

Director of Remuneration As ensured by the Personnel and Compensation Committee, the remuneration of directors is consistent with the company’s culture, strategy, and control environment, and aligned with the long-term interests of the company and its stakeholders. Directors’ remuneration or any change thereto is approved by stockholders during the annual stockholders’ meeting.

Executive Directors Remuneration Ayala’s executive director, Fernando Zobel de Ayala, who is the company’s CEO and President, does not receive the fixed retainer fee for directors nor any remuneration for attending Board and committee meetings.

Non-Executive and Independent Directors Remuneration Non-Executive and Independent Directors Remuneration Ayala pays director fees only to the company’s NEDs and IDs. The current fee structure for the NEDS and IDs is as follows:

Board Committees Board committees with specified delegated functions were constituted to allow the Board to optimally perform its roles and responsibilities. Duly approved committee charters define the roles and responsibilities of each committee and are available on the company’s website. The table on Board and Board Committee Membership and Attendance provides the composition and attendance details of each committee.

Executive Committee In the intervening period between scheduled board meetings, the Executive Committee has the authority to exercise powers and perform duties within the competence of the Board, as may have been delegated to it by the Board. It acts by majority vote of all its members.

Refer to the Executive Committee report to learn more.

Finance Committee The Finance Committee has the duty of overseeing the company’s financial policy and strategy, including capital structure, dividend policy, and capital allocation decisions.

Refer to the Finance Committee report for the highlights of its 2021 activities.

Corporate Governance and Nomination Committee The Corporate Governance and Nomination Committee is tasked with annually reviewing the structure, size and composition of the Board to ensure the appropriate mix of directors to ensure proper implementation of the company’s corporate governance policies and practices.

Refer to the Corporate Governance and Nomination Committee report to learn more.

Audit CommitteeThe Audit Committee oversees matters relating to the effectiveness of the internal control system, robustness of the internal and external audit process, performance of the internal audit function, integrity of the company’s financial statements and financial reporting process, and the company’s compliance with applicable legal and regulatory requirements.

Refer to the Audit Committee reportfor the highlights of its 2021 activities.

Risk Management and Related Party Transactions CommitteeThe Risk Management and Related Party Transactions Committee ensures that management maintains a sound enterprise risk management framework and internal control system and reviews all material RPTs for endorsement to the Board to ensure that the RPTs are at arm’s length, and the terms and conditions are fair and will inure to the best interest of the company and its subsidiaries or affiliates and the shareholders.

Refer to the Risk Management and RPT Committee report to learn more.

Personnel and Compensation Committee The Personnel and Compensation Committee is responsible for establishing a formal and transparent procedure for fixing the remuneration packages of corporate officers and directors and ensures that compensation is aligned with the long-term interests of the company and its stakeholders while remaining competitive against the market.

Refer to the Personnel and Compensation Committee report to learn more.

Sustainability CommitteeThe Sustainability Committee was newly constituted in 2021 and supports the Board in fulfilling the Board’s oversight responsibilities in relation to Ayala’s commitment to and efforts regarding sustainable developments and integration of ESG matters in the formulation of Ayala’s strategies.

Refer to the the Sustainability Committee report to learn more.