'MAN OF THE YEAR' STEERS AYALA TO SUSTAINED GROWTH

It takes a certain kind of leadership to sustain the relevance of a 184-year-old corporation.

At the helm should be leaders who are able to create value for its stakeholders and build an enabling environment that promotes sustainable growth. As in the case of Ayala Corp., this diversified conglomerate owes much of its longevity to the leadership’s thrust for a high level of governance standards, a culture of trust and transparency, its deep relationship with its stakehold- ers, and pursuit of broad-based development.

“By ensuring an internal system of checks and balances, by deepening our relationship with all our stakeholders, and by keeping the interests of the country in mind, we believe Ayala can continue to create and share value in the years to come,” said Fernando Zobel de Ayala, president and chief operating officer, of Ayala Corp.

Culture at the top

Zobel, who was recently conferred the prestigious MAP Management Man of the Year 2018 award by the Management Association of the Philippines, shared how they are striving to sustain the relevance of the conglomerate, starting with their culture at the top. The seventh generation Zobel, along with his brother Jaime Augusto, currently runs the country’s oldest business house.

In a speech at the Shareholders Association of the Philippines Summit last year, Zobel explained how their governance framework had pushed the group to benchmark itself against metrics set out by the international investment community, especially after Ayala transitioned to become a corporation from being a family partnership in the 70s, and

had then listed at the local bourse. “While we recognize that our governance framework is a constant work in progress, we would like to think that this has served us well in sustaining the relevance and longevity of a 184-year corporation. Let me elaborate on this by citing some examples, starting with our culture at the top,” Zobel said.

“At the board level, we ensure sufficient diversity in thinking across our board of directors with a proper combination of knowledge, experience, and expertise to guide management as it addresses challenges and market opportunities… With each member possessing strong independence in thinking, we encourage a culture of trust, openness, and constructive dissent. We have a culture of healthy challenge in the boardroom and senior management,” he said.

Ayala also values transparency beyond being mere compliance to regulatory requirements, and hence, the group has started communicating in detail its long-term strategic targets to shareholders, including its five-year plan for 2020.

Consequently, such efforts have advanced the brand equity of Ayala as an institution, enabling it to attract the best and most respected partners with global institutions such as Mitsubishi, Singapore Telecom, JP Morgan, DBS, and GIC. It likewise gained interest from a good number of blue chip institutional investors from around the world who have become long-term shareholders of the company, Zobel further disclosed.

Deeper engagement

Zobel also highlighted the need to build trust and relevance by being a contributor to society as a whole. Ayala, for instance, has aligned its profit goals more specifically with the needs of the communities it interacts with, and has pursued sectors with astounding gaps in capacity, accessibility, quality, and affordability that are critical to broad-based development.

An example he cited was Manila Water, which delivers water supply, as well as sewerage and sanitation services to more than 6 million customers in the eastern part of Metro Manila. It has a flagship program called Tubig Para Sa Barangay, a business model designed for areas with clusters of low-income communities, including informal settlers.

Zobel further cited Ayala’s ventures in power and infrastructure as a way to help expand the country’s infrastructure systems; healthcare and education, so as to provide affordable products and services to the low-income segment; and industrial technologies, as a way to help revitalize the manufacturing industry and create jobs for a wider segment of Filipinos.

“We view this philosophy as imperative in sustaining the long-term growth and relevance of our institution. Business cannot thrive in failing economies rife with inequality,” Zobel said. “These elements are only a few examples of the way that we practice corporate stewardship. We have always been aware that Ayala, as a business, would not have succeeded through the years without the trust that Filipinos have put in us.”

Prestigious award

Such leadership has indeed allowed Ayala to continue to thrive and remain one of the most respected conglomerates in the country. And in today’s setting, this excellence in leadership is being aptly recognized with the MAP Management Man of the Year 2018 award conferred to Zobel—a personal achievement that likewise reflects the stellar feat of the company.

MAP cited Zobel for “helping steer the Ayala Group to being consistently ranked by the global investor community as among the best in the Philip- pines for management excellence, corporate governance, sustainability, and people management, and for nurturing the strategic transformation of Ayala Land by improving the commercial and residential landscape of several areas all over the country, and by being a solid proponent of providing greater access to affordable housing to help augment the country’s housing backlog.”

The group also noted Zobel’s contribution in helping establish the country’s highly successful public-private partnership, the Manila Water, and transforming it into a water infrastructure player in Southeast Asia, as well as his active participation, support and leadership in nation-building organizations, such as Centex (education), Habitat for Humanity (housing), Hero Foundation (fallen soldiers), Caritas (church), Asia Society (culture), and National Museum of the Philippines (arts).

Also cited were Zobel’s major contributions to national development, job creation and income generation through the Ayala Group’s huge investments in various industries; and to re-shaping national values through his track record of integrity, professional competence, and strong leadership.