Expounding van Riel’s Orchestration of Communication: The CEO as the Great

Orchestrator of Corporate Communications

Submitted by 7704345
Msc Corporate Communications and Reputation Management
Manchester Business School, University of Manchester

There once was a man of extraordinary talent who wielded his charm through a magical musical
instrument – the Pied Piper of Hamelin borough he was called. The townsfolk sought for his help to
get rid of the infestation that has been destroying their crops. The Piper blew his pipe and gathered all
the rodents and led them to the river to drown. But he was not paid his due and the entire town
realized their mistake too late for the Pied Piper blew his pipe again and merrily led their children
away never to be seen again.

Pied pipers are communicators who could, if they were today’s CEOs, lead many organisations to
riches and formidable reputation. Or, they could also lead them to rapaciousness and ruination.

The Metaphor and the Need to Orchestrate Corporate Communication

Webster’s extended definition describes orchestra as “a band of instrumental

musicians suitable for the performance of symphonies, overtures, etc., as well as for
the accompaniment of operas, oratorios, cantatas, masses, and the like, or of vocal
and instrumental solos.” There are at least forty string instruments with a proper
complement of wind instruments. A conductor usually directs the orchestra. It is
interesting to note that the early orchestra did not have a conductor and used the
concertmaster or harpsichordist to play this role.

In this essay, the metaphor is used to position the corporate actors as the
composer (the Board, the CEO and his team of senior managers), the conductor (the
corporate communications team), the musicians (employees) and the audience
(stakeholders, publics). The company like the orchestra has a generally accepted
hierarchy, structures and sections with defined functions. An organization cannot do
without a conductor for it is he who will wield the baton, syncopate in front to give
cues and at certain times, inspire the musicians on stage (Mintzberg, 1998, p. 145).
An integrative approach is required then to harness each section’s output to create a
singular product just like the harmony that is created by the orchestra.
Organisations, indeed, are like orchestras.

The need for ‘orchestrated’ strategy stems from the fact that today’s
organizations are getting more complex as a result of globalization. Changes in
technology and production of ideas tend to be faster and these will have an impact
on how organizations harness information for its own advantage. The propensity to
orchestrate becomes stronger when the organization undergoes a strategic change.
And during that period, the organization will confront questions like ‘How will it
redefine its business position in the new business landscape?’ ‘Are traditional
customers enough to meet the bottom line?’ ‘How can the business be sustainable?’
‘How do you tell stakeholders that you are a responsible enterprise?’
 Often the answer can be found in corporate communication. From the early
feudal structures to the highly industrialized societies, man has always needed an
organized form of handling communications (Cornilessen, 2004, p.1).
Communication management is not new. The interconnectedness of the modern
world, on the other hand, desires for a more strategic approach of communicating
with a web of stakeholders. Regulatory regimes and the well-informed customer
give rise to the strategic communication imperative (Argenti, Howell and Beck,
2002). Developing an integrated, strategic approach to communications will be
critical to success. Executives are now finding it urgent to ensure that their
communications practices contribute directly to corporate strategy implementation.

Van Riel (1995, p. 5) identified three basic forms of communication that

organizations use. These are: management communication, marketing
communication and organizational communication. The first pertains to the
communication activities of senior managers with internal and external publics. The
second consists primarily of sales-oriented communications such as advertisement,
sponsorship, direct selling, etc. The third covers the area of public relations, public
affairs, investor relations, environmental communication and internal
communication. This categorization is akin to the different orchestra sections where
each section plays a different musical instrument with different roles to play cued on
different times across the symphony. The organization, like the orchestra, has to
develop a capability to produce a harmonious ensemble that keeps in tune with the
overall musical composition.

Aligning Communication with Strategy

Using Cornilessen’s framework on communication strategy, this essay forwards the

view that a good corporate strategy will also use a communication strategy. Whereas
corporate strategy provides the vision i.e. where an organization wants to go and
how it intends to get there, the communication strategy designs the appropriate set
of communication programs, functional and operational, to be directed at targeted
stakeholders so that the corporate vision can be achieved.

Fig. 1 The link between corporate strategy and communication strategy (Cornilessen, 2004, p. 101)

2

 Corporate strategy can be compared then to an enabling law while
communication strategy is manual that translates the intent into actionable
programmes. As a strategic function, corporate communications will be involved in
the decision-making process where corporate strategy is concerned. Here, the
communicator must assume the role of a communication strategist in the corporate
strategy team. In the last part of this essay, the corporate strategy and
communication strategy dynamics will be illustrated using the experience of an
energy company that actually went through a strategic change via privatization.

Corporate Communication Roles

What role do corporate communication practitioners play in strategic

decision-making? Academic research has established general types of corporate
communication practitioners and cast them into broad roles: the manager and the
technician.

Broom (1982) conceptualized four dominant theoretical roles that

communication practitioners perform. The roles are: the communication technician,
the expert prescriber, the communication facilitator, and the problem-solving
process facilitator. The technician is not part of the management team and is
concerned with preparing and producing materials to carry out the communication
programmes. The expert prescriber operates as the authority on both communication
problems and their solutions and management will most likely be passive in this
role-type situation. The communication facilitator acts as a ‘go-between’ or
‘information broker’ between the organization and its stakeholders. Finally, the
problem-solving process facilitator collaborates with other managers to define and
solve communication problems for the organization.

Dozier (1992) reworked Broom’s conceptual roles and simplified them into
two broad role categories, namely: the communication technician and the
communication manager.

Communication technician: The role creates and disseminates messages, the

tactical implementor of decisions made by others and is generally not
involved in management decision-making and strategic decisions concerning
communication strategy and programmes.

Communication manager: The role is primarily concerned with externally

oriented, long-term decisions, rather than solving short-term, technical
problems. It typically uses research to monitor the organization’s
environment and opinions of key stakeholders. And because they possess
needed intelligence gained from research, managers are more likely to
participate in the organization’s decision-making and strategic planning.

Another important view of the communication practitioner’s role is that of a

boundary spanner (Dozier and Grunig and Repper in Grunig ed., 1992). Decision-
makers require informational inputs provided by the boundary spanners or
“individuals within the organization who frequently interact with the organization’s

3

environment and gather (…) and relay information to the decision-makers…”
(Grunig ed. p.99). When communication practitioners are involved at the decision-
making table, information about relations with priority stakeholders gets factored
into the process of organizational decision-making and into strategies and actions
(Lauzen, 1995)

Orchestrating Communication During Uncertain Times: The EDC Privatisation

Experience

This essay will now attempt to illustrate the orchestration of corporate

communication as it applies to a strategic change that an actual company underwent
in 2006 to 2007 (Details in Appendix 1).

Privatisation Background

Privatizing Energy Development, a government-owned corporation in the

business of developing and production of geothermal energy in the Philippines, was
first contemplated in the mid-90s but was later shelved when the Asian Financial
Crisis struck. When market conditions became favorable again in 2006, the new CEO
revived the plan.

On December 13, 2006, launched its Initial Public Offering (IPO) in the
Philippine Stock Exchange (PSE). The IPO offered 6 billion shares or at least 40
percent of common stocks to the public where 160 institutional investors subscribed
to the international part of the offer. The IPO was only the first step in attaining full
private status. EDC remained a government entity with the 60 percent.

So much has changed since the ‘golden years’ when the national government
provided the capital outlay and guaranty that started EDC’s geothermal business in
the 70s. The Government’s fiscal position back then made it impossible for EDC to
get fresh capital infusion to bankroll its expansion projects. Securing loan from
international financial institutions was impossible because of sovereign guaranty
was stopped. On the business side, certain governmental arrangements were
creating operational incompatibility that resulted in delays in production,
notwithstanding the brain drain of technical manpower that resulted from the
austerity measures that capped government employee salaries. EDC needed to be
fully emancipated so it can begin anew. The new CEO has a vision and that will not
be realized unless the company moves into the private sector.

There was no other option but to communicate to the National Government

the urgency of privatizing EDC. Otherwise, it would go down the path of ruination
as in the case of other state-owned power companies. While EDC is still viable, it
had to be mainstreamed into the efficiency of a market-driven environment. Hence,
EDC launched its most challenging public relations campaign yet – a multi-
stakeholder communications program. The primary objective of the specialized PR
program was 100% divestment strategic sale. Specifically, the objectives were:

• To sustain energy after the IPO listing and generate greater acceptability
about EDC’s full privatization.

4

 •To communicate to the regulatory agencies and approving authorities that
EDC can maximize its growth potentials as a private company.
• To promote EDC’s financial viability to investors.
The Target Audiences

The Gatekeepers: Even after IPO, EDC was still a subsidiary of the Philippine
National Oil Company (PNOC) and as such, governmental procedures still applied.
EDC had to go through with the prescribed bidding process and secure the go-signal
of regulatory and oversight bodies. These agencies included the following:
Department of Finance (DOF), Power Sector Assets and Liabilities Management
Corporation (PSALM), Department of Energy (DOE), Joint Congressional Power
Commission (JCPC)∗, Securities and Exchange Commission (SEC) and Office of the
Government Corporate Counsel (OGCC).

The Investors: What EDC looked for was financial and technical capability. EDC was
looking for investors that possess a deeper and broader understanding of the
geothermal business, or at a least a good grasp of operating an energy business in
the country. After all, EDC is the Philippines’ premier geothermal company with
thirty solid years experience in geothermal and environmental management.
International investors were also sought since they tend to exercise price leadership
and can determine more accurately the value of companies. However, the provision
of the Philippine Constitution limiting foreign ownership of Filipino companies to
only 40 percent had to be considered.

The Employees: Before full privatization could be sold to investors, it had to be well
understood and accepted first by the employees. At that time, there were 2,560
employees with average age of 41.60 years. Average employee service was 12.53
years. By position, 49% were rank and file, 36% professional/technical, 12%
supervisors and 3% executives. A majority of the company’s employees bought
shares during the IPO, making them shareholders too. As both employee and
stockholder, they were not only one of the target audiences; they also became
individual spokespersons that will help create awareness and acceptability to their
family, friends and professional contacts.

The Media: Media played a key role in implementing the plan. EDC was willing to
submit to the bidding process with full transparency and accountability. The
campaign ensured that the media got updates and feeds so the reporters could
inform the public about campaign milestones. Energy beat reporters and columnists
were given press releases and some were invited to join the road shows and investor
briefings.


























































∗
JCPC is composed of 14 members of the Philippine Senate and the House of Representatives. It is empowered
by law to endorse the privatization plan of government-owned and controlled corporations (GOCCs) in the energy
sector. It has the power to call for a senate investigation should the transaction become inimical. Obtaining
sanctions from such bodies became stringent at that time due to issues of inefficiencies and delays in the
restructuring of the power sector.

5

 The Strategy

Key members of the 1998 privatization team were reconvened together with
the CEO’s communications team. The CEO himself was the architect of the
privatization strategy.
The communication strategy was focused on three main activities: First,
facilitate the smooth sell-down of government’s remaining 60% controlling shares in
EDC; second, attract a good mix of investors to participate in the bidding; and third,
sustain, if not increase, public acceptability of EDC’s transition to the private sector.

The key message was: EDC as a private company is a viable business

proposition. It will survive outside the ambit of government. It will, in fact, unlock
its potential and grow in a deregulated, privatized setting and will be in better
position to help the government achieve its power industry reform goals thru this
high-impact programs in renewable energy development.

A team composed of the Corporate Communications, Government Relations,

Investor Relations, Finance and Planning Group was formed to implement the three-
pronged strategy. The first was focused on obtaining the unanimous approval of
Congress and regulatory agencies; the second was focused on engaging the right
kind of investors targeting those that have businesses in energy and related sectors;
and the third was to create a favourable communication environment to mass
communicate EDC’s story investors and stekholders. The following shows the
matrix of communication tools and activities used in the communication strategy:
Table 1. Communication Strategy Matrix, EDC Entry to the Philippine Quill Multi-Audience
Category, 2007.

KEY ACTIVITIES COMMUNICATION TOOL/STRATEGY

Engaging the gatekeepers
Preparing Employees for the
Transition
Attracting investors
• Consultations with the Privatization Council and Department of
Finance
• Obtain support of the Department of Energy
• One-on-one presentations and liaison work with JCPC (to
provide updates and monitor bottlenecks that might thwart the
final leg of the transaction)
• Conference calls-cum-advocacy meetings with the Committees
on Energy of the Philippine Congress
• Creation of multi-sectoral Transformation Team HR, Office of
the President, Operations, Employee Unions)
• Meetings and forums (town hall setting)
• Use of bulletin boards and intranet, newsletters
• Corporate Governance Lecture Series
• Q&A on the EDC’s Full Privatization
• Newsletters via the Transformation Team that served as the
bridge between management and employees in implementing
organizational changes to a private setting
• Management presentations to cornerstone and institutional
Investors
• Road shows in Hong Kong, Singapore, USA and UK
• Conference calls and business briefings with select fund
managers
• Production of promotional materials: project site videos,
brochures, exhibits and power point presentations

6


Sustaining public awareness
and gaining wide support
• Q&A on the EDC’s Full Privatization
• 30s TVC, infomercials
• TV and radio public affairs program guesting
• News releases, column feeds and magazine features
• Networking (national and regional press corps, plus employees’
own network)

Analysis

The EDC experience illustrates a rich example of how the orchestration model
worked effectively together with the corporate strategy-communication strategy
dynamics. The CEO and senior management developed the corporate strategy while
the communication strategy entered the loop trough informing and translation and
feedback. A senior corporate communication person led communication loop in the
strategy. This essay goes further by incorporating the orchestration model with
Grunig’s (1992) worldview of excellent public relations favoring the two-way
symmetrical presupposition as the effective framework in discussing the case study
of EDC. Please note that the analysis is limited only to the first-hand observation and
qualitative examination of this student without the support of in-depth interviews
and focused group discussions that will either affirm or debunk such observations.
This student was an actual observer of the public relations of EDC and to some
extent, played a technician’s role in the implementation of the PR program that time.
This student had also constant interaction with the CEO by way of his function as
speechwriter in the PR Department. Suffice it to say, the observations described in
this essay establishes the starting point for further case study of EDC’s privatization
experience in relation to the orchestration model.

This initial analysis establishes the premise that in EDC’s case, a very good
orchestration of communication was necessary and that a synergistic approach to
corporate strategy to achieve the company’s transition from government to private
was successfully facilitated by the CEO and his privatization team using precisely
this orchestration model. Furthermore, the analysis espouses the normative model of
two-way symmetrical communications and the positivist worldview to illustrate
how this normative model has been applied during EDC’s most important
organizational change episodes.

Normative theory defines how things should be or how some activity should
be carried out or used to solve problems. Positive theory describes phenomena,
events or activities as they actually occur and in this case, describes how corporate
communications was actually practiced during the change process. Two-way
symmetrical model favors understanding over persuasion as the principal objective.
It favors balance and adjusts the relationship between the organization and the
public. It is worth noting that the previous privatization attempt did not succeed and
in the observed strategy, the CEO and his team opted for the two-way symmetrical
process in the second attempt. The policy environment research conducted by the
Government Relations and the stakeholder’s meeting initiated by the CEO prior to
the implementation of the strategy reflects the balanced understanding being
proposed in the symmetrical model. Following the symmetrical approach, the CEO
and his emissaries conducted a series of personalized, one-on-one presentations with

7

the gatekeepers to make them understand the privatization objectives and the
process by which the company is submitting itself into.

Moreover, EDC’s two-way symmetrical worldview, through its privatization

experience, is framed in the moving equilibrium presupposition. Grunig articulated
the moving equilibrium as “…systems that strive toward an equilibrium with other
systems, an equilibrium state that constantly moves as the environment changes.”
(Grunig, 1992, p. 44)

Firm Strategy Orchestration of Goals (Better business

(Privatisation) Communication performance as a private
company)

Fig. 2: Van Riel’s Orchestration of Communication adapted into Grunig’s Excellent

Public Relations Theory

Putting up road shows in five countries and producing audiovisual materials

and collaterals for the road shows became an enormous task from a logistical point
of view. In this aspect, the expertise of communication technicians came in. While
the senior corporate communications person was performing the communication
manager role, a group of public relations specialists carried out the nitty-gritty of the
communication activities. The Government Relations Group scheduled one-on-one
conference calls with the members of the JCPC while the Finance and Investor
Relations Group conducted investor briefings and road shows. Media relations and
reputation management were supervised by the Corporate Communications
Department. There were media feeds and column mentions via news releases,
feature stories, 30s TVCs in one business channel, and column mentions. The
executives were provided feedback and analyses filtered from the daily media
monitor. Human Resources together with Internal PR handled employee
communications. Employees were regularly updated about the goings-on of the
process. There were pockets of employee forums conducted for the Manila-based
and site-based employees. News stories of interest that were published or aired were
compiled and posted in bulletin boards for the employees’ information. The
Transformation Team was created to set up the value system of a privatizing
company. This aspect of the communication strategy echoes Barrett’s (2002)
argument that emphasizes effective employee communication as the glue that holds
an organization together and that during major change, that glue becomes even
more critical.

Perhaps the most powerful weapon that the CEO was able to wield was the
company’s reputational capital built over 30 years and promoted in corporate stories
that depicted EDC as a phenomenon in the energy industry. Its employees are
branded as the breed of new heroes called to join an organization with almost

8

nationalistic objectives back in the 1970’s at the height of the oil crisis. EDC’s
corporate story capitalizes on the fact that it was a forerunner in alternative energy
production that gave Filipinos their first commercial non-oil, indigenous energy
resource. EDC is solely responsible for making the Philippines as one the world’s
largest producer of geothermal power, next only to the United States. In this aspect,
one can see the power that a corporate story can convey to stakeholders as symbolic
realities extend to real-life metaphors (Myrsiades, 1987). The CEO was able to draw
on the rich resource that is organizational reputation and integrate it in selling the
brand to investors in particular. This aspect fits into the Hatch and Schultz (2001)
argument that corporate brands need to be managed in relation to the interplay
between vision, culture and image.

To be able to wield the baton and orchestrate the band, one must have power,
or at least be imbued with a cloak of authority. The senior person of the Corporate
Communications Department was in fact part of the dominant coalition, group of
senior managers that control the organization. Lastly, the privatization case gives
affirmation to another proposition that connects gender empowerment in the power
approach of organizational positioning of the communication function and its effect
on the two-way symmetrical model (Wetherell, 1989 in Hun, Gronig and dozier,
1992 ch. 15). EDC’s senior corporate communications officer is a woman with the
rank of a senior vice president sitting in the management committee. Her role in the
privatization team was undoubtedly that of a communications manager with high
involvement in the dominant coalition. She may not have known it at that time but
from an observer’s point of view, she exhibited the characteristics of a manager that
uses the symmetrical worldview due mostly to her field training and conflict
resolution experiences. Her authority has ably aided the CEO on his engagements
with powerful stakeholders. In this aspect, one can argue that the femininity
correlation has been demonstrated with a woman executive occupying the
managerial role and one who has appreciation of the two-way symmetrical
approach in resolving the conflicts that have risen during the privatization
campaign.

The CEO and the Orchestration of Communication

In today’s modern times, reporting to a CEO who understands, appreciates

and utilizes communication strategy to the fullest extent is a corporate
communicator’s boon. When the CEO assumes the excellent communicator role, the
entire organization will be able to harness communication strategies and tools to
achieve business objectives. Argenti (2002) subscribes to the idea of a CEO making a
strong commitment to the corporate communication function and the intricacies of
the relationship between him and the corporate communication directors. He
elaborates by saying that this can spell the difference between the success and failure
of the function and more broadly, can enhance the company’s ability to build its
reputation and get its strategic objectives implemented (Argenti, 2002, ch. 3).

9

 By using the orchestration metaphor, van Riel contextualizes the necessity of
one baton-wielder to produce a singular music created from the harmonization of
different musical instruments. There will be instances too when the CEO will
perform the role of the conductor aside from being a composer, as in the case of
EDC’s CEO. Richard Pascale, the management thinker sees the CEO as “an orchestra
conductor, directing change according to a score which all players agree upon”
(Koten 1984, p.2). He goes further to say that everyone must know the score and that
shared goals plus good communications give the CEO more information faster, and
more accurately.

The CEO of EDC during the privatization did perform the conductor’s role
and this was understandable because of his previous stints as political
communications manager. He is the younger brother of the late national hero Ninoy
Aquino whose widow became the Philippines’ first woman president. His
appointment as CEO of EDC came at a time when the company needed a visionary
leader. As a PR man himself, he was hands-on in formulating and implementing the
privatization strategy. His stint as a Board Director prepared him for the daunting
task that a CEO would do in reviving privatization. He was effective in rallying the
support of key government gatekeepers while ensuring that the transaction was
carried out in the most transparent and accountable manner possible (CEO Profile in
Appendix 2).

Wielding the conductor’s baton becomes more important in times of

significant organizational change e.g merger, divestment or privatization. This essay
illustrates the orchestration metaphor citing the privatization experience of EDC in a
third world setting. The metaphor and normative theory, which are of western
orientation, seems to fit comfortably in the analysis of excellent public relations
practice espousing a positivist two-way symmetrical model.

The EDC experience illustrated that corporate communication is not a solo

act, hence the metaphor of orchestration. The experience has also provided an actual
example of Grunig’s excellence in communication management. The case showed
that the corporate communication role was that of a strategic manager, has power in
the organization, and has a symmetrical worldview for public relations to make
organizations more effective. Most importantly, it affirms the long-held notion of the
CEO as an effective communicator. Unlike the Pied Piper of Hamelin, the CEO in
this case blew his pipe to lead the organization to a better business position.

10

References

Aggestam, M. (2006), ‘Privatization Ideology and ownership: An institutionalist

Study’, Journal of Applied Behavioral Science, Vol. 42, No. 4: 491-593.

Argenti, P.A. (2002), Corporate Communication, New York: McGraw-Hill,

Burnes, B. (2000), Managing Change: A Strategic Approach to Orgnisational

Dynamics, 3rd ed., England: Pearson Education Ltd.

Broom, G.M. (1982), ‘A comparison of sex roles in public relations’, Public Relations
Review, 8(3):17-22.

Clampitt, P., DeKoch, R. and Cashman, T. (2000), ‘A strategy for communicating

uncertainy’, Academy of Management Executive, Vol. 14, No. 4: 41-57.

Cornelissen, J. (2004), Corporate Communication: A Guide to Theory and Practice.

London: Sage Publications

Daly, G., Teague, P. and Kitchen, P. (2003), ‘Exploring the role of internal
communication during organizational change’, Corporate Communications: An
International Journal, Vol. 8, No.3: 153-162.

Dozier, D. M. and Brom, G.M. (1995), ‘Evolution of the manager role in public
relations practice’, Journal of Public Relations Research, 7:3-26, quote on p.22.

Grunig, J.E. and Grunig, L.A. (2002), Implications of the IABC Excellence Study for
PR Education’, Journal of Communication Maagement, 7 (1):34-42.

Grunig, J ed. (1992), Excellence in Public Relations and Communication

Management, Hillsdale: Lawrence Elrbaum Associates.

Hatch, M. J. and Schultz, M. (2001), ‘Are the Strategic Stars Aligned for your
corporate brand?’ Harvard Business Review, February:128-135.

Hatch, M.J. and Schultz, M. (2003), ‘Bringing the corporation into corporate
branding’, European Journal of Marketing, Vol 37 No 7/8: 1041-1064

Koten, J. (1984), ‘Corporate Communications: All together now’, Business Horizons,

Vol. 27, Issue 1: 18-20.

Lauzen, M.M. (1995), ‘Public relations manager involvment in strategic issue

diagnosis’, Public Relations Review, 21:287-304.

Meyer, K. (2002), ‘Management challenges in privatization acquisitions in transition

economies’, Journal of World Business, 32: 266-276.

Mintzberg, H. (1998), ‘Covert leadership: Notes on managing professionals’,

Harvard Business Review, November/December: 141-147.

Murdoch, A. (1998), ‘Human re-engineering’, Management Today, Mar: 66-69.

11

Myrsiades, L. (1987), ‘Corporate stories as cultural communications in the
organizational setting’, Management Communication Quarterly, Vol 1, No.1: 84-120.

Tucker, M.L, Meyer, G. and Westerman, J. (1996), ‘Organizational communication:

Development of strategic internal competitive advantage’, Journal of Business
Communications, Vol. 33, No. 1:51-69.

Wright, D.K. (1995), ‘The role of corporate public relation executives in the future of
of employee communications’. Public Relations Review, 21(3): 181-198.

van Riel, C.B.M. (1995). Principles of Corporate Communication. Prentice-Hall,

London.

12

Appendix 1: EDC’s Privatisation Campaign earned the Excellence Award in the 2008
Philippine Quill of the International Association of Business Communicators.
Title
of
Entry:
Successful
Implementa6on
of
the
EDC
Priva6za6on


Communica6on
Management,
Mul6‐Audience
Communica6on


Proponent:
Dave
Jesus
Devilles


Posi6on:
PR
Specialist


Organiza6on:
Energy
Development
Corpora6on


Program Background

On December 13, 2006, Energy Development Corporation (EDC), then a government-owned

energy company, successfully launched its Initial Public Offering (IPO) in the Philippine Stock
Exchange (PSE). The IPO offered almost 6 billion shares or at least 40% of EDC’s common stocks to
the public where 160 institutional investors subscribed to the international part of the offer. EDC’s
IPO was awarded by PSE with the first ever Bull Run of the Year Award for being the biggest and
most successful in 2006 – a feat no other government corporation has achieved since Petron.

For EDC, however, the IPO was only the first step in becoming a fully private company. At
40% public, EDC remained a government entity. Yet, the government’s fiscal condition prevented the
company’s full take-off to expand the business on a larger scale. So much has changed since the
‘golden years’ when the national government provided the capital outlay and guaranty to start EDC’s
geothermal business as it did in the 70s.

Government’s fiscal position made it impossible for EDC to get fresh capital infusion to
bankroll its expansion projects. There are at least seven new geothermal prospects to be explored and
at least five geothermal power plants to be acquired after the maturity of all the Build, Operate,
Transfer (BOT) Agreements in 2009. However, securing loans from international financial institutions
became limited because of the suspension of the sovereign guaranty. Moreover, certain
governmental arrangements were no longer compatible to the operation of the company and were
already causing delays in the field, notwithstanding the brain drain of technical manpower. EDC
needed to be fully emancipated from the old ways of running the business so it can begin
implementing its new vision of expanding the business in a sustainable manner.

There was no other option but to communicate to the National Government the urgency and
long-term benefits of privatizing EDC. Otherwise, it would go down the path of ruination as in the
case of other state-owned power companies. While EDC is still viable, it had to be mainstreamed into
the efficiency of a market-driven environment. Hence, EDC launched its most challenging PR
campaign yet – a full-blown specialized communications program to attain full privatization in the
soonest time possible.

OBJECTIVES

The primary objective of the specialized PR program was to secure the needed governmental
approval and gain wider public acceptability for the 100% divestment of the National Government
from EDC. Specifically, the objectives were:

• To sustain energy after the IPO listing and generate greater acceptability about EDC’s full
privatization.
• To communicate to the regulatory and approving agencies that EDC can maximize its growth
potentials as a private company.
• To promote EDC’s financial viability to investors.
• To model EDC’s privatization in the energy industry.

13

PROJECT PLAN AND DETAILS

The Overall Strategy

After the IPO, what happens next?

“The eagle will soar high again,” EDC President and CEO, and the privatization prime mover, Paul
A. Aquino said.

While this particular program took off from the success of the IPO campaign, the overall
strategy was focused on three main activities: One, rev up a more focused campaign to facilitate the
smooth sell-down of government’s remaining 60% controlling shares in EDC; second, attract a good
mix of investors to participate in the bidding; and three, sustain, if not increase, public acceptability
on EDC’s transition to the private sector.

The key message was: Because EDC is viable, it will survive outside the ambit of government.
EDC will, in fact, unlock its potential and grow bigger in a deregulated, privatized setting and will be
in better position to help the government achieve its power industry reform goals thru this high-
impact transition.

We sustained the positive reviews of the IPO and used the right mix of PR tools to engage the
target publics to create greater awareness and ultimately, to secure their votes of confidence for the
impending full privatization. What would the target publics most likely think and feel about selling a
government crown jewel? Who were they and what PR tool would best convey our message?

The Target Audiences

The Gatekeepers: Even after IPO, EDC was still a subsidiary of the Philippine National Oil Company
(PNOC) and as such, governmental procedures still applied. EDC had to go through with the
prescribed bidding process and secure the go-signal of regulatory and oversight bodies. These
agencies included the following: Department of Finance (DOF), Power Sector Assets and Liabilities
Management Corporation (PSALM), Department of Energy (DOE), Joint Congressional Power
Commission (JCPC)∗, Securities and Exchange Commission (SEC) and Office of the Government
Corporate Counsel (OGCC).

The Investors: Aside from the current shareholders, EDC engaged institutional investors and strategic
partners. What EDC looked for was financial and technical capability. EDC was looking for investors
that possess a deeper and broader understanding of the geothermal business, or at a least a good
grasp of operating an energy business in the country. After all, EDC is the Philippines’ premier
geothermal company with thirty solid years experience in geothermal and environmental
management. International investors were also sought since they tend to exercise price leadership
and can determine more accurately the value of companies. However, we had to consider the
provision of the Philippine Constitution limiting foreign ownership of Filipino companies to only
40%.

The Media: Media played a key role in implementing the plan. EDC was willing to submit to the
bidding process with full transparency and accountability. The campaign ensured that the media got
updates and feeds so the reporters could help us inform the general public about the relevant events


























































∗
JCPC is composed of 14 members of the Philippine Senate and the House of Representatives. It is empowered
by law to endorse the privatization plan of government-owned and controlled corporations (GOCCs) in the energy
sector. It has the power to call for a senate investigation should the transaction become inimical. Obtaining
sanctions from such bodies became stringent at that time due to issues of inefficiencies and delays in the
restructuring of the power sector.

14

 of the campaign. Energy beat reporters and columnists were given press releases and some were
invited to join the road shows and investor briefings.

The Employees: Before full privatization could be sold to investors, it had to be well understood and
accepted first by the employees. At that time, there were 2,560 employees with average age of 41.60
years. Average employee service was 12.53 years. By position, 49% were rank and file, 36%
professional/technical, 12% supervisors and 3% executives. A majority of the company’s employees
bought shares during the IPO, making them shareholders too. As both employee and stockholder,
they were not only one of the target audiences; they also became individual spokespersons who can
create awareness and acceptability to their family, friends and other professional contacts.

Resource Utilization

A team composed of the Corporate Communications and External Relations Group and
Finance and Planning Group was formed to plan and implement the program. The Corporate
Communications Department utilized its existing budget to produce videos, TV commercials, and
print ads as well as to reprint promotional materials like brochures, annual reports, briefing kits and
exhibit posters. The road shows were led by the Finance Group together with the global underwriter
and financial advisor CLSA Exchange Capital. Below is the matrix of activities and PR tools used by
the team:

KEY ACTIVITIES COMMUNICATION TOOL/STRATEGY

Engaging the Gatekeepers • Consultations with the Privatization Council and

Department of Finance

• Obtain support of the Department of Energy

• Corporate video, brochures
• One-on-one presentations and liaison work with JCPC (to
provide updates and monitor potential bottlenecks that

might thwart the final leg of the transaction)

• Conference calls-cum-advocacy meetings with the

Committees on Energy of the Philippine Congress

Keeping Employees Updated • Meetings and forums

about the Bidding Process
• Corporate Video and Music Video
• Corporate Governance Lecture Series
• Q&A on the EDC’s Full Privatization
• Newsletters via the Transformation Team that served the
bridge between Management and Employees in

implementing organizational changes compatible to a

private setting

Attracting Investors to • Management presentations to cornerstone and

Participate in the Bidding institutional Investors

• Road shows in Hong Kong, Singapore, USA and United

Kingdom

• Conference calls and business briefings with select funds

• Production of promotional materials: project site videos,
brochures, exhibits and power point presentations

• Q&A on the EDC’s Full Privatization

15

Sustaining Public Awareness • 30s TVC
• Corporate Videos
• News Releases, Column Feeds and Magazine Features
• Print Ads
• Networking (national and regional press corps, plus
employees’ own network)

PROGRAM EXECUTION

At this point, the objective was to secure the needed government approval for full divestment
while promoting the company to investors.

Obtaining approval was far more complex than it would have been for an ordinary company.
We benchmarked with the ongoing privatization of the other government companies like Transco
and National Power Corporation (NPC). We also studied the experience of sister company Petron.

During the benchmarking, we found out that EDC was unknown outside of the energy
industry. Since then, it became standard practice to introduce first the nature of EDC’s business and
what geothermal energy is all about. This provided the opportunity to inform the public that EDC
stayed the course and has, in fact, become one of the most successful government corporations in the
country despite the political and economic crises that ensued in the 80s and 90s. We used laymanized
financial figures to show that EDC is largely responsible for making the Philippines as the world’s
largest geothermal producer on a per capita basis and for operating the world’s biggest steam field.
Or that EDC has helped the country save US$ 4.5 billion from oil exports that displaced 153 billion
barrels of oil equivalent since it started operation in 1983.

Some of the gatekeepers would not be persuaded to sell one of government’s crown jewels so
to speak. It would take a series of one-on-one presentations with them to fully explain the need of the
company to acquire fresh capital at a time when current fiscal conditions would not permit so, that
the crown jewel was losing luster because of limited government resources. We made them
understand the predicament of EDC that being a governmental entity delimited the company’s
natural growth path. For us to say this to high-ranking government officials required subtlety and
diplomacy aside while appealing to their own advocacies.

Securing the gatekeepers’ approval was challenging but putting up road shows in five
countries and producing audiovisual materials and collaterals for the road shows became an
enormous task from a logistical point of view. The first round of domestic road shows was conducted
over a two-week period simultaneous with the international road shows. Then there were
management presentations organized to accommodate the pre-qualified bidders’ inquiries.

The program was made flexible in order to adapt to the nuances of the various publics. Our
Policy Advocacy Group scheduled one-on-one conference calls with the members of the JCPC while
the Finance and Investor Relations Group conducted investor briefings and road shows. Media
relations and reputation management were supervised by the Corporate Communications
Department. Pockets of activities like conference calls, one-on-one meetings, road shows, forums and
management presentations were also organized.

The audiovisual materials – including a music video of its corporate hymn – were aired
whenever applicable, and these were mostly shown in employee forums, investor briefings and road
shows. There were media feeds and column mentions via news releases, feature stories, 30s TVCs in
one business channel, and column mentions. The executives were provided feedback and analyses
filtered from the daily media monitor.

Employees were regularly updated about the goings-on of the process. There were pockets of
mini-fora/stakeholders forum conducted for the Manila-based and site-based employees. News
stories of interest that were published or aired were compiled and posted in bulletin boards for the
employees’ information. The Transformation Team was created to set up the value system of a

16

privatizing company. Internal updates were circulated through newsletters and electronically
through Lotus Notes.

RESULTS

On November 21, 2007 full privatization was achieved when the winning bid was declared at
a whopping PhP58.5 billion. According to the Department of Finance, EDC’s privatization proceeds
comprised more than half of the privatization revenue the government generated in 2007. The
overwhelming response from investors and their subsequent participation in the transaction affirmed
that the privatization communications program was effective. Contrary to notions, the whole process
was executed smoothly in only less than a year – 11 months and eight days to be exact. The EDC
campaign proved that a government transaction can also be efficient and transparent. The successful
transaction imbued a bright spot in the country’s power sector and generated positive stories about
the country’ geothermal success story.

National Government Finally Gave its Go Signal

It took at least a dozen one-on-one meetings and a series of conference calls with the various
agencies before EDC finally secured the go signal. As a matter of fact, the Chief Executive herself
mandated the Department of Finance to fast track EDC’s privatization and targeted the completion of
the transaction before the end of 2007. When the transaction was finally closed, the government
gained more than what it has bargained for – an upper for its notoriously low record in selling power
assets and another good image for the country because the transaction has attracted foreign investors
to participate in an otherwise arduous major public bidding.

Overwhelming Investors’ Participation

When the pre-bid conference was held, a record 24 big firms vied for the controlling stakes.
The interested groups represented a good mix of investors as they were comprised of three Japanese
power firms (Marubeni, Kanematsu and Sumitomo), 4 local conglomerates (First Gen, Aboitiz, Alsons
and ATN Holdings) and 17 other banks and joint ventures (ABN AMRO, Ashmore Energy, Reykjavik
Energy, San Miguel, SGV, among others). Later on, the companies formed five consortia due to the
huge capital requirement of the sale. The magnitude of the sale was quite substantial and the
investors were advised to have some backup financing. Two of the bids exceeded the floor price of
the transaction demonstrating that they were buying EDC not only for its stock value but also for its
intrinsic value. First Gen’s President and CEO Federico Lopez commented that EDC was very much
compatible with the Lopez Group’s ‘environmentalism in Philippine business’ philosophy and that
was one of the major reasons why First Gen got attracted to EDC. It was also reported by our Investor
Relations Office that foreign businesses were asking about the company’s social and environmental
performance which showed their interest in the company’s capability for sustainable growth.

Model of Privatization

EDC is now the newest addition to the 30-company stock index (phisix) and ranked No. 11 in
terms of market capitalization. The JP Morgan Stanley’s Capital Index has also included EDC in its
Asia and Far East Index.

One of the best feedbacks came from former Energy Secretary Raphael PM Lotilla who wrote
to EDC President Paul Aquino, “Because of efficient and timely execution, EDC’s process is being looked
upon as a model of other government-owned-and-controlled corporations that are currently undertaking similar
efforts. The continued and great interest of local and foreign buyers, including institutional investors, in EDC
signals a very strong confidence in the company’s performance over the years…EDC can deliver on its growth
potentials in the geothermal business.”

17

Privatization Gained Widespread Acceptability

The remaining technical manpower stayed after privatization. The employees welcomed the
new era and are now smoothly shifting to a better corporate culture. There was synergy between the
new management and the employees which explained why manpower complement remained the
same as before. Today, EDC is making inroads in its various expansion projects – setting up of a
business development office in Indonesia to join in the development of the country’s 20,000 MW
geothermal reserves, participation in the government’s sale of geothermal power plants, exploration
of seven new geothermal projects and marketing of technical expertise via consultancy services
abroad.

In quantifiable terms, the program elicited 519 positive and 594 neutral stories as opposed to
the 70 negative comments during the campaign period. Through the TVC and media feeds, the
campaign generated a PR value of Php 109 million and media value of Php 32.8 million. These
metrics gave us a gauging tool for us to know how we were reaching the general audience. Every
positive event was fed to the national and regional reporters. The regional media network established
during the campaign created greater awareness among EDC’s stakeholders in the project sites in
Leyte, Negros Island, Sorsogon, Albay, Davao and North Cotabato. The campaign to gain public
acceptability was generally manageable since no major group went out to oppose the transaction.
Even the blocs in JCPC and Senate could no longer postpone the bidding because EDC submitted to
the process with full accountability and transparency.

EDC Privatization Success Story Begets More Positive Stories for the Philippines

EDC received communiqués from various local and international media outfits informing us
that they would be featuring stories about the company. EDC’s geothermal or the Philippines’
geothermal success story was featured in CNN, Washington Post, The Independent, World Business
Report, Philippine Free Press, Business Mirror and Business World. Such stories sustained the
company’s visibility in the business circuit even after the campaign. EDC’s CEO was one of the
resource persons that the World Business Report tapped to promote the country to international
investors.

The campaign served as a catalyst so that the world will know that a Filipino company has
the capability to undertake and successfully carry out a major public transaction with full
transparency and efficiency unheard of before. Indeed, EDC broke records once again and soared
higher like an eagle.

18

Appendix 2: Paul Aquino, EDC’s Presdient and CEO during the privatisation
campaign was conferred the Communication Excellence in Organizations (CEO
EXCEL) recognition for his exemplary achievement in business communications.
This appendix profiles his achievements.





























































19



1. What
communication
program
or
activities
in
the
company/organization
did
the
CEO/nominee

implement
or
lead
in
the
preceding
12
months?
Cite
three
to
>ive
speci>ic
programs
or
activities.



 Full
Steam
Ahead.
Paul
Aquino
revived
the
thwarted
privatization
plan
of
PNOC
EDC
and
made
it

happen
in
2007.
The
scope
and
extent
of
implementing
the
privatization
involved
the
entire
gamut
of

the
Philippine
bureaucracy
and
unpredictable
capital
markets
including
the
effective
communication

of
the
program
to
its
employees.
Despite
challenges,
the
technocrat
and
political
strategist
in
him
went

full
steam
ahead
and
made
PNOC
EDC
the
model
of
privatization
in
the
country.



 One
 Notch
 Higher.
 The
 Philippines’
 premier
 geothermal
 company
 needed
 a
 new
 vision
 and
 Paul

Aquino
provided
one
–
that
of
making
PNOC
EDC
a
world
class
Filipino
enterprise.
His
mantra,
“Raise

the
 bar
 of
 excellence
 one
 notch
 higher,”
 continues
 to
 be
 the
 inspiration
 for
 the
 company’s

organizational
 transformation
 program
 that
 has
 made
 business
 operation
 more
 efOicient
 while

maintaining
a
strong
values
system.



 Balik­
 Galing
 Community
 Partnerships
 Program.
 The
 practice
 of
 good
 corporate
 citizenship

became
institutionalized
after
he
pushed
for
the
strengthening
of
the
community
relations
project
into

a
full‐blown
corporate
social
responsibility
program
called
Balik‐Biyaya.
In
2007,
it
has
evolved
into

Balik‐Galing
 and
 is
 now
 a
 community
 empowerment
 program
 expressing
 the
 company’s
 corporate

philosophy
 of
 engaging
 communities
 through
 a
 deeply
 meaningful
 social
 equity
 investment.
 The

program
encourages
a
ripple‐like
empowerment
to
create
a
cycle
of
welfare
and
wealth
in
PNOC
EDC’s

43
host
communities
with
approximately
18,000
households.



 The
EDC
Idol.
The
Company’s
most
important
resource
is
its
employee.

He
recognizes
that
work

satisfaction
 and
 motivation
 go
 beyond
 monetary
 beneOits
 and
 that
 the
 ‘ties
 that
 bind’
 should
 be

maintained
throughout
time.
EDC
Idols
as
a
recreational‐cum‐networking
program
is
a
spin‐off
of
the

name
that
he
coined
for
its
main
component
‐‐
the
EDC
Idols
talent
competition‐‐based
on
the
famous

American
 Idol
 talent
 search.
 EDC
 Idols
 is
 now
 a
 popular
 event
 among
 employees
 and
 has
 been

adopted
 to
 cover
 employee
 recreational
 events
 like
 sports
 competitions
 and
 Oitness/wellness

activities.
All
these
aim
to
restore
esprit
de
corps.



2. What
 company/organization/stakeholder
 objectives
 were
 addressed
 by
 each
 of
 the

CEO/nominee’s
communication
program/activities?



Full
Steam
Ahead
emancipated
the
company
from
the
Government
setup
that
is
no
longer
conducive
for

its
growth.
The
time
was
more
than
ripe
for
PNOC
EDC
to
grow
and
compete
outside
of
the
Government

cradle,
 as
 it
 is
 no
 longer
 an
 infant
 enterprise.
 Full
 privatization
 was
 the
 best
 solution
 to
 PNOC
 EDC’s

capital
requirements
for
business
expansion,
and
most
importantly,
to
release
it
from
the
encumbrances

of
bureaucratic
edicts
that
will
only
render
the
company
inefOicient
and
obsolete.



One
 Notch
 Higher
 rekindled
 the
 ability
 of
 the
 corporate
 organization
 to
 rise
 up
 to
 the
 demands
 of
 the

changing
 business
 environs.
 It
 re‐engineered
 the
 corporate
 structure
 to
 adapt
 to
 the
 reforms
 in
 the

industry
and
to
make
its
business
edge
razor‐sharp
again
amid
reforms
in
the
Philippine
energy
sector.

One
Notch
Higher
introduced
the
best
practices
in
the
industry
like
corporate
governance
and
corporate

social
responsibility.
These
helped
the
company
to
have
a
seamless
transition
from
a
government‐owned‐
and‐controlled
corporation
(GOCC)
to
a
private
company.
It
aimed
for
performance
change
–
that
from
a

purely
 subsidy‐dependent
 mindset
 to
 that
 of
 a
 highly
 competent
 and
 competitive
 culture
 to
 attract,
 as

well
as
retain,
the
best
employees.



Balik‐Galing
as
a
social
equity
investment
program
has
been
forging
partnerships
with
host
communities

in
 the
 four
 fronts
 where
 company
 resources
 and
 expertise
 allow:
 health,
 education,
 livelihood
 and

environment.
There
are
more
than
18,000
households
in
the
Oive
project
sites
of
the
company
and
most
of

them
live
below
the
poverty
threshold
line
(BPTL).
As
a
government
entity
then,
PNOC
EDC
was
the
de

facto
government
in
those
upland
communities
where
basic
social
services
are
wanting.




To
 an
 EDC
 employee,
 working
 in
 the
 company
 means
 being
 part
 of
 the
 breed
 of
 new
 heroes
 –
 the
 EDC

Idols
 so
 to
 speak.
 Well
 motivated
 and
 properly
 trained,
 the
 EDC
 Idol
 can
 perform
 extremely
 well
 in
 a


20

culture
 of
 corporate
 efOiciency
 and
 professional
 competence.
 However,
 it
 has
 been
 observed
 that
 the

esprit
 de
 corps
 has
 been
 declining
 in
 recent
 years.
 One
 of
 the
 main
 components
 of
 the
 internal

communication
 program
 of
 the
 OfOice
 of
 the
 President/CEO
 was
 the
 revival
 of
 employee‐oriented

activities
that
would
bring
back
the
spirit
of
camaraderie
and
teamwork
and
that
it
has
to
be
fun
while

bringing
out
unlimited/undiscovered
talents
in
sports,
singing,
dancing
and
in
other
creative
avenues.




3. What
 speciDic
 problems
 or
 issues
 were
 involved
 in
 each
 program
 or
 activity?
 State
 the

communication
strategy
adopted
to
address
these
problems
or
issues.



Program
 Problem/Issues
 Strategy

Full
Steam
Ahead

 • Bureaucratic
grind
mill
 A
multi‐audience
campaign
was
launched
to

(Privatization)
 in
securing
approvals.
 communicate
to
Government
and
investors
the

• Bottlenecks
in
the
 vision
of
PNOC
EDC
and
why
it
needed
to
privatize.


endorsement
of
the
 
‐
One‐on‐one
meetings

Joint
Congressional
 
‐
Conference
calls

Power
Commission
 
‐
Road
shows

(JCPC).
 
‐
Investors’
forums

• Potential
negative
 
‐
Legislative
consultations

publicity
brought
 
‐
Positive
news
releases

about
by
the
issues
of
 Key
message:
PNOC
EDC
will
survive
outside
the

selling
government’s
 umbrella
of
Government.


other
power
assets.



One
Notch
Higher

 • Resistance
to
change
 Launched
the
new
corporate
vision
“We
are
a
total

(Organizational
 and
attitude
of
 energy
company
and
the
world
leader
in
geothermal

Transformation)
 complacency
that
has
 energy.”

crept
into
the
 

organization
 • Encouraged
employees
to
practice
the
Ten

• Exodus
of
some
of
the
 Commandments
of
Becoming
One
Notch

best
employees
and
 Higher

executives
 


• Government
issuances
 • Institutionalized
Corporate
Governance
and

e.g.
Administrative
 Internal
Control
in
the
corporate
policy

Order
106
and
 

Executive
Order
366
 • Wrote
and
implemented
the
Code
of


 Conduct
and
Business
Ethics



• Re‐engineered
organizational
structure

using
the
ModiOied
Flat
Banded
Organization



• Information
Updates
from
the

Transformation
Team
to
make
a
smooth

transition
from
GOCC
to
private
company



• Formulated
a
succession
planning
program

and
curriculum
of
the
Managers’
Forum
and

Deputy
Managers’
Assembly



• Conducted
in‐house
trainings
as
creative

solution
to
government
belt‐tightening

order



Key
message:
PNOC
EDC
is
a
professionally
ran

GOCC
and
shall
be
the
industry
benchmark
by

nurturing
an
effective
and
reputable

organization
of
success­driven
and
value­
oriented
workforce.




Balik‐Galing

 • Acceptability
within
 Revitalized
and
re‐packaged
the
community


21

(Corporate
Social
 organization
and
 relations
project
into
a
full‐blown
CSR
program

Responsibility)
 Oinding
resources
in
 embedded
in
the
corporate
policy.

view
of
government’s
 

mandatory
Oiscal
 • Conducted
employee
forum
on
CSR


measures
 • Encouraged
volunteerism
among
employees

• DeOining
area
of
 • Revitalized
the
CSR
program
into
a
proactive

responsibility:
Too
 policy
to
focus
on
four
fronts:
health,

much,
too
many
 education,
livelihood
and
environment

stakeholders
and
 emphasizing
on
empowerment
over
dole‐
culture
of
dole‐outs
 out

• Complications
re
 • Established
social
fences
by
presenting

presence
of
 alternatives
and
turning
host
communities

Communist‐Terrorists
 into
active
partners
of
the
company

in
host
communities
 

Key
message:
We
are
in
a
unique
position
to

make
a
big
difference
while
maintaining

harmonious
and
mutually
beneDicial
relations

with
our
stakeholders.



EDC
Idols

 • Loss
of
institutional
 An
internal
communications
program
to
revive
total

(Employee
Total
 memory
 wellness
in
the
workforce.

Wellness)
 • Reviving
the
EDC
 

esprit
de
corps

 • EDC
Idols
Talent
Search


 • Fitness
and
Wellness
activities

• Innovative
Minds

• Inter‐site
sports
tournaments



Key
message:
The
next
breed
of
new
heroes?

Simply,
an
EDC
Idol.




4. Who
were
the
target
stakeholders
and
what
was
the
extent
of
their
involvement
or
interest?



Program
 Stakeholders
 Involvement/interest

Full
Steam
  Employees
 Employees’
 acceptance
 and
 full
 support
 was
 a
 major

Ahead
  Government
 consideration.

 Banks
and
Oinancing
 

institutions
 Government
holds
100%
interest
in
the
company
thru

 Institutional
Investors
and
 PNOC
Mother
Company.
Approvals
and
endorsements

capital
markets
(local
and
 from
 key
 government
 agencies:
 Privatization
 Council,

international)
 Power
 Sector
 Assets
 and
 Liabilities
 Management

Corporation
 (PSALM),
 the
 Department
 of
 Energy

(DOE)
and
the
Joint
Congressional
Power
Commission

(JCPC).



Most
 international
 institutional
 investors
 possess
 a

broader
 understanding
 of
 the
 geothermal
 sector
 in

comparison
to
domestic
retail
investors.



International
 investors
 have
 the
 ability
 to
 exercise


price
 leadership
 and
 more
 accurately
 determine
 the

value
of
PNOC
EDC.



One
 Notch
  Managers,
Deputy
 The
 global
 vision,
 and
 even
 privatization,
 had
 to
 be

Higher
 Managers,
professional,
 communicated
 Oirst
 to
 the
 employees
 being
 both
 the

and
rank
and
Oile
 promoter
and
beneOiciary
of
the
program.


employees
 

The
 transfer
 of
 expertise,
 technology
 and
 values
 are


22

 important
 in
 succession
 planning,
 hence
 the
 regular

assemblies
of
Managers
and
Deputy
Managers.




Balik‐Galing
  Host
 communities
 in
 Oive
 EDC
 operates
 in
 Oive
 provinces
 covering
 43
 partner

project
 areas
 located
 in
 communities
with
a
population
of
18,000
households.

Oive
different
provinces.

 Balik‐Galing’s
 four‐pronged
 CSR
 program
 is
 intended

to
 create
 the
 cycle
 of
 wealth
 and
 welfare
 within
 and

around
 the
 partner
 barangays.
 The
 social
 fences
 the

host
communities
will
create
can
also
help
weaken
the

mass
 base
 of
 the
 insurgent
 ideology
 in
 the

countryside.



EDC
Idols
  Employees
 Just
as
Plato
advocated
for
the
well‐rounded
man,
the

 Geothermal
 Champions,
 EDC
employee
should
excel
not
only
in
work,
but
also

retirees
and
ex‐employees

 in
play
to
achieve
total
excellence.
The
need
came
at
a

time
when
esprit
de
corps
was
waning
after
the
exodus

of
 some
 of
 the
 best
 employees.
 Retirees,
 and
 ex‐
employees
 were
 invited
 to
 join
 in
 some
 of
 the

activities.
 The
 pioneers,
 the
 so‐called
 geothermal

champions,
 were
 honored
 with
 the
 Geronimo
 Z.

Velasco
 Award
 for
 Geothermal
 Excellence.
 Their

success
stories
shall
inspire
the
new
employees.






5. In
 each
 program
 or
 activity,
 how
 did
 the
 CEO
 demonstrate
 his/her
 outstanding

communication
 strategy,
 skills
 and
 leadership?
 Describe
 the
 creativity,
 innovation,

sustainability
and
other
exceptional
attributes
of
his/her
communication
activities?



The
name
Aquino
already
rings
with
decibels
of
the
great
political
clan.
Paul,
the
younger
brother
of
the

late
 national
 hero
 Ninoy
 Aquino,
 is
 not
 only
 a
 good
 political
 strategist
 but
 a
 technocrat
 as
 well.
 His

appointment
as
CEO
of
PNOC
EDC
came
at
a
time
when
the
company
needed
a
visionary
leader.
Armed

with
 a
 clear
 understanding
 of
 the
 geothermal
 business,
 he
 convinced
 the
 primary
 stakeholders
 and

turned
them
into
advocates/partners
of
the
four
programs.
He
promised
to
change
things
employing
his

signature
“one
notch
higher”
approach.
And
he
did.




He
may
be
a
political
appointee
but
he
only
used
his
political
acumen
to
help
the
company
navigate
in
the

bumpy
 sailings
 of
 its
 privatization.
 As
 a
 PR
 man
 himself,
 he
 was
 hands‐on
 in
 formulating
 and

implementing
the
privatization
strategy.
Leading
his
team
of
Oinance
and
communications
team,
he
sold

the
 program
 lock,
 stock
 and
 barrel,
 Oirst
 to
 PNOC
 Mother,
 then
 to
 the
 Government,
 and
 Oinally
 to
 the

investors.
 His
 stint
 as
 a
 Board
 Director
 prepared
 him
 for
 the
 daunting
 task
 that
 a
 CEO
 would
 do
 in

reviving
 the
 privatization.
 He
 is
 adept
 at
 the
 workings
 of
 the
 market
 and
 he
 used
 this
 knowledge
 in

securing
 the
 best
 price
 for
 the
 company’s
 stocks.
 He
 was
 also
 effective
 in
 rallying
 the
 support
 of
 key

government
 gatekeepers
 while
 the
 transaction
 was
 being
 carried
 out
 in
 the
 most
 transparent
 and

accountable
 manner
 possible.
 He
 tapped
 the
 communication
 channels
 available
 to
 him
 thereby
 making

both
the
investing
public
and
the
government
aware
about
the
progress
of
the
transaction.





He
earned
the
support
of
the
program
stakeholders
with
a
bonhomie
that
only
an
Aquino
like
him
could

do.
 He
 devised
 interesting
 forums
 that
 steer
 away
 from
 traditional,
 boxed,
 boring
 discussions.
 The

employee
assemblies
and
managers’
forums
have
always
been
an
experiential
learning.
The
Oirst
EDC
Idol

immediately
became
a
hit
among
the
crowd
and
his
bingo
bonanzas
became
a
staple
during
anniversaries

and
 Christmas
 parties.
 Relations
 with
 employee
 unions
 were
 at
 their
 most
 amicable
 with
 9
 out
 10

Collective
Bargaining
Agreements
(CBAs)
signed
in
2007.




Yet
 this
 good‐humored
 CEO
 has
 an
 audacious
 penchant
 for
 exercising
 competence,
 hence,
 the
 stress
 on

always
raising
the
bar
of
excellence
one
notch
higher
in
all
the
projects
that
were
implemented
under
the

programs.
 He
 wrote
 the
 Ten
 Commandments
 of
 Becoming
 One
 Notch
 Higher
 and
 this
 has
 become
 the

constant
reminder
for
everyone
to
always
strive
for
excellence.
This
was
his
prelude
to
the
new
vision
of

a
 global
 PNOC
 EDC.
 This
 vision
 parlayed
 into
 initiatives
 and
 actions
 that
 are
 now
 transforming
 the

organization.



23



Already
a
 professionally
 ran
GOCC,
he
 introduced
better
practices
to
maintain
the
company’s
culture
 of

competence.
Foremost
in
his
reforms
is
the
institutionalization
of
the
corporate
governance
policy
in
the

corporate
character
of
PNOC
EDC
and
this
has
brought
the
company
into
a
higher
level
of
competence
and

a
new
awareness
of
corporate
social
responsibility.
It
was
his
policy
to
strike
balance
between
business

proOit
 and
 social
 equity
 investment.
 In
 the
 Oield,
 he
 always
 takes
 time
 to
 meet
 the
 local
 folks
 and

community
 leaders
 to
 get
 Oirst‐hand
 evaluation
 about
 the
 CSR
 projects.
 That
 way,
 he
 gets
 better

evaluation
for
the
projects
launched
under
Balik‐Galing.



He
set
the
example
at
a
time
when
government
was
trimming
down
its
huge
Oiscal
deOicit.
He
assumed
the

position
with
only
himself
to
Oill
in
the
CEO’s
ofOice,
utilizing
existing
staff
in
conducting
his
daily
tasks
and

he
 even
 voluntarily
 slashed
 his
 salary
 by
 half.
 Prudent
 Oinancial
 management
 was
 exercised
 if
 only
 to

conserve
 precious
 Oinite
 resources
 for
 the
 company’s
 more
 important
 projects.
 Paul
 Aquino
 had
 the

advantage
of
the
Oirst
mover.
And
he
banked
on
the
novelty,
simplicity
but
practicality
of
these
programs

in
communicating
them
to
the
stakeholders.




6. What
Dinancial
and
non­Dinancial
resources,
talents,
suppliers
or
support
groups
–
whether
in­
house
 or
 outsourced
 –
 were
 harnessed
 in
 implementing
 these
 communication
 activities?


How
were
these
resources
utilized
cost­effectively
by
the
CEO/nominee?



At
 that
 time,
 PNOC
 EDC
 as
 a
 government
 entity
 was
 still
 subject
 to
 government
 audit.
 Paul
 had
 to
 Oind

creative
ways
in
utilizing
the
resources
of
the
company
in
implementing
the
programs
without
sacriOicing

quality.
 
 When
 he
 became
 CEO,
 income
 rose
 steadily
 from
 Php
 2.4
 billion
 in
 2004
 to
 Php
 5.4
 billion
 in

2007,
with
the
highest
posted
at
Php
10
billion
in
2005.
Most
of
the
programs
depended
on
the
allocation

that
will
be
approved
by
the
Board.
The
move
to
revive
privatization
was
a
calculated
risk
back
then
but
it

is
 worth
 mentioning
 that
 had
 the
 company
 remained
 a
 GOCC,
 more
 than
 half
 of
 the
 targets
 of
 the

programs
 would
 not
 have
 been
 met
 because
 the
 Oiscal
 crisis
 that
 the
 government
 faced
 would
 have

prevented
 the
 disbursement
 of
 subsidies.
 Privatization
 was
 the
 best
 option
 for
 the
 company
 to
 survive

and
grow.




The
 OfOice
 of
 the
 President/CEO
 directly
 supervised
 all
 four
 programs.
 Full
 Steam
 Ahead
 required
 the

services
 of
 a
 Oinancial
 advisor/global
 underwriter.
 CLSA
 Exchange
 Capital
 won
 in
 the
 bidding
 for
 PNOC

EDC’s
IPO
transaction.
The
budget
for
the
rest
of
the
campaign
was
sourced
internally
from
the
Investor

Relations
OfOice,
Corporate
Planning,
Human
Resources
and
Corporate
Communications.
HR
consultants

for
 the
 organization
 transformation
 projects
 and
 events,
 including
 those
 that
 required
 third
 party

validation,
were
tapped.
The
workshops,
seminars,
forums
and
assemblies
were
conducted
jointly
by
the

company’s
 Human
 Resources
 Organizational
 Development
 Department
 and
 Corporate
 Communications

Department.
 The
 Balik‐Galing
 program
 has
 been
 implemented
 by
 the
 Community
 Partnerships

Department
since
last
year.
Employees
signiOied
interest
to
volunteer
in
the
CSR
projects.
The
pockets
of

EDC
Idols
events
have
been
undertaken
by
the
Corporate
Communications
Department.




7. Cite
clear
and
speciDic
measurements
or
indicators
that
showed
the
long­term
and
sustainable

results
 or
 impact
 of
 the
 nominee’s
 communication
 programs
 or
 activities
 for
 the
 company

and
the
stakeholders.



• PNOC
 EDC
 is
 now
 a
 private
 company.
 Full
 privatization
 was
 achieved
 in
 November
 21,
 2007
 with
 the

sale
of
60%
government
shares
to
FirsGen
at
Php
58.5
billion
(USD
.5
billion).
Earlier,
the
Initial
Public

Offering
fetched
Php19.2
billion
(USD500
million)
for
the
company
and
it
was
used
for
the
upgrading
of

drilling
 equipment
 and
 exploration
 of
 new
 projects.
 Some
 Oirms
 during
 the
 international
 road
 shows

have
 expressed
 interest
 in
 engaging
 the
 company
 in
 their
 respective
 energy
 projects
 either
 as

consultant
 or
 developer.
 It
 was
 also
 noted
 by
 the
 Investor
 Relations
 OfOice
 that
 recent
 inquiries
 came

from
ethical
funds,
which
have
bias
for
clean
energy.

• Today
 PNOC
 EDC
 enjoys
 greater
 Olexibility
 in
 aggressively
 pursuing
 business
 opportunities
 like
 its

current
 venture
 in
 the
 Indonesian
 geothermal
 market.
 The
 company
 can
 now
 participate
 in
 the

government’s
sale
of
its
geothermal
power
plants.
And,
it
now
has
greater
Olexibility
employing
the
best

minds,
as
it
is
no
longer
restricted
by
administrative
orders
capping
employee
salary
and
beneOits.

• The
Philippine
Stock
Exchange
has
awarded
PNOC
EDC
with
the
Bull
Run
Award
for
its
outstanding
IPO.

The
IPO
listing
has
also
won
the
Gold
Quill
Award
of
Excellence
in
the
Multi‐Audience
Communication


24

 category.
PSE
has
already
included
PNOC
EDC’s
bourse
in
the
stock
index
(Phisix)
placing
the
company

in
the
roll
of
elite
listed
blue
chip
companies
as
it
ranked
No.
11
in
terms
of
market
capitalization.
The
JP

Morgan
Stanley’s
Capital
Index
has
also
included
PNOC
EDC
in
its
Asia
and
Far
East
Index.


• PNOC
 EDC
 has
 been
 included
 in
 the
 Institute
 of
 Corporate
 Directors’
 2007
 Top
 20
 Corporate

Governance
Scorecards
for
publicly
listed
companies.


• World
Bank
awarded
Clean
Development
Mechanism
(CDM)
contracts
to
PNOC
EDC’s
Northern
Negros

and
 Nasulo
 Geothermal
 Projects.
 PNOC
 EDC
 is
 now
 signatory
 to
 two
 Emission
 Reductions
 Purchase

Agreements
(ERPA)
with
the
World
Bank.

This
will
reduce
greenhouse
gas
emissions
by
displacing
the

equivalent
 generation
 of
 a
 diesel‐Oired
 power
 plant.
 With
 the
 current
 ERPA
 signed,
 all
 certiOied
 the

Netherlands
Clean
Development
Mechanism
Facility
(NCDMF)
with
the
World
Bank
acting
as
its
trustee

would
purchase
emission
reductions
generated
by
the
project.
The
ERPA
has
a
contract
value
of
about

€7.2
million
for
the
guaranteed
purchase
of
a
minimum
of
929,000
tons
of
carbon
dioxide
from
NNGP

between
2007
and
2012.



• In
Leyte,
over
700
MW
of
BOT
geothermal
power
plants
have
been
transferred
smoothly
and
are
now

operating
 with
 seamless
 efOiciency.
 In
 Mindanao,
 BOT
 contractor
 Marubeni
 and
 PNOC
 EDC
 signed
 an

Energy
Conversion
Agreement
Extension
for
the
Mindanao
I
and
II
power
plants.
The
BOT
plants
will
be

transferred
to
the
Company
in
2009.



• Balik‐Galing
 Results:
 Establishment
 of
 PNOC
 EDC’s
 award‐winning
 Schools
 for
 Excellence
 in
 Leyte

(DepEd
citation,
Phillipine
Quill
Award
of
Merit
and
Anvil
Award
of
Merit);
815
high
school
students
in

marginalized
 communities
 have
 Oinished
 secondary
 education
 as
 scholars;
 organized
 122

farmers’/community
associations
with
644
small‐scale
contracts
amounting
to
Php54
million
and
Php

207
 million
 (USD5
 million)
 livelihood
 funds
 to
 date;
 and
 the
 resulting
 publicity,
 testimonials,
 and
 the

growing
 pool
 of
 “mentored
 mentors”
 speaking
 successfully
 communicated
 the
 relevance
 and
 value
 of

Balik‐Galing.



• An
appreciation
of
geothermal
energy
and
its
role
in
the
Philippine
economy
has
been
cultivated
among

the
local
government
ofOicials
of
host
communities
in
5
geothermal
production
Oields.




• The
enterprise‐wide
survey
conducted
in
October
showed
that
there
is
a
highly
remarkable
perception

that
 PNOC
 EDC
 is
 the
 industry
 leader
 and
 that
 it
 is
 headed
 for
 better
 times
 in
 the
 event
 of
 full

privatization.


• The
 new
 performance
 rating
 system,
 which
 seeks
 to
 recruit
 and
 retain
 the
 best
 employees,
 has
 been

implemented.

• Institutionalized
 corporate
 governance
 through
 the
 adoption
 of
 the
 Ten
 Commandments
 of
 Becoming

One
Notch
Higher
and
the
Code
of
Conduct
and
Business
Ethics.

• More
than
600
employees
or
20,832
man‐hours
of
volunteer
service
have
volunteered
in
the
company’s

various
 CSR
 projects.
 They
 served
 as
 resource
 persons
 in
 our
 education
 program,
 counselors
 for
 our

youth
 projects,
 accountants
 for
 our
 livelihood
 endeavors,
 rescuers
 in
 times
 of
 natural
 disasters,
 and

rendered
whatever
assistance
they
could
contribute
to
our
various
CSR
projects.


25