Statement of compliance with corporate governance standards in 2020
In 2020, PGNiG complied with the set of corporate governance standards laid down in the ‘Best Practice for GPW Listed Companies 2016’ (the “Code of Best Practice”), adopted by the WSE Supervisory Board in its Resolution No. 26/1413/2015 of October 13th 2015.
The amended text of the Code is available on the Warsaw Stock Exchange’s corporate governance website at www.gpw.pl/dobre-praktyki and on the Issuer’s website at www.pgnig.pl/pgnig/lad-korporacyjny/dobre-praktyki
In accordance with the Code of Best Practice, PGNiG:
- ensures proper communication with investors and analysts by pursuing a transparent and effective information policy. To this end, it offers easy and equal access to information by using various communication tools – in this respect, the company does not comply with principle I.Z.1.15 only;
- is managed by the management board, whose members act in the interest of PGNiG and are responsible for its activities. It is the management board’s responsibility to lead the company, to be involved in setting and achieving its strategic goals, and to ensure that the Company is efficient and safe;
- is supervised by an effective and competent supervisory board. Members of the supervisory board act in the interest of PGNiG and are guided in their conduct by the independence of their opinions and judgments. In particular, the supervisory board gives its opinion on the company’s strategy and verifies the work of the management board with respect to achieving the set strategic objectives, and monitors the company’s results; – in this area, the Company departs only from principle II.Z.7;
- maintains effective internal control, risk management and compliance systems, as well as an effective internal audit function appropriate to the size of the company and the type and scale of its operations;
- encourages shareholder engagement with the company. The general meeting respects the rights of shareholders and seeks to adopt resolutions without infringing on the legitimate interests of particular groups of shareholders – in this respect, the company does not comply with recommendation IV.R.2 only;
- has clear procedures in place to prevent conflicts of interest and entering into transactions with related parties where a conflict of interest may arise. The procedures provide for ways to identify, reveal and manage such situations;
- has a remuneration policy in place to determine the form, structure, and method of determining the remuneration of members of the company’s governing bodies and key managers – in this respect, the company does not comply with recommendation IV.R.4 only.
Since the application of the Best Practices at the organisation, PGNiG has gradually reduced the scope of non-compliance with the detailed rules laid down in the document. In 2016, the Company did not apply four principles and two recommendations. In 2020, the Company did not comply with two principles and two recommendations of the Code of Best Practice. Reasons for the non-compliance are presented below.
Reasons for non-compliance with the principles and recommendations of the Code of Best Practice
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Disclosure policy and I.Z.1.15 |
Content of the principle: A company should operate a corporate website and publish on it, in a legible form and in a separate section, in addition to information required under the legislation: information about the company’s diversity policy applicable to the company’s governing bodies and key managers; the description should cover the following elements of the diversity policy: gender, education, age, professional experience, and specify the goals of the diversity policy and its implementation in the reporting period; where the company has not drafted and implemented a diversity policy, it should publish the explanation of its decision on its website.
Reason for non-compliance: The key criteria taken into account in the process of recruitment and selection of candidates to positions in the Company’s key governing bodies are mainly professional experience and education. The Company has not developed a diversity policy for its key managers. |
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Management and Supervisory Board
II.Z.7 |
Content of the principle: Annex I to the Commission Recommendation referred to in principle II.Z.4 applies to the tasks and the operation of the committees of the supervisory board. Where the functions of the audit committee are performed by the supervisory board, the foregoing should apply accordingly.
Reason for non-compliance: An Audit Committee operates as a standing committee of the Supervisory Board. Pursuant to the Best Practice for WSE Listed Companies, the Issuer should apply the rules laid down in Annex I to Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board. The Issuer has implemented all the requirements to ensure that the Audit Committee participates in the oversight of the Issuer’s activities except:
Given the way in which the Audit Committee currently operates, the Issuer does not consider it necessary to introduce very detailed regulations specifying the operation of the Committee, including the implementation of the recommendation specified in section 4.3.2. Annex I to the European Commission Recommendation The Issuer will take appropriate steps in the future, if justified by the actual manner of operation of the Audit Committee |
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General Meeting and shareholder relations IV.R.2 |
Content of the recommendation: If justified by the structure of shareholders or expectations of shareholders notified to the company, and if the company is in a position to provide the technical infrastructure necessary for a general meeting to proceed efficiently using electronic communication means, the company should enable its shareholders to participate in a general meeting using such means, in particular through:
Reason for non-compliance: The Company decided not to apply the recommendation as the current shareholding structure and the high shareholder representation at the General Meeting do not indicate any need to enable its shareholders to participate in the General Meeting using electronic means of communication. The Company does not rule out introducing such a possibility in the future. |
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Remuneration
VI.R.4. |
Content of the recommendation: The remuneration levels of members of the management board and the supervisory board and key managers should be sufficient to attract, retain and motivate persons with skills necessary for proper management and supervision of the company. Remuneration should be adequate to the scope of tasks delegated to individuals, taking into account additional functions, for instance on supervisory board committees.
Reason for non-compliance: The Company follows recommendation VI.R.4 on the remuneration levels of the Management Board members and key managers. The recommendation cannot be implemented by the Company with respect to members of its Supervisory Board, as their remuneration is regulated by generally applicable laws, namely the Act on Rules for Remunerating Persons Managing Certain Companies of June 9th 2016 (Dz.U. of 2017, item 2190). |