Empresas Copec Corporate Governance seeks to ensure that management, investment and productive action practices consider economic, social and environmental aspects, and that these are translated into contributions that go beyond direct economic benefit and what is established by legal regulations. Among its most important principles are the promotion of transparent, efficient markets consistent with the rule of law; proper allocation and monitoring of responsibilities among the different authorities; protection of shareholders’ rights, in order to facilitate their exercise and ensure fair treatment; continued promotion of strategic advice; and constant concern for ensuring that management is effectively monitored by the Board of Directors, and the latter represents the interests of all shareholders.
It is worth mentioning that these principles are based on those defined by the Organization for Economic Cooperation and Development (OECD). Each corporate principle is translated into a way of doing business where key aspects include a permanet concern to create value in a sustainable manner and carry out a reflective and informed decision-making process, with a clear long-term view and committed to social, human and economic development.
Empresas Copec Corporate Governance structure is basically made up of the following estates:
Board of Directors
The Board of Directors consists of nine members, who were elected, for a three-year term, at the Ordinary General Shareholders’ Meeting held on April 25, 2018. It should be mentioned that most of them were proposed by the controlling shareholder. Directors meet monthly to define and assess the Company’s general strategy; review, approve and monitor key financial decisions, such as dividend policy and capital structure; control management of the company’s operations; analyze large investment projects, transactions and asset sales; ensure effective and efficient risk management; guarantee representativeness of the financial statements; ensure compliance with law and self-regulation rules; monitor the relationship with key market agents; keep shareholders permanently informed; select the CEO and review his performance, having powers to remove him and supervise his replacement; and advise on the selection, evaluation, development and compensation of senior executives in the Company.
The members of the Board of Directors receive a compensation for performing their duties, which is approved annually at the Ordinary Shareholders’ Meeting, in accordance with the provisions of article 33 of Law No. 18,046. For 2018, monthly compensation was 300 UF for the Directors, 600 UF for the Vice Chairman and 900 UF for the Chairman.
Its members are: Roberto Angelini Rossi (Chairman), Jorge Andueza Fouque (Vice Chairman), Manuel Bezanilla Urrutia, Andrés Bianchi Larre, Gabriel Bitrán Dicowsky (Independent Director), Juan Edgardo Goldenberg Peñafiel, Arnaldo Gorziglia Balbi, Andrés Lehuedé Bromley and Francisco León Délano. It is worth mentioning that the Chairman and Vice Chairman were appointed at the Board Meeting held on April 26, 2018.
The Directors’ Committee consists of three members, as provided for in article 50 bis of Law No. 18,046, who are elected among the members of the Board of Directors, and is chaired by the Independent Director. The Committee is responsible for analyzing strategic issues that allow management and investment decisions of the Company to be carried out while safeguarding the interests of all shareholders; proposing to the Board the names of the external auditors and private risk rating agencies, for them to be suggested and approved at the respective Ordinary Shareholders’ Meeting; and periodically reviewing the reports submitted by external auditors, the Company’s financial statements, risk management reports, transactions with related companies, remuneration policies and compensation plans for managers, senior executives and workers.
The remunerations and the expenditure budget for its operation are approved, once a year, at the Ordinary Shareholders’ Meeting, in accordance with the provisions of article 50 bis of Law No. 18,046. For 2018, monthly remuneration was 100 UF for each of the members and the total budget reached 5,000 UF. Its members were appointed at the Board Session held on April 26, 2018 and are: Andrés Bianchi Larre, Gabriel Bitrán Dicowsky (Chairman) and Juan Edgardo Goldenberg Peñafiel.
The Ethics Committee consists of three members, who are elected by the Board, in order to provide advice on ethics issues; define and promote the values and behaviors promoted in the Code of Ethics; propose to the Board the updates and amendments to said Code; and support the Crime Prevention Officer in his different enforcement activities, mainly in the process of identifying and analyzing complaints related to the Prevention Model, the determination of investigations and the potential application of penalties in this regard.
Its members are: Juan Edgardo Goldenberg Peñafiel, José Tomás Guzmán Rencoret and Eduardo Navarro Beltrán. It is worth mentioning that they were ratified at the Board
Meeting of November 24th, 2011.
Information Security Committee
The Information Security Committee consists of three members, who are chosen by the CEO to implement the policies, rules and procedures established in the Information Security Model, and ensure compliance.
Its members are: Pamela Harris Honorato, Rodrigo Huidobro Alvarado and Fernando Marcone García-Huidobro. The latter holds the position of Information Security Officer.
Crime Prevention Officer
The Prevention Officer is appointed by the Company’s Board of Directors, for a 3-year term, to implement and monitor the proper operation of the Crime Prevention Model.
This Model was certified again in 2018, and it allows promoting prevention of those crimes under Law No. 20,393 and other conducts contained in the laws, rules and regulations of oversight agencies, and in the policies established by the Company.
In addition to this, Empresas Copec has a confidential and anonymous whistleblowing channel, where anyone with information about an act or event constituting a breach of Law No. 20,393 or that deviate from the principles of the Code of Ethics, can report it directly to the Company’s highest level.
The main Stakeholders of the Company include investors and financial analysts, civil society, regulators, media and government institutions. They were identified through the AA1000 Stakeholder Engagement Standard methodology, which considers the level of Influence, Dependence and Tension.
Empresas Copec has a series of procedures, instruments and channels that minimize information asymmetries; facilitate adequate functioning of the capital market; align the interests of the administration with those of the shareholders, workers and the environment; promote informed participation of all shareholders in the Shareholders’ Meetings, ensuring their right to speak and vote; ensure that management and investment decisions take into account the interests of minority shareholders; and periodically submit transparent, truthful and representative information to all its stakeholders.
a) Investor Relations area
The Investor Relations area is responsible for serving and guiding investors and analysts on market behavior and business operation; periodically submit results; issue statements; and participate in national and international conferences. This area consists of three members: Cristián Palacios González (Director of Finance and Investor Relations), Juan Hurtado and Camilo Milic, who are permanently available to attend inquiries from investors.
b) Corporate and investor websites
The corporate website and the website for investors provides key, up-to-date information and grant access to documents such as the Company’s bylaws, minutes of Shareholders’ Meetings, financial statements, annual reports, sustainability reports, earnings reports, news, list of analysts that cover the Company, Manual for Handling Information of Interest to the Market, Corporate Governance Practices and Procedures, Code of Ethics, Community Contributions Policy, Sustainability Policy, Risk Management Policy, Crime Prevention Policy, General Policy on Antitrust, General Policy on Information Security, among others.
c) Corporate Magazine
The Company publishes quarterly an institutional magazine aimed at providing information on the different initiatives developed by Empresas Copec and its affiliates, investments and articles of general interest.
Empresas Copec has a series of corporate policies to ensure effective and efficient management, and guarantee law enforcement and self-regulation rules. They include:
a) Manual for Handling Information of Interest to the Market
It establishes the provisions regarding the use and/or disclosure of insider information, being mandatory for Directors, CEO, Managers, Senior Executives, employees and advisors with access to it, and external auditors of the Company.
b) Risk Management Policy
It establishes the systematic identification of internal or external events that may pose risks for the achievement of business objectives, as well as their assessment, mitigation and monitoring.
c) Policy on Information Security
It sets general criteria and guidelines on Information Security management, and guides the actions adopted in this area so that they are consistent with the business objectives.
d) Community Contributions Policy
It defines the guidelines so that the decisions taken regarding contributions benefit the country and the communities in which the Company operates.
e) Policy on Antitrust
It protects and strengthens compliance with the principles and rules on antitrust, which must be carefully observed and protected by all members of the company.
f) Sustainability Policy
It sets the principles, directives and general guidelines to ensure that the Company’s activities are carried out under the best sustainability standards.
g) Auditing Policy
It establishes that the auditor, the responsible partner or the auditing company rotate at least once every five years, in order to ensure full independence of this process and guarantee transparency of financial information.
h) Corporate Governance Procedures
It establishes practices and procedures that ensure adequate and efficient functioning of the Company’s Board of Directors. They include guidelines for the application and induction process for new Directors; mechanisms for analysis, detection and assessment of the adequacy, timeliness, importance and ease of understanding of the various disclosures that the Company makes to the market; the process of hiring consultants to the Board; CEO and/or Senior Executives replacement procedure; and the continuous training process for Directors, which includes updating on best corporate governance practices, inclusion issues, diversity and sustainability reports, risk management, rulings, fines, and conflicts of interest.
It is worth noting that during 2018, the members of the Board of Directors attended the following training sessions:
• The Commission for the Financial Market: implications and prospects for corporate governance.
• The role of Compliance and its role in supporting the Board of Directors and senior management.
• Challenges and treatment of conflicts of interest. Risks in the performance of the Board of Directors and senior management.
• Update on the tax environment. In addition, they received a Compendium on Corporate Governance that includes key literature about Trends in Sustainability; Domestic Case Law; Latest Trends in Corporate Governance; and Risk Management in Organizations; prepared by the Corporate Governance Center of the Pontificia Universidad Católica.