Corporate Governance Code

CORPORATE GOVERNANCE CODE
OF
SOCIETATEA ENERGETICĂ ELECTRICA S.A.
 

 

Full version of the code can be accessed here: Corporate Governance Code – Full – updated on 27 April 2017

 

TABLE OF CONTENTS
1. Preamble
2. Governing Pillars
3. Corporate Bodies
3.1 General meeting of shareholders
3.2 Board of Directors
3.3 Committees of the Board of Directors
3.4 Managers
4. Nomination and Remuneration Policies
5. Shareholder Relations
6. Transparency, Reporting, internal Control and Risk Management
6.1 Reporting
6.2 Internal control
6.3 Risk Management
7. Insider Dealing and Market Manipulation
8. Conflict of Interests
9. Whistle Blower
10. Competition Compliance
11. Social Responsibility
12. Employee Loyalty and Retention
13. Relations with Suppliers and Other Business Partners

 

Schedules
Schedule 1 Articles of Association
Schedule 2 Charter of the Board of Directors
Schedule 3 Charter of the Nomination and Remuneration Committee
Schedule 4 Charter of the Audit Committee
Schedule 5 Charter of the Strategy and Corporate Governance Committee
Schedule 6 Insider Dealing and Market Manipulation Guidelines
Schedule 7 Code of Ethics and Professional Conduct
Schedule 8 Internal Control Principles
Schedule 9 Risk Management Principles

 

1. PREAMBLE

Societatea Energetică Electrica S.A. (Electrica) is the holding-company of Electrica group, which is the leading distributor and supplier of electricity in Romania.
Starting with 4 July 2014, the shares issued by Electrica are traded on the Bucharest Stock Exchange (the BSE) and the global depositary receipts (GDRs) issued by The Bank of New York Mellon (BNYM) having Electrica’s shares as underlying security, are traded on the London Stock Exchange (the LSE).
Electrica adheres to and applies wilfully the provisions of the Corporate Governance Code issued by the BSE as may be amended or replaced from time to time.
This code of corporate governance (the Code) embeds Electrica’s general principles and conduct rules which set forth and regulate the corporate values, the responsibilities, obligations and business conduct of the company.
The Code is also a guide for the management and the employees of Electrica and other stakeholders on the business conduct and governance matters.
The Schedules form integral part of this Code.

 

2. GOVERNING PILLARS

Electrica’s governance is based on the following pillars:

  1. flexible, efficient and effective management;
  2. responsibility and accountability;
  3. vision and strategy;
  4. delivering growth in shareholder value over the longer term.

3. CORPORATE BODIES

The corporate bodies of Electrica are structured / organized as follows:

  1. the general meeting of shareholders (the GMS), which is the highest decision-making forum of the company,
  2. the board of directors (the Board of Directors); and
  3. the general manager.

3.1 General meeting of shareholders
The GMS is the main corporate governance body of Electrica, deciding on the items as outlined in the Articles of Association.
The convening, functioning, voting as well as other provisions regarding the GMS are detailed in Electrica’s Articles of Association attached as Schedule 1 (Articles of Association).

 

3.2 Board of Directors
The Board of Directors is entrusted with fulfilling all the necessary and useful acts for performing Electrica’s business object (save for the ones assigned to the GMS), as well as for supervising the managers’ activity.
The composition, organisation, duties and responsibilities of the Board of Directors are set out in Electrica’s Articles of Association attached as Schedule 1 (Articles of Association) and the Charter of the Board of Directors attached as Schedule 2 (Charter of the Board of Directors).

 

3.3 Committees of the Board of Directors
In order to increase the effectiveness of its work, the Board of Directors has established the following committees:

  1. Nomination and Remuneration Committee;
  2. Audit Committee; and
  3. Strategy and Corporate Governance Committee.

The organisation, duties and resp onsibilities of each committee are laid down in Electrica’s Articles of Association attached as Schedule 1 (Articles of Association), respectively in the charters of each committee attached as Schedule 3 (Charter of the Nomination and Remuneration Committee), Schedule 4 (Charter of the Audit Committee) and Schedule 5 (Charter of the Strategy and Corporate Governance Committee).

 

3.4 Managers
The Board of Directors delegates Electrica’s management to one or more managers, appointing one of them general manager.
The duties and responsibilities of the manager are set out in Electrica’s Articles of Association attached as Schedule 1 (Articles of Association).

 

4. NOMINATION AND REMUNERATION POLICIES

Electrica shall establish and implement a nomination and remuneration policy in line with best practices for the nomination and remuneration of its directors, managers and, as the case may be, other members of its personnel.

 

5. SHAREHOLDER RELATIONS

All the owners of financial instruments of the same type and class issued by Electrica are entitled to equal treatment. With a view towards an effective, active and transparent communication with its shareholders, Electrica shall set up an investor relations department within Electrica and shall set up processes to ensure effective and transparent communication with the investors with the observance of its legal obligations.

 

6. TRANSPARENCY, REPORTING, INTERNAL CONTROL AND RISK MANAGEMENT

6.1 Reporting
As a listed company, Electrica must comply with certain specific reporting and transparency rules.
Electrica prepares and publishes periodical and continuous information on all the important events, including the company’s financial situation, performance, assets and management.
Electrica shall make available to investors the list of its transparency and reporting obligations.

 

6.2 Internal control
For the purpose of maintaining sound internal control systems Electrica shall adopt and implement an internal control policy in accordance with best practices.
[The policy shall be based on the principles laid down in Schedule 8 (Internal Control Principles).]

 

6.3 Risk Management
Electrica shall implement a risk management policy in order to determine the nature and extent of the principal risks it can take in achieving its strategic objectives.
[The policy shall be based on the principles laid down in Schedule 9 (Risk Management Principles).]

 

7. INSIDER DEALING AND MARKET MANIPULATION

Electrica shall implement an insider dealing and market manipulation policy to prevent its personnel and investors from, and keep them informed on, the restrictions and sanctions applicable to insider dealing or market manipulation relating to its securities.
[The policy shall be based on the guidelines laid down in Schedule 6 (Insider Dealing and Market Manipulation Guidelines) and shall be updated regularly to be in line with the applicable legislatio n.]

 

8. CONFLICT OF INTERESTS

Electrica has adopted conflict of interest principles to avoid harmful acts against Electrica’s interests.
The principles are set out in Electrica’s Code of Ethics and Professional Conduct attached as Schedule 7 (Code of Ethics and Professional Conduct).

 

9. WHISTLE BLOWER

Electrica shall create and implement a whistle blower policy.
The policy shall be based on the principles laid down in in Electrica’s Code of Ethics and Professional Conduct attached as Schedule 7 (Code of Ethics and Professional Conduct).

 

10. COMPETITION COMPLIANCE

Electrica shall adopt a competition compliance policy so that its management and personnel are fully aware of the rules applicable in a free competition environment as well as the potential competition risks.
The policy shall be based on the principles laid down in Electrica’s Code of Ethics and Professional Conduct attached as Schedule 7 (Code of Ethics and Professional Conduct).

 

11. SOCIAL RESPONSIBILITY

Electrica shall carry out its activity as a responsible player on the energy market, considering social involvement as part of its strategy. Electrica aims to achieve economic success in an ethical manner, with respect for its employees, community and environment as further established in Electrica’s Code of Ethics and Professional Conduct attached as Schedule 7 (Code of Ethics and Professional Conduct).

 

12. EMPLOYEE LOYALTY AND RETENTION

Electrica shall implement a human resources policy to foster employee loyalty, communication and retention.
The policy will be based on key principles set out in Electrica’s Code of Ethics and Professional Conduct attached as Schedule 7 (Code of Ethics and Professional Conduct).

 

13. RELATIONS WITH SUPPLIERS AND OTHER BUSINESS PARTNERS

Electrica has implemented sound ethics and principles in line with best practices to ensure integrity of its business relations as laid down in Electrica’s Code of Ethics and Professional Conduct attached as Schedule 7 (Code of Ethics and Professional Conduct).