Corporate Governance - Operation of the Management Board and the Supervisory BoardCorporate Governance - Operation of the Management Board and the Supervisory Board

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Corporate Governance - Operation of the Management Board and the Supervisory Board

Operation of the Management Board and the Supervisory Board

Composition and changes thereto in the last financial year, and activities of the Company's management and supervisory bodies and their committees

Composition of the Management Board

As at 31 December 2015, the Management Board of Budimex SA was composed of the following persons:

  • Dariusz Jacek Blocher - President of the Management Board, General Director,
  • Fernando Luis Pascual Larragoiti - Vice-President of the Management Board,
  • Cezary Mączka - Board Member, Chief HR Officer,
  • Jacek Daniewski - Board Member, Chief Legal and Organisational Officer,
  • Henryk Urbański - Board Member, Chief Real Estate Officer,
  • Marcin Węgłowski - Board Member, Chief Financial Officer.

Changes in the composition of the Management Board in 2015:

  • Andrzej Artur Czynczyk resigned from the position of Member of the Management Board as of 17 September 2015,
  • Upon the request of the President of the Management Board, the Supervisory Board, by resolution No 239 of 16 December 2015, appointed Cezary Mączka as Member of the Management Board.

As at 31 December 2015, the following persons had joint authorisations:

  • Artur Popko - joint authorisation with the other commercial representative,
  • Radosław Górski - joint authorisation with the other commercial representative.

Changes in the authorisations to represent the Company in 2015:

  • on 26 February 2015, joint authorisations to represent the Company together with a Member of the Management Board, granted to Artur Popko, Radosław Górski and Andrzej Goławski, were withdrawn,
  • on 26 February 2015, joint authorisations to represent the Company together with the other commercial representative were granted to: Artur Popko, Radosław Górski and Andrzej Goławski.
  • on 5 October 2015, the joint authorisation to represent the Company together with the other commercial representative, granted to Andrzej Goławski, was withdrawn.

During the year 2015, policies concerning appointing or recalling members of managing bodies as well as the rights of members of these bodies, including the right to take decisions on share issuance or redemption, as provided in the Articles of Association, did not change.

Composition of the Supervisory Board and its committees

As at 31 December 2015, the Supervisory Board of Budimex SA was composed of the following persons:

  1. Marek Michałowski - President of the Supervisory Board,
  2. Alejandro de la Joya Ruiz de Velasco - Vice-President of the Supervisory Board,
  3. Igor Adam Chalupec - Secretary of the Supervisory Board,
  4. Marzenna Anna Weresa - Supervisory Board Member,
  5. Ignacio Clopes Estela - Supervisory Board Member,
  6. Javier Galindo Hernandez - Supervisory Board Member,
  7. Jose Carlos Garrido-Lestache Rodriguez - Supervisory Board Member,
  8. Piotr Kamiński - Supervisory Board Member,
  9. Janusz Dedo - Supervisory Board Member.

In 2015, there were no changes to the composition of the Supervisory Board or its structure.
As at 31 December 2015, the Audit Committee was composed of the following persons:

  1. Marzenna Weresa - Chairperson,
  2. Javier Galindo Hernandez - Member,
  3. Jose Carlos Garrido - Lestache Rodriguez - Member.

The composition of the Audit Committee did not change in 2015.

With respect to the independence of an Audit Committee member, provisions of the following apply: Article 56 section 3 item 1, 3 and 5 of the Act of 7 May 2009 on Statutory Auditors and their Self-Governance, Entities Authorised to Audit Financial Statements and on Public Oversight, as well as criteria of independence from the company and entities materially related to the company, within the meaning of the Code of Best Practice for WSE Listed Companies (rule 6 Section III Best Practice for Supervisory Board Members).

The independent status of a Supervisory Board member is determined by the Company in accordance with the criteria defined in the Procedure for Integrated Management System No 05-05 relating to obtaining information from Supervisory Board members and publication thereof, based on representations filed by Board members and in accordance with Article 56 section 3 items 1, 3 and 5 of the Act of 7 May 2009 on Statutory Auditors and their Self-Governance, Entities Authorised to Audit Financial Statements and on Public Oversight.

As at 31 December 2015, the Investment Committee was composed of the following persons:

  1. Piotr Kamiński - Chairman,
  2. Alejandro de la Joya Ruiz de Velasco - Member,
  3. Javier Galindo Hernandez - Member.

The composition of the Investment Committee did not change in 2015.

As at 31 December 2015, the Remuneration Committee was composed of the following persons:

  1. Marek Michałowski - Chairman,
  2. Igor Chalupec - Member,
  3. Alejandro de la Joya Ruiz de Velasco - Member.
The composition of the Remuneration Committee did not change in 2015.

Operation of the Management Board

The Management Board operates in accordance with the provisions of the Company’s Articles of Association, Rules of Procedure of the Management Board and other applicable laws, including the Code of Commercial Companies. The Management Board is composed of one or more members. The Management Board conducts the Company affairs and formally represents the Company.

The President of the Management Board is appointed and recalled by the Supervisory Board. The President of the Management Board is, at the same time, the Company’s General Manager. The Supervisory Board, at the request of the President of the Management Board, appoints vice-presidents and other members of the Management Board for a 3-year joint term of office.

The functioning of the Management Board is managed by the President of the Management Board. The detailed method of the Management Board operations is provided in the Rules of Procedure of the Management Board, approved by the Supervisory Board.

Resolutions of the Management Board are adopted by an absolute majority of votes. In the event of an equal number of votes, the President of the Management Board has the casting vote.

Persons authorised to make representations and sign documents on behalf of the Company are:

  • President of the Management Board - sole representation
  • two Members of the Management Board acting together or one Board Member acting together with an authorised commercial representative.

Representations filed with the Company or submissions of documents are considered valid if addressed to one Board Member or commercial representative.

Operation of the Supervisory Board

The Supervisory Board operates on the basis of the Articles of Association, Rules of Procedure of the Supervisory Board and other legal regulations, including the Code of Commercial Companies. The organisation and operation of the Supervisory Board is defined in the Rules of Procedure of the Supervisory Board adopted by the Supervisory Board.
The Supervisory Board adopts resolutions provided that at least half of Board Members are present at the meeting and all its members were invited to the meeting. The Supervisory Board adopts resolutions by an absolute majority of votes. In the case of an equal number of votes, the casting vote is that of the President of the Supervisory Board. Resolutions of the Supervisory Board may be taken in writing or by means of direct communication. Resolutions of the Supervisory Board are valid and effective if all Board members were informed about the content of the draft resolution. Supervisory Board members may participate in adopting resolutions by voting in writing by proxy i.e. through another member of the Supervisory Board, in all matters listed on the agenda of the Supervisory Board meeting, except for matters that were added to the agenda in the course of the Supervisory Board meeting.

In performing its duties, the Supervisory Board is authorised to review all documents of the Company and to request reports and clarifications from the Management Board or employees of the Company; it is also authorised to review the company’s assets, books of account and documents. The Supervisory Board is also entitled to order, for its own use, appropriate expert studies regarding matters covered by its supervision and control.

The Supervisory Board supervises all aspects of the Company’s operations on a continuous basis. Particular duties of the Supervisory Board include:

  • assessment of the directors’ report on the company’s operations and of the financial statements for the preceding financial year,
  • assessment of proposals made by the Management Board concerning the distribution of profit or coverage of loss,
  • recommending to the General Meeting of Shareholders to grant discharge to members of the Management Board,
  • submission of the annual written reports on the results of the aforementioned assessment to the General Meeting of Shareholders,
  • suspension, for valid reasons, of individual or all Management Board members and delegating Supervisory Board members for a period lasting no more than 3 months to temporarily perform the duties of those Management Board members who were recalled, resigned or could not perform their duties for other reasons,
  • approval of the Rules of Procedure of the Management Board of the Company,
  • conclude contracts with the Company Management Board Members and determine the remuneration of the President and the Members of the Management Board as well as their bonus schemes, exercise the rights resulting from the employment contract towards the Management Board Members on behalf of the Company; employment contracts shall be concluded by the President on behalf of the Supervisory Board,
  • appointing a statutory auditor from the National Council of Statutory Auditors in order for the Company’s financial statements to be audited,
  • approval of the agreement between the Company’s Management Board and the underwriter to take up the Company’s shares,
  • granting approval to a Board member to his/her engagement in a competitive business or to participate in a competitive company,
  • granting approval to the exclusion or limitation by the Management Board of pre-emptive rights to newly issued shares,
  • granting approval to the method of determining the issue volume, price and to the issue of shares for an in-kind
    (non-monetary) contribution,
  • granting approval for the purchase or disposal of property, perpetual usufruct right or share in property, machines and equipment and/or disposal or acquisition of securities or other assets if the unit price of the acquisition or disposal exceeds one fifth of the Company’s share capital; if the value of the transactions referred to in this item does not exceed the amount stated above, the decision is made independently by the Management Board.

In accordance with par. 12, section 3 of the Rules of Procedure of the Supervisory Board, the Supervisory Board is authorised to establish committees or appoint teams from among its members, or delegate a Board member to such bodies. As stated above, the following three committees operate as part of the Supervisory Board: Audit Committee, Investment Committee and Remuneration Committee.

Responsibilities of the Audit Committee

Tasks of the Audit Committee include:

  • providing recommendations to the Board regarding the selection of an entity to perform the function of a statutory auditor authorised to audit the Company’s financial statements and consolidated financial statements for the previous financial year;
  • monitoring the process of preparing the Company’s financial statements and consolidated financial statements for the previous financial year; performing detailed reviews of the results of those audits at each audit stage;
  • monitoring the financial audit process;
  • monitoring the effectiveness of the internal control, internal audit and risk management systems; 
  • forwarding to the Supervisory Board conclusions and recommendations relating to the audit and assessment of the financial statements of the Company and of the consolidated financial statements for the previous year, as well as the Management Board’s proposals concerning the distribution of profit or coverage of loss;
  • forwarding to the Supervisory Board conclusions and recommendations concerning acknowledgement of the fulfilment of duties by the Chief Financial Officer,
  • monitoring the independence of the statutory auditor and the entity authorised to audit financial statements, in this case - the independence of services referred to in article 48 par. 2 of the Act of 7 May 2009 on Statutory Auditors and Their Self-Governance, Entities Authorised to Audit Financial Statements and on Public Oversight, 
  • performing other tasks commissioned by the Supervisory Board depending on the current situation at the Company,
  • submitting interim and annual reports on its activities to the Supervisory Board.

Responsibilities of the Investment Committee

The role of the Investment Committee is to provide opinions or approve decisions material for the Company from the point of view of the value of operations relating to: making investments or divestments in non-financial assets, company incorporation or dissolution, making investments or divestments or issuing financial assets, the Budimex Group company mergers, demergers or transformations, carrying out financial operations, establishing special purpose vehicles (SPVs) to perform works or to render services based on the terms and conditions other than those prevailing in the form of consortium agreement in effect at the Budimex Group, preliminary agreements and non-firm bids, development projects and material agreements with related entities.

The Investment Committee operates in accordance with the procedure approved by the Supervisory Board. The Supervisory Board is informed at its subsequent meetings about matters on which the Investment Committee was to provide opinions during the period in between the Supervisory Board’s meetings.

Responsibilities of the Remuneration Committee

The responsibilities of the Remuneration Committee comprise:

  • submitting for approval by the Supervisory Board proposals concerning remunerating the Management Board Members, in particular: fixed remuneration, performance-based remuneration, retirement scheme and severity as well as long-term incentive programs, together with recommendations concerning objectives and assessment criteria for appropriate alignment of remuneration of Management Board Members with long-term shareholder interests and the Company’s objectives defined by the Supervisory Board; providing the Supervisory Board with proposals concerning remuneration of individual Management Board Members and ensuring that the remuneration proposed is consistent with the remuneration rules adopted by the Company, and assessment of work performance of individual Board Members; providing the Supervisory Board with proposals concerning the appropriate form of employment contracts for individual Board Members; providing the Supervisory Board with proposals concerning bonus ratios, their weight for Board members based on the budget for the given year; offering assistance to the Supervisory Board in supervising the process under which the Company meets the regulations in the area of remuneration disclosure (in particular in the area of remuneration of members of the Management Board); monitoring the level and structure of remuneration of Management Board members based on independent payroll reports, market ratios, and submitting to the Supervisory Board appropriate underlying studies and conclusions; providing opinions on the appointment and removal of members of Supervisory Boards at Budimex SA subsidiaries, except for SPVs;
  • approving, at the request of the Management Board, the bonus ratio for employees of the Budimex SA head office to be used in calculation of preceding year bonus and the percentage ratio for remuneration increase in the current year;
  • preparation of the annual report on activities of the Remuneration Committee.
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