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GOOD GOVERNANCE PRACTICES

General principles of good governance in the Viscofan Group 

Viscofan considers that good corporate governance is a key factor for generating value, improving economic efficiency, and bolstering the trust of its shareholders and other stakeholders, thanks to the appropriate segregation of functions, duties, and responsibilities, among all the Company’s governing and administrative bodies.

To this end, Viscofan has an unwavering commitment to good corporate governance, understood as the code of ethics of the governing bodies of companies. Its main purpose is to provide a high level of trust to make its business goals and structure compatible with the protection of shareholders’ and other stakeholders’ interests.

Viscofan’s commitment to corporate governance and its ongoing improvement has been a constant feature that has driven to include corporate governance principles and the principal recommendations of such principles, regardless of their scope of application at any given time. Viscofan has progressively strengthened its structure to ensure monitoring of the evolution of the principles of good corporate governance, in Spain and worldwide, and a continuous analysis of such evolution, adapting them to the circumstances of society, to reach the best level of compliance. 

GIVEN THAT VISCOFAN’S ACTIONS ARE GLOBAL, INTERNATIONAL GOOD GOVERNANCE PRINCIPLES ARE MONITORED AND ANALYSED TO FOSTER THEIR INCORPORATION WHEN THEY CAN CONTRIBUTE TO THE DEVELOPMENT OF SOCIETY AND ITS BUSINESS, WITH BETTER GUARANTEES FOR ITS SHAREHOLDERS.

Governing and supervisory bodies

Viscofan has the following internal bodies that it considers necessary to ensure that everything functions in line with good governance recommendations:

Shareholders and the General Meeting

The General Meeting of Shareholders is the supreme governing body of the Company in which shareholders decide by a majority vote on the affairs within the scope of their authority. The General Meeting of Shareholders is one of the most important moments of corporate life and will shaping. Viscofan has established the principle of “one share, one vote”, which promotes equality among all of the company’s shareholders.

There is only one class of shares, giving the same rights and obligations to all of the Company’s shareholders. There are no restrictions to voting and no limit to the number of votes that can be cast by one single shareholder. 

Over recent years, Viscofan has taken a number of steps to facilitate transparency, fluid communications and shareholder involvement. A particularly noteworthy initiative is a bonus for attendance payable to the shares present or represented at the General Meeting of Shareholders that have duly evidenced their attendance or representation thereat, which is recorded in the Policy to encourage shareholders to take part in the General Meeting of Shareholders approved by the Board of Directors.

In 2017, a proposal was submitted again for a bonus per share of €0.01. For the same purpose, Viscofan also grants shareholders the option of remote voting or, where appropriate, of granting proxies electronically, including such delegation, where appropriate, voting instructions. 

Likewise, Viscofan published on its website an attendance, proxy appointment or remote voting card to make it easier for shareholders to exercise their rights through its use and a questionnaire to respond to the most commonly asked questions, formal and tangible, directed by its shareholders, depository institutions and other intermediaries on the development of the General Meeting and other items included in the agenda, and it continues to promote continuous dialogue with shareholders, their representatives and advisors through the Investor Relations Department and the Shareholder Desk to ensure access to information that is necessary for them to exercise their rights and take appropriate decisions.

As a result of these measures, at the General Meeting held on April 27, 2017, 79.12% of the company’s share capital participated, 80.08% in 2016 and 73.06% in 2015, maintaining the high attendance percentage in the General Meetings of the last 5 years, higher than 73% and above the average for listed companies, which is especially significant taking into account the company’s high free-float.

Viscofan publishes on its website information on its annual reports, results and strategic programmes; corporate governance structure, with detailed information of its members. This includes the director class to which they belong, in the case of nominee directors indicating the shareholder they represent, personal and biographical profile, Directorships held in other companies, date of appointment and number of shares or stakes in the Company, the composition and positions held in Board’s committees; Company’s internal rules, including codes and policies drawn up voluntarily; information on the General Meetings; and any news, modifications or important events that may occur, both on the Group’s activities and on its corporate governance and structure.

As from the notice of the General Meeting of Shareholders, Viscofan includes a link on its website with direct access to all the information related to the General Meeting, including electronic means for the delegation of votes and remote vote, and the card that can be used to exercise such rights, along with a list of questions received on the General Meeting and answer to them.

Likewise, the company places an online forum which aims to facilitate communication among shareholders with reference to the General Meeting, in which they can publish:

  • Any supplementary proposals to the agenda announced in the notice of the General Meeting.
  • Requests of support for such proposals.
  • Initiatives to reach the percentage required to exercise statutory non-controlling shareholder rights.
  • Offers or requests to act as a voluntary proxy. 

SHAREHOLDERS HAVE A SPECIFIC E-MAIL ADDRESS (INFO-INV@VISCOFAN.COM) AND A SPECIFIC TELEPHONE NUMBER: +34 948 198 436.

Board of Directors

The Board of Directors is the body in charge of representing and managing the Company. Its chief function is the general supervision of Viscofan S.A., and where applicable, the companies comprising the Group.

The Board of Directors consists of ten directors, of which two are executive, two are nominees, representing the shareholders Corporación Financiera Alba S.A., and Angustias y Sol S.L., two are external and the other four are independent, thus complying with the most recent recommendations for good corporate governance in that the number of nominee and independent directors should constitute an ample majority on the Board of Directors. The Secretary to the Board is not a Director.

In order to perform the functions with the required rigor and efficiency, the Board of Directors of the Company prepares an annual schedule of meetings of the Board and the various committees, so that the directors can better plan their time and to encourage commitment to, and attendance of meetings. Furthermore, the annual plan includes visits to some of the Group’s centres and involvement of the management to better monitor the Group strategy and that of each of its companies. The Board holds regular meetings for which directors receive the information they need well in advance, including, as appropriate, the minutes or reports of the different Board Committees. The Board met on 12 occasions in 2017, and the Board Chairman attended all the meetings. The attendance percentage of the directors was 100%, taking into account that two directors gave voting instructions for two meetings.

Likewise, the Board and its different Committees carry out their annual evaluation, coordinated by the Secretary and conducted by the Lead Director in the case of the Executive Chairman, to whom the Appointments and Remuneration Committee submits its report, where it analyses the formal and material aspects of its activity, the performance of the directors and Chairmen of each of the Committees and that of the Board itself, including any observations that may be useful to improve its work. In 2016 Spencer Stuart, as independent external consultant, was commissioned to assess the Board and its Committees. The result of this assessment was highly satisfactory although actions are still carried out mainly to ensure the participation of directors, encouraging commitment to, and attendance of meetings and providing them with the tools to thoroughly examine specific aspects of their particular activity and environment of the different production centres and to better monitor the Group strategy and that of each of its companies.

Full information of the Board of Directors is permanently accessible in the “Corporate Governance” section of the Company’s website, which also includes individualised information of the category of each of the directors, reviewed every year, once it has been verified by the Appointments and Remuneration Committee, membership in the different Committees, and other relevant details, as referred above in this report. Details of individual remuneration are included in the Remuneration Report presented to the General Meeting for approval in an advisory vote, as part of the application of the remuneration policy approved by the General Meeting.

THE BOARD OF DIRECTORS CONSISTS OF TEN DIRECTORS, COMPLYING WITH THE MOST RECENT RECOMMENDATIONS FOR GOOD CORPORATE GOVERNANCE IN THAT THE NUMBER OF NOMINEE AND INDEPENDENT DIRECTORS SHOULD CONSTITUTE AN AMPLE MAJORITY ON THE BOARD OF DIRECTORS.

Board of Directors Committees

The Board has created three committees in support of its functions:


Made up of three Directors, the Chairman and two Vice-Chairmen. The Delegated Committee has done a considerable amount of work as the permanent delegation of the Board, helping to closely follow-up on the Group’s transactions in different places.

The Delegated Committee met on 10 occasions in 2017. In the exercise of its duties it analysed the issues to be addressed by the Board of Directors and supervised the implementation at the Group’s various subsidiaries of the strategy approved by the Board and, with the utmost transparency, submitted to the Board the proposals that arose so that the Board could adopt the resolutions it considered appropriate. It also furnished all Board members with the minutes of its meetings.

It carried out a strategic analysis to study potential growth, both organic and acquisition-led, and a variety of investment possibilities. By means of an example, in 2017 the Board of Directors purchased 100% of the share capital of the Supralon companies in Europe, monitored the investment to build the plant in Cáseda (Spain) where new technology is to be built also in 2018, monitored the investment to increase the collagen capacity of the plants of Suzhou (China) and Koteks (Serbia), with the support of the analyses performed by the Delegated Committee. The Committee looked at the various technological products and families, product development and energy optimisation.

Whenever the Committee considered it appropriate, not only the members of the Committee and Secretary took part in the meetings, but also the Director General Manager and various Senior Managers.


The Audit Committee consists of three independent directors and one nominee director appointed by the Board of Directors pursuant to a report by the Appointments and Remunerations Committee, bearing in mind accounting, auditing and risk management knowledge, skills and experience. Its Chairman is the independent director Mr. Ignacio Marco-Gardoqui. 

The Audit Committee’s tasks include those provided for in the law, highlighting, among others, supervising the preparation and integrity of the financial information of the Company, including the SCIIF review, reviewing, analysing and commenting financial statements and other relevant financial information with Management, internal and external auditors, monitoring the suitability of the control policies and procedures in place, reviewing the internal control and risk-management systems, supervising internal auditing services and verifying that Top Management contemplates its recommendations, proposing external auditors, overseeing their independence, reviewing the audit plan, results of its execution, supervising compliance with internal codes of conduct and good governance guidelines, hearing, and where possible, responding to initiatives, suggestions, or complaints from shareholders in relation to the committee’s scope of action, setting up and overseeing a whistle-blowing mechanism enabling employees to communicate confidentially and, if deemed necessary, anonymously, their concerns regarding possible irregular and potentially significant practices with the company, particularly those relating to accounting, finances and auditing, human rights and corruption. 

In 2017 the Audit Committee put forward to the Board of Directors the designation of PricewaterhouseCoopers S.L. as the new Accounts Auditor of Viscofan S.A. and the consolidated Group for 2017, 2018 and 2019.

The Audit Committee met 8 times in 2017, on 2 occasions with the previous external auditors from EY, and on 2 occasions with the current external auditors of PwC. Throughout its relationship with its external auditor, and as one of its obligations, it ensured that the financial statements were presented without reservations or qualifications, and with total independence. Whenever the Audit Committee considered it appropriate, it required the presence of members of the management team, the internal audit and external auditors.

Finally, it informed the Board of Directors of all of its activities, also delivering all the minutes of its sessions to the Board Members, as well as the information related to the risk map and the tax issues.


The Appointments and Remuneration Committee is made up of three directors, all of which are nonexecutive, appointed by the Board of Directors, and most of them are independent. Its Chairman is the independent director Mr. Jaime Real de Asúa.

This Committee evaluates the qualifications, experience and knowledge required by the Board to define the needs of the candidates to fill each vacancy, proposes the appointment of independent directors and reports on other board members and appointments/removals of senior management, sets a target for the least represented gender and prepares guidelines on how to achieve it, examines and organises the succession of the Chairman and chief executive and proposes to the Board the remuneration policy for Directors and senior management, as well as the remuneration policies covering shares and options, where applicable, and long-term policies for remunerating board members and top executives.

The Appointments and Remuneration Committee met 7 times in 2017 and whenever it considered appropriate, it required the presence of members of the Top Management.

This committee has carried out its functions, both by regulation, and those set out in the Company’s Bylaws and Board of Directors Regulations.

It reviewed the qualification of directors, it prepared reports for the assessment of executive directors and the assessment of the Committee itself and it headed the assessment of the Board and its committees concerning 2017.

It analysed the competencies knowledge and experience required to be a Board member, it requested the presence of the Lead Director in order to learn about the concerns of non-executive directors, it submitted to the Board of Directors the proposals and reports for the re-election or appointment of Directors, whose appointments are proposed to the General Shareholders’ Meeting of the Company for approval.

It revised the succession plan of the Chairman, the Director General Manager and Senior Management, and the talent management policy.

Concerning remuneration matters, it applied the current remunerations policy approved by the General Board and created the remunerations table for the application of this policy, including the annual remuneration. It proposed annual retribution and monitored triennial remuneration requirements, both for Directors and Top management, as well as the wage policy for Top Management.

In addition, aiming to present a compensation policy to the Board of Directors for the coming years for submission to the General Shareholders’ Meeting to be held in 2018, this Committee was advised by external consultant experts, with the target to keep on adapting to the best practices of remuneration, attraction and retention of talent necessary to contribute to reinforce the leadership of Viscofan in a competitive environment.

The Committee for work-life balance of employees of the Viscofan Group reports to the Appointments and Remuneration Committee.

The composition, functions, organisational and operational rules, as well as the duties assigned to each one of the Board committees are detailed in the internal regulations of the company, described below, and in the Annual Corporate Governance Report. Likewise, upon call notice of the General Meeting of Shareholders, as mentioned above, the annual activities report of the Audit Committee and those of the Appointments and Remunerations Committee, as well as the independent reports of the auditor and third party transactions drafted by the Audit Committee are all published. All information on the Committees, functions, composition and activities, as well as its different reports and the proposal on the Board’s remuneration referred to above can be consulted on its website www.viscofan.com. 


Internal Regulations in the scope of good governance policy

The internal rules governing the aforementioned bodies, supplemented by the applicable rules to ensure good corporate governance in the Viscofan Group, are available to shareholders and the general public on the Company’s website (www.viscofan.com), as well as in compulsory publications and registration, on the website of the CNMV (www.cnmv.es) and the Mercantile Registry of Navarre www.rmbmnavarra.com, respectively.

The internal regulations are principally made up of:

  • Articles of Association: These are the basic rules governing the Company and all its bodies. The articles set out the main features and operating principles of the General Meeting of Shareholders, the Board of Directors and its committees.
  • Shareholders´ General Meeting regulation: This text lays down the regulations governing the General Meeting of Shareholders to ensure transparency and safeguard shareholders’ rights, and their access to Company information. The rules stipulate the formalities of calling, attending, holding and recording General Meetings of Shareholders and of access to prior and General Meeting information by shareholders.
  • Board of Directors regulation: These set down the principles of action of the Board of Directors, including an appraisal mechanism, and its organisational and operating rules, the standards of conduct of Directors, their duties and the overarching principles that should guide their decisions. They also govern committees existing within the Board of Directors, their organisational and operational rules, and their remit and powers.
  • Code of conduct: This text lays down the ethical principles and action standards that must be followed by directors, managers and employees of Viscofan Group throughout the development of their professional activity. The general ethical principles included in such Code can be summarised in: Respect and Defence of Human Rights; Sustainability; Integrity, Responsibility and Transparency; Respect and Non-Discrimination; Efficiency; and Loyalty.

Likewise, within the regulatory compliance system, the Viscofan Group has approved and made available to employees on the internal network, action policies in the following areas:

Commercial
  • Commercial Practices Manual: The commercial activity has the opportunity and the obligation of providing a reliable picture of the quality and good practices of the Viscofan Group, to all those interlocutors with which we are likely to have a relationship.


    This document notes the guidelines and standards that have to be taken into account throughout the development of a commercial activity within the Viscofan Group. Its aim is to ensure the security of such activity and reduce its risks, by guiding and setting the conduct guidelines that are admitted by the organisation.

  • Policy of Business Courtesies: Around the world there are generally accepted customs and practices which include awards, gifts or other courtesies as a show of cordiality, fondness and appreciation. However, under the guise of business courtesies, there might be a granting of advantages with the hidden purpose of influencing decisions of one of the parties to the commercial relationship, vitiating it.

    The purpose of the policy of business courtesies of the Viscofan Group is to establish an objective criterion that sets the difference between business courtesies and the eventual granting of advantages with another purpose, as to avoid the latter.

  • Policy to outsource commercial services: distributors, agents and other: The policy to outsource commercial services is developed due to the growing need of incorporating new control guarantees in business management. An important part of our sales takes place through external business services and, therefore, their correct identification, follow-up and control are required for smooth business operation.

Ensuring Good Governance
  • P Risk Control and Management Policy: The purpose of the Risk Control and Management Policy is to set the basic principles and the general action framework to control and manage risks of all nature faced by the Viscofan Group in order to identify, measure, prevent and mitigate their impact in its activity, in case of any occurrence.
  • Corporate Social Responsibility Policy: P It acknowledges the commitment of the Viscofan Group to developing its activities responsibly, maximising the creation of sustainable and shared value for its stakeholders (shareholders, employees, the market and the society as a whole), identifying, preventing and correcting the possible negative impacts of its actions.
  • Human Rights Policy: The Viscofan Group aims to highlight its support and contribution to the spreading and respect of Human Rights within its scope of action, with its adherence to the United Nations Global Compact with regard to Human Rights, work, environment, anti-corruption and with the incorporation of the Human Rights Policy and the Global Compact to its internal regulations. By doing so, it emphasises its promotion and compliance, by incorporating the policy to the organisational and compliance control structure of the Group.
  • Communication policy with shareholders, institutional investors and its representatives or advisors: In order to ensure on-going communication and give certainty to shareholders on the transparency and access to information and pay particular attention to their points of view on corporate governance rules and practices, among others, the Company’s Board of Directors approved a Communication policy with shareholders, institutional investors and their representatives or advisors based on the principles of equality, transparency and legality.
  • Internal Code of Conduct on Matters Relating to the Securities Market: Rules of conduct to ensure that the institutional and personal acts of the Company Directors and employees strictly comply with current laws and regulations on transparency in the markets and to protect investors’ interests.
  • Director selection policy: The Appointments and Remunerations Committee drafts this policy in order to provide the Board of Directors with candidates that can offer the competencies, knowledge and experience required for the Board at all times, taking account of the vacancies to be covered and the structure and composition of the Board.
  • Policy to encourage shareholders to take part in the General Meeting of Shareholders: attendance fee: All shareholders may exercise their attendance and participation rights in accordance with objective non-discrimination criteria and, therefore, the application of this policy will benefit all shareholders who comply with such requirements.
Information management
  • Personal Data Protection Policy: The protection of natural persons with regard to the processing of personal data is a fundamental right that must be respected.


    The Data Protection Policy establishes the commitment of the Viscofan Group with personal data privacy and protection of all natural persons linked with the Viscofan Group. The purpose of the Personal Data Protection Policy is to ensure personal data protection, setting the common principles and guidelines for the Viscofan Group in compliance with and adequacy of the applicable legislation.

  • Authorisation Policy on Computer Access and Profiles: The computer systems and networks of the Viscofan Group form a unit of work and information the protection of which requires the creation of measures that ensure its correct use. Resources management must be performed through authorisations. In the IT area, authorisation access and user permissions are used as a security system to limit and control access to computer systems and networks.
  • Password Policy: One of the basic principles to ensure security of computer systems and networks within the Viscofan Group, is to regulate and limit their access.
  • Computer Systems and Networks Management Policy: This document outlines the Computer Systems and Networks Management Policy of the Viscofan Group. The IT departments manage and support the computer systems and networks of the Viscofan Group, to assist the operational processes of the Group and match its objectives and strategies. Its management must ensure availability, and combine both the functionality and operability of systems and networks, and their security.
  • Policy on Audiovisual Information Control: Viscofan’s leadership of the casings sector is greatly underpinned by the development and constant evolution of manufacturing technologies in the different product families. Protecting this technology and its know-how is vital for the company to continue the creation of value in the long-term. This, and the fact that capturing audiovisual means are easily available, requires standardisation in its use through the Policy on Audiovisual Information Control.
Personnel management
  • Policy on Staff Selection and Recruitment: The activity and the development of the Viscofan Group are largely determined by the effort, work and commitment of the people that make it up. This requires a solid policy on staff selection and recruitment so as to ensure objectivity and qualification of new staff, and the selection of the people who best meet the requirements in each case.
  • Policy on New Recruits’ Reception: The purpose of the reception policy reflected in this document is to ensure an appropriate reception, with an overall and efficient view, to all our new staff members of the Viscofan Group, so as to guarantee their knowledge of the position, duties to be performed and the internal rules and procedures that have to be complied with, and to speed up the adaptation of new employees to the Group.
  • Training Policy: The aim of the Training Policy is to guarantee that Viscofan Group’s employees have all the knowledge and skills necessary for optimum execution of the duties assigned to them, improving or updating their performance.
  • Staff Leave Procedure: The aim of the Staff Leave Procedure of the Viscofan Group is to establish a smooth and safe process that is able to guarantee business security and continuity due to any person’s leave, with the same guarantees and level of confidentiality, and avoiding the loss of other resources.
Production
  • EHS (environment, health & safety) policy: This is the commitment to undertake industry best practices on this matter, as befits our position and world leading vocation.
  • Basic principles in safety, health and hygiene matters: The basic principles in safety, health and hygiene matters embody the commitment of the Viscofan Group to implement and follow-up a Prevention Management System to ensure safety, health and hygiene at the facilities of the Viscofan Group, in accordance with the applicable rules in each case and based on the internal requirements set across the Group or in each one of the companies. The main purpose of these principles is prevention, through the performance and implementation of effective actions prior to the materialisation of risks, in order to avoid them, or to reduce their impact if they were to take place.
  • Food Regulation Policy: Its purpose is to ensure compliance with and adequacy to food regulations that are applicable to the activities and products of the Viscofan Group, identifying the necessary channelsfor their control, analysis and monitoring.
  • Control procedure instructions in case of product recall: The purpose of this procedure is to set action recommendations to ensure the quick identification and recall of products that might represent a risk for food safety, in case of crisis, in order to protect consumers, brand image in the market and the interests of the Viscofan Group and its customers.
Financial resources management
  • Policy on Internal Control of the Financial Information: Viscofan trades in the Spanish stock market, and therefore the internal control systems of the Viscofan Group need to be able to give reasonable assurance on the financial information that is prepared, showing an accurate, true, correct, complete and homogeneous picture of the economic situation, complying with the applicable legal obligations of Viscofan S.A. and of each of the companies comprising the Group.


    This policy includes the basic general principles of the Policy on Internal Control of the Financial Information, which shall be further developed in manuals and guidelines.

  • Tax Strategy: It embodies the principles and basic lines that will govern the tax strategy of the Viscofan Group in accordance with the applicable legislation and with best tax practices, avoiding risks and inefficiencies and ensuring adequate coordination of tax practise in each jurisdiction and its alignment with the long-term business strategy of the Group.
Travel and expense management
  • Policy on Management of Purchases for Assets and Contracts for Services: The management of purchases for assets and contracts for services must satisfy the needs of the Viscofan Group as best possible. This policy aims to increase the activity's security and control and reduce its risks, by guiding and setting the conduct guidelines that are admitted by the Group.
  • Policy on Business Expenses: The international expansion of the Viscofan Group and its commitment to deliver products in the world market result in the need for continuous staff movements and give rise to numerous expenses away from the location of each company, its offices or production plants.
    Such expenses and the requirements that must be met in accordance with the internal regulations and applicable laws have to be regulated in each case, so that they are borne by the different companies of the Group.
  • Code of conduct for trips and stays abroad: It sets out the action principles and behavioural pattern that must be followed by directors, managers and employees of the Viscofan Group in their trips, travel or stays, both temporary and permanent, in countries other than their country of origin, as a result of their professional relationship with the Viscofan Group.

In order to watch and monitor the adequate implementation and follow up of the regulations, and the management and maintenance of an internal channel for complaints, the Viscofan Group has specific committees; 

  • Regulatory Compliance Committee: The Regulatory Compliance Committee includes among its duties that of overseeing risks specific to the Company in relation to criminal liability or any other breach of Company regulations (internal and external).
  • Ethics Committee: The Ethics Committee is responsible for opening, on its own account or at the request of a third party, the investigation of any situation that may give rise to a situation of risk for the Viscofan Group, as a result of a breach of the Viscofan Group’s internal regulations or any other circumstance. To this end, Viscofan has a channel for complaints that is also accessible to all employees, to communicate any signs that might be seen as a risk, available through Vinsite (internal communication platform for employees of the Viscofan Group), mail or physical mail to the Ethics Committee at Viscofan’s head offices in Navarre. In 2017 the Ethics Committee met on 2 occasions and completed the investigation of 2 matters raised. 

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