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.
Viscofan has the following internal bodies that it considers necessary to ensure that everything functions in line with good governance recommendations:
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:
SHAREHOLDERS HAVE A SPECIFIC E-MAIL ADDRESS (INFO-INV@VISCOFAN.COM) AND A SPECIFIC TELEPHONE NUMBER: +34 948 198 436.
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.
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.
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:
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 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.
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.
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.
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;
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