TAURON’s Corporate Governance

As a public company we make sure we develop partnership and transparent relationships with our stakeholders, based on corporate governance rules. Corporate governance encompasses all activities and regulations aimed at ensuring balancing of interests of all stakeholder groups engaged in the company’s operations: shareholders, management board, supervisory board, personnel, customers, suppliers.

In accordance with the disclosure rules in force and in line with the comply-or-explain approach the company shall report cases of permanent or incidental breaches of the rules defined in Best Practice of Companies Listed on the Warsaw Stock Exchange. Reports on corporate governance rules are published in a similar way as current regulatory filings and posted on the company’s website.

The confirmation of high standards with respect to corporate governance was the 2013 inclusion of TAURON Polska Energia in RESPECT Index – an index of socially responsible companies operating based on the best standards with respect to information policy, investor relations, social relations and environment protection.

Compliance with corporate governance rules

The company was subject to corporate governance rules described in Best Practice of Companies Listed on the Warsaw Stock Exchange (Best Practice) in 2013. This document also includes corporate governance rules that the company decided to comply with voluntarily. Best Practice were adopted for use by the company’s Management Board.

Best Practice that the company is subject to and to comply with which the company could decide voluntarily are published on the Warsaw Stock Exchange website (http://www.corp-gov.gpw.pl).

Non-compliance with corporate governance rules

The only rule that the company did not comply with in 2013 was the rule included in Section IV clause 10 of Best Practice (in the version in force since January 1, 2013), related to providing shareholders with an opportunity to take part in a general meeting using electronic communications means, based on:

  1. broadcasting the proceedings of the general meeting (GM) in real time,
  2. two-way communications in real time, using which shareholders may take the floor during the proceedings of a general meeting, while being physically present at a different place.

In order to enable compliance with the above rule the company’s Management Board asked the Ordinary General Meeting to pass a resolution on a change to TAURON’s Articles of Association, proposing provisions that would enable shareholders to take part in a general meeting using electronic communications means, including in particular: broadcasting the proceedings of the general meeting (GM) in real time, two-way communications in real time, using which shareholders may take the floor during the proceedings of a general meeting, while being physically present at a different place, exercising the voting right, in person or through a power of attorney, prior to or during the General Meeting. The company’s Ordinary General Meeting that took place on May 16, 2013 did not pass the above mentioned resolution. In conjunction with the above in 2013 the company did not comply with the rule included in Section IV clause 10 of Best Practice and the recommendation provided in Section I clause 12 of Best Practice.

The company complied with the other rules detailed in Sections II, III and IV of Best Practice. No cases of breaches of the adopted corporate governance rules were detected during the period running from the day the company’s shares were admitted to be traded on the public exchange until December 31, 2013.

Recommendation on remuneration policy

Seeking to comply with recommendation I.5 of Best Practice the company is applying Policy on remunerations of members of supervision and management bodies including the description of the rules it is based on at TAURON Polska Energia SA (Remuneration Policy), taking into account the recommendations of the European Commission of December 14, 2004 on fostering an appropriate regime for the remuneration of directors of listed companies (2004/913/EC), complemented with the recommendation of the European Commission of April 30, 2009 (2009/385/EC). This Policy defines objectives and rules of remunerating members of the Management Board and Supervisory Board in the company, in compliance with the common regulations in force, as well as applicable resolutions of General Meeting and the Supervisory Board of the company. The goals of the Remuneration Policy are, among others:

  1. ensuring a motivational and coherent regime for the remuneration of members of the Management Board and Supervisory Board,
  2. linking the remuneration rules with monitoring of the implementation of adopted strategic plans and the performance of financial plans,
  3. linking the remuneration of members of the company’s corporate bodies with the performance of their tasks.

Recommendation on the balanced participation of women in the performance of the management board and supervision functions

In accordance with recommendation I.9 of Best Practice WSE is recommending that public companies and their shareholders should ensure balanced participation of women and men in the performance of the management board and supervision functions in their companies. Members of the company’s Supervisory Board shall be appointed, in accordance with the provisions of Articles of Association, by the General Meeting of Shareholders and the State Treasury - within its personnel related entitlements, while members of the Management Board shall be appointed by the Supervisory Board. The company’s rules in force in this respect do not impose restrictions on participation in the company’s bodies or qualification proceedings based on the candidates’ sex. Acting in compliance with the requirement defined in Section II clause 1 sub-clause 2a) of Best Practice, in Q4 2013 the company posted on its corporate website information on the participation of women and men in, accordingly, TAURON’s Management Board and Supervisory Board over the last two years.