Corporate Governance
The PGNiG Group pays close attention to the observance of corporate governance principles. The Group is honest and fair to its shareholders, treats them all on equal terms and makes every effort to establish the best possible relations between its investors and governing bodies.
General Meeting
The General Meeting is PGNiG’s supreme governing body, through which the shareholders exercise their corporate rights, including examination and approval of the Directors’ Report, adopting decisions concerning dividend amounts, forms and payment dates. The General Meeting grants its vote of approval for the other governing bodies of PGNiG, appoints members of the Supervisory Board and makes decisions concerning the company’s assets.
Supervisory Board
The Supervisory Board exercises continuous supervision over the Company’s activities in all areas of its operations, pursuant to the rules stipulated in the Rules of Procedure for the Supervisory Board. The Supervisory Board is composed of five to nine members, including one independent member, appointed by the General Meeting of PGNiG for a joint three-year term. The State Treasury is entitled to appoint and remove one member of the Supervisory Board, as long as it remains a shareholder of PGNiG. On a Supervisory Board composed of up to six members, two of them are elected by PGNiG employees, and where the Supervisory Board is composed of seven to nine members, three of them.
Management Board
The Management Board is an executive body managing the affairs of PGNiG and representing it in all actions before court and out of court. The Management Board is composed of between two to seven members, with the precise number defined by the Supervisory Board. The members of the Management Board are appointed for a joint three-year term. The powers of the Management Board include all matters connected with the management of the affairs of PGNiG, where such matters are not explicitly reserved for other governing bodies by applicable laws or provisions of the Articles of Association. The Management Board operates in accordance with applicable laws and regulations, including in particular the provisions of the Commercial Companies Code, as well as the provisions of the Company’s Articles of Association and the Rules of Procedure for the Management Board.
Audit Committee
The Audit Committee has acted within the Supervisory Board as its standing body since November 27th 2008. The Audit Committee is composed of at least three members of the Supervisory Board, including at least one member independent from PGNiG or any entity significantly affiliated with PGNiG and appointed by the General Meeting pursuant to PGNiG’s Articles of Association. Such a person has to be competent in accounting and finance matters. The members of the Audit Committee are appointed by the Supervisory Board.
The powers and the manner of operation of the Company’s governing bodies are described in detail in the Articles of Association and rules of procedure for the General Meeting, the Supervisory Board (including the rules of procedure for the Audit Committee) and the Management Board. The documents are available at www.pgnig.pl in the Corporate Governance section.
Best Practices
The Management Board of PGNiG puts enormous emphasis on compliance with corporate governance principles. Since its stock-exchange debut in 2005, the Company has been following the recommendations of the Warsaw Stock Exchange stipulated in the Code of Best Practice for WSE Listed Companies. Reports on PGNiG’s compliance with the requirements of corporate governance are published online at www.pgnig.pl in the Corporate Governance section.
Special control rights
In accordance with the Articles of Association, as long as the State Treasury holds an equity interest in the Company, the State Treasury, represented by the minister competent for matters pertaining to the State Treasury, acting in consultation with the minister competent for economic affairs, has the right to appoint and remove one member of the Supervisory Board.
Additionally, pursuant to the Articles of Association, the State Treasury (as a shareholder) approves in writing: (i) any changes to material provisions of the existing trade agreements for import of natural gas to Poland, as well as execution of such agreements, and (ii) the implementation of any strategic investment projects or the Company’s involvement in investment projects which, permanently or temporarily, impair the economic efficiency of the Company’s business activities, but which are necessary to ensure Poland’s energy security.
Irrespective of the State Treasury’s share in the Company’s share capital, the State Treasury also has the right to demand that the General Meeting be convened and that particular matters be placed on the agenda.
Voting rights restrictions
In 2012, neither the Company’s Articles of Association, nor any of its other internal regulations provide for any restrictions on the exercise of voting rights.
On December 31st 2012, the amendments to the Articles of Association of PGNiG, introduced under a resolution of the Company’s Extraordinary General Meeting dated December 6th 2012, were entered in the Register of Entrepreneurs. Under the amended Articles of Association, the voting rights of the Company shareholders are limited so that at the General Meeting no shareholder can exercise more than 10% of the total vote at the Company as at the date of the General Meeting, with the proviso that such a restriction of voting rights is deemed non-existent for the purpose of determining the obligations of buyers of major holdings of shares.
The voting rights restrictions do not apply to shareholders who, as at the date of the General Meeting’s resolution imposing the limitation of voting rights, are holders of shares conferring more than 10% of the total vote at the Company, and shareholders acting together with shareholders holding shares conferring more than 10% of the total vote, pursuant to agreements concerning joint exercise of voting rights.
For the purpose of restricting the voting right, the votes of shareholders bound by a parent-subsidiary relationship will be aggregated and if the aggregated number of votes exceeds 10% of the total vote at the Company, it will be subject to reduction.
Rules governing amendments to the Company’s Articles of Association
Pursuant to the Commercial Companies Code and the Company’s Articles of Association, amendments to the Articles of Association are introduced by virtue of resolutions adopted by the General Meeting with the required majority of votes and must be entered in the register of entrepreneurs. Any amendment to the Articles of Association must be submitted by the Management Board to the registry court within three months from the date on which the General Meeting adopted the resolution introducing the amendment. The consolidated text of the Articles of Association is drawn up by the Management Board and then approved by the Supervisory Board.
Rules governing appointment and removal of Management Board members
Pursuant to the Articles of Association, individual members of the Management Board or the entire Management Board are appointed and removed by the Supervisory Board. A member of the Management Board is appointed following a qualification procedure carried out pursuant to the Regulation of the Polish Council of Ministers of March 18th 2003 concerning qualification procedures for members of management boards of certain commercial-law companies (Dz.U. No. 55, item 476, as amended). This procedure does not apply in the case of the Management Board members elected by employees.
As long as the State Treasury remains a shareholder of the Company and the Company’s annual average headcount exceeds 500, the Supervisory Board appoints as a Management Board member one person elected by the employees, to serve for the Management Board’s term of office. A person is considered to be a Management Board candidate elected by the employees if, during the election, 50% of valid votes plus one were cast in favour of that person, with the reservation that the election results are binding on the Supervisory Board if at least 50% of the Company’s employees participated in the election.
Management Board members are appointed for a joint term of three years. A member of the Management Board may resign from his/her position by delivering a representation to that effect to the Supervisory Board, with a copy to the State Treasury (represented by the minister competent for matters pertaining to the State Treasury). To be valid, the resignation must be submitted in a written form, or otherwise will be ineffective towards the Company.
The Management Board member elected by employees may also be removed upon a written request submitted by at least 15% of the Company’s employees. The Supervisory Board orders the vote, and its results are binding on the Supervisory Board if at least 50% of the Company’s employees participate in the voting and the percentage of votes cast in favour of the removal is not lower than the majority required for the election of a member of the Management Board by the employees.
Information for shareholders pertaining to General Meetings
A shareholder or shareholders representing at least one-twentieth of the share capital may request that certain matters be placed on the agenda of the General Meeting. Any such request should be sent to the Company in the Polish language, in writing, or in electronic form to the following e-mail address: wz@pgnig.pl. The request should contain grounds or a draft resolution concerning the proposed agenda item and should be submitted to the Company’s Management Board not later than 21 days before the planned date of the General Meeting. The shareholder or shareholders should prove their entitlement to exercise this right by presenting relevant documents in written form.
Any shareholder or shareholders representing at least one-twentieth of the Company’s share capital may, before the date of the General Meeting, submit to the Company draft resolutions concerning items which have been or are to be placed on the General Meeting’s agenda, in writing or in electronic form to the e-mail address wz@pgnig.pl. Any such draft resolutions should be in the Polish language, in the form of a Word file. The shareholders should prove their entitlement to exercise this right by presenting relevant documents in written form.
During the General Meeting, each shareholder may submit draft resolutions with respect to items placed on the agenda. Such draft resolutions should be in the Polish language.
Shareholders may participate in the General Meeting in person or by proxy. Pursuant to Art. 4121.2 of the Commercial Companies Code, a power of proxy for participation in a General Meeting of a public company and exercise of the voting right must be granted in writing. Powers of proxy should be granted in writing or in electronic form. The power of proxy should be in the Polish language and may be sent to the Company prior to the General Meeting in electronic form as a PDF file (scanned document) to the e-mail address: wz@pgnig.pl. While at the General Meeting, all shareholders and proxies should carry a valid identity document.
Given that the Company does not provide for the possibility of participating in the General Meeting by electronic means (including taking the floor at the General Meeting using means of electronic communication) or exercising voting rights by postal ballot or by electronic means, no ballot forms for voting through a proxy will be published.
Representatives of legal persons should have on them the original or a copy (certified by a notary public) of an excerpt from the relevant register (issued within the last three months), and if their right to represent the legal person does not follow from the relevant register entry – they should have on them a written power of proxy (the original or a copy certified by a notary public) along with the original or a copy (certified by a notary public) of the excerpt from the relevant register which must be valid as at the date of granting the power of proxy.
The General Meeting may be attended only by persons who are Company shareholders on the record date, i.e. 16 days prior to the General Meeting.
Persons entitled to participate in the General Meeting may obtain the full text of documents to be submitted to the General Meeting, along with draft resolutions and comments of the Management and Supervisory Boards, from the Company’s registered office. Such persons may obtain copies of the Directors’ Report on the Company’s operations and of the Company’s financial statements, as well as a copy of the Supervisory Board’s report and the auditor’s opinion, no later than 15 days prior to the General Meeting, while copies of recommendations and proposals concerning the other items of the agenda will begin to be distributed a week before the General Meeting.
Pursuant to Art. 407.1 of the Commercial Companies Code, the list of shareholders entitled to participate in the General Meeting is made available for inspection at the Company’s registered office in Warsaw, ul. Marcina Kasprzaka 25, for three weekdays prior to the date of the General Meeting.
Information concerning the General Meeting will be available on the Company’s website at: www.pgnig.pl in the section General Meeting – information for shareholders.