Corporate governance

A great deal of attention is paid in the PGNiG Group to the observance of corporate governance principles. The Group is honest and fair with its shareholders, treats them all on equal terms and makes every effort to establish the best possible relations between investors and the Group’s 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, and adoption of decisions concerning dividend amounts, as well as forms and dates of dividend payments. 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 Group’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 appointed by the General Meeting for a joint three-year term and is composed of five to nine members, including one independent member. 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 – and where the Supervisory Board is composed of seven to nine members, three of them – are elected by PGNiG employees.

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 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 related to the management of PGNiG’s affairs, where such matters are not explicitly reserved for other governing bodies by the applicable laws or provisions of the Articles of Association. The Management Board operates in accordance with applicable laws and regulations, particularly those defined in 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.

In 2009, the PGNiG Group introduced Management by Objectives (MBO), a system whereby it is possible to compensate employees based on their performance, rather than their working time. MBO was initially implemented for management boards of subsidiaries, heads of branches and heads of departments at PGNiG Head Office. After one year, the managerial staff were obliged to report on the progress of their assigned objectives. If they had been attained, the managers were awarded a bonus. This system provides great support for the PGNiG Management Board in the pursuit of Group strategy, by linking the objectives set before individual organisational units with the broader framework of strategic objectives. These also include elements from the Sustainable Development and Responsible Business Strategy.

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 of PGNiG or any entity significantly related to PGNiG, and is appointed by the General Meeting pursuant to PGNiG’s Articles of Association. Such a person must be competent in accounting and finance matters. The members of the Audit Committee are appointed by the Supervisory Board.

Good Practices

The PGNiG Management Board 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 as stipulated in the Best Practices 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.

Culture of Dialogue

PPGNiG communicates well with the market. The Company fulfils its disclosure obligations towards shareholders and other stakeholders by publishing reports on its activities and financial statements, as well as by holding press conferences where its major undertakings and strategic objectives are communicated to the public. The rules of procedure for the General Meeting, the Supervisory Board, the Management Board and the Audit Committee are available online at www.pgnig.pl in the Corporate Governance section.