Corporate governance

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CORPORATE GOVERNANCE G4-DMA

Purpose

Collaborators at Servicios Nutresa, Medellín, Colombia.

Collaborators at Servicios Nutresa, Medellín, Colombia.

 

To establish a framework for transparent, trustworthy, ethical conduct for Grupo Nutresa’s actions, developing management, information disclosure and control policies, aligned with the highest international standards of corporate governance, which positively impact organizational reputation to benefit shareholders and other stakeholders.

Strategy and Progress 2015

Strategy Progress 2015
Update the Company’s corporate governance measures. verde1

The Company’s Code of Good Governance and Bylaws were amended to adopt the recommendations of the new version of the Código País guidelines and implement other measures at the forefront of corporate governance.

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The following policies were approved by the Board of Directors and the Shareholders Meeting:

  • Remuneration and Evaluation of Senior Management
  • Risks
  • Succession of Senior Management
  • Human Resources
  • Related Party Transactions
  • Remuneration and Evaluation of the Board of Directors
  • Succession of the Board of Directors
  • Acquisition of Treasury Shares
verde1

A framework of institutional relations was approved in order to align Grupo Empresarial Nutresa’s interest with that of all the companies that comprise it.

Disclose the good governance measures and sensitize all the Company’s employees. verde2

The new Code of Good Governance was implemented and disseminated in the foreign companies.

Ensure compliance of the governance practices accepted by the Company. verde3

Progress was made in developing profiles of the members of the Board of Directors with the help of a consulting firm with broad expertise in corporate governance issues.

Strengthen mechanisms used to report issues concerning ethics and conduct. naraja

The Ethics Hotline was consolidated by documenting a protocol to deal with reported cases.

Risks and Opportunities

Good corporate governance ensures that the Company’s actions and those of its governing bodies are carried out in an institutional framework of ethical behavior that aims for transparency and integrity.

Transparency is ensured by delivering clear, complete and timely information, which generates trust in stakeholders, maintaining and attracting national and foreign investors.

In turn, integrity is promoted through structured policies that clearly determine the guidelines for behavior that must be met by governing bodies, employees, clients, suppliers and shareholders, and it is guaranteed through strict monitoring of compliance, using internal and external control procedures.

Committed to its investors, the Company intends to maintain excellence in the management of corporate governance by asserting and implementing the highest standards in the world on the matter, especially in the areas of transparency and integrity.

Future Perspectives

Grupo Nutresa’s commitment for 2020 is to preserve excellence in the management of corporate governance by implementing the leading practices in the world. The Company focuses on maintaining the corporate governance measures that govern its operation up to date and strengthening interaction with its stakeholders, according to regional and global trends.

The short–term challenge is to ensure compliance of the new measures implemented in 2015. The amendments to the Bylaws and the Code of Good Governance, and the implementation of new policies pose new challenges and opportunities for the governing bodies, which should focus on continuous monitoring in order to verify compliance with the objectives proposed, greater corporate transparency, ethical behavior and integrity.

Furthermore, different activities and campaigns to strengthen ethics with permanent disclosure to employees and stakeholders on organizational values and observable behaviors in ethics and transparency will be carried out in the short and medium term.

Remarkable Achievements

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The Colombian Financial Superintendency assesses the level of implementation of the corporate governance practices that it recommends that issuers of securities in Colombia apply. Grupo Nutresa obtained the highest score in this survey with 38 fully implemented measures.

logo alas20 agenda de lideres sustentables 2020
Grupo Nutresa obtained the ALAS20 2015 recognition in the following categories: Leading Company in Sustainability, Board Member of a Leading Company in Sustainability, ALAS20 Company Colombia, and Latin America Grand Prix Company. These recognitions were awarded thanks to the Company’s leadership, as well as its consistency and excellence in public disclosure of information on its practices of investor relations, sustainable development and corporate governance.

Carlos Ignacio Gallego P. and Antonio Mario Celia M., receiving the Alas20 award.

Carlos Ignacio Gallego P. and Antonio Mario Celia M., receiving the Alas20 award.

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For the third year, Grupo Nutresa obtained the Investor Relations “IR” recognition awarded by the Colombian Stock Exchange to companies that have voluntarily adopted best practices for information disclosure and investor relations.

Progress 2015

Collaborators at Alimentos Cárnicos. Ibagué, Colombia.

Collaborators at Alimentos Cárnicos. Ibagué, Colombia.

According to the Bylaws, the Board of Directors consists of seven (7) members. In April 2015, one of the Board members resigned and the Board has since continued to operate with six members, all of whom have different backgrounds, knowledge and expertise in finances, business and strategy. Three of the six current Board members are independent, including the Chairman. The criteria adopted by Grupo Nutresa to determine the independence of its Board members is more rigorous than the one prescribed by law, and it is contained in the Company’s Code of Good Governance.

In 2015 the Company created a profile matrix that identifies desired skills for members of the Board of Directors and helps to determine if current Board members comply with such skills. The matrix is available on the Company’s website.

The Board of Directors meets once a month and all the support committees meet at least twice a year, with the exception of the Finance, Audit and Risk Committee, which meets at least five times a year. In this way, each body is able to perform its duties and comply with the minimum frequencies established for its meetings.

The Board of Directors also conducted its annual self–evaluation, which assesses the qualities, attributes and experience of the Board and its support committees. This evaluation was focused on reviewing the performance and contribution of the Board members and the support committees, and highlighted aspects where improvements can be made.

In 2015, the Company’s Code of Good Governance and Bylaws were amended, implementing the corporate governance recommendations made by the Colombian Financial Superintendency through the new Código País guidelines and adopting other world–class corporate governance measures, including:

  • The elimination of alternate members on the Board of Directors.
  • The annual election of the Board of Directors.
  • The establishment of broader terms for the convening of the Shareholders Meetings: 30 days for ordinary meetings and 15 days for extraordinary meetings.
  • New functions for the Chairman of the Board related to his leadership.
Collaborators Compañia de Galletas Noel. Medellín, Colombia.

Collaborators Compañia de Galletas Noel. Medellín, Colombia.

  • New functions for the Finance, Audit and Risk Committee, which allow it to strengthen the independence and efficiency of the Internal Audit.

In line with the implementation of the new measures, the Board of Directors and the Shareholders Meeting approved the following policies, which contribute to establishing clear guidelines in search of greater transparency and integrity in each of the Company’s activities and those of its administrative bodies:

  • Policy on Remuneration and Evaluation of Senior Management.
  • Risk Policy.
  • Senior Management Succession Policy.
  • Human Resources Policy.
  • Policy on Related Party Transactions.
  • Policy on Remuneration and Evaluation of the Board of Directors.
  • Board Succession Policy.
  • Policy on the Acquisition of Treasury Shares.

By updating the Code of Good Governance, a more structured procedure was established for the election of the Board of Directors. Terms for convening the Shareholders Meeting were extended with the intention of allowing more time for the Appointment and Retribution Committee to evaluate candidate profiles, thus ensuring that all the necessary requirements to be a Board member – and to be an independent member – are met.

The Appointment and Retribution Committee is now in charge of analyzing desired profiles for Board members, according to criteria such as diversity, experience, female participation, compliance of such desired profiles by current Board members, identification of gaps between ideal and existing profiles, and the design of training plans to close these gaps. In this way, the continuous improvement of the Board is guaranteed through an ongoing review.

In 2015 the Company monitored corporate governance measures at the global and regional levels through the review and study of different sources. Noteworthy is the research conducted with the support of CESA (Colegio de Estudios Superiores de Administración) and the Private Competitiveness Council (Consejo Privado de Competitividad), which analyzed the performance of the companies listed in the principal Latin American stock exchanges and its relation to the implementation of the best information disclosure practices. Grupo Nutresa was one of the companies included in the research.

ETHICS HOTLINE G4-57 SDG 16 G4-58 SDG 16

The most significant risks associated with ethics and transparency are fraud, money laundering, financing of terrorism and corruption.

During 2015, 150 incidents in violation of the Anti–Fraud and Anti–Corruption Policy were committed against Grupo Nutresa companies, for an estimated value of COP 1.27 billion, classified as:

  • 120 cases of appropriation of resources.
  • 19 cases of forgery and manipulation of information.
  • 4 cases of conflicts of interest.
  • 7 cases of workplace harassment, abuse of trust, misuse of Company assets, among others.

TYPES OF IMPROPER ACTS

  • Appropriation of resources 80%
  • Forgery and Manipulation of information 12.6%
  • Workplace harassment, abuse of trust, misuse of company assets, among others 4.7%
  • Conflicts of Interest 2.7%

Two hundred seventy two (272) people related to the Grupo Nutresa companies, either through employment contracts (68%) or service contracts (32%), were involved in these incidents. All of them had their contractual relationship terminated and the relevant legal actions were interposed. The Grupo Nutresa companies have insurance policies with adequate coverage to address the impact of these actions. G4-SO5 SDG 16

TYPE OF RELATIONSHIP

  • Hired Employees 58%
  • Third Parties and Contractors 32%
  • Temporary Employees 10%

Some of these cases were reported through the Ethics Hotline. A total of 67 reports were received through this complaint mechanism during 2015, all of which were channeled to the areas responsible in each of the businesses. Of these reports, 82% involved employees and 18% involved third parties.

GRIEVANCE MECHANISMS

Grupo Nutresa also has various mechanisms – such as Customer Service lines, Coexistence Committees, the Human Rights Tactical Committee, suggestion boxes, and Human Resources teams – through which complaints are received and which allow the Company to identify and manage complaints on labor practices, human rights, impacts on communities, clients and the environment.

Collaborators Pastas Doria. Mosquera, Colombia.

Collaborators Pastas Doria. Mosquera, Colombia.

Complaints filed addressed and resolved through formal grievance mechanisms G4-EN34 SDG 16 G4-LA16 SDG 16 G4-HR12 SDG 16 G4-SO11 SDG 16

Complaints filed addressed and resolved through formal grievance mechanisms

Sol Beatriz Arango Mesa, Grupo Nutresa’s Vice President of Sustainable Development, was invited to participate in a panel called “Disclosure Practices, Good Governance and Investor Trust”, which also included the participation of Francisco Reyes, Colombian Superintendent of Corporations; Juan Pablo Córdoba, President of the Colombian Stock Exchange; and Luis Fernando Rico, General Manager of ISAGEN. This panel concluded that “the disclosure of information and corporate transparency is a commitment of all of us, and the lack of such transparency converges into a problem for all of society”1.

1 Official website of the CESA – Superior Studies School of Management.