Report Functions ARC
1.- Composition, duties and operation
On 17 April 2015, the Board of Directors approved the creation of the Appointments and Remuneration Committee and the appointment of its members.
The rules of organization and operation of the Appointments and Remuneration Committee, described below, are contained in article 16 of the Board of Directors’ Regulations.
The Appointments and Remuneration Committee will comprise within the minimum of three members and maximum of five members, all of whom must be non-executive members. At least two of whom must have the status of independent directors.
The composition of the Appointments and Remuneration Committee comprises the following members:
|Mr. Giampaolo Zambeletti||Chair||Independent|
|Mr. Leonard Peter Shore||Member||Independent|
|Mr. Josep Maria Coronas Guinart||Member||Dominical|
In accordance with the Board of Directors’ Regulations, the Board of Directors will appoint a Chair among the independent directors. The Chair must be replaced every four years and may be re-elected once a period of one year from his departure has transpired. The Appointments and Remuneration Committee will appoint a Secretary and may appoint a Vice-Secretary that will not be necessarily members of the Committee itself.
The Appointments and Remuneration Committee will meet every time the Board of Directors or its Chair request a report be issued or proposals adopted and, in any case, whenever it is deemed advisable for the proper execution of its duties. It will be convened by the Chair of the Committee, either on his/her own initiative or on the request of the Chair of the Board of Directors or of two members of the Committee itself.
The Appointments and Remuneration Committee will be validly constituted when the majority of its members attend the meeting, either present or represented. The resolutions will be adopted by a majority vote among those in attendance, present or represented.
Insofar as they are applicable and in a supplementary manner, the Board’s rules of operation will apply thereto. Without prejudice to the other tasks assigned to it by the Board of Directors, the Appointments and Remuneration Committee will have at least the following basic responsibilities:
- To evaluate the competencies, knowledge and experience required in the Board of Directors. To this end, it will define the duties and skills required of the candidates to fill each vacancy, and it will evaluate the time and dedication needed for them to effectively perform their
- To establish a target for the representation of the under-represented gender on the Board of Directors, and prepare guidance on how to obtain said target.
- To submit to the Board of Directors proposals for the appointment of independent directors for the co-optation thereof or for the submission thereof to the decision of the General Shareholders’ Meeting, as well as proposals for the re-election or dismissal of the aforesaid directors by the General Shareholders’ Meeting.
- To inform on proposals for the appointment of the other directors for the co-optation thereof or for the submission thereof to the decision of the General Shareholders’ Meeting, as well as proposals for the re-election or dismissal of the aforesaid directors by the General Shareholders’ Meeting.
- To inform on proposals for the appointment and dismissal of members of the Senior Management and the basic conditions of their contracts.
- To inform, in advance, on the appointment by the Board of Directors of the Chair and, where applicable, of one or more Vice-Chairs, as well as the appointments of the Secretary and, where applicable, of one or more Vice-Secretaries. The same procedure shall be followed to agree on the dismissal of the Secretary and, where applicable, of each Vice-Secretary.
- To examine and organise the succession of the Chair of the Board of Directors and of the Company’s CEO and, if appropriate, to make proposals to the Board of Directors for such succession to occur in an orderly and well planned manner.
- To propose to the Board of Directors the remuneration policy for the directors and general managers, or for those individuals who perform their senior management duties reporting directly to the Board of Directors, to executive committees or to CEOs, as well as the individual remuneration and all other contractual conditions for executive directors, ensuring compliance therewith.
- To suggest to the Board of Directors which members should form part of each of the Committees.
- To periodically review the remuneration programmes, considering their suitability and returns.
- To propose to the Board of Directors, for submission to the General Shareholders’ Meeting for an advisory vote, the drafting of an annual report on the remuneration of its directors, under the terms of article 541 of the Law on Capital Companies, already other provision which may replace the same in the future.
- To consider the suggestions made to it by the Chair, Board members, company executives or shareholders.
- To provide information regarding the appointment and dismissal of managers who have direct dependence to the Board of Directors or some of its members, as well as establishing the basic conditions of their contracts, including remuneration, and also inform decisions on remuneration of directors, within the statutory framework and, where appropriate, of the remuneration policy adopted by the General Meeting of Shareholders
- To monitor compliance with the corporate governance rules and internal codes of conduct.
- To monitor the corporate social responsibility strategy and practices, and to assess the degree of compliance therewith.
Six meetings have been held and the following actions, among others, have been carried out:
(A) Corporate Governance:
The relevant report evaluating the competence, experience and merits of the Directors, Mr. Francisco Reynes, Mr. Jose Maria Coronas, Mr. José Aljaro and Mr. Tobias Martinez was issued, for the purpose of their re-election.
The necessary arrangements for the selection process of candidates as a female independent director were started, with the engagement of the firm EgonZehnder, and the first interviews were conducted.
An internal evaluation was carried out on the functioning of the Board of Directors and Committees, to be submitted to the Board of Directors.
Information in relation to the IAGC and the IAR was made available, as well as the proposed amendment to the Bylaws and Regulations of the Board / Shareholders’ meeting.
The amendment of the Internal Code of Conduct (RIC) was proposed in order to adapt its content to the new Regulation on Market Abuse.
(B) Activities in relation to remuneration:
The degree of compliance of the 2015 CEO’s objectives and the performance appraisal were analysed. Also, the objectives of the CEO for the year 2016 were analysed and the corresponding proposals were made to the Board of Directors.
The Directors’ Remuneration Policy was prepared and approved, in order to submit it to the Board of Directors and submit it for approval by the General Shareholders Meeting.
The remuneration of the directors was reviewed in order to accommodate it to the market and taking into account the degree of involvement and dedication of the directors.
The remuneration of the Senior Management personnel (those who directly report to the Chief Executive Officer) to be applied as of 2017 was analysed, making the relevant proposal for its approval by the Board of Directors.
(C) Activities in relation to Corporate Social Responsibility:
A Corporate Responsibility Master Plan was defined for the period comprising years 2016-2020, which aims to be a tool that integrates all the company’s ethical, environmental and social initiatives, with a long-term view, and which establishes a series of commitments in accordance with internationally accepted standards.
A Corporate Responsibility Policy was drawn up and proposed which establishes the basic guidelines and lines of action in the area of the Corporate Responsibility of Cellnex Telecom that allow the formalization and concretion of the Corporate Responsibility concept within the framework of the organization, its communication to the stakeholders and the progressive integration in all the systems and operative processes of the group.
(D) Activities in relation to the Code of Ethics:
It was proposed to expand the functions of the Ethics and Criminal Prevention’s Committee to those of Compliance. Therefore, the name of the Committee was modified by that of the Ethics and Compliance Committee and a document that describes the duties of the responsible for criminal compliance that turns to be held by such Committee, which maintains the same composition of members.
Within the criminal prevention model implemented in Cellnex, it was analysed and drawn up a proposal of a disciplinary system that aims to sanction the breach of the procedures and internal rules implemented by Cellnex for the prevention and detection of crimes.
(E) Talent Management:
The NRC analysed the actions carried out to date by the Management and the projects for 2017, mainly the Succession Plan and High Potential Program.
A proposal for a Selection and Appointment of Directors’ Policy was developed to be submitted to the approval of the Board of Directors.
A proposal for a Communication and Contacts Policy with shareholders was developed to be submitted to the approval of the Board of Directors.