Corporate Governance Policies
Following the Legal Entities’ Criminal Liability Law’s enactment and entry into force, Pampa’s Board considered the compliance status of the Integrity Program outlined in Sections 22 and 23 of this law. Its purpose is to implement internal actions, mechanisms and proceedings to promote integrity, supervision and control, geared at preventing, detecting and correcting irregularities and illegal acts covered by this law.
The Program set forth by law has mandatory and optional requirements, and Pampa has defined the need to comply with all of them. It is worth highlighting that all mandatory requirements had already been implemented at Pampa before said law’s effective date.
Moreover, the Integrity Program is periodically reviewed by the Board, including the identification of potential improvement opportunities. The Board has defined that Pampa’s Internal Audit Department will be the body internally responsible for the program, including its development, coordination and supervision.
Pampa has a Code of Conduct in place, reviewed and updated in 2021, and approved by the Board at year-end. This Code is our guide in order to make honest decisions in our daily activities and defines the way we pursue our challenges. It sets the basic principles to ensure a service of excellence for our customers and build relationships with our suppliers, teammates, shareholders, authorities, intermediate organizations, and the Pampa community.
Pampa offers the Ethics Hotline, an exclusive channel to report, on a strictly confidential basis, any suspected misconduct or breach of the Code of Conduct. This line is available through different channels (website, chat, toll-free telephone number or e-mail) and is operated by an external supplier to ensure higher transparency. Moreover, Pampa has a Procedure for handling complaints. This document describes the process to follow from the reception of a complaint to the investigation’s conclusion and the application of the appropriate corrective actions. The Audit Committee is responsible for supervising the channels’ operation and resolving complaints in issues within its authority.
The policy against Fraud, Corruption and Other Irregularities, reaffirming transparency and ethics as necessary behaviors to lead the Company’s business and achieve sustainable growth.
In this sense, this Policy prohibits fraud, corruption in any form, or acts of misconduct within Pampa. Moreover, it sets Pampa’s stance on preventing corruption and other acts of misconduct, complementing the principles and values defined in our Code of Conduct. Therefore, both documents should be read in conjunction. Finally, this Policy also stipulates the obligation to report any actual or suspected violation of laws and/or regulations, as well as the prohibition of retaliation against any employee or third party for filing a report, legitimately and in good faith, or for refusing to participate in acts of corruption.
This Policy, reviewed and updated by the Board of Directors in 2021, sets certain restrictions and rules on trading Pampa and/or its affiliates’ marketable securities in a stock exchange. Therefore, it ensures higher transparency and guarantees that no Pampa employee may gain a benefit or economic advantage from using of material non-public information about Pampa and/or any of its affiliates.
This Policy applies to Pampa and its subsidiaries’ employees deemed ‘covered individuals’, including, but not limited to, directors, members of the Supervisory Committee, and Senior Management lines.
Since 2008, the Company has had a Policy on Related-Party Transactions. According to the Capital Markets Act No. 26,831, all high-value transactions between Pampa and individuals and/or legal entities that could be deemed ‘related parties’ under the applicable regulations in force shall be subject to a specific prior authorization and control procedure. Said procedure is conducted under the supervision of Pampa’s Legal Affairs Executive Department and involves both Pampa’s Board and Audit Committee (if applicable). This Policy was reviewed and updated by the Board in 2021.
As a trustee under the CIESA Trust, Pampa qualifies as an ‘Obliged Subject’ according to Subsection 22, Section 20 of Law No. 25,246 on Concealment and Laundering of Proceeds of Crime, as amended. This Policy was approved to meet the Company’s obligations as an ‘Obliged Subject’ even though its main activities as of this date do not include acting as a trustee in companies or conducting any other activity under Section 20 of Law No. 25,246. This Policy is based on and geared at possible risks for the Company resulting from its role as trustee under a single trust.
Since 2008, Pampa’s Board has implemented a Self-Assessment Questionnaire that allows for annually examining and assessing its performance and management.
The Company’s Legal Affairs Executive Department oversees the examining and filing of each individual questionnaire; afterward, based on the results, it will submit to Pampa’s Board all measures deemed valid to improve the performance of the Board’s duties.
Since 2009, the Company has had a Relevant Information Disclosure Policy approved by Pampa’s Board. This Policy sets the basic principles guiding the process when information relevant to Pampa is published, as per regulatory requirements imposed by the stock exchanges where Pampa’s securities are traded or those in which Pampa is a registered issuer.
Approved by Pampa’s Board in 2018, this Policy outlines the guidelines to reach a proper balance between distributed amounts and Pampa’s investment plans. It aims at a clear, transparent and consistent practice allowing shareholders informed decision-making, all of them consistent with the Company’s Bylaws and the applicable legal and regulatory framework in force.
|This Dividend Policy (the “Policy”) is designed in accordance with laws and regulations in force in Argentina and the Bylaws of Pampa Energía S.A. (“Pampa”). It establishes a set of guidelines to be observed in order to keep an adequate balance between distributed amounts and Pampa’s investment plans; aiming at establishing a clear, transparent and consistent practice which enables shareholders to make informed decisions. The Policy will be disclosed at Pampa’s “Investors” website.
|2. Dividend Distribution Decision-Making
|2.1. The decision to distribute a dividend is at the sole discretion of the Shareholders’ Meeting, based upon the Board of Directors’ recommendation. It is expressly set forth that the Company is under no obligation to distribute profits, and the Shareholders’ Meeting will have sole discretion regarding the determination and timing of a dividend distribution.
2.2. The Shareholders’ Meeting will determine the dividend amount to be distributed and it may establish the distribution method and timing. The Shareholders’ Meeting may fix a maximum distributable amount during the fiscal year, and it may delegate to the Board the power to determine the distribution timing and method as deemed fit and suitable. In addition, it may create special reserves for future dividend distribution, which may be later reversed if distribution thereof is deemed to be appropriate.
2.3. The decision to distribute a dividend will be made in a manner consist with a reasonable and prudent management practice.
|3. Conditions under which a dividend will be paid – Regulations and internal requirements
|3.1. Pursuant to Section 70 of the Argentine Business Organization Law (Ley General de Sociedades) (the “ABOL”), Pampa is required to allocate 5% (five percent) of its realized and liquid profits as reflected in the income statement for the fiscal year, up to 20% (twenty percent) of the capital stock, to a Statutory Reserve.
3.2. Pursuant to ABOL Section 224 “A dividend distribution or payment of interests to the shareholders is lawful only if made out of realized and liquid profits reflected on a financial statement for the fiscal year, which has been regularly prepared and approved.” In addition, Section 70 of such regulations establishes that in the event of a reduction in the statutory reserve for any reason whatsoever, no profits shall be distributed until such reserve is restored. Profits shall not be distributed either as long as losses from previous years are not covered, all in accordance with the provisions of ABOL Section 71. Therefore, to distribute a dividend Pampa is required to have liquid and realized profits based on a financial statement approved by the General Ordinary Shareholders’ Meeting and in the event of a reduction in the statutory reserve, it shall be restored.
3.3. Additionally, upon determining a distribution of profits, any potential contract limitations on the Company shall be contemplated.
|4. Eligible Shareholders
|4.1. The list of shareholders eligible for a dividend is prepared on the basis of Pampa’s register of shareholders kept by Caja de Valores S.A., address at 25 de Mayo 362, City of Buenos Aires.
4.2. Any declared dividend will be payable to the holder of record as of the date to be reported.
|5. Dividend Payment Procedure
|5.1. Pursuant to applicable laws and regulations, dividends shall be paid within thirty (30) calendar days of approval by the Shareholders’ Meeting. In addition, Pampa must report to the Argentine Securities Commission (CNV) that a dividend has been made available at least 5 (five) business days in advance.
5.2. If applicable, the relevant tax withholding will be made.
|6.1. This document will be effective as from the date of approval by the Board of Directors.
6.2. If any amendments are made to the Legislation or Pampa’s Bylaws, such changes will have effect on the relevant parties in the event of any inconsistency within this document.
This Policy, approved by the Board 2021, is an evolution of the QHSE Policy, originally approved in 2017 and readjusted to the current Company and its challenges, fostering the sustainable development of our businesses. It aims to unify Quality, Health, Safety and Environment (QHSE) standards in our operations’ different processes, guaranteeing the maximum possible safety in each activity’s ordinary course of business. Moreover, this Policy strengthens Pampa’s culture and relationship with different stakeholders, makes the commitments required by certifiable international standards visible, and improves their understanding and commitment.
|This Compensation Policy (the “Policy”) is designed in accordance with the laws and regulations in force in Argentina, the Bylaws and the Rules of the Nomination and Compensation Committee (the “Committee”), and it will provide guidance on the principles pursuant to which the compensation payable to the members of the Board of Directors of Pampa Energía S.A. (“Pampa”) will be made up and effected. It will be used by the Shareholders’ Meeting, the Board of Directors and the Committee as standard practice, and it may be amended as the case so requires based on the circumstances surrounding the individual performance of each member of the Board in each fiscal year. The Policy will be disclosed at Pampa’s Investor Relations website.
|2. Legal Framework
|2.1. Pursuant to the Argentine Business Organization Law No. 19,550, as amended, (the “ABOL”), the maximum amount of compensation that Board members may benefit for any reason shall not exceed twenty-five percent (25%) of profits.
2.2. Such maximum amount will be limited to five percent (5%) if no dividend is distributed to the shareholders, and it will be increased pro rata based on the distribution, up to such cap if all profits are distributed.
2.3. For purposes of application of this provision, the values and limits will be calculated in accordance with the rules of the Argentine Securities Commission.
2.4. If any such limits are exceeded, compensation may be disbursed, provided that it is complied with the ABOL.
|3. Shareholders’ Meeting
|3.1. On an annual basis, the Board of Directors will propose to the Shareholders’ Meeting an aggregate amount of fees for all Directors for analysis. The Shareholders’ Meeting may authorize payment of fees in advance during the course of the fiscal year. If the so payment in advance exceeds the amount eventually approved by the Shareholders’ Meeting upon discussing the fiscal year, any excess amount shall be returned.
3.2. The compensation payable to the Board members will be consistent with compensation received by Directors at other comparable local companies. For such purposes, the aggregate amount will be previously submitted to the Committee for an opinion.
3.3. A fixed amount will be established to be payable to each Director. It may vary based on the tasks performed by each member within Pampa’s organization. Should a Director performing executive functions, he or she may receive additional amounts for his or her services as Pampa’s employee, in the form of a fixed or variable payment scheme or payable in stock or ADRs of Pampa. The total compensation to be approved by the Shareholders’ Meeting shall take into account these amounts pursuant to the rules of the Argentine Securities Commission.
3.4. The fees paid to the directors will be adjusted at least annually in accordance with an average of indexes reflecting changes in prices and on a comparative basis taking into account market adjustments.
|4. Expenses and Reimbursement
|Pampa will reimburse the Board members for any expenses incurred as a result of performance of their functions subject to standards of reasonableness, responsibility and timing, upon approval by the Chair of the Board of Directors in accordance with the procedures established for such purposes.
|5.1. This document will be effective as from the date of approval by the Board of Directors.
5.2. If any amendments are made to the Legislation, the Rules of the Argentine Securities Commission or Pampa’s Bylaws, such changes will have effect on the relevant parties in the event of any inconsistency within this document.
|This Nomination Policy (the “Policy”) describes the principles governing nomination and appointment of members of the Board of Directors of Pampa Energía S.A. (“Pampa”) and it is designed in accordance with the rules and regulations in force in Argentina, the Bylaws and the Rules of the Nomination and Compensation Committee (the “Committee”) that are applicable to the matter. It shall be approved and amended by the Board of Directors, upon consultation with the Committee. In addition, the Policy will be disclosed at Pampa’s Investor Relations website.
|2. Powers of the Committee
|The Committee will assist the Board of Directors in the nomination process by making recommendations for election of Board members as set forth in the Committee’s regulations.
|3. Composition of Board of Directors
|The business affairs of Pampa will be managed by a Board of Directors consisting of such number of regular and alternate members to be determined by the Shareholders’ Meeting, in accordance with the provisions of the Bylaws.
|4. Independence and Incompatibilities
|4.1. The Board of Directors is required to have among its members such number of independent directors as deemed necessary in compliance with applicable local and international legal rules and regulations. The independent status is determined on the basis of the guidelines set by the Argentine Securities Commission.
4.2. A director who, following his or her appointment as an independent director, becomes unfit for any reason that changes his or her status as such, must report it immediately to the Board. The Board of Directors will review its composition in order to maintain the number of independent directors required by applicable laws.
4.3. In relation to the incompatibilities preventing someone from being appointed to the Board, they are listed in the Argentine Business Organizations Law No. 19,550 (the “ABOL”).
|As established in Pampa’s Bylaws, independent directors may not be re-elected for a further term immediately following his or her expired term of office. The other members of the board of directors may be re-elected indefinitely without limitation.
|6. Diversity and No Discrimination
|6.1. In all areas across the company, Pampa promotes best practices regarding diversity and no discrimination, creating an environment free from any kind of discrimination based on race, color, gender or sexual orientation, union affiliation, religion or other differences.
6.2. Harassment or discrimination against any member of the Board of Directors or candidate under any circumstances based on any kind of prejudices will not be permitted, and comments or actions that are likely to give rise to a hostile environment among the members of the Board will not be tolerated. Equal opportunities will be offered to the candidates who, at the discretion of the Shareholders, the Board and the Committee, are duly qualified for the seat.
6.3. In order to comply with the foregoing, the Board of Directors may not be fully composed by persons with the same gender.
|7. Appointment of Members
|Pursuant to the ABOL, the appointment of members to the Board shall be approved by the Shareholders’ Meeting, and such matter should be discussed on a case-by-case basis as part of the Agenda. Any candidate to fill a vacancy in the Board of Directors is required to comply with the procedure laid down in Section 8 hereof.
|8. Nomination Process
|8.1. Presentation of Candidates: Upon calling a Shareholders’ Meeting, the Board will propose the candidates to fill any vacancies in Pampa’s Board of Directors, in accordance with Section 12 of the Bylaws regarding staggered renewal and election based upon lists.
8.2. Committee: For these purposes, the Board of Directors will be assisted by the Committee. Any candidate to the seat of director must -as a prerequisite- be screened by the Committee, which will take into account factors such as independence, diversity, age, skills, experience, knowledge of the Company’s business and industry, among other eligibility requirements.
8.3. Reporting to the Committee: For such purposes, the Board will provide the Committee with:
8.4. The Committee’s opinion will not be binding on the Board of Directors or the Shareholders’ Meeting, but its recommendations will be communicated to the Shareholders’ Meeting at the time of voting for the election of the Board members.
|9. Recommendation of Candidates by the Shareholders
|9.1. To nominate a candidate, pursuant to Section 12 of Pampa’s Bylaws, the shareholders who wish to do so are required to represent -individually or as a whole- at least 3% (three percent) of the capital stock. For such purposes, they must provide the Chair of the Board, or anyone who may replace him or her, with information on the proposed candidate or a list of regular and alternate candidates at least 5 (five) business days prior to the Shareholders’ Meeting at which the election will take place. The following information will be also provided along with the details on the candidates: (i) adequate documentation as evidence of the shareholding required to make the proposal and (ii) the information set forth in Section 8.3 (iii) for each candidate. The proposed list will be communicated by the Company to the market through the means established for such purposes at least 2 (two) business days prior to the Shareholders’ Meeting. In addition, it must be submitted to consideration by the Committee prior to the Meeting.
9.2. The proposal of candidates by shareholders pursuant to Section 12 of the Bylaws may be considered by the Board and added to the list of candidates proposed by it. Otherwise, they will be proposed in a different manner, for which purposes a separate list of candidates proposed by the shareholders will be prepared.
9.3. Cumulative Voting: If in any election of Directors there are shareholders who choose to exercise cumulative voting rights, the provisions of the ABOL and/or any rules governing such right will be applied. Those voting cumulatively are required to disclose, upon giving notice of exercise of the cumulative voting right, at least 3 (three) business days prior to the Meeting, the name(s) of the candidate(s) for election as Regular Director(s) and their respective Alternate member(s), along with the information set forth in Section 8.3 (iii). Proposed candidates will be previously considered by the Committee.
|10.1. This document will be effective as from the date of approval by the Board of Directors.
10.2. If any amendments are made to the applicable Legislation, the CNV Rules or Pampa’s Bylaws, such changes will have effect on the relevant parties in the event of any inconsistency within this document.