Corporate Governance Policies
Corporate Governance Policies
Corporate Governance Policies
Upon the enactment and entry into force of the Legal Entities’ Criminal Liability Law, Pampa’s Board assessed the level of compliance with the Integrity Program set forth in Sections 22 and 23 of such law, which seeks to implement a set of internal proceedings, mechanisms and actions for integrity, supervision and control, geared at preventing, detecting and correcting the irregularities and illegal acts covered by such 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.
Furthermore, the Integrity Program is periodically monitored 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 Business Conduct in place which lays down the ethical principles that constitute the foundation of the relationships between Pampa, its employees and other stakeholders (customers, suppliers, government, shareholders, community, etc.) by providing guidelines and supplying instruments that guarantee the transparency of affairs and proper Company management.
Moreover, Pampa has a Fraudulent Practices Prevention Policy and a Procedure for handling complaints. This last document describes the process to be followed from the reception of the complaint to the conclusion of the investigation and the application of any pertinent corrective action. One of the available instruments is the Ethics Hotline, an exclusive channel to report, on a strictly confidential basis, any suspected misconduct or breach to the Code of Business Conduct. This line can be accessed through different channels (website, toll-free telephone number or e-mail) and is managed by a third-party provider to ensure higher transparency. The Audit Committee is responsible for supervising the channel’s operation and the resolution of complaints in issues within its authority.
This Policy has been implemented to set certain restrictions and rules regarding the trading of marketable securities in a stock exchange, whether Pampa’s and/or any related companies, thus ensuring higher transparency and guaranteeing that no Pampa employee may be rewarded of any economic advantage or benefit from the use 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 in place whereby, pursuant to the Capital Markets Act No. 26,831, all high-value transactions made between Pampa and individuals and/or legal entities which, pursuant to the applicable regulations in force are considered ‘related parties’, will be subject to a specific prior authorization and control procedure to be carried out under the supervision of Pampa’s Legal Affairs Executive Department and which involves both Pampa’s Board and its Audit Committee (as applicable).
Pampa, in its capacity as trustee under the CIESA Trust, qualifies as an ‘Obliged Subject’ pursuant to Subsection 22, Section 20 of Law No. 25,246 on Concealment and Laundering of Proceeds of Crime, as amended. Even though neither acting as a trustee in companies nor any other activity set out in Section 20 of Law No. 25,246 are among the Company’s main activities as of this date, in order to meet the obligations resulting from its condition as ‘Obliged Subject’, this Policy was approved, which 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 own performance and management.
The Company’s Legal Affairs Executive Department oversees examining and filing each individual questionnaire; afterwards, based on the results, it will submit to Pampa’s Board all measures deemed useful to improve the performance of the Board’s duties.
Since 2009, the Company has a Relevant Information Disclosure Policy in place, approved by Pampa’s Board, which aims to regulate the basic principles guiding the operation of the processes to be followed when publishing information relevant to Pampa in accordance with the regulatory requirements imposed by the securities markets where Pampa’s securities are traded or those in which Pampa is a registered issuer.
This Policy, approved by Pampa’s Board in 2017, seeks to consolidate the Quality, Safety, Environment and Labor Health (QSELH) standards into the operating processes of exploration and production, power generation, electricity distribution, refining and distribution, and petrochemicals with the highest safety possible within the ordinary course of each activity.
Approved by Pampa’s Board in 2018, this policy outlines the guidelines to be followed to reach a proper balance between distributed amounts and Pampa’s investment plans with the purpose of establishing a clear, transparent and consistent practice allowing shareholders informed decision-making, all of this 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 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.