Corporate Governance Policies
Corporate Governance Policies
Corporate Governance Policies
Pampa has a Code of Business Conduct in place, updated in March 2017, which not only lays down the ethical principles that constitute the foundation of the relationships between Pampa, its employees and suppliers, but also offers the means and instruments that ensure transparency in the handling of matters and issues that may affect Pampa’s adequate management.
Moreover, Pampa has a Fraudulent Practices Prevention Policy and a Procedure for Reporting Suspected Frauds or Irregularities. Both documents contain a detailed description of the process to be followed from the reception of the complaint to the conclusion of the investigation and pertinent corrective action, if applicable. To such effect, it offers the Ethics Hotline, an exclusive channel to report, on a strictly confidential basis, any suspected misconduct or breach to the Code of Business Conduct, which provides different means (toll-free telephone number, e-mail, and/or web page) and is managed by a third-party provider to ensure higher transparency. The Audit Committee is responsible for supervising the channel’s operations and the resolution of complaints in issues within its authority.
This Policy has been implemented with the purpose of establishing certain restrictions and formalities regarding the trading of marketable securities, whether Pampa’s and/or any related companies’, in a stock exchange, thus ensuring higher transparency and guaranteeing that no Pampa employee may derive 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.
|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.
Pursuant to the Capital Market 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 executive legal department and which involves both Pampa’s Board of Directors and its Audit Committee (as applicable).
In line with the Code’s recommendations, in 2008 Pampa’s Board of Directors approved the implementation of a self-assessment questionnaire to annually examine and assess its own performance and management.
The Company’s executive legal affairs department is in charge of examining and filing each individual questionnaire; afterwards, based on the results, it will submit to Pampa’s Board of Directors all measures deemed useful to improve the performance of the Board of Directors’ duties.
In the year 2009, Pampa’s Management Committee approved the Relevant Information Disclosure Policy in order 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.
In the year 2009, Pampa’s Management Committee passed the Policy on Preliminary Approval for External Auditors’ Services, which standardizes an internal process for the Audit Committee to comply with its obligation to grant its prior approval to the hiring of External Auditors for the provision of any kind of authorized service to Pampa or any of its subsidiaries.
In the year 2010, in accordance with the provisions of the U.S. Foreign Corrupt Act and in addition to the Code of Business Conduct, Pampa adopted the Fraudulent Practices Prevention Program, which sets out the responsibilities, duties and methodology necessary to prevent and detect any misconduct and/or fraudulent behavior within Pampa and/or any Pampa Group company.
On April 26, 2017 Pampa’s Board of Directors approved the Quality, Safety, Environment and Labor Health Policy to continue meeting the standards for operating the oil & gas exploration and production, power generation, electricity distribution, refining and distribution segment and petrochemical segments with the highest safety possible within the ordinary course of each activity.