i. The Company must be led by a professional and qualified Board of Directors, which will be in charge of laying the necessary foundations to guarantee the Company’s sustainable success. The Board is the guardian of the Company and the interests of all its shareholders.
ii. The Board will be responsible for establishing and promoting the corporate culture and values. In its actions, the Board should ensure compliance with the highest standards of ethics and integrity based on the Company’s best interests.
iii. The Board will be responsible for pursuing a strategy inspired in the Company’s vision and mission and aligned with its values and culture. The Board will constructively engage with the management to ensure the proper development, execution, monitoring and modification of the Company’s strategy.
iv. The Board will exercise a permanent control and supervision over the Company’s management, ensuring that it takes measures towards the implementation of the strategy and the business plan approved by the Board.
v. The Board will have the necessary mechanisms and policies in place to exercise its and each of its members’ duties in an efficient and effective way.
|1. The Board of Directors generates an ethical working culture and sets out the Company’s vision, mission and values.|
|In 2017, the Company’s Board approved its Code of Business Conduct, which sets out Pampa’s vision, mission and values(1) and expresses the conduct expected of the Company members, both in their daily activities and in decisions having long-term effects. The Company permanently monitors all its policies and procedures, including the Code of Business Conduct, to keep them updated in accordance with the development of the Company and its businesses, always in observance of the highest standards of corporate governance. Based on what has been described above, the Company applies the recommended practice.|
|2. The Board of Directors sets the Company’s general strategy and approves the strategic plan, which is developed by the management. In doing so, the Board takes into consideration environmental, social and corporate governance factors. The Board of Directors oversees its implementation using key performance indicators and taking into consideration the best interests of the Company and all its shareholders.|
|As regards the Board of Directors, the Company applies the practice taking into consideration several indexes, factors, risks and projections analyzed by the management, as well as the different environmental, social, health and safety factors disclosed in the Company’s Annual Sustainability Report, and in line with Pampa’s strategy, approves an annual budget which will guide each sector’s actions in the following fiscal year. To such effect, the Planning and Strategy Department oversees devising and enforcing the strategy and its budget.|
|3. The Board oversees the management and ensures that it develops, implements and maintains a proper internal control system with clear reporting lines.|
|The Company applies the recommended practice given that, at least on a quarterly basis, a management report is submitted to the Board detailing relevant events for Pampa’s performance.
Moreover, the Board is on daily contact with the Company’s management and during the Board’s meetings with members of the different departments, who are invited so that they may raise queries regarding the specific topics to be addressed, aiming to guarantee the Board’s monitoring and follow-up of the goals set for the fiscal year.
Pampa understands that the interaction between the Board of Directors and the management (including the Board’s members exercising executive functions) enriches control over the Company’s administration and the level of understanding on its performance. The preparation and professional credentials of all Board of Directors’ members allow for an open and sincere discussion on the Company’s management(2).
Moreover, one of the duties of the Audit Committee (consisting exclusively of independent directors) is supervising the proper functioning of internal control systems.
Finally, the Board of Directors approved the Company’s organizational chart, setting out the different reporting levels to the Chief Executive Officer (CEO), establishing clearer reporting lines.
|4. The Board of Directors designs the corporate governance structure and practices, appoints the responsible person for their implementation, monitors their efficiency, and suggests changes if necessary.|
|In line with the best practices, the Board not only approves the different corporate governance policies applicable throughout the Company, but also monitors them to adjust them to the Company’s reality, as described in Practice 1 in this Corporate Governance Report. In this sense, the Board has approved the following policies: Best Security Trading Practices, Related-Party Transactions, Material Information Disclosure, Compensation, Nomination, Dividend Distribution and Prevention Regarding QSELH. On the other hand, it periodically monitors the Company’s Integrity Program.
Moreover, the Board analyzes in each case whether specific committees are needed for the application of different policies. If it considers that a specific committee is not necessary, the Board delegates its application, monitoring and review to the area it considers competent to such effect. In the way described, the Company applies the recommended practice.
|5. The Board of Directors’ members have enough time to exercise their duties in a professional and efficient manner. The Board and its Committees have clear and formalized rules for their operation and organization, which are disclosed in the Company’s website.|
|The Board’s members devote the time and efforts necessary to monitor issues submitted for their approval, tracking and monitoring. The Board and its Committees receive prior information on the topics submitted for their consideration to allow for an efficient decision-making process. Moreover, certain Directors serve executive functions in the Company, which allows them to have daily contact in their administration. As regards the professionalism of the Board’s members, as established in our Nomination Policy, the Company evaluates the nominees to be proposed before the Shareholders’ Meeting taking into consideration, among other aspects, their independence, diversity, age, skills, experience, knowledge of the Company’s business and industry and possible incompatibilities, to guarantee the Board of Directors’ diversity.
Moreover, the Board of Directors and its Committees (the Audit, Compensation and Nomination Committees) have their respective internal rules governing their functioning, which are available on our website. These rules primarily regulate matters concerning the directors’ powers and responsibilities and the holding of meetings. In the way described, the Company applies the recommended practice.