Corporate governance

//Corporate governance
Corporate governance 2017-07-19T11:43:07+00:00

Strategy and progress

STRATEGY GRI 103-2
PROGRESSGRI 103-3
Updating the Organization’s corporate governance measures.
  • New sustainability-related functions were assigned to the Strategic Planning Committee of the Board of Directors. The name of this committee was changed to Strategic Planning and Sustainability Committee.
Socializing the good governance measures and raising awareness among all employees.
  • A report on the implementation of successful corporate governance practices and the Annual Corporate Governance Report were presented to both the shareholders and the stakeholders via the Company’s website with the purpose of communicating relevant news on the subject.
  • The Organization continued to socialize the Code of Corporate Governance in the inductions for new employees.
Watching over the compliance with the governance practices incorporated by the Company.
  • The firm AtKearney conducted an external and independent evaluation to the performance of the Board of Directors.
  • The Appointment and Remuneration Committee analyzed the most convenient personal profiles for the Board of Directors, the tentative profile composition, the necessary time the members would need to adequately perform their duties, and the existing gaps between the profiles of the current members and the profiles identified as necessary for the Company.
Strengthening the reporting mechanisms for matters related to ethics and conduct.
  • Telephone lines were implemented for the operation of the Ethics Line in the international operations, and a plan was designed for strengthening and socializing this reporting mechanism in 2017.

Purpose

Establishing a conduct framework governed by transparency, integrity and ethics for Grupo Nutresa. This conduct framework will be established by developing policies of management, information dissemination and control, which will be aligned with the highest international standards of corporate governance, thus having a positive impact on the organizational reputation for the benefit of the shareholders and all other stakeholders.

Risks and opportunities GRI 103-1

Comercial Nutresa employees.

One of the Organization’s main goals is to keep the corporate governance aligned with the highest international standards. This will allow to ensure the transparency and integrity in the administration and control of the operations, enabling an optimal performance from the governance bodies and the fulfillment of the strategic goals.

The Company delivers unabridged, clear and timely information to its shareholders and all other stakeholders with the intention of ensuring transparency and promoting integrity by means of the implementation of policies and behavior guidelines that must be complied with by the governance bodies, employees, customers, suppliers and shareholders.

Through these mechanisms, the Organization generates value, trust and well-being among the stakeholders with the purpose of attracting and retaining local and foreign investors.

Outlook

Grupo Nutresa’s commitment for 2020 is to maintain the excellence of its corporate governance management by means of the implementation of advanced world-class practices.

In search for higher levels of corporate transparency, ethical behavior and integrity, the Organization focuses its efforts on keeping its internal policies and guidelines updated according to the latest worldwide trends in the field, and on strengthening the interaction with its diverse stakeholders through the timely delivery of information.

The short-term objective is to monitor the compliance with the amendments of the Code of Corporate Governance and with the bylaws, and to follow up on the new policies that were implemented in 2014 and 2015. Furthermore, it is a priority to confirm that the changes implemented over the past few years are effectively executed in the practice and in the Organization’s daily activities, and to ensure that these changes have a positive impact on the sustainable management.

At both the medium and long term, the Organization will execute campaigns to socialize the Code of Corporate Governance among the employees and related audiences. The purpose of the foregoing is to strengthen the ethical behavior and the transparency by embracing the organizational values and the clarity with regard to the observable behaviors in the subject matter.

Success stories and acknowledgments GRI 103-3

The Organization’s internal audit was granted the international quality certification by the Institute of Internal Auditors (IIA) for having complied with the international framework for the professional performance issued by said institute, which promotes the implementation of practices aimed at the independence and efficiency of the internal audit.

For the fourth time, Grupo Nutresa received the Investor Relations acknowledgment, which is awarded by the Colombian Stock Exchange to the companies that have voluntarily adopted the best practices in terms of information disclosure and relations with investors.

Grupo Nutresa received, for the second consecutive year, the ALAS20 Acknowledgment in the category of Leading Company in Relations with Investors. This accolade is based on the leadership exhibited by the Organization with regard to the consistency and excellence in the disclosure to and engagement with its investors.

Progress achieved in 2016 GRI 103-3

Servicios Nutresa employees.

The Board of Directors is formed by seven members. In 2016, the Shareholders Assembly reelected the six members who formed the Board from April 2015 to March 2016 and elected a new independent member, Cipriano López González, for the April 2016-March 2017 term.

All Board members have diverse profiles, knowledge and experience in finance, business and strategy, and they fulfill the skill set requirements defined as necessary for said governance body. In 2016, a skills matrix was created with the expected abilities for the Board as a collegiate body, which includes the fulfillment of said skills by the current members. The skills matrix is published on the Company’s website.

The Organization has incorporated more rigorous criteria, which are established in the Code of Conduct, than the ones established by the law to determine the independence of the Board members. Thus, four of the seven Board members are independent, including its Chairman.

In 2016, the Appointment and Remuneration Committee, based on the analysis conducted by Prospecta, a consulting company specialized in corporate governance matters that is currently part of AtKearney, analyzed the most convenient personal profiles for the Board of Directors, the tentative profile composition, the necessary time the members would need to adequately perform their duties, and the existing gaps between the profiles of the current members and the profiles identified as necessary for the Company.

Said Committee submitted to the Board and the investors a report of the aforementioned analysis, which included a training plan for 2016 and 2017 with regard to the improvement opportunities identified. Following this plan, the Board of Directors received training in nutrition, health, well-being and risk management.

A report on the implementation of successful corporate governance practices and the Annual Corporate Governance Report were presented to both the shareholders and all the stakeholders via the Company’s website with the purpose of communicating the most relevant facts and news on the subject with regard to the Organization.

The Board of Directors decided to assign new sustainability-related functions to the Strategic Planning Committee, which changed its name to Strategic Planning and Sustainability Committee.

The Board gathered every month and all the support committees met twice in 2016, except for the Finance, Audit and Risks Committee, which held five meetings. All of them fulfilled the functions and meeting frequency provisions established in the Code of Conduct.

The performance of the Board was evaluated by AtKearney, an independent third party that analyzed its level of development as a collegiate body in four different dimensions: Structure / Governance, Coordination, Interaction and Strategic approach. The evaluation produced positive results among which it was identified that, with regard to the main recommendations derived from the 2014 evaluation, the Board has exhibited important progress in relation to the definition of a plan to train its members and formally bring them up to date.

Additionally, the Board conducted its annual self-evaluation through which it assessed the qualities, attributes and experience of the Board itself and its support committees, and several improvement opportunities were also identified.

Ethics Line

For Grupo Nutresa, ethics and transparency are fundamental pillars of its corporate operation and highly relevant principles for the fulfillment of its mission. Fraud, asset laundering, financing of terrorism and corruption are the most significant risks related to this matter, which are managed through policies, codes and awareness-raising and education initiatives that facilitate the development of the relations with the corresponding stakeholders.

The Organization also addressed 48 reports received through the Ethics Line, which were channeled by the responsible departments of each one of the Businesses. 87% of the reports were related to direct employees and 13% of them involved third parties. 27% of the reported situations were confirmed.

In 2016, the Organization found out about 148 incidents in which the Code of Conduct was violated, amounting to COP 1,3 billion and classified as follows: GRI 102-17 [SDG 16]

Appropriation of inventories
73
Appropriation of cash
18
Misuse of the Company’s assets
18
Falsification of information
14
Suspected self-robbery
11
Appropriation of portfolio
4
Other
3
Conflict of interest
2
Appropriation of travel allowances
2
Sexual harassment
2
Appropriation of third-party properties
1

Hover your mouse to see the figures

156 employees were involved in these incidents, 81% of which worked under direct employment contracts and the rest under service provision contracts. The contractual relations with all of them were terminated and the corresponding legal actions were commenced.

With the purpose of mitigating the possible negative impacts of these type of wrongful acts, all the companies have insurance policies with adequate coverage. GRI 205-3GRI 205-3

Superior Achievement Acknowledgment System

This system establishes that 30% of the variable annual compensation of the CEO, the CFO and the Secretary General should be paid with Company shares, and the disposition of such shares is limited until the Executives retire. The settlement is paid in a 3-year term, encouraging thus the Executives to remain in the Organization.

The variables used in this system include (internal and external) financial, social, market and sustainability metrics, whose annual goals are determined by the Appointment and Remuneration Committee of the Board of Directors.