Corporate governance
The Board
Pepco Group N.V. is headed by a Board of Directors which has the collective responsibility for the management of the company. The Board is the Company’s statutory managing board within the meaning of the Dutch Civil Code. The Board is appointed by shareholders, who are the owners of the company. The Board is responsible for the direction and oversight of the company on behalf of the shareholders and is accountable to them for all aspects of the company’s business. The Board maintains overall responsibility for the management of the group.
The Board:
- Develops strategy, grows shareholder value, provides oversight and corporate governance.
- Provides leadership of the group, driving it forward for the benefit, and having regard to the views, of its shareholders and other stakeholders.
- Governs the group within a framework of effective controls, which enable risks to be assessed and managed.
- Approves the group’s strategic objectives.
- Ensures that sufficient resources are available to the group to enable it to meet strategic objectives.
The Board has formally adopted a schedule of matters reserved to it for its decision (incorporated within the Board Rules).
Board Rules and Board Profile
Board rules
The Board Rules provide for an internal division of tasks, procedures, and decision-making of the Board of Directors of Pepco Group. In performing their duties, the directors shall comply with these rules. These rules are complementary to, and subject to, the company’s articles of association and applicable laws and regulations.
Board profile
To ensure that the Board of Directors of Pepco Group is adequately composed at all times,
members of the Board are appointed on the basis of applicable laws, the articles of association, the Board Rules for the Board of Directors and the Board Profile. The Board Profile provides a guideline for the composition of the Board and an indication of the desired knowledge and experience, skills, competencies and background of the Board, which is pursued both individually and collectively.
Board Diversity Policy
We have a Board Diversity Policy which commits to at least 30% female representation on the Board. The Board is committed to promoting equality, diversity and inclusion in the boardroom and to ensuring that all members of the Board are able to contribute to discussion. The Board currently comprises eight directors, with two out of the six non-executive directors being female (33.33%).
As per the Board Diversity Policy, all appointments seek to promote diversity of gender, nationality, skills, background, knowledge, competencies, industry experience and other qualities. The Board aims to meet industry targets and recommendations wherever possible and considers merit and an appointee’s qualifications and previous experience in nominating members to the Board.
The Committees
The Board has established three permanent committees that deal with significant aspects of the company’s affairs. These are the Audit Committee, Nomination Committee and Remuneration Committee. If the need should arise, the Board may set up additional committees as appropriate.
Audit Committee
Oversees the group’s financial and non-financial reporting, risk management and internal control procedures, the compliance with legal and regulatory requirements, and the work of its internal and external auditors.
Nomination Committee
Reviews the composition of the Board and senior management, and plans for its progressive refreshing with regard to balance and structure as well as succession planning, taking account of evolving legal and regulatory requirements as well as stakeholders’ expectations.
Remuneration Committee
Determines the framework, policy and levels of remuneration of the Executive Directors and senior executives.
Compliance with the Dutch Code and Warsaw Code
As Pepco Group N.V. is incorporated under the laws of the Netherlands and listed on the WSE, the company applies the Code of Best Practice for WSE Listed Companies (the Warsaw Code) and complies with the Dutch Corporate Governance Code (the Dutch Code) by applying principles and best practice provisions that are applicable or explaining why the company deviates from them.
As the principles set out in the Warsaw Code are similar to the principles of the Dutch Code, the company complies with a majority of the principles and best practice provisions of the Dutch Code.
Compliance with the Code of Best Practice for WSE Listed Companies
Remuneration
In line with the Remuneration Policy of the company, the remuneration of the Executive members of the Board is determined by the Non-Executive members of the Board, upon the recommendations of the Remuneration Committee. The Non-Executive Directors who are not considered to be independent do not receive remuneration from the company or its affiliated enterprises. The general meeting decides on the Remuneration Policy applicable to the Non-Executive Directors.
Relationship agreement
At the time of Company’s listing on the Warsaw Stock Exchange (May 2021), the Company entered into a relationship agreement with certain affiliate enterprises of Steinhoff International Holdings N.V. (the SIHNV Affiliates) to regulate the relationship between the Company and the Steinhoff group of companies (the Relationship Agreement). The Relationship Agreement provides that:
a) for so long as the SIHNV Affiliates hold, in aggregate, more than 30% of the voting rights of the Company, the SIHNV Affiliates will jointly be entitled to nominate three Non-Executive Directors to the Board. This nomination right is reduced to two Non-Executive Directors when the SIHNV Affiliates hold, in aggregate, less than 30% of the voting rights of the Company. This nomination right is further reduced when the SIHNV Affiliates hold, in aggregate, less than 20% of the voting rights of the Company. If the SIHNV Affiliates hold, in aggregate, less than 10% of the voting rights of the Company, they will no longer have the entitlement to nominate any members of the Board;
b) subject to compliance with applicable laws and regulations, including the Market Abuse Regulation, the Company will:
i. provide certain information to the SIHNV Affiliates to enable the Steinhoff group of companies to fulfil its regulatory and legal obligations and to facilitate the preparation of the accounts of the SIHNV Affiliates and connected enterprises for so long as such provision is reasonably required by generally applicable accounting principles; and
ii. provide reasonable assistance and access to Company management in connection with any planned disposal of shares in the Company that are held by the SIHNV Affiliates;
c) transactions and arrangements between the SIHNV group of companies and the Pepco Group will be conducted at arm’s length and on normal commercial terms; and
d) no member of the SIHNV group of companies will propose or procure the proposal of a member resolution which would prevent the Company from complying with its legal and regulatory obligations.
In June 2023, SIHNV and its subsidiaries implemented a restructuring plan. As part of that plan, all investments and group services’ debt were transferred to Steinhoff Topco B.V. (now called Ibex Topco B.V.). The ultimate beneficial owner of Pepco Group N.V. is Ibex Topco B.V.