[G4-34] The main form of exercising supervision over the Company’s activity by the Supervisory Board are Supervisory Board meetings. The Supervisory Board performs its duties as a collective body. Supervisory Board meetings are convened by the Supervisory Board Chairperson or Deputy Chairperson.
Supervisory Board meetings are convened by the Supervisory Board Chairperson or Deputy Chairperson:
- in accordance with the arrangements made by the Supervisory Board;
- upon its own initiative;
- on the written motion of each Supervisory Board member;
- on the written motion of the Management Board.
Supervisory Board meetings are held in the Company’s seat. In justified cases, a meeting may be held in a different location.
To convene a Supervisory Board meeting, it is required to invite in writing all Supervisory Board members at least 7 days before the date of the meeting. For important reasons, the Chairperson of the Supervisory Board may shorten this period to 2 days, specifying the manner of delivering the invitations. Notifications of the Supervisory Board meeting are sent by fax or electronic mail. In the notification the Chairperson specifies the date, venue and a detailed draft agenda of the meeting. The Supervisory Board holds meetings as needed but no less frequently than once every 2 months. Meetings may also be held without being formally convened provided that all the Supervisory Board members are present and none of them objects to the meeting being held or the agenda. The proposed agenda may be amended if all Supervisory Board members are in attendance at the meeting and nobody objects to such amendment. A matter not included in the agenda should included in the agenda of the next meeting.
Supervisory Board members are obligated to participate in Supervisory Board’s meetings. Supervisory Board members should specify the reasons for their absence in writing. Justification of the absence requires adoption of a resolution by the Supervisory Board. Supervisory Board meetings may be attended by the Company’s Management Board members provided that the Supervisory Board does not object to that. Participation of Management Board members in the Supervisory Board’s meetings is compulsory if they have been invited by the Supervisory Board Chairperson. Meetings can be also attended by other persons, if they have been invited as specified above.
The Supervisory Board may ask opinions of legal advisors providing regular legal assistance to the Company and, in justified cases, appoint and invite to its meetings, appropriate experts in order to obtain their opinions and make the right decision. In the aforementioned cases the Supervisory Board adopts a resolution on commissioning a selected expert (audit, consulting or law firm), obligating the Company’s Management Board to enter into a pertinent agreement.
Supervisory Board meetings are presided over by the Chairperson of the Supervisory Board or, in his/her absence, by the Deputy Chairperson. For important reasons, with the consent of a majority of Supervisory Board members present at the meeting, the person presiding over the meeting is obligated to put to a vote a motion to discontinue the meeting and set a date for resuming it. The Supervisory Board makes decisions in the form of resolutions. Resolutions are adopted mainly at meetings. The Supervisory Board adopts resolutions if at least one half of its members are present and if all members have been duly invited, as specified in the Supervisory Board Bylaws. Subject to unconditionally binding provisions of law, including Commercial Company Code, and provisions of the Company’s Articles of Association, the Supervisory Board adopts resolutions with an absolute majority of votes at the meeting, where absolute majority is understood as more votes cast „in favor” than the votes „against” and abstentions. No resolution may be adopted on matters not included in the agenda unless all Supervisory Board members are present and nobody files an objection. This does not apply to justificiation of the absence of a Supervisory Board member at the meeting. Resolutions are adopted by open ballot. Secret ballot is ordered:
- on the motion of even one Supervisory Board member;
- on personnel matters.
The Supervisory Board, in accordance with the Company’s Articles of Association, may adopt resolutions following the written procedure or via remote means of direct communication. Adoption of a resolution following this procedure requires prior notification of all Supervisory Board members of the wording of the draft resolution. Adoption of resolutions following this procedure does not apply to election of the Supervisory Board Chairperson and Supervisory Board Secretary, appointment or suspension of a Management Board member and dismissal of these persons, as well as other matters whose resolution requires secret ballot. Voting on a resolution adopted in the above procedure, the Supervisory Board members specifies how they voted, i.e. “for”, “against” or “abstained”. Resolutions, specifying that they were adopted following the written procedure or via remote means of direct communication, are signed by the Supervisory Board Chairperson. Resolutions adopted pursuant to this procedure are presented at the next Supervisory Board meeting together with the outcome of the vote.
Supervisory Board members are permitted to participate in the meeting and vote on resolutions adopted at the meeting using means of direct remote communication, i.e. tele- or video-conferences, provided that in the venue specified in the meeting notice at least half of the Supervisory Board members are present and there is a technical possibility of ensuring a secure connection.
Supervisory Board members participate in the meetings and exercise their rights and discharge their duties in person and are obligated to discharge their duties with due diligence. They are also obligated to keep secret the information associated with the Company’s activities, which they have obtained in connection with discharging their mandate or otherwise. The Supervisory Board performs its activities as a collective body.
The Supervisory Board may, for important reasons, delegate individual members to perform specific oversight functions independently for a specified time. The Supervisory Board may delegate its members for a period no longer than three months, to perform temporarily the duties of Management Board members who were dismissed, who have resigned or who cannot discharge their duties for other reasons. The aforementioned delegation requires the consent of the Supervisory Board member to be delegated.
A detailed description of the Supervisory Board’s activities in the past financial year is presented in the Supervisory Board Activity Report submitted annually to the Shareholder Meeting and then published on the website.
The Supervisory Board may appoint from among its members standing or ad hoc task forces and committees to perform specific activities. Permanent committees of the Supervisory Board are as follows:
- TAURON Polska Energia S.A. Supervisory Board Audit Committee (Audit Committee);
- TAURON Polska Energia S.A. Supervisory Board Nomination and Compensation Committee (Nomination and Compensation Committee);
- TAURON Polska Energia S.A. Supervisory Board Strategy Committee (Strategy Committee).
The composition, tasks and operating rules of the aforementioned committees are defined in the committee bylaws adopted by the Supervisory Board.
A detailed description of the operation of the Supervisory Board is presented in the Commercial Company Code, Company’s Articles of Association, available at the website, and in the Bylaws of the Supervisory Board of TAURON Polska Energia S.A. with its registered office in Katowice.
The Supervisory Board consists of five to nine persons appointed for a joint term of office of 3 years, except for the first term of office, which lasted 1 year. In accordance with the Company’s Articles of Association, Supervisory Board members are appointed and dismissed by the Shareholder Meeting, with the State Treasury holding the right to appoint and dismiss 5 Supervisory Board members.
Remarks regarding appointment of Supervisory Board members:
- in the period during which the State Treasury, including State Treasury subsidiaries within the meaning of § 10 Sec. 5 of the Articles of Association, holds the Company’s shares carrying voting rights of at least 25% of the total number of votes in the Company, the State Treasury is entitled to appoint and dismiss Supervisory Board members of a number equal to half of the maximum number of Supervisory Board members defined in the Articles of Association (in the event this number is fractional, it is rounded down to an integral number, e.g. 4.5 is rounded off to 4) plus 1, with the reservation that the State Treasury:
- is obligated to vote at the Shareholder Meeting on determining the number of Supervisory Board members corresponding to the maximum number of Supervisory Board members specified in the Articles of Association if such a motion is submitted to the Management Board by a shareholder or shareholders holding a number of shares authorizing them to exercise at least 5% of the total number of votes in the Company,
- is excluded from the voting right at the Shareholder Meeting on appointment and dismissal of the remaining Supervisory Board members, including independent Supervisory Board members; this however does not apply to a case when the Supervisory Board cannot act as its composition is smaller than required by the Articles of Association, and the shareholders present at the Shareholder Meeting other than the State Treasury do not supplement the composition of the Supervisory Board in accordance with the division of places in the Supervisory Board, as described in this chapter;
- in the period during which the State Treasury, including subsidiaries of the State Treasury within the meaning of § 10 Sec. 5 of the Articles of Association, holds the Company’s shares carrying voting rights of at least 25% of the total number of votes in the Company, the State Treasury, represented by the minister responsible for State Treasury matters, is entitled to appoint and dismiss one Supervisory Board member;
- the appointment and dismissal of Supervisory Board members by the State Treasury in accordance with the procedure set forth in Section 1 or 2 above is made by way of a declaration submitted to the Company.
At least two members of the Supervisory Board should meet the independence criteria (independent Supervisory Board members). The phrase “independent supervisory board member” means an independent Supervisory Board member within the meaning of the Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board (2005/162/EC), in consideration of Best Practices of Warsaw Stock Exchange Listed Companies.
Independent Supervisory Board members submit to the Company, before their appointment to the Supervisory Board, a written representation on satisfying the prerequisites for independence. In the event of a situation resulting in failure to satisfy of the prerequisites for independence, the Supervisory Board member is obligated to immediately notify the Company thereof. The Company informs shareholders about the current number of independent Supervisory Board members.
The Supervisory Board exercises permanent supervision over the Company’s activity operations in all areas of its operations.
According to the Company’s Articles of Association, the Supervisory Board’s duties and powers include in particular the matters specified in the following table.
A description of the experience and competences of the Supervisory Board members is published at the website www.tauron.pl.
The Supervisory Board Committees are composed of 3 to 5 (7 in the case of the Strategy Committee) members. The work of individual Committees is managed by their Chairperson.
Meetings are convened by the Chairperson of the Committee on his/her own initiative or on the motion of the Committee member or Supervisory Board Chairperson and are held as needed. In the case of the Audit Committee the meetings are held no less frequently than once per quarter. The Committee Chairperson may invite to the meetings Supervisory Board members who are not Committee members, Management Board members and employees of the Company, and other persons working or cooperating with the Company. The Committee Chairperson or person appointed by him/her submits findings, recommendations and reports to the Supervisory Board.
Committees adopt resolutions if at least one half of its members are present and if all of them have been duly invited to the meeting. Committee resolutions are adopted with an absolute majority of votes present at the meeting, where absolute majority is understood as more votes cast „in favor” than the votes „against” and abstentions. Supervisory Board Committees may adopt resolutions by following a written procedure or via remote means of direct communication.
Supervisory Board Committees members may take part in the Committee meetings and vote on the adopted resolutions via remote means of direct communication, i.e. teleconferences or videoconferences.
The Company’s Management Board is informed about the recommendations and assessments submitted to the Supervisory Board by the given Committee. Every year the Supervisory Board Committees publish, through the Company, information on their composition, number of meetings held and participation in the meetings during the year and the main actions taken. Additionally, the Audit Committee confirms its positive assessment of the independence of the financial audit process and presents a short description of the steps taken to formulate such a conclusion.
The Company’s Management Board ensures for individual Committees the possibility of using the services of external advisors to the extent required to discharge their duties.