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CORPORATE GOVERNANCE ANNUAL REPORT - 2015 GRUPO
ARGOS S.A.
Corporate governance is a system used to determine the distribution of rights and
responsibilities among the different actors in a company, and to define how the company
acts. It reflects the organization’s spirit and the responsibility it assumes in seeking to do
things well under principles of honesty, transparency and fairness, empowering its human
and financial resources to achieve productivity and competitiveness without forgetting the
needs of each stakeholder.
Under these premises, Grupo Argos adopted certain business parameters that comprise its
Corporate Governance Code in order to create bonds of confidence and transparency with
its shareholders, the market and society in general.
This annual Corporate Governance Report presents a summary of how the commitments
set forth in the Corporate Governance Code have been met.
Grupo Argos’ corporate governance practices are subject to constant review and upgrading
under the highest international standards, with the goal of meeting and exceeding the
minimum Colombian legal requirements. Furthermore, Grupo Argos makes sure that its
subsidiaries meet these same standards.
Corporate Governance practices are based on the following principles:
• Fair, equal treatment of shareholders and investors.
• Equal, timely and regulated disclosure of relevant information required by
shareholders and investors to make sound decisions.
• Transparent, fluid and complete information provided to the market.
• Clear, general rules established to guide the actions of the administrative bodies,
directors and employees.
• National and international regulations in force are observed and promoted.
• Responsibility to the environment.
In 2015 Grupo Argos conducted various activities to establish its corporate governance and
maintain compliance with the highest standards on the matter. Consequently, the Corporate
Governance Code was amended to include the recommendations of the Nuevo Código País
issued by the Financial Superintendence of Colombia at the end of 2014, and several of the
policies suggested therein were adopted.
Acting through the Sustainability and Corporate Governance Committee, the Board of
Directors at Grupo Argos is responsible for steering issues of sustainability and corporate
governance.
In turn, the majority of the board members at Cementos Argos and Celsia, the principal
businesses of Grupo Empresarial Argos, are independent. These boards also have
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sustainability and corporate governance committees that define relevant guidelines on these
topics within the framework of action defined by Grupo Argos. A majority share in ODINSA
was acquired in 2015, and a process is in place to bring this entity into compliance with the
standards established for Grupo Empresarial Argos.
There are also cross-cutting teams that generate synergies as spaces for discussion and
analysis where employees of Grupo Argos interact with employees of its subsidiaries,
seeking to find consensus in the implementation of best practices.
I. STRUCTURE OF OWNERSHIP
Grupo Argos S.A. is the parent company of Grupo Empresarial Argos, which includes
organizations present in several countries around the Americas, with active participation in
businesses that include cement, energy, real estate, ports and road and airport concessions.
Grupo Argos is the controlling shareholder of Cementos Argos S.A., Celsia S.A. E.S.P.,
Grupo Odinsa S.A. and Situm S.A.S. and holds 50% of the share capital in Compas S.A.
and Pactia S.A.S.
Share Capital
Total repurchased shares 5,702,432
Total shares in reserve 375,844,911
* Share capital as at December 31, 2015.
Owners of significant shareholdings
o Common share
Name of shareholder Shares %
Share
GRUPO DE INVERSIONES SURAMERICANA S.A. 230,089,478 35.65%
GRUPO NUTRESA S.A. 79,804,628 12.37%
FONDO DE PENSIONES OBLIGATORIAS PORVENIR MODERADO 38,260,878 5.93%
AMALFI S.A. 36,324,221 5.63%
FONDO DE PENSIONES OBLIGATORIAS PROTECCIÓN MODERADO 21,153,572 3.28%
Common shares Preferred shares
Subscribed shares 651,102,432 173,052,657
Outstanding shares 645,400,000 173,052,657
Nominal value COP 62.5 COP 62.5
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o Preferred shares
Name of shareholder Shares %
Share
FONDO DE PENSIONES OBLIGATORIAS PROTECCIÓN MODERADO 39,262,482 22.69%
FONDO DE PENSIONES OBLIGATORIAS PORVENIR MODERADO 31,949,129 18.46%
FONDO DE PENSIONES OBLIGATORIAS COLFONDOS MODERADO 11,880,226 6.87%
FONDO DE CESANTÍAS PROTECCIÓN 5,463,067 3.16%
FONDO DE PENSIONES PROTECCIÓN 4,626,200 2.67%
Family, commercial, contractual or corporate relationships among those with
significant shareholdings and the Company, or among those with significant
shareholdings
Grupo Argos has no direct commercial or contractual relations with any persons with
significant shareholdings in the Company.
Grupo Argos holds 36.95%, directly and indirectly, of Grupo de Inversiones Sura S.A., and
9.83% of Grupo Nutresa S.A., and has several board members in common.
Directors.
In addition, the Company is engaged in commercial relations with some of the subsidiaries
of Grupo de Inversiones Sura S.A. and Grupo Nutresa S.A. These relations are developed
under regular market conditions.
Trading shares and other securities issued by the Company by Board Members,
Senior Management and other Managers
There was no trading of this nature in 2015.
Summary of known agreements between shareholders
At this time the Company is not aware of any agreements signed between shareholders.
Shares held by the Company and issuances during the period
No shares were issued or repurchased in 2015. Nevertheless, as indicated above, the
Company holds 5,702,432 repurchased shares.
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II. ADMINISTRATIVE STRUCTURE
Composition of the Board of Directors and its Support Committees
The Grupo Argos Board of Directors is comprised of seven principal members, five of whom
are independent members as required by Colombian law and the Corporate Governance
Code. None of the board members is a Company employee.
The Board is presided by Rosario Córdoba, an independent member of this body.
Name Quality Date of initial
appointment
Rosario Córdoba Independent Member and Chair of the Board of Directors
March 23, 2011
David Bojanini García Shareholder member March 20, 2004
Carlos Ignacio Gallego Palacio Shareholder member March 26, 2014
Mario Scarpetta Gnecco Independent Member March 29, 2006
Ana Cristina Arango Uribe Independent Member March 25, 2009
Jorge Uribe Independent Member March 25, 2015
Armando Montenegro Independent Member March 25, 2015
The Board of Directors has three support committees comprised of Independent or
Shareholder Members, and headed by an Independent Member. In choosing members, their
profiles, knowledge and professional experience as pertains to each Committee purpose is
considered. Furthermore, some Company employees are part of the Committees, with the
right to speak but not to vote.
Audit, Finance and Risk Committee
This committee is comprised of 3 Independent Board Members who are experienced in
accounting and financial topics. At least one of the committee members must have
experience in corporate finance and/or matters related to the design and implementation of
internal control systems.
The committee’s ultimate goal is to assess accounting procedures, manage relations with
the Statutory Auditor, and efficiently supervise the control and risk management system
architectures.
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Members of the committee include:
• Armando Montenegro Committee Chair and Independent Member
• Rosario Córdoba Chair of the Board and Independent Member
• Ana Cristina Arango Uribe Independent Member
Also part of this committee are the Company’s CEO, the Chief Financial Officer, the Internal
Auditor, and the Statutory Auditor.
Appointment and Remuneration Committee
This committee is comprised of 3 Board Members, and at least one must be an Independent
Member. Members must be experienced in matters of strategy, human resources, and/or
topics related to salary policies and similar issues.
The committee’s primary goal is to support the Board of Directors in the exercise of duties
related to appointment and remuneration of Board Members and Senior Management.
Members of the committee include:
• Jorge Uribe Committee Chair and Independent Member
• Rosario Córdoba Chair of the Board and Independent Member
• David Bojanini Shareholder Member
Similarly, the Chief Officer of Human Resources and Chief Administrative Office is part of
this committee.
Information of the duties of the Board of Directors and its support committees and board
member resumes may be reviewed on the Grupo Argos’ website.
Sustainability Committee and Corporate Governance
This committee is comprised of three Board Members, and at least one must be an
Independent Member.
The committee’s primary goal is to assist the Board of Directors in its role of recommending
and supervising the Company’s Sustainability and Corporate Governance measures.
Members of the committee include:
• Mario Scarpetta Committee Chair and Independent Member
• Rosario Córdoba Chair of the Board and Independent Member
• Carlos Ignacio Gallego Shareholder member
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The Company CEO and Chief Legal Counselor are also part of the committee.
Changes to the Board of Directors during the period
Jorge Uribe and Armando Montenegro were elected as new Board Members replacing Jorge
Esteban Giraldo Arango and Guillermo Heins Finkesteadt, who submitted their resignation
due to the age requirement established by the Corporate Governance Code.
Board Members at the Parent Company who are also Board Members or hold
director level positions at subsidiaries
There are no Board Members of the Parent Company within Grupo Argos, who are also
board members or directors at Grupo Argos subsidiaries.
Policies approved by the Board of Directors during the period
The following policies were approved by the Board of Directors in 2015:
- Relationship Policy for Grupo Empresarial Argos Related Parties, which expressly
states the unified purpose that must govern the actions of all the companies in the
corporate group. The objective of this policy is to establish the rules and principles
that companies included in Grupo Empresarial Argos must observe, as well as their
Directors, Managers and Employees. Said rules and principles are of an economic,
legal, administrative and operational nature, always seeking to contribute to
strengthening the value of the businesses, preserve the company reputation,
consolidate the organizational identity and unify criteria.
- The Anti-Fraud, Bribery and Corruption Risk Management Policy contains the
general parameters of action to be followed by all Employees, Managers,
Shareholders, Directors and Third Parties in order to minimize the materialization of
situations giving rise to the risk of fraud, bribery and corruption. It also provides
guidelines to segment, identify, measure, control, investigate and correct this type of
conduct, promoting a culture of compliance.
- The Policy for Internal Audit, Anti-Money Laundering and Combating the Financing
of Terrorism is aimed at establishing the general parameters of action that must be
followed by every Employee, Administrator, Shareholder, Third Party and Director of
Grupo Argos to achieve efficient, effective and timely operation of the System for
Internal Audit, Anti-Money Laundering and Combating the Financing of Terrorism.
Similarly, it seeks to safeguard the reputation of Grupo Argos and to protect its
stakeholders, establishing the necessary measures and exercising the respective
oversight processes, with the goal keeping Company activities and resources from
being used for illegal purposes, or from being involved with third parties that are
engaged in these types of activities.
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- The Transparency Hotline Policy aims to regulate the operation of the transparency
hotline and provide the conditions necessary to make anonymous reports of events
or facts that may constitute or appear to constitute conducts that are irregular,
fraudulent or illegal.
- The Senior Management Selection, Remuneration and Promotion Policy aims to
define selection, remuneration and promotion criteria for Senior Management in the
Company.
Furthermore, the Board approved an amendment to the Gifts and Entertainment Policy which
establishes general parameters of action to minimize the situations of real or potential
conflicts of interest, and the risks of Fraud, Bribery or Corruption derived from giving or
receiving business gifts and entertainment.
These policies are posted on the Grupo Argos website.
Process for appointing Board Members
The basic principles, general and specific competencies, and the limitations of candidates
who intend to become part of the Grupo Argos Board of Directors are drafted in the Bylaws
and the Corporate Governance Code.
The General Meeting of Shareholders holds the election for the Board of Directors.
- Directors may not be more than 72 years old and must have: (i) experience as a
member on other Boards of Directors, (ii) some professional specialty that is relevant
for the activity they perform in the Company, (iii) basic skills that allow them to
perform their tasks adequately; including
analytical and managerial skills, a strategic vision of the business, objectivity and the
capacity to present their point of view, and the ability to evaluate balanced
scorecards, (iv) the capacity to understand and to be able to question financial
information and business proposals, and to work in an international setting.
- In addition to the basic competencies, board members shall have other specific
competencies that will enable them to contribute in one or more dimensions because
of their special knowledge of the industry, of financial aspects and risks, legal
matters, business issues and crisis management.
- Board Members may be (i) Executive Members, persons employed by the Company,
(ii) Independent Members, persons that accredit compliance of the requirements set
forth in Chapter III, Section 4, Paragraph e of the Corporate Governance Code, or
(iii) Shareholder Members, persons that do not meet the description of Independent
Member and are Significant Shareholders in the Company, or persons expressly
nominated by a Significant Shareholder or group of Significant Shareholders.
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- When conforming the Board of Directors, the Company will aim to have Independent
Directors with experience in corporate finance and/or internal control who shall be
designated to be part of the Audit Committee.
- At least 50% of directors elected for a specific period must meet the requirements to
be considered as independent members and they must declare it as such at the time
of accepting their inclusion in a list of candidates. Independent Members will lose
that status after being an Independent Member for three consecutive 3-year terms.
It should be noted that at this time, 5 of the 7 members meet the independent member
requirements.
Election procedure is as follows:
- Prior to the meeting announcement, shareholders will be notified on the Company
website of the professional profiles recommended for candidates in accordance with
the evaluation made by the Appointment and Remuneration Committee.
-
- Proposals to elect board members shall be presented by shareholders at least 5
business days prior to the date set for the General Meeting of Shareholders in which
the election will take place.
- To ensure that profiles of Directors proposed by shareholders meet the criteria set
forth in the Corporate Governance Code, the Appointment and Remuneration
Committee will be responsible for evaluating and providing an opinion about the
proposals submitted prior to the General Meeting of Shareholders. This opinion will
be posted on the Company website.
- The electoral quotient system and other provisions set forth in the Bylaws and the
law shall be applicable to the election.
Board of Directors remuneration policy
According to the provisions of the Bylaws and the Corporate Governance Code,
remuneration is set by the General Meeting of Shareholders in accordance with the
structure, obligations and responsibilities of the Board, as well as the members’ personal
and professional qualities, dedication and experience.
Payment shall be made on a monthly basis, regardless of attendance to Board meetings, as
the Company understands that their duties go beyond mere attendance to the meetings. In
turn, members that participate on a Board support committee shall receive an additional
remuneration, which is determined by the Board of Directors.
Remuneration for the Chairman of the Board may be higher because of the scope of his or
her specific functions and greater dedication of time.
Remuneration of the Board Members and Senior Management Members
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As per the motion approved at the 2015 Ordinary General Meeting of Shareholders, Board
members were paid a monthly professional fee of COP 6,000,000. Furthermore, they
received COP 6,000,000 as professional fees for their participation in the various Board of
Directors support committees.
The remuneration for Senior Management members is disclosed in the information provided
pursuant to Article 446 of the Code of Commerce. This information is part of the financial
statements and may be viewed on the Company website.
Dates of attendance to Board of Directors meetings
o Number and type of meetings conducted
Type of meeting Number of meetings
Conventional 14
Teleconference 1
Total number of meetings 15
o Attendance
Board Member Attendance
percentage
Average
percentage of
attendance
Rosario Córdoba 100%
98%
David Bojanini García 100%
Carlos Ignacio Gallego Palacio 100%
Mario Scarpetta Gnecco 100%
Ana Cristina Arango Uribe 93%
Jorge Uribe 100%
Armando Montenegro 93%
Chair of the Board of Directors
In accordance with the provisions of the Corporate Governance Code, only a Board member who is an independent member may be elected and hold the position of Chair of the Board.
The Chair of the Board is responsible for the following:
- Ensure that the Board of Directors establishes and implements the Company’s
strategic management efficiently.
- Coordinate and plan the Board of Directors functions by establishing an annual work
plan based on the duties assigned thereto.
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- Make the meeting announcement, either directly or through the Board of Directors
Secretary.
- Prepare the agenda for the meetings, in coordination with the Company CEO and
Secretary of the Board.
- Ensure information is duly to the Board Members in a timely manner, directly or
through the Board Secretary.
- Preside over meetings and manage the debates.
- Ensure the execution of agreements reached by the Board of Directors and monitor
the orders and decisions thereof.
- Monitor the active participation of the Board Members.
- Lead the process of annually evaluating the Board of Directors and its Committees,
except for his or her own evaluation.
Secretary of the Board of Directors
As per the Bylaws, the General Counsel would be a high-level company employee,
designated by the Board of Directors as suggested by the Company CEO and by
recommendation of the Appointment and Remuneration Committee.
Furthermore, the Corporate Governance Code stipulates that the duties of the General
Counsel, in addition to those established by law, the Company Bylaws, the Board of
Directors, the Company CEO and other internal regulations and codes, are as follows:
- To preserve company documentation, duly reflect the development of the sessions
in the Books of Minutes, and to attest to agreements reached by governing bodies.
- Ensure that the Board of Directors’ performance is in line with applicable regulations
and guarantee that its governance procedures and rules are respected and
periodically revised in accordance with the Bylaws and other internal Company
regulations.
- Handle conflicts of interest that may arise in the Company which the Board of
Directors must be made aware of.
- Inform the Board of Directors of the shares registry system and situations of control
in the entity.
- Provide legal advice to the Board of Directors and submit reports regarding legal
issues of material importance for the Company’s activity and management.
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- Report Board of Directors’ decisions to different departments and employees in the
Company.
- Comply with the functions delegated by the Board of Directors.
Relations between the Board of Directors and the Statutory Auditor, financial
analysts, investment banks, and rating agencies during the year.
In 2015, the Statutory Auditor was present in every meeting held by the Audit, Finance and
Risk Committee.
External Counseling received by the Board of Directors
In 2015 the Company work with Spencer Stuart firm to design a matrix with the qualities and
competencies to be considered when naming Board Members.
As part of the annual board member training plan, in 2015 the Directors participated in the
Annual Meeting of the League of Directors, organized by Prospecta, with the participation of
Jeffrey A. Sonnenfeld, Associate Dean of the School of Business and Founder of the Chief
Executive Leadership Institute (CELI) at Yale University.
Handling Information with the Board of Directors
In seeking to ensure a communication channel that is fluid, timely and confidential we have
a special application (app) in place since 2014 that is used to share information with Board
Members. The application was used successfully in 2015. This channel is confidential and
exclusively for members of the Board and Senior Management, and can store and share all
the information needed for Board Members to engage in their duties.
Information on attendance and activities of Board of Directors Committees
Meetings of the three Board of Directors Support Committees had 100% attendance by their
members.
Major topics addressed by the Audit, Finance and Risk Committee
- Financial Statements
- Progress in conversion to IFRS
- Comprehensive Risk Management Model
- Internal Control System
- Internal Audit Report
- Statutory Audit Report
- Evaluation and recommendation to adopt the Anti-Fraud, Bribery and Corruption
Risk Management Policy, the Policy for Internal Audit, Anti-Money Laundering and
Combating the Financing of Terrorism and the Transparency Hotline Policy.
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Major topics addressed by the Sustainability and Corporate Governance Committee
- Assessment and recommendation to adopt the Policy governing Relationships
between
Related Parties and Grupo Empresarial Argos
- Amendments to the Corporate Governance Code
- Assessment and recommendation of the Human Rights Protection System.
Major topics addressed by the Appointment and Remuneration Committee
- Regulations for the variable compensation system
- Salary increase proposal
- Assessment and recommendation to adopt the Senior Management Selection,
Remuneration and Promotion Policy
- CEO promotion process analysis and timetable
- Business training
Information on conducting evaluation processes for Board of Directors and
Senior Management, and a summary of results
The Board of Directors is evaluated on an annual basis, alternating external evaluations with
self-evaluations. The external evaluation is conducted by an independent firm selected by
the Board itself based on a recommendation by Administration. These evaluations consider
both quantitative and qualitative aspects, and are the basis to adopt corrective actions or
amendments, as well as to establish training for members.
The Corporate Governance Code establishes that: (i) a report with the conclusions of the
evaluations will be posted on the Company website, (ii) the evaluation plan is intended to
analyze the reasonableness of internal regulations and the Directors’ dedication and
performance, and (iii) The Administration shall inform the General Meeting of Shareholders
about the operation and main activities undertaken by the Board of Directors, Board
committees, and the Company CEO in the previous year.
III. TRANSACTIONS WITH ASSOCIATES
Board of Directors’ attributions on this type of transactions and conflict of
interests
According to the Bylaws, one of the duties of the Board of Directors is to authorize
transactions with associates, when necessary.
In turn, the Corporate Governance Code stipulates that one of the main duties of the Audit,
Finance and Risk Committee is to: (i) be aware of and ask the Board to approve transactions
carried out by the Company with associates, Significant Shareholders, Board members,
Company Managers or Associates of any of the aforementioned when these have a material
impact, are outside the ordinary course of business or are conditions other than usual market
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conditions, and (ii) evaluate and notify the Board of Directors about any potential conflicts of
interest that may arise between the Company and its associates or between associate
companies, and propose mechanisms to manage the situation.
Grupo Argos’ Code of Conduct, approved by the Board of Directors, establishes the
parameters to identify, disclose and prevent potential conflicts of interest. According to this
Code, when a Conflict of Interest or a situation that may eventually lead to a Conflict of
Interest is identified, company employees must disclose it in a timely and adequate manner,
describing the situation fully and in detail, documenting the event and providing all
information that may be relevant to make the corresponding decision. In disclosing conflicts
of interest, the Company requires all its employees to complete a Statement of Potential
Sources of Conflicts of Interest every year. In the event that the situation occurs during the
period between two annual declarations, it must be reported to the Business Conduct Officer
by completing the forms provided for this purpose. Said person will make a decision based
on the general parameters established by the Business Conduct Committee. If the situation
does not fall within these parameters, the Business Conduct Officer will refer it to the
Business Conduct Committee. Conflicts of Interests shall be resolved by strictly applying the
following principles: when Grupo Empresarial Argos’ interest and those of its Shareholders,
Managers or a third party related thereto come into conflict, Grupo Argos’ interests will
always be given priority; when the shareholders’ interests and those of its Managers or a
third party related thereto come into conflict, the shareholder’s interests will always be given
priority.
Furthermore, as indicated above, in 2015 Grupo Argos and its subsidiaries implemented the
Relations Policy Between Companies Related to Grupo Empresarial Argos, which expressly
states the unified purpose that must guide the actions of all the companies included in the
group, and whose object is to establish the regulations and principles to be observed by
companies that are part of Grupo Empresarial Argos, its Directors, Managers and
Employees in their legal, administrative and operational relations.
Details of transactions with the most relevant associates in the Company’s
opinion, including transactions between Conglomerate companies.
Details of transactions between companies in Grupo Empresarial Argos are found in the
Special Report prepared as per Article 29 of Law 222 / 1995, which is part of the
documentation made available to shareholders during the right of inspection period and will
be provided to the shareholders with meeting documentation.
Conflicts of interest that occurred and Board Members’ actions
In 2015, there were no conflicts of interest.
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Mechanisms to resolve conflicts of interest between companies in the same
Conglomerate and its application during the year
The Relations Policy Between Companies Related to Grupo Empresarial Argos describes
the tools to resolve conflicts of interest that may arise between Group companies.
In 2015, there were no conflicts of this nature.
IV. RISK MANAGEMENT SYSTEMS
Explanation of the Internal Control System and amendments during the year
Grupo Argos’ Internal Control System is supported by a solid structure comprised of the
Audit, Finance and Risk Committee, the Internal Audit Department, the Compliance Office,
the Statutory Auditor and the Risk Department. Grupo Argos created the Corporate
Controller position in the last quarter of 2015 with the aim of strengthening the Internal
Control System by designing and coordinating the elements that make up the Control
Architecture with its Associates.
The Board of Directors works to create a solid control environment in the Business Group
by standardizing the internal control system’s bases, and promoting a risk prevention culture
with clearly establish report hotlines.
One of the roles of the Audit and Finance Committee is to support the Board of Directors in
supervising the effectiveness of the Control Architecture’s various components applicable to
the business group. This position is also in charge of supervising the efficiency of the
regulatory compliance function and anti-money laundering and combating the financing of
terrorism activities.
In turn, the Internal Audit Department is responsible for engaging in its independent activity
to assess the quality and effectiveness of the internal control system objectively, and of
providing guidance and advice to add value in the execution of company activities. In order
to ensure its independence, the Internal Audit Department depends directly on the Audit,
Finance and Risk Committee.
The Compliance Office is responsible for promoting the design of procedures aimed at
ensuring compliance with all regulations applicable to the Company, proposing policies that
foster adequate compliance with corporate conduct expectations, designing training
materials on competency and preparing and monitoring risk guidelines associated to their
work.
The Risk Department consolidates risk guidelines and monitors risks that may affect the
achievement of the conglomerate’s strategic objectives. Enterprise Risk Management
includes all types of risks, including social, environmental and financial risks, as part of the
Company's fundamental sustainability strategy and vision. Grupo Argos supervises its
subsidiaries’ risk status through the Audit, Finance and Risk Committee on a quarterly basis.
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Grupo Argos’ Statutory Audit is provided by a prestigious international firm designated by
the General Meeting of Shareholders. In order to ensure it is independent, the Statutory
Audit firm is forbidden from performing or providing services other than those inherent to its
position to companies within the Conglomerate. In 2015, the Statutory Auditor did not report
any legal disqualifications or incompatibilities.
The Corporate Governance Code stipulates that the agreement between the Company and
Statutory Auditor must indicate that in the event of successive reelections, the maximum
total duration of the contractual relation shall be 10 years, that individuals designated to
exercise the position of principal and alternate must change at least every 5 years, and that
said individuals may act as Grupo Argos Statutory Auditors after at least 2 years have
passed from their withdrawal from the post.
Description of the risk policy and its application during the year, and response and
oversight plans for the principal risks
Grupo Argos has an Enterprise Risk Management Model that includes an integral analysis
of the performance of its subsidiaries and the sectors in which they participate. This model
continued to be implemented in 2015 in order to define the corporate risk profile, strengthen
the system based on Grupo Argos’ challenges as parent company, consolidate the corporate
risk map and take the actions necessary to assess handling and monitoring risks.
The risk policy is unified for the entire business group, and is complemented with a series of
complementary policies and guidelines that aim to frame the strategy, projects and
processes within the highest standards of corporate governance and sustainability. The risk
strategy proposed for the organization has 4 fundamental pillars: governance, culture,
methodology (best practices) and information technology. Each element is the basis to
analyze risks and subsequently handle them.
The culture of risk is a fundamental pillar within the model adopted, and is the basic premise
to ensure that the risk management system works as a dynamic model in the company. The
risk culture strategy, called "Awareness means taking the right steps," seeks to promote the
recognition of the risk factors that affect the strategy, projects, processes and facilities in the
different levels within the organization. This campaign is complemented with training, internal
methodologies to evaluate and delegate risks and surveys to measure maturity and risk
culture.
V. GENERAL MEETING OF SHAREHOLDERS
Operating differences of the General Meeting of Shareholders between the minimum levels established by current regulations and those set forth by the Company Bylaws and the Rules of Procedure for the Meeting of Shareholders.
Listed below are the best practices established in different corporate documents of Grupo
Argos that have been adopted by the Company to ensure greater transparency and respect
for the rights of shareholders at the General Meeting of Shareholders:
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- The announcements for ordinary meetings shall be made at least 30 calendar days
in advance, and for extraordinary meetings at least 15 calendar days in advance.
- In no case shall the announcement include points such as "Miscellaneous" or "Other"
that would impede participants from accurately knowing ahead of time the totality of
the topics to be addressed at the respective meeting. This does not preclude the
introduction of a point for shareholders to present proposals they deem pertinent.
- During the period between the announcement and the Meeting, shareholders may
consult the website and the General Counsel for documents related to the respective
General Meeting of Shareholders, including the minutes of the last meeting. During
the same period, at the express written request of any shareholder, copies of
documents specifically indicated in the request may be consulted anywhere the
Company has administrative offices.
- When a meeting includes Board Member elections, information available to
shareholders must include the proposals of candidates for the positions. To that
effect, shareholders must send their proposals for Board Members at least five
business days prior to the meeting date. The proposed list of candidates to the Board
of Directors must include copies of their resume and a Declaration of Independence
signed by these individuals, as well as a Declaration of Conflicts of Interest.
- At events where the General Meeting of Shareholders intends to address a
substantial change of corporate purpose, waive pre-emptive rights, announce a
change of corporate or early dissolution or segregation of the Company, these topics
must be expressly indicated in the meeting announcement. Additionally, the right to
withdraw will be allowed at these events under the same terms and conditions
provided by law for events like mergers or splits.
- During the announcement period, shareholders will have access to the financial
information of subsidiaries.
- During the meeting, the company will make electronic media outlets available to
shareholders to disclose meeting progress and enable shareholders who were
unable to attend to follow the event.
Measures adopted during the year to encourage shareholder participation
In order to foster active, enriching communication with shareholders, in recent years the
Company has been engaged in different strategies to get to know its shareholders. One such
strategy is the CRM platform (Customer and stakeholders Relationship Management) thus
providing systematized management of shareholder information. Furthermore, and based
on the provisions of the Company’s Stakeholder Dialog system, in November several focus
group sessions were held with different stakeholders in which Company shareholders were
also present. These sessions are opportunities to establish effective communication
channels with the various stakeholders, seeking to learn about their main concerns and
needs.
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Information provided to shareholders and communication
Grupo Argos uses the following channels to communicate with its shareholders and to
provide information:
- Website: www.grupoargos.com.
- The Fiduciaria Bancolombia Shareholder Service Center with the following service
lines: +57 (4) 404-2371, +57 (4) 404-2362, +57 (4) 404-2453, +57 (4) 404-2451, +57
(4) 404-2452.
- Investor Service Office, managed by the Chief Financial Officer
([email protected]) and the Director of Investor Relations
- Financial Superintendence website which discloses relevant information to the
market: www.superfinanciera.gov.co.
Number of requests and topics for which shareholders have asked the company
for information.
o First half of 2015
Request Amount
OFFICE VISIT 45
TELEPHONE CALLS 154
Total shareholders served: 199
Request Amount
GENERAL CERTIFICATES 21
OVER-THE-COUNTER TRANSFERS 3
TAX CERTIFICATES 326
HISTORICAL CERTIFICATES 3
CHANGE IN DEPOSITOR 46
INFORMATION UPDATE OR CHANGE 3
DIVIDEND PAYMENT INFORMATION 29
Total requests 431
o Second half of 2015
Request Amount
18
OFFICE VISIT 14
TELEPHONE CALLS 30
Total shareholders served 44
Request Amount
GENERAL CERTIFICATES 19
OVER-THE-COUNTER TRANSFERS 4
TAX CERTIFICATES 397
HISTORICAL CERTIFICATES 1
CHANGE IN DEPOSITOR 50
REPOSSESSIONS AND CLEARANCE 1
INFORMATION UPDATE OR CHANGE 2
DIVIDEND PAYMENT INFORMATION 49
Total requests 493
Attendance to the General Meeting of Shareholders
The most important information concerning attendance to the 2015 General Meeting of
Shareholders is presented below:
Ordinary Meetings 2015 General Meeting of Shareholders
Grupo Argos S.A.
Shareholders represented 738
Assistants 323
Shares represented 541,350,671
Outstanding shares 645,400,000
Percentage of shares represented 83.87%
Details of major agreements
The following topics were approved during the ordinary General Meeting of Shareholders in
2015:
- Financial Statements for 2014
- Management Report by the Board of Directors and the CEO
- Profit Sharing Plan
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- Designation of Jorge Uribe and Armando Montenegro as new board members,
replacing Jorge Esteban Giraldo Arango and Guillermo Heins Finkensteadt
- Board of Directors remuneration
- Amendment to the Bylaws to align them to the recommendations made by Código
País
- Election of Deloitte as the Company’s Statutory Auditor, and setting the professional
fees - Appropriation for social benefit
In addition, the Administration named the most important impacts of the IFRS convergence
process, as well as activities and timetable to be implemented in 2015 to meet Código País
recommendations.
The minutes of the 2015 Ordinary General Meeting of Shareholders may be consulted during
the right of inspection period at the Company website.