Viscofan adds a strategic value to its good corporate governance to provide a high level of trust to make its business goals and structure compatible with the protection of the rights of all stakeholders.
MATERIAL ASPECTS |
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Good corporate governance is a key factor to generate value, improve economic efficiency, integrate businesses and bolster the trust of its shareholders and other stakeholders, thanks to the appropriate division of functions, duties, and responsibilities, among all the Company’s governing and management bodies.
In recent years, it has progressively reinforced its structure to ensure the incorporation of the principles and best practices of good corporate governance, both nationally and internationally, adapting them to the circumstances of the Viscofan Group, until reaching the best level of compliance.
The Viscofan Group’s governance is governed by the general ethical principles and guidelines established by the Group’s Code of Conduct.
In turn, the good governance commitment of the Company’s Board of Directors is expressed in its General Sustainability Policy, approved in 2020 by the Board of Directors, which aims to set out the basic principles and commitments that should govern the Group’s sustainable development strategy.
This strategy, expressed in the Sustainability Action Plan, seeks to favour a culture of best practices in sustainability, and contribute to improving people’s well-being, boosting the economic, environmental and social development of GOOD GOVERNANCE PRACTICES the communities in which the Viscofan Group is present, and create value on a sustainable basis through ethical behaviour for all its stakeholders.
Alongside this, the General Sustainability Policy is organised into specific policies in the main axes of sustainability drives which, in 2020 were proposed or updated by the Board of Directors:
Likewise, within Viscofan’s commitment to Good Corporate Governance and, in particular, to promoting compliance with the recommendations of the Code of Good Governance for Listed Companies approved by the National Securities Market Commission (hereinafter the “CNMV”), updated in June 2020, modifications were made in the year to the Board of Directors, the Board Committees and their Regulations.
The governance structure of Viscofan is based on two main bodies: the General Shareholders’ Meeting and the Board of Directors.
The General Shareholders’ Meeting is the supreme governing body of the Company in which shareholders decide by a majority vote on the affairs within the scope of their authority.
Viscofan has established the principle of “one share, one vote” which promotes equality among all of the company’s shareholders. There is only one class of shares, giving the same rights and obligations to all of the Company’s shareholders. There are no restrictions to voting and no limit to the number of votes that can be cast by one single shareholder.
In recent years, Viscofan has been pursuing a series of initiatives to promote transparency, communication and shareholder participation at the General Meeting, including information on the items on the agenda, an attendance premium of €0.01 per share, facilitating remote voting, electronic voting, electronic forum and a questionnaire to answer the most common questions regarding the General Meeting.
In 2020, under article 41 of Royal DecreeLaw 8/2020 of 17 March, on extraordinary urgent measures to combat the social and economic impact of COVID-19, the General Shareholders’ Meeting held on 24 April 2020 was exclusively attended by telematic means, and for this purpose it was broadcast on the corporate website, www.viscofan.com.
As a result of all these measures, and despite the changes caused by the COVID-19 pandemic, the General Shareholders’ Meeting for the year was attended by 87.57% of the company’s share capital, maintaining the high attendance percentage at the General Meetings of recent years, above the average for listed companies, which is especially significant taking into account the company’s high free-float.
% participation | |
31/12/20 | |
Corporación Financiera Alba, S.A. | 13.0% |
APG Asset Management N.V. | 10.1% |
Angustias y Sol S.L. | 5.0% |
Marathon Management, LLP | 4.9% |
Setanta Asset Management | 4.0% |
Wellington Management Group LLP | 3.2% |
Other Board of Directors | 0.9% |
Treasury shares | 0.3% |
Free Float | 58.6% |
General Shareholders Meeting | 24/4/20 | 12/4/19 | 25/5/18 |
% attending in person | 19.2% | 19.7% | 18.2% |
% proxy and remote voting | 68.4% | 62.8% | 62.2% |
Total attendance |
87.6% | 82.5% | 80.4% |
The Board of Directors is the body in charge of representing and managing the Company. Its essential function is the approval of the strategy, the basic policies, the preparation of financial statements and, in short, the general supervision of all aspects forming part of Viscofan S.A. and, where appropriate, of the companies forming its group of companies guided by corporate interest.
Name and surname | Category | Position in the board | Last Appointment Date | Audit Committee | Appointments, Remuneration and Sustainability Committee |
Mr. JOSÉ DOMINGO DE AMPUERO | Executive | Chairman | 12/4/19 | ||
Mr. JOSÉ ANTONIO CANALES | Executive | Director | 25/5/18 | ||
Mr. IGNACIO MARCO-GARDOQUI | Independent | Vice Chairman | 24/4/20 | Vocal | Vocal |
Mr. JOSÉ MARÍA ALDECOA | Independent | Lead Director | 25/5/18 | Vocal | Vocal |
Mr. JAIME REAL DE ASÚA | Independent | Director | 25/5/18 | Chairman | |
Mrs. LAURA GONZÁLEZ MOLERO | Independent | Director | 25/5/18 | Chairwoman | |
Mr. NÉSTOR BASTERRA | Other External | Director | 25/5/18 | Vocal | |
Mrs. AGATHA ECHEVARRÍA | Other External | Director | 25/5/18 | Vocal | |
Mr. JUAN MARCH | Nominee | Director | 12/4/19 | Vocal | |
Mr. SANTIAGO DOMECQ | Nominee | Director | 24/4/20 | Vocal | |
Mrs. CARMEN DE PABLO | Independent | Director | 24/4/20 | Vocal | |
Mr.JOSÉ ANTONIO CORTAJARENA | Secretary | Non director | Secretary | Secretary |
Board of directors
The Board of Directors consists of eleven directors, of which two are executive, two are nominee, two are other external directors and the other five are independent, thus complying with the good corporate governance recommendations stating that the number of nominee and independent directors should constitute an ample majority on the Board of Directors. The Secretary to the Board of Directors is not a director.
In this year, the 2020 General Shareholders’ Meeting approved the increase in the number of directors from 10 to 11, to strengthen the Board of Directors, increasing both the number of independent directors and the number of female directors, which is the least represented gender on the Board of Directors, hence, the percentage of female Board members in 2020 totalled 27.3%.
In this regard, the appointment of Mrs Carmen de Pablo Redondo as director was approved with the category of independent external director. She was also appointed as a member of the Audit Committee.
At the same Meeting, the directors Mr Ignacio Marco-Gardoqui Ibáñez and Mr Santiago Domecq Bohórquez were renewed as independent and nominee directors.
The selection of Directors is specifically regulated in the Policy on the Selection of Directors and Diversity on the Board of Directors, updated in 2020, to ensure that proposals for the appointment or re-election of directors are based on a prior analysis of the skills required by the Board of Directors and to encourage the diversity of knowledge, experience, age and gender required on the Board at all times, taking into account the vacancies to be covered and the structure and composition of the Board.
Curriculum and profiles of members of the Board of Directors
The curriculum and profiles of the members of the Board of Directors at 31 December 2020 are detailed in section C.1.3 of the Annual Corporate Governance Report forming part of this Management Report. They are also available on the Company’s website, www.viscofan.com, in the Corporate Governance section.
Performance of functions
In order to perform their duties with the required rigor and efficiency, the Company’s Board of Directors prepares an annual schedule of meetings and the annual work plan of the Board itself and of its various committees, so that the directors can better plan and to facilitate their commitment to and attendance of meetings. Directors receive the information they need well in advance, including, as appropriate, the minutes or reports of the different Board Committees.
The Board of Directors delegates to its Chairman and the General Manager the powers of representation, powers relating to the purchase or sale, powers relating to personnel, to charges, payments, contracts, auctions and transactions, to checking accounts, credit or savings, to bills of exchange and promissory notes, securities, guarantees, and supplementary powers of the foregoing.
Actions are still being carried out to guarantee the participation of the directors, facilitating their dedication and attendance to the meetings, to provide them with tools to give more in-depth knowledge of specific aspects of the activity and specific environments of the different production centres, thus improving the monitoring of the strategy of the Group and of each of its companies.
In this regard, in 2019, the Board of Directors drew up and implemented a programme to update the knowledge of the directors, a programme that continued in 2020 and is expected to continue in subsequent years.
In addition, the annual plan included visits to some of the Group’s production centres which, in 2020, could not be conducted due to the COVID-19 pandemic, and the participation of executives to enable greater monitoring of the implementation of the Group’s strategy and of the management of each of its companies.
The Board met on 12 occasions in 2020, and the Board Chairman attended all the meetings. All meetings were attended by all the directors. The percentage of meetings attended of the total votes during 2020 was 100% (in 2019, 98.33%).
Also, during the 2020, the Lead Director held three meetings with the other directors, without the attendance or representation of any executive director.
Evaluation
The Board of Directors carries out an annual evaluation of the quality and efficiency of the operation, diversity and competencies of the Board itself and of the Committees - which is promoted by the Appointments, Remuneration and Sustainability Committee, and coordinated by the Lead Director in the case of the evaluation of the Executive Chairman.
Every three years, the Board of Directors is assisted by an external consultant in the evaluation process, whose independence is verified by the Appointments, Remuneration and Sustainability Committee. In 2019, the Company received the advisory services of Korn Ferry to facilitate said assessment, whose conclusions were submitted and validated in the session of January 2020.
The performance assessment in 2020 was conducted internally, on the basis of a questionnaire whose purpose was to provide a specific vision for each director with regard to both strong and weak points, as well as any other suggestions they may have to improve the efficiency of the Board and of the Committees. The questionnaire is divided into various sections: Size and structure of the Board, Board mandate, team dynamic, mandate compliance, administrative support and training, evaluation of the Executive Chairman and functioning of the Committees.
The result of the questionnaire was analysed by the Appointments, Remuneration and Sustainability Committee of which the Lead Independent Director is a member, by the Audit Committee itself with regard to its own assessment, and the conclusions were presented to the Board of Directors, where the process was concluded and a plan of action approved to include the appropriate improvements.
The Action Plan arising from the assessment of the Board and its Committees promotes the training of directors to improve their competences. In this regard, in 2020, the Audit Committee received a training session on cybersecurity and, moreover, the Appointments, Remunerations and Sustainability Committee and the Audit Committee received a training session on the monitoring, novelties and updates of competences in the area of Sustainability and Sustainable Finance.
Likewise, the Appointments, Remuneration and Sustainability Committee has included a new member, Mr Ignacio Marco-Gardoqui, to contribute with its knowledge and experience to the new sustainability competences entrusted to the Committee.
Remuneration
The Board of Directors’ Remuneration is regulated in the directors’ remuneration policy, approved at the 2018 General Shareholders’ Meeting held on 25 May for a three-year period, and which is available on the company’s web page in the Corporate Governance section. This policy establishes a remuneration system for directors based on (i) their capacity as such and (ii) specific executive or senior management functions.
It is envisaged to submit a new directors’ remuneration policy to the 2021 General Shareholders’ Meeting for 2021, 2022 and 2023.
In addition, the General Shareholders’ Meeting held on 24 April 2020 approved a Long-Term Incentive Plan for the period 2019-2021 for the Company’s executive directors, managers and other key personnel of the Viscofan Group with 94.5% of votes in its favour. This plan establishes the delivery of a cash amount and shares in the Company based on the fulfilment of objectives of creation of value for shareholders (TSR) and sustainability which includes the improvement in the indicators of accident rate and reduction of waste in a landfill.
In the short term, variable remuneration included specific CO2 emissions and a reduction of land fill waste.
The remuneration of the Board of Directors in 2020 was €3,490 thousand (€2,995 thousand in 2019).
The Annual Remuneration Report for 2020 is available on the company’s website in the Corporate Governance section.
The Annual Report on the Remuneration of Directors for 2019 was presented as a separate item on the agenda and in an advisory capacity to the General Meeting of Shareholders held on 24 April 2020, and was approved by 99.3% of shareholders.
The Board has created two committees in support of its functions: The Audit Committee and the Appointments, Remuneration and Sustainability Committee.
AUDIT COMMITTEE
The Audit Committee consists of six members, all non-executive and a majority independent, appointed by the Board of Directors at the proposal of or pursuant to a report by the Appointments, Remuneration and Sustainability Committee, bearing in mind accounting, auditing and financial and non-financial risk management knowledge, skills and experience.
On 24 April 2020, the number of Committee members rose from 5 to 6, including Mrs Carmen de Pablo as a member to take advantage of her extensive knowledge and experience in the accounting and audit area.
On the same date, the independent director Laura González Molero was appointed as Committee Chairwoman, to substitute Mr Ignacio Marco-Gardoqui, chairman since 21 April 2016, once the legal period has expired for such position to form part of the Committee with a director function.
The composition, functions, rules of organisation and operation, as well as the responsibilities conferred upon the Committee are regulated in the Articles of Association, in the Regulations of the Board of Directors, and in the Regulations of the Committee itself. The Regulation governing the Committee was updated on 17 December 2020 to detail the functions and operations of the Committee more precisely and in accordance with the new wording of the Code of Good Governance for listed companies, notwithstanding other technical modifications that were deemed appropriate. In this regard, the new version of the Regulation includes the addition, among others, of competences such as supervision of the process for the preparation and integrity of non-financial information, and the supervisory function for financial and non-financial risk control and management systems.
The Committee functions are detailed in section C.2.1 of the Annual Corporate Governance Report of this Management Report.
Actions taken during the year:
The Audit Committee met on 13 occasions during the financial year and, whenever considered appropriate, the presence of senior management members was required.
With regard to its relationship with the external auditor (PricewaterhouseCoopers S.L.), the Audit Committee:
In its relationship with the external auditor, the Committee was also informed of the work completed during the preliminary phase, which consisted in reviewing the pre-closure, and during the closure, in identifying and planning work that, because of its unusual nature or accounting impact, required special attention by the external auditor, such as the merger with Nanopack, the three-year plan based on shares, the implementation of the European Electronic Single Format (ESEF), COVID – 19, and the potential regulatory change with regard to the taxation of dividends.
During the 2020 financial year the Audit Committee met three times with the external auditor.
Prior to their presentation to the Board and communication to the CNMV and securities markets, the Audit Committee has reviewed and analysed the financial statements of Viscofan S.A. and its Group, contained in the annual, half-yearly and quarterly reports, to confirm that this information is reliable, understandable and relevant and that accounting criteria consistent with the previous annual closure have been followed, for which it has had the necessary support from the Group’s senior management, especially from the area in charge of Consolidation and Financial functions, as well as from the Group’s internal and external auditors.
It has also supervised the Group’s corporate performance, which is in full growth, while constantly aiming for simplification and efficiency. There has been corporate restructuring in this regard as below:
The Committee analysed and approved the work plan for 2020 drawn up by internal audit. It has regularly monitored its implementation and has been directly informed of any incidents in its development.
In relation to Directive 2014/95/EU, its implementing regulations in Spain and Law 11/2018 on non-financial information, the Committee has monitored the reporting process of this Statement of Non-Financial Information.
The Committee reviewed the internal control systems established by the Group. In this area it supervised the monitoring of possible risks and impacts arising from COVID-19, and the measures implemented by the Viscofan Group. The
Committee supervised the activities undertaken by the Ethics and Compliance Committee. During this financial year actions included updating the Ethics and Compliance Manual and Internal Conduct Regulations regarding the Securities Market, as well as the preparation and approval of the Crime Prevention Policy. The training activity envisaged has also been undertaken with the collaboration and support of external consultants.
To better fulfil its functions, the Audit Committee may seek the advice of external professionals. The Audit Committee issues its own annual report of activities, available to the public on the company’s website.
Finally, it informed the Board of Directors of all of its activities, also delivering all the minutes of its sessions to the directors, as well as the information rel
APPOINTMENTS, REMUNERATION AND SUSTAINABILITY COMMITTEE
It is formed by five non-executive directors appointed by the Board of Directors: three independent directors, one other external director and one proprietary director. Its chairman has been the independent director Mr Jaime Real de Asúa since 21 April 2016.
On 29 October 2020, the Committee was renamed as the Appointments, Remuneration and Sustainability Committee (formerly Appointments and Remuneration), to reflect the actual scope of its functions following the assignment to the Committee in September 2019 of the functions relating to the supervision of corporate governance and sustainability
Also, on 29 October 2020, the number of its members rose from four to five, and it was reinforced to better assume its functions and promote compliance with the recommendations of the CNMV’s Code of Good Governance for Listed Companies. Consequently, Mr Ignacio Marco-Gardoqui Ibáñez was appointed for the position.
The composition, functions, rules of organisation and operation, as well as the responsibilities conferred upon the Committee are regulated in the Articles of Association, in the Regulations of the Board of Directors, and in the Regulations of the Committee itself.
The Regulation governing the Committee was updated on 17 December 2020 to detail the functions and operations of the Committee more precisely and in accordance with the new wording of the Code of Good Governance for listed companies, notwithstanding other technical modifications that were deemed appropriate. In this regard, the functions relating to corporate governance and sustainability were modified.
Additionally, they are outlined in section C.2.1 of the Annual Corporate Governance Report of this Management Report.
Actions taken during the year:
The Appointments, Remuneration and Sustainability Committee met on 7 occasions in 2020 and, whenever considered appropriate, the presence of the Chairman, Managing Director and senior management members was required.
In its function of contributing to ensuring that the Company maintains a high degree of monitoring of best corporate governance practices, the Committee conducted an analysis of the composition and structure of the Board and its Committees. Specifically:
The Committee promoted and coordinated the evaluation process of the Board of Directors with regard to their actions in 2020, with the coordination of the Lead Director as far as the Executive Chairman is concerned.
The Committee also met its commitment with regard to the preparation of the Annual Report on Directors’ Remuneration, as well as the setting and reviewing of the objectives to which annual and long-term variable remuneration is subject. Also, in accordance with its obligation to periodically reviewing the remuneration policy for directors and senior management, the Committee, assessed by Korn Ferry, made a study of the remunerative framework for senior management and updated it.
The Committee concurrently undertook preparatory work on the new Remuneration Policy for Directors that will be submitted at the 2021 General Shareholders’ Meeting, with assessment by Willis Towers Watson.
As part of its functions relating to sustainability during the financial year, the Committee supervised the Group’s Sustainability Action Plan, as well as issues such as the management and promotion of talent and work/life balance.
The Committee also contributed to updating the basic sustainability policies approved by the Board of Directors in 2020, in accordance with the growing importance this area has on the Company’s strategy.
JOSÉ ANTONIO CANALES | General Manager Director |
CORPORATE MANAGEMENT DIVISION | |
JOSÉ ÁNGEL ARRARÁS | R&D and Quality Chief Officer |
ANDRÉS DÍAZ | Chief Operations Officer |
GABRIEL LARREA | Chief Commercial Officer |
MARÍA CARMEN PEÑA | Chief Financial Officer |
ÓSCAR PONZ | Chief Plastic Business Unit Officer |
CORPORATE SERVICE DIVISION | |
ARMANDO ARES | Chief IR & Corporate Communications Officer |
CÉSAR ARRAIZA | Chief Strategy, Organization and IT Officer |
ALEJANDRO BERGAZ | Internal Audit Manager |
JOSÉ ANTONIO CORTAJARENA | Chief Legal Officer & Secretary of the Board of Directors |
IÑAKI RECALDE | Chief Technology & Diversification Officer |
JUAN JOSÉ ROTA | Chief Human Resources Officer |
RICARDO ROYO | Chief European Business Officer |
DIRECCIÓN DE GESTIÓN FILIALES | |
EDUARDO AGUIÑAGA | General Manager Mexico |
LUIS BERTOLI | General Manager Brazil |
JESÚS CALAVIA | General Manager Spain |
BELÉN ALDAZ | Human Resources Manager Spain |
GUILLERMO EGUIDAZU | General Manager USA |
MILOSLAV KAMIS | General Manager Czech Republic |
ÁNGEL MAESTRO | General Manager Uruguay |
IÑIGO MARTíNEZ | General Manager Serbia |
JUAN NEGRI | General Manager Asia Pacific |
WILFRIED SCHOBEL | General Manager Germany |
Viscofan considers that integrity and transparency contribute directly to achieving its objectives and managing its business in a sustainable manner. To guarantee it, it establishes a system of regulatory compliance described in the Ethics and Compliance Manual, which must govern the ethical performance of administrators, directors and employees of the Viscofan Group, as well as any person who works for the Viscofan Group, in the performance of their professional activity. This system is crucial to be able to protect people and the organisation and avoid risks with a negative impact on the Group.
The Code of Conduct contains the ethical procedural principles and conduct guidelines summarised in the Respect and Defence of Human Rights; Sustainability; Integrity, Responsibility and Transparency; Respect and Non-Discrimination; Efficiency; and Loyalty.
The functions of the Board of Directors are to ensure the correct application of this Code of Conduct, and to that end, it has the collaboration of the Ethics and Regulatory Compliance Committee, who supervise and monitor compliance with the Code of Conduct.
The internal rules governing the aforementioned bodies, supplemented by the applicable rules to ensure good corporate governance at the Viscofan Group, are available on the Company’s website (www.viscofan.com) within the Corporate Governance section, as well as in compulsory publications and registration, on the website of the CNMV (www.cnmv.es) and in the Mercantile Registry of Navarre www.rmbmnavarra.com, respectively.
These internal regulations are mainly formed by the regulations of social bodies and committees:
In 2020, the regulatory compliance system was reinforced with the application of more specific policies which will help to regulate the procedural framework. Hence, within the regulatory compliance system, the Viscofan Group has approved procedural policies in the following areas:
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* pproved or updated in 2020
The Viscofan Group has an ethical and compliance system, which aims to promote an ethical culture at the organisation, which reinforces its long-term competitiveness and sustainability, reputation and ensures compliance with the regulatory system by all Group employees, together with prevention and response faced with the commission of offences and breaches of regulations.
To attain its objectives, the system has an extensive updated regulatory scheme, control procedures, training and communication items and a complaint’s channel, among others.
It also has management bodies of the foregoing. Specifically, the Ethics and Regulatory Compliance Committee, responsible for supervising and ensuring the adequate implementation and followup of the Group’s compliance system, defined by the Board of Directors.
Likewise, the Audit Committee supervises the effectiveness and operation of the Ethics and Regulatory Compliance Committee and, for this purpose, its receives regular information on compliance with the Internal Code of Conduct in matters relating to the Securities Market and the Code of Conduct, and in particular, regarding the whistleblowing channel.
The whistleblowing channel is a key element to the system. To facilitate supervision of compliance with Viscofan’s Code and Ethics and regulations, employees and any person with a legitimate interest can access the Complaints Channel on Viscofan’s web page under the Corporate Governance section, on the employee’s Intranet to notify any sign of conduct that they deem to be a possible risk, or by email to officeofethics@viscofan.com or by post to the Ethics Committee at Viscofan’s central offices in Navarre.
The Committee is the body responsible for commencing, on its own account or at the request of a third party, an investigation on events or practices that may give rise to a situation of risk for the Viscofan Group as a result of a breach of the Viscofan Group’s Code of Conduct or prevailing regulations.
In 2020 the Ethics and Regulatory Compliance Committee met on 5 occasions and completed the investigation of 4 matters raised.
Training is an essential element to promote the ethical culture and prevent non-compliance. In 2020, in order to reinforce awareness and knowledge of Regulatory Compliance, specific training was provided in different areas:
In line with the sustainability policy, risk management aims to balance the desire for value creation for our stakeholders with the risks associated with business, commercial, operational, labour, financial and social initiatives.
Viscofan has approved a risk management control policy, whose purpose is to set the basic principles and the general action framework to identify, measure, prevent and mitigate risks of all types that may affect the attainment of the strategic objectives.
Viscofan seeks to reinforce the risk control system, promoting a solid business model enabling risks to be confronted in a controlled manner. The aim of Viscofan’s risk management policy is to identify and assess risks as soon as possible, based on the Code of Conduct, the internal regulations and the MORE TO BE Strategic Plan, and to take adequate measures to reduce them and, in some cases, they can present opportunities.
The risk management system is the responsibility of the Board of Directors, which delegates its supervision and correct functioning to the Audit Committee. Likewise, the Viscofan Group has different bodies charged with the supervision and control of different risks that could arise in the course of Viscofan’s activities with different level of occurrence and materiality:
Through the different risk control and supervision bodies, the Viscofan Group commissions the Risk Control Committee to prepare a risk map, which was updated in 2020. It encompasses risks of a diverse nature, which are classified in accordance with the COSO methodology into four main categories depending on the nature of the objectives they affect: strategic, operational, information and compliance.
In 2020, the comprehensive risk management and control system monitored these risks, identifying those that are most critical (by expected impact and probability of occurring), as well as considering new risks and assessing their tendency.
Moreover, the Viscofan Group monitored the values of the risk indicators and the defined thresholds, so that when these thresholds were exceeded the required management measures were taken to redirect the risks to the defined tolerance level.
The information in reference to risk management has been developed in greater detail in section E) of the Annual Corporate Governance Report. In this section, the Viscofan Group describes the main risks and uncertainties, the bodies responsible for drawing up and enforcing the risk management system, the description of the main risks, the level of tolerance and risks occurred in the year and the plans to respond to and supervise the main risks.
Below are the main risks faced by the company in 2020 and the response and supervision plan:
Risk |
Materialisation in 2020 |
Response and supervision plan |
1.a) COVID-19: Infection of Viscofan Group workers with the subsequent risk of production shutdowns due to outbreaks of COVID-19 in the workforce or due to a shortage of staff.
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Its employees, by strengthening prevention and hygiene measures, increasing the health personnel at factories so Viscofan can meet its responsibilities as an essential food company. Hence, none of our production plants have had to close down due to COVID-19. Supply to our customers throughout the world has been ensured and in some countries increased demand has been met. |
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1.b) COVID-19: The lockdown measures imposed in some countries, together with a decreased demand for some products and the shutdown of production in non-essential industries affected the performance of some raw materials, especially collagen skins in Europe, causing an increase in prices and a shortage of raw materials that could have led to a risk of production stoppages. |
To mitigate this risk, the Viscofan Group took corrective measures involving the diversification of suppliers, an increased safety stock, assurance of purchase volumes and the application of innovative solutions resulting from R&D. This risk has not led to shutdowns in production plants. |
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1.c) COVID-19: Interruptions in the production of customers due to outbreaks of COVID-19 at their factories. |
The diversification of the Viscofan Group’s customer portfolio led the impact to be moderated and action was quickly taken to recover lost volumes. |
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1.d) COVID-19: Limitations to the commercial activities of new products in the face of mobility restrictions |
Remote meetings were held with customers and commercial activities have been maintained whenever possible. |
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1.e) COVID-19: In some markets, demand for casings increased beyond the usual growth rates, sometimes leading to changes in planning, modifications to orders and stress on productive capacity. |
1.e) COVID-19: In some markets, demand for casings increased beyond the usual growth rates, sometimes leading to changes in planning, modifications to orders and stress on productive capacity. |
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1.f) COVID-19: The pandemic has meant that a part of the workforce has had work from home, which could have resulted in connection problems to computer systems and difficulties in the performance of administrative activities, |
Viscofan has ensured access to computer equipment and connections to corporate programmes in the commercial, financial, purchasing and logistics areas. The security protocols were also strengthened in the Information Systems Master Plan, with the implementation and planning of specific actions in the area of cybersecurity |
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1.g) COVID-19: Mobility restrictions due to the pandemic have made it difficult to complete investment projects that require the mobility of specialist personnel. |
Faced with this situation, Viscofan has had to make changes to its production, logistics and investment plans. These projects include those aimed at improving the production speed and efficiency of the collagen production assets in the United States and Canada. Since the mobility restrictions have been maintained, the MORE TO BE Strategic Plan has been extended into 2021, to provide continuity to existing projects and as a driving force for others to continue to contribute to the company’s growth and strength in the long term. |
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Since the mobility restrictions have been maintained, the MORE TO BE Strategic Plan has been extended into 2021, to provide continuity to existing projects and as a driving force for others to continue to contribute to the company’s growth and strength in the long term. |
Strengthening the action plans for occupational safety, increasing specific investment in safety to reduce the risk of accident and action in the area of training and internal communication. |
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Changes in exchange rates, mainly due to the depreciation of the BRL and the USD against the EUR, have had a negative impact on the group's results. |
The impact arising from the fluctuations in the exchange rates of the Group's main currencies has been managed through the application of a policy involving hedging and commercial disciplinary measures. |
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Significant increase in the price of CO2 emission allowances.
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A sustainability action plan has been deployed, together with the corresponding Policies approved by the Board of Directors and the creation of a committee to manage sustainability risks that include environmental risks and those resulting from climate change. The Group has continued with the implementation of the Environmental Policy, the renewal and extension of certifications in this sphere (mainly ISO 50.001 and ISO 14.001) and specific projects to improve management. There have also been active purchases in emission rights to cover future instalments. |
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New commercial relationships within the market may be subject to new agreements between countries as opposed to the previous framework of free movement within the European Union. |
Viscofan UK Ltd has increased its finished goods inventories in order to maintain a service to customers in the United Kingdom in the light of possible restrictions to the movement of goods between that country and the European Union. |
s stated in Principle 10 of the United Nations Global Compact, of which Viscofan is a signatory, “Businesses should work against corruption in all its forms, including extortion and bribery”.
This principle governs at Viscofan, being expressed in the Code of Conduct, and it has been enacted and reinforced in recent years with the approval by the Board of Directors of the Anti-corruption Policy (2019) and the Crime Prevention Policy (2020) which, encompassed within the Compliance System, demonstrate the Group’s commitment to the permanent monitoring and sanctioning of fraudulent acts and conduct and the development of a business culture of ethics and honesty.
To avoid any type of corruption, the regulations establish a series of guidelines, and communication and training is encouraged in this area on forbidden procedures that may form the scope of corruption: bribery, extortion, facilitating payments and influence peddling, gifts, business courtesies, donations and sponsorships and relationships with third parties.
Further, the Global Risk Committee carries out an analysis of fraud risks, and its different forms are regulated in various policies; and sets specific controls and mechanisms to reduce their likelihood of occurrence. The identified risks are: conflict of interest and internal fraud, private corruption, and fraud and misleading advertising.
Specifically, to fight against money laundering, the Group had a reinforced control system in 2020 with financial, tax and commercial policies, and it was considered to be a low risk.
It should be noted that in 2020, there have been no acts that have been subject to significant legal actions related to unfair competition, monopolistic practices and against free competition, nor have processes or complaints been opened due to breaching laws or regulations in the social and economic field. Likewise, no case of corruption has been reported or revealed on which the Ethics and Regulatory Compliance Committee has had to take action.
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