Annual Report 2023

A. Composition

18. Distinction to be Drawn Between Executive and Non-Executive Directors And, as Regards Non-Executive Members, Details of Members that May Be Considered Independent

The Company seeks a balance in the composition of the Board of Directors through the integration of Non-executive directors and independent directors alongside the Executive Director, in the scope of a delegation of duties, the respective discrimination of which being referred in point 17. The distinctive criterium used by the Company coincides with that of the EU Commission’s Recommendation 2005/162/EC, of 15th February 2005, being considered as Executive Director any member who is engaged in the daily management of the Company and, a contrario sensu, Non-Executive Directors are those who are not engaged in the daily management.

The Board of Directors is therefore composed of Non-executive Directors, in particular independent Directors who possess a wide range of technical skills, contact networks and connections with national and international bodies, who therefore enrich and optimise the Company’s management in terms of creating value and ensuring adequate protection of the interests of all its shareholders and other stakeholders, thereby ensuring effective monitoring, supervision and assessment of the activity of the remaining members of the Board of Directors.

As referred in point 17., the number of Non-executive Directors of the Company is currently 10, which the Company considers suitable considering the terms under which, as described in point 21. below, the delegation of powers is made in favour of the Chief Executive Officer, the implementation of a support structure for him, and the establishment of a Mechanism for Coordinating the Activities of Non-Executive Directors, which allow to efficiently ensure the functions that are attributed to them, taking into account the size of the Company and the risks inherent to its activity.

In accordance with the principles by which the Company is run, although all Board members are accountable to all shareholders equally, the independence of the Board of Directors in relation to the shareholders is further reinforced by the existence of independent Board members.

Pursuant to the 2018 IPCG’s Corporate Governance Code (2018 revised in 2023), hereafter referred to as “2023 IPCG’s Recommendations”, considering the provision of recommendation IV.2.4, which establishes the independence criteria to be used in the evaluation made by the Board of Directors, Clara Christina Streit, Elizabeth Ann Bastoni, Francisco Seixas da Costa, María Ángela Holguín Cuéllar, Natalia Anna Olynec and Sérgio Tavares Rebelo qualify as independent Directors.

Clara Christina Streit, Elizabeth Ann Bastoni and Sérgio Tavares Rebelo are also members of the Audit Committee, being subject further to the independence criteria indicated in paragraph 5 of Art. 414 CCC. According to these criteria Director Sérgio Rebelo cannot be regarded as independent because he does not meet the independence criteria as a member of the Audit Committee. Each of the members of the Audit Committee also complies with the rules of incompatibility laid down in paragraph 1 of Art. 414-A CCC, except that provided for in sub-paragraph b).

Being the number of independent directors of six, in accordance to the criteria above mentioned, out of a total of eleven Directors, the Company complies with recommendation IV.2.4. (2023 IPCG’s Recommendations).

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