Corporate governance system
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Corporate governance system
(102-18)
The DIA Group has a Corporate Governance and compliance system that ensures a proper climate of control and compliance with both external and internal regulation. This regulatory system, which has been designed to protect the interests of all the company’s interest groups, meets the requirements of the Spanish Capital Companies Law and follows all of the good governance recommendations of the Spanish National Securities Market Commission (the CNMV)1.
The DIA Group’s Articles of Association, the Board of Directors’ Regulations, the Internal Code of Conduct, the Audit and Compliance Commission Regulation and the Code of Ethics represent the cornerstones of this corporate system. This set of rules defines the basic principles of action and the responsibilities of all of DIA Group’s partners, establishes what the relationship should be like between the main governing corporate bodies, and sets out the basic operating rules to ensure efficient decision-making.
Corporate governance system
In addition, following the recommendations of the CNMV’s new Good Governance Code, DIA’s relationships with its main interest groups are governed by the company’s various corporate policies, all of which are approved by the Board of Directors:
Corporate Social Responsibility Policy
With the aim of generating a common, well-defined operating framework with the various interest groups, the DIA Group has a CSR Policy based on the values that define it, ensuring that laws and regulations are respected, compliance in good faith with its obligations and contracts, and that the uses and best practice in the sectors in which the company carries out its activity are respected.
Corporate Investor Relations Policy
The Investor Relations Policy establishes the guidelines of the department in charge of dealing with the stock markets, based on transparency, truthfulness, agility, and constant communication, in accordance with the law, the Internal Code of Conduct, and the rest of the company’s internal regulation. Those responsible for investor relations base their actions on these principles, reaching out to the necessary people in order for shareholders, institutional investors, and voting advisors to have clearly identified contact people as well as the means to access the company’s information in a regular and simple way.
Corporate Tax Policy
The DIA Group’s tax policy establishes the scope of action necessary to responsibly comply with tax regulations while ensuring that the company’s interests are covered and always support the company’s business strategy. Accordingly, DIA aspires to create a climate of good faith, transparency, collaboration, and reciprocity in its relationships with the tax authorities, in accordance with the law, while defending its legitimate interests.
Corporate Risk Management Policy
The company’s Risk Management policy establishes guidelines based on an integrated model that aims to improve the company’s organisational ability to manage scenarios of uncertainty. This focus allows the organisation to identify events and evaluate, prioritise and respond to risks associated with its main objectives, projects, and operations. The entire organisation plays an important role in achieving the targets of this risk management system.
Corporate Environmental Policy
The Corporate Environmental Policy establishes the general principles that must govern the management and planning of the company’s business, integrating criteria related to efficiency and sustainability. The aim is to define the guidelines to prevent the impacts that DIA’s business could generate in areas such as waste management, greenhouse gas emissions, and ecodesign, among others. In a nutshell, this policy aims to promote the responsible use of resources.
Corporate External Relations Policy
The aim of the Corporate External Relations Policy is to ensure that the media, regulatory bodies, and associative networks are provided with information in a way that is transparent, accessible, and based on mutual respect. This policy is focused on achieving the company’s targets that are outlined in its strategic plan, and on better positioning the company in the market.
Corporate Quality and Food Safety Policy
The company’s Corporate Food Quality and Safety Policy aims to generate a climate of confidence among its consumers through a system that scrupulously guarantees the proper production, processing, and management of all the products the company offers. Accordingly, the company keeps control of product quality and safety throughout the supply chain, monitoring the storage, transport, and sales processes.
Corporate Crime Prevention and Anti-Corruption Policy
The aim of this policy is to define and promote a culture of compliance by means of a model of ethics and integrity and fight against corruption and other illicit behaviour. The Corporate Crime Prevention and Anti-Corruption Policy aims to ensure that each of the Group’s subsidiaries, as well as its administrators and employees, exercise their functions with responsibility, diligence, and transparency, ensuring an adequate control system that allows the company to avoid and detect compliance risks, avoiding both the application of penalties and sanctions as well as a deterioration of the DIA Group’s image (the perception of the DIA Group by its main interest groups).
Corporate Franchise Policy
The Corporate Franchise Policy establishes the guidelines related to franchisees, ensuring that each country’s legislation is respected, the veracity of the information provided, and compliance with the agreements reached with the entrepreneurs who decide to manage a DIA store through the franchise model.
Corporate Human Resources Policy
This policy represents the reference framework at a corporate level for the management of people, and includes the guidelines that reflect the DIA Group’s commitment to job creation and its professionals within the context of the company’s corporate values. This policy also aims to promote the company’s long-term commitments with a certain degree of price, adapting to the different cultural, labour, and business contexts in all the countries in which the company operates.
Corporate Marketing and Customer Communication Policy
The company’s Corporate Marketing and Customer Communication Policy bases its guidelines on respecting the commitments undertaken with customers and on honesty in both verbal and written communication, as well as on integrity in all of the company’s professional actions in this context. Accordingly, the directives to follow in terms of communication with customers are established, based on the general principles of transparency, proximity, equality, and quality.
All of these policy tools are available to the general public at www.diacorporate.com
1 Except for that related to the existence of a Remuneration Commission separated from the Appointments Commission for reasons sufficiently explained in the Corporate Governance Annual Report.
Board of Directors
Main functions and responsibilities
The main function of the Board of Directors is to supervise and submit any business issues that have a particular impact on the Group. Specifically, DIA’s Board of Directors is responsible for approving the Company’s general policies and strategies, as well as the related tools that are required, among which we highlight the strategic plan, the annual budget, the investment and financing policy, the Company’s tax strategy, its remuneration policy, and the performance evaluation of the management team, among others.
Appointment and composition of the Board of Directors
In order to ensure that it operates in an efficient and participative way, the DIA Group’s Board of Directors is made up of a total of ten members, of which eight are independent, one is executive, and one is referred to as “other external directors”.
In accordance with the requirements of its Regulation, DIA’s Board of Directors, through its Appointments and Remuneration Committee, ensures that the selection process for board members favours diversity in terms of gender, experience, and knowledge. Appointments are always based on a prior analysis of the Board of Directors’ needs in order to favour the general interest of the organisation, so all the members of the Board of Directors are professionals with a clear executive profile and extensive experience in businesses related to retail distribution and consumer goods (102-24).
In addition, in the context of the forecasts made on the back of the changes to the Capital Companies Law in terms of corporate governance, the Appointments and Remuneration Committee.has taken on the role of establishing a target in terms of the representation of the less represented gender on the Board and has set out guidelines on how to achieve this objective in its Director Selection Policy. Currently, 30% of the DIA Group’s Board of Directors is made up of female members, thus achieving the gender diversity objectives recommended by the CNMV for 2020.
As of 31 December 2017, the Board of Directors included the following people (102-22):
| Name or corporate name of the Director | Representative | Type of Position | Position | Date of appointment | Date of last appointment | Election Process |
|---|---|---|---|---|---|---|
| Mr. Mariano Martín Mampaso | Independent | 2nd Vice-Chairman | 05/07/2011 | 28/04/2017 | Agreement at the Annual General Shareholder Meeting | |
| Mr. Juan María Nin Génova | Other External | Director | 15/10/2015 | 22/04/2016 | Agreement at the Annual General Shareholder Meeting | |
| Mr. Borja de la Cierva Álvarez de Sotomayor | Independent | Director | 05/09/2016 | 28/04/2017 | Agreement at the Annual General Shareholder Meeting | |
| Mr. Ricardo Currás de Don Pablos | Executive | CEO | 28/06/2000 | 22/04/2016 | Agreement at the Annual General Shareholder Meeting | |
| Mr. Julián Díaz González | Independent | Director | 05/07/2011 | 22/04/2016 | Agreement at the Annual General Shareholder Meeting | |
| Ms. María Luisa Garaña Corces | Independent | Director | 14/12/2016 | 28/04/2017 | Agreement at the Annual General Shareholder Meeting | |
| Ms. Ana María Llopis Rivas | Other External | Chairwoman | 05/07/2011 | 22/04/2016 | Agreement at the Annual General Shareholder Meeting | |
| Mr. Antonio Urcelay Alonso | Other External | Director | 05/07/2011 | 28/04/2017 | Agreement at the Annual General Shareholder Meeting | |
| Mr. Richard Golding | Independent | 1st Vice-Chairman | 05/07/2011 | 28/04/2017 | Agreement at the Annual General Shareholder Meeting | |
| Ms. Ángela Lesley Spinder | Independent | Director | 15/02/2016 | 22/04/2016 | Agreement at the Annual General Shareholder Meeting |
Commissions of the Board of Directors
DIA’s Board of Directors has two Commissions with different functions: the Appointments and Remuneration Commission, and the Audit and Compliance Commission. Both comply with the Capital Companies Law and with the good corporate governance recommendations of the Good Governance Code, which recommends, in order to guarantee impartiality and objectivity, that the Chairman of the Commission should be an independent board member and that the majority of its members should also be independent board members.
The Audit Commission is responsible for supervising the integrity of financial information, compliance with the corporate governance rules, internal codes of conduct, and the corporate social responsibility policy. The Commission is also responsible for the control and management of corporate risks, as described briefly further on.
Appointments and Remuneration Commission
The Appointments and Remuneration Commission is made up of three members: an independent chairman, and another two members, who are also independent. In 2017, the Commission met up on four occasions.
| Name | Position | Type of Position |
|---|---|---|
| Mr. Mariano Martín Mampaso | Chairman | Independent |
| Ms. Ángela Spindler | Member | Independent |
| Mr. Antonio Urcelay Alonso | Member | Independent |
Audit and Compliance Commission
The Audit and Compliance Commission is made up of five members: an independent chairman, and four members who are also independent. In 2017, the Commission met up on four occasions.
| Name | Position | Type of Position |
|---|---|---|
| Mr. Juan María Nin Génova | Member | Other external |
| Ms. María Garaña Corces | Member | Independent |
| Mr. Richard Golding | Member | Independent |
| Mr. Julián Díaz González | Member | Independent |
| Mr. Borja de la Cierva | Chairman | Independent |
Changes to the Board of Directors and Management
In terms of the governing body, we highlight the approval by the General Shareholders’ Meeting in April 2017 of María Garaña as independent director and the re-qualifications of the directors Juan María Nin Génova and Antonio Urcelay Alonso, who have gone from being classified as independent directors to ‘other external’. In turn, the chairmanship of the Audit Commission is transferred from Richard Golding to Borja de la Cierva.
Moreover, in December 2017, the Board of Directors approved the Regulations of the Audit and Compliance Commission, the aim of which is to determine the Commission’s competences and working principles, the basic rules of its organization, and favor the independence of the Commission.
During 2017, the DIA Group decided to organise itself by business line in order to adapt to the current reality of its structure, while also adapting to the diversity of the current offer, especially in Spain, and enabling the company to leverage the synergies generated. This new organisational structure guarantees the priorities of the strategic plan, based on three key pillars:
To give priority to the business
To maintain and develop synergies
To guarantee the corporate functions
Accordingly, each business line has its own operational structure, which are organised in the necessary regions in order to be managed, while maintaining the national and international management teams of Franchises, Logistics, Human Resources, and Expansion.
Accordingly, the proximity business in Spain (where all of the banners are currently located) is defined for the DIA banners (Market and Maxi), the supermarkets business is defined for the La Plaza de DIA banner, the household and personal care products business is defined for the Clarel stores, and lastly, another business line that includes the online channel and Cash & Carry.
In recent years, DIA has become a multi-banner and multi-brand company, and is in the middle of a far-reaching digitalisation process. The new organisation reflects this reality, thus moving closer to the needs of its customers and its new business lines.
The DIA Group’s top management team, headed up by Ricardo Currás as CEO (102-19), remains as follows:
- Ricardo Currás de Don Pablos. CEO.
- Amando Sánchez Falcón. Executive Manager for Portugal and Corporate Manager of Services.
- Juan Cubillo Jordán de Urríes. Group Executive Purchase Manager.
- Ignacio Gosálbez Quintana. Head of Organisation and Systems, DIA Group.
- Javier La Calle Villalón. Executive Manager for China and Corporate Manager of Resources.
- Isabel Fernández de Córdoba Moncada. Internal Audit Manager.
- Antonio Coto Gutiérrez. Executive Manager for America and Partnerships.
- Diego Cavestany de Dalmases.Executive Manager for Spain and New Businesses
- Faustino Dominguez de la Torre Unceta. Executive Manager for DIA Spain.
All of the above members have extensive experience in the company, and no external appointments have been necessary.
Shareholder Meeting
DIA held one ordinary annual general shareholder meeting in 2017, on 28th April. 747 shareholders participated in this meeting, either in person or through representation by proxy, and whose shares amount to 58.98% of the total.
| JGA | %shareholders | Number of shares | %Capital | |
|---|---|---|---|---|
| April 2016 | In person | 134 | 48,880,634 | 7.85% |
| By proxy | 683 | 336,192,892 | 54.01% | |
| Total | 817 | 385,073,526 | 61.86% | |
| 28th April 2017 | In person | 105 | 27,399,370 | 4.40% |
| By proxy | 642 | 339,787,097 | 54.58% | |
| Total | 747 | 367,186,467 | 58.98% | |
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