Corporate Governance

Corporate governance principles for institutions supervised by Polish Financial Supervision Authority

On 22 July 2014, the Polish Financial Supervisory Authority (PFSA) adopted Corporate governance principles for supervised institutions, expecting their implementation as of 1 January 2015.Beginning from 2015, application of the principles will be included in supervisory review and assessment (BION) and regularly reviewed.The purpose of the principles is to improve corporate governance standards and transparency of operation of institutions supervised by PFSA.
Corporate governance principles issued by PFSA defined internal and external relationships of the supervised institutions, to include relations with shareholders and clients, organization, internal supervision and key internal systems and functions, as well as statutory bodies and their cooperation.

PFSA decided that the corporate governance principles should be adopted by the supervised institutions (banks), become a crucial program paper underlying their strategic corporate policy and form appropriate procedures and proceedings in these institutions.

Therefore, on 22 December 2014, Extraordinary Shareholders' Meeting of Bank Pocztowy approved "Corporate governance principles for Bank Pocztowy S.A." (the "Principles") determining internal and external relationships of the Bank, including those with shareholders and clients.Further, the Principles regulate the operation of internal supervision, key internal systems and functions, as well as statutory bodies and their cooperation.

The Corporate governance principles for supervised institutions issued by PFSA state that the supervised institution should apply the principles determined therein to the widest extent possible, including the principle of proportionality arising from the scale of operations, business specifics and nature of each institution.Refraining from the full application of specific principles is allowed only if their comprehensive implementation would be impractical for the supervised institution.

"Corporate governance principles for Bank Pocztowy S.A." introduce the following principles adjusted to the specifics of Bank Pocztowy:

• Article 8.4 “If justified with the number of shareholders, the Bank shall attempt to help them participate in General Shareholders’ Meetings, among others allowing active participation through the Internet.”
• Article 21.2: “Supervisory Board includes the position of Chairman, who manages its work. The Chairman is appointed based on experience and team leadership skills”.
• Article 29.1: “Subject to relevant legal regulations, remuneration of Supervisory Board members is calculated adequately to their roles and to the scale of Bank’s operations. Members appointed to work in committees, including the Audit Committee, should be paid adequately to the additional tasks they perform in these committees."

The Bank does not apply principles referred to in section 9 “Exercise of titles arising from assets purchased at client's risk" since principles determined in Articles 53-57 do not apply to the Bank, since it does not perform services involving asset management at client’s risk.

As expected by PFSA, the Principles have been adopted as of 1 January 2015.

Pursuant to Article 27 of Corporate governance principles for Bank Pocztowy S.A, the Supervisory Board shall evaluate implementation of the principles introduced thereby on a periodic basis, and the results of the evaluation shall be published on Bank’s website and communicated to the other bodies of the Bank.For the first time the compliance with the Principles in question will be evaluated by the Supervisory Board during its meeting in 2016.

The Bank’s Charter assume annual evaluation of the Principles.

For alignment purposes, other corporate documents have been adjusted: the Bank’s Charter, Operating Rules of the Supervisory Board, and Operating Rules of the Management Board; besides, Operating Rules of the General Shareholders’ Meeting of Bank Pocztowy S.A. were adopted.

On 30 November 2015 the Bank amended its internal regulations, such as the Corporate governance principles for Bank Pocztowy S.A., where the number of members of the Supervisory Board have been changed for the period before and after dematerialization of shares as a consequence of the amendments to the Charter of Bank Pocztowy approved by the Extraordinary General Shareholders’ Meeting on 30 June 2015 and in order to adjust the Bank’s regulations to standards applicable to public companies.

Banking Code of Ethics

On 11 June 2013, Bank Pocztowy implemented the Banking Code of Ethics adopted by Polish Bank Association.The document, accepted by the General Shareholders’ Meeting of Polish Bank Association on 18 April 2013 is a set of good banking practices regarding banks themselves, their employees and agents.

According to the Code, banks, as public trust institutions, shall respect legal regulations regarding their operations, recommendations of PFSA, resolutions of the banking self-government, standards included in the Code and good commercial practices.Banks, their employees and agents follow the principles of professionalism, reliability, objectivism, due diligence and best knowledge.Carrying their business operations, banks should contribute to social and economic domestic growth and increase in social wellbeing through respecting CRS principles, innovative solutions and support of educational initiatives.Social responsibility is the fundamental principle underlying relations of banks and their employees with environment.When following their business strategy, banks should consider both economic conditions and legitimate interests of their clients, employees, shareholders, business partners and local communities.The Code includes principles of the Financial Market’s Code of Best Practices.

Code of Best Practice for WSE Listed Companies

Since Bank Pocztowy’s securities are not traded on the regulated market (its bonds are listed with Catalyst, the over-the-counter trading system), it is not bound to follow the Code of Best Practice for WSE Listed Companies.

In 2015 Bank Pocztowy followed principles include in the Code of Best Practice for WSE Listed Companies to the extent applicable to non-public companies.When preparing for IPO, on 24 April 2012 the Management Board passed a resolution to apply the Code of Best Practice for WSE Listed Companies. In the resolution, it declared the will to follow the principles and recommendation of the Code as of the date of approving the prospectus, except for principle IV.10 and recommendation I.5, I.9, I.11 and I.12. In the justification of the resolution, the Management Board provided a detailed explanation (technical reasons regarding principle IV.10 and formal reasons regarding the other) why the above principles and recommendations should not be followed.