Compliance of the company with the UK Corporate Governance Code 2018
MYTILINEOS S.A. (the "Company") as of 01.01.2019, following a relevant resolution of the Company’s Board of Directors on 15.11.2018, aiming at ensuring transparency and responsible operation in all areas of its activity, voluntarily adopted the UK Corporate Governance Code −2018 (the "Code"). The Code is posted on the
Based on the highest international standards of entrepreneurship, the Company strives for closer engagement with its investors, with the ultimate aim of unlocking further value for its shareholders. Drawing on the best corporate governance practices, the Company formulates its strategy and develops the general directions, policies, values and principles that govern its operation, while ensuring transparency and safeguarding the interests of its shareholders.
1 Board leadership and company purpose
Principle A: The role of the Board of Directors
The Board of Directors (the Board) sets the tone with regards to the standards of corporate governance. To this end the Board decided to adopt voluntarily the UK Corporate Governance Code as from 01.01.2019, recognizing that the Code is widely recognized as best standard of corporate governance.
The Board operates effectively for the longer-term interests and sustainability of the Company. In order to improve its efficiency, the Board of Directors adopted in 2022 its Terms of Reference, which set out in detail, inter alia, its responsibilities, the general principles governing its operation, the way it operates, the way of supervision of its executive members, and the way it is evaluated. The relevant legislation, the Company's Articles of Association, the UK Corporate Governance Code and the relevant guidance from the Financial Reporting Council (FRC Guidance on Board Effectiveness, 2018) were taken into account in preparing the Board Rules.
The Board is diverse, including adequate gender diversity, and its members possess the appropriate level of knowledge, skills and expertise required to deliver upon expectations. The Company demonstrates a clear division of responsibilities between Management and the Board: The Executive Committee is supported by a) the Financial, the Capital Allocation and the Energy & Regulatory Matters Committees and b) the respective Committees of the Metallurgy, Power & Gas, Renewables Storage Development and Sustainable Engineering Solutions Business Units.
As a responsible industrial company, MYTILINEOS integrates sustainability considerations as part of its main purpose. The Company’s business model is at the centre of its operations: It supports its growth, describes the categories of resources it utilises, presents the picture of its activities, its production performance, the value it creates for its Stakeholders and wider society, in general, its overall contribution to Sustainable Development. Detailed analysis is provided in the Management Report section of the 2022 Annual Report.
To offer a better understanding of the Company’s business model, use is made of key performance indicators together with descriptions of the interrelationships between the resources utilised. This information is available at
The Board of Directors established within 2021 the Sustainability Committee, with the purpose to assist the Board in strengthening the Company’s long-term commitment to creating value in all three pillars of Sustainable Development (economy, environment and society). Specifically for 2022, the Board of Directors monitored in particular the progress of the Company's key carbon reduction initiatives and, by extension, the Company's climate targets and the key sustainability disclosure requirements of the new European Corporate Sustainability Reporting Directive (CSRD).
In addition, MYTILINEOS assigns, on a biannual basis, the study of the socio-economic impact of its activities, to an independent consultancy which is selected through a tender procedure. The results of the study, which are outlined in a relevant report, are presented to the Sustainability Committee, and are published on the Company's website. More information on the latest report of the socio-economic impact of MYTILINEOS (2019) is available at the following
Principle B: Purpose, values and culture
The Board of Directors approved the Company’s vision, mission and values as part of its strategy. The Company's strategy is reviewed annually at a Board meeting, as well as at an executive session of the Non-Executive Directors.
Principle C: Resources, risks and controls
Within 2022, the assessment of the System of Internal Control was completed and the implementation of improvement proposals was started. Within its remit to oversee the company’s internal controls and risk management systems, the Audit Committee monitored the assessment of the System of Internal Control using the (Committee of Sponsoring Organisations of the Treadway Commission — COSO) 2013 Framework. The Audit Committee also oversees the Compliance function.
Principle D: Shareholder and stakeholder engagement
The Company interacts with a broad range of social groups. These different groups are recorded, ranked and characterized as Company’s "key Stakeholder groups", based on specific criteria according to the international AA1000 Stakeholder Engagement Standard (SES) and in correlation with:
i. the position they hold within the Company’s sphere of influence,
ii. the degree of significance and relativity attributed to or existing in Company’s activities and
iii. the way they affect the Company’s ability to fulfil its vision and mission.
The Company’s synergies with its Stakeholders are shaped in the context of the Company's contribution to the Sustainable Development Goal 17 that seeks to strengthen partnerships to support and achieve the ambitious targets of the 2030 Agenda without exclusions, built on a common vision, principles and values. The Company promotes regular communication with its Stakeholder groups; the frequency of such communication stems from the type of relationship built with each group, aiming to understand their expectations and respond promptly to matters concerning them, preserving and strengthening at the same time its "social license to operate".
Additionally, MYTILINEOS has developed a specific Stakeholders Engagement process. This practice expresses the Company’s long-standing principle of engaging with its Stakeholders through a systematic and sincere dialogue. As a corporate institution, the Stakeholders Consultation process, has been carried out consistently annually since 2011 and is subject to self-assessment and self-improvement procedures.
ii. A detailed analysis of the results of the Stakeholder Engagement Process 2022 is provided in the Annual Sustainable Development Report 2022 published in June and posted on the Company's website.
Principle E: Workforce policies and practices
The Code of Business Conduct of the Company serves as a record of the general principles which define the responsible business conduct and the ethical rules that all the employees and business partners of MYTILINEOS are recommended and expected to follow, as well as a record of the commitments of the Company’s Management towards its people. The Code ensures that all Company activities adhere to the principle of integrity, thus safeguarding its reputation, which is its most valuable intangible asset and, as any other asset, should not only be protected but should also be further developed, by ensuring that the conditions that will allow this are in place. The Board has last approved the Code of Conduct in November 2019 and since then there has not been the need for any update. In 2021 the Board has approved and endorsed the Conflicts of Interest policy and guideline for MYTILINEOS that is applicable to the Board itself and all MYTILINEOS employees. Also, in 2022, the Board of Directors approved a Process of Compliance with the Obligations arising from the framework for Related Party Transactions, which applies to both Board members and other related parties of the Company.
MYTILINEOS has established a whistleblowing process (
Additionally, the Remuneration Policy for the Directors contributes to the Company’s business strategy and long-term interests and sustainability by encouraging the Executive Directors to focus on sustained long-term value creation by providing a fair and appropriate level of fixed remuneration and a balance of short and long-term incentives to ensure there is focus on short term objectives that will over time build to create long-term value creation, as well as long-term goals. The remuneration policy for the Executive Directors, as for all employees, is based on the principle of paying fair and reasonable remuneration for the best and most appropriate person for the role while ensuring that the Company pays fairly and competitively and in the longer-term interests and sustainability of the Company.
The Remuneration and Nomination Committee and the Board of Directors receive periodic updates on the wider employee remuneration structure and practices within the Company, which are considered when establishing and revisiting the Policy. This is to ensure that remuneration practices and structure are as consistent as possible across the Company.
Last but not least the Company aims to apply the principle of Diversity (based, among other basic parameters, on gender, age, experience, skills and knowledge) to the composition of its Board of Directors, of its executive management team and of all direct employees in all its activities, where this is feasible. To this end, the Company in its diversity policy sets as its objective the achievement of targets concerning the representation of women on the board, senior executives and direct employees. The diversity policy is disclosed in Section 6 together with related targets. Since February 2022, the Company achieved a percentage of 27% concerning gender representation to its Board of Directors in line with its own target, while according to Greek law 4706/2020 the relevant percentage is 25%.
Provision 1. Reporting on actions to generate long-term value
The Board of Directors discusses the Company's strategy and monitors its implementation in each of its meetings, which are held either in person or by video conference. In-depth analysis and discussion also is conducted at the executive sessions of the Non-Executive Directors.
Provision 2. Monitoring and reporting on culture
The Code of Business Conduct applies to the Board, the management and the workforce. The Board overviews its implementation and monitoring by acquiring reports and through in person meetings of its Audit Committee with the Head of Internal Audit, the Compliance Director and the Non-Financial Enterprise Risk Manager. The reports are related to the controls on the main parts of the Code that are built to ensure proper implementation. The Audit Committee receives and assesses the reports and interacts with the Compliance Division if and when it deems appropriate on specific issues.
Non-Financial Key Performance Indicators (KPIs —
The remuneration policy supports its short and long-term business plan, so as to continue creating value for customers, shareholders, employees and the Greek economy. The level of fixed pay for Directors is established on the basis of paying no more than is necessary, always supporting the Company’s longer-term interests and sustainability.
The Policy provides for variable compensation arrangements for Executive Directors to further align the Executive Directors’ interests with those of the Company as the performance conditions used will be based on indicators of the long-term success and sustainability of the Company. The remuneration policy is disclosed on the
The Remuneration Policy is disclosed in Section 1.5.
Provision 3. Engagement with shareholders
The (executive) Chairman engages with the Company’s major institutional shareholders throughout the year in various ways: during the Annual General Meeting (AGM), through teleconference calls held on the occasion of half year and annual results, in the annual gathering of domestic institutional investors held at the company’s headquarters, as well as during one-to-one meetings with key institutional investors, both upon request but also before significant corporate events initiated by the company. The Chair also holds an extensive Q&A session with minority shareholders during the AGM. Shareholders’ concerns, if any, are discussed with the Board and the Lead Independent Director is available to investors should the need arise.
The Company engages with shareholders and proxy advisors and since 2020 this effort has been strengthened through the organization, on an annual basis, of a targeted corporate governance roadshow, organized with the help of an external consultant, Velos Advisory, to maintain an active dialogue with the stewardship teams of its key investors, both before the AGM and throughout the year, with the participation of the Lead Independent Director, members of the Board of Directors and of the Company Secretary. During 2022, the annual Corporate Governance Roadshow was held, at which, among others, the responsibilities of the Independent Non-Executive Directors, the Company's compliance with the UK Corporate Governance Code, the succession planning, the Board evaluation, new policies and procedures adopted by the Company, were discussed with the relevant departments of our major institutional shareholders.
Provision 4. Actions to be taken if significant votes against
The recommendations of the Management for the resolutions regarding the Annual Shareholders’ General Meeting dated 2 June 2022 were passed by the majority of shareholders, with percentages ranging from 99,8% to 92.08%, more than 80% of the represented paid up share capital. In case 20% or more of votes are cast against a recommendation of the Management for a shareholder resolution in the future, the Company, when announcing voting results, also shall explain what actions it intends to take to consult shareholders who voted against in order to understand the reasons behind the result. The Company shall also announce no later than six months after said shareholder meeting the results of such consultation and the actions taken and, in any case, provide a summary thereof in the annual report.
Provision 5. Engagement with stakeholders and workforce representation
Full account of how the Board takes into account the interests of various stakeholders’ groups is provided in the Sustainable Development Report 2022 which becomes available by the time of the AGM in June 2023 on the
The Materiality process, i.e. the process of identifying, understanding and prioritizing the sustainability issues, is one of the key elements in the Company’s responsible operation. Τhe Company's open dialogue with its Stakeholders, in addition to enhancing its ability to understand the impact of its activities, enriches this process with new inputs. The workforce participates in the process of determining the material Sustainable Development topics through a relevant Social Partner survey that was carried out in 2021 and takes place every two years based on the official MYTILINEOS process. The results of this process will be published in the 2022 Sustainable Development Report.
For the purpose of setting remuneration, the Remuneration and Nomination Committee and the Board of Directors receive periodic updates on the wider employee remuneration structure and practices within the Company, which are considered when establishing and revisiting the Remuneration Policy. In addition, the Remuneration and Nomination Committee and Board of Directors are provided with information on remuneration trends across the Company including average pay increases along with any relevant economic data, such as the rate of inflation to take into account when operating the Policy.
Provision 6. Whistleblowing
The Company expects its employees to report serious violations of the Code of Business Conduct, when they become aware of them or when these are brought to their attention. This will allow the Company to address and rectify the matter, before it becomes a violation of the law or a health and safety risk or jeopardizes the Company’s reputation. In cases involving violations of the Code, the competent bodies of the Company shall investigate thoroughly the reports made, while at the same time observing the confidentiality of the relevant information, unless otherwise provided for by the law. MYTILINEOS has established a whistleblowing process [
All reports shall be investigated by the appropriate personnel in confidentiality.
The Company has also recently upgraded its whistleblowing system, with the use of a third party platform by an EU based company that specializes in Whistleblowing applications, to maximize anonymous reporting capabilities and Compliance with the EU Directive 1937/2019. This platform along with the updated whistleblowing policy and procedure shall be released within 2023 and shall be in accordance to the national law on whistleblowing 4990/2022.
Additionally, the Company may set up a grievance mechanism or whistleblowing channel or reporting line if required by the contractor, when doing business in countries with an increased corruption risk (as in reference to the Corruption Perception Index by Transparency International) that pose a bribery and corruption risk for the Company.
Pursuant to the Terms of Reference of the Board of Directors, adopted in 2022, the Board shall regularly review the Company’s Whistleblowing framework and shall receive updates from the Compliance Division on relevant employee reports. It is also explicitly provided that the Board shall ensure that arrangements and procedures are in place to allow the proportionate and independent investigation of such matters and the adoption of follow-up actions.
Provision 7. Conflicts of interest
Each member of the Board has a duty of loyalty to the Company. Board members act with integrity and in the Company’s interests and safeguard the confidentiality of information that is not publicly available. They must not have a relationship of competition with the Company and should avoid any position or activity that creates or appears to create a conflict between their personal interests and those of the Company in accordance with the legislation and its Articles of Association.
During 2021, the Company adopted a separate Conflict of Interest policy and procedure, elaborating further the relevant section of the Code of Business Conduct of the Company. More information on the Policy and Procedures on Conflicts of Interest, which has been approved by the Board of Directors by its resolution dated 15/06/2021 is available in Section 2.3.
In 2022, the Company adopted a specific process to comply with the obligations under the Related Party Transactions Framework, taking into account both the legislative framework and the UK Corporate Governance Code. Further information on this process, which has been approved by the Board, is available in Section 7.
Finally, the Internal Audit Division reports to the Audit Committee any cases of conflict of the private interests of Board members with the interests of the Company, which (cases) it ascertains in the performance of their duties.
Provision 8. Director concerns and resignations
Pursuant to the Company’s Articles of Association (available on the website) and Greek Company Law 4548/2018 on the request of a member of the Board of Directors, the Chairman is required to record in the minutes a summary of such member’s opinion. The BoD will consider including in the Board’s Terms of Reference a provision according to which, on resignation, a non-executive member of the Board of Directors has the right to provide a written statement to the Chair for circulation to the Board. In accordance with the Company's Articles of Association and the Greek Law on Joint Stock Companies 4548/2018, upon request of a member of the Board of Directors, the Chairman is obliged to record in the minutes a summary of this member's opinion. Pursuant to the Terms of Reference of the Board of Directors, approved in 2022, when Board members have concerns about the operation of the Board or the management of the Company that cannot be resolved, their concerns should be recorded in the minutes of the Board. It is also explicitly provided that where a Non-Executive Board member resigns, that member may, if he/she has any such concerns, submit a relevant written statement to the Board Chair, for circulation to the Board.
2 Division of responsibilities
Principle F: The role of the Chair
The Chair of the Board has according to the Terms of Reference of the Board of Directors, approved in 2022, the following responsibilities and obligations:
i. Leads the Board and is responsible for its overall effectiveness in directing the Company. The Chair should demonstrate objective judgement throughout his/her tenure and promote a culture of openness and debate.
ii. Coordinates, convenes and chairs the Board meetings, introduces the items to be discussed, directs the Board’s work and is responsible for ensuring the timely and clear information of the Board members.
iii. Seeks regular engagement with major shareholders in order to understand their views on the Company’s governance and performance against the strategy, while at the same time ensuring that the Board as a whole has a clear understanding of the shareholders' views.
iv. Demonstrates objective judgement and promotes communication, fosters the development of constructive relations within the Board, and encourages the effective contribution and active participation of the Board’s non-executive members.
v. Encourages and promotes the open exchange of views in a spirit of constructive challenge and ensures that any diverging views are voiced and discussed at the Board level as part of the decision-making process.
vi. Determines, with the assistance of the Company Secretary, the agenda of the Board meetings and ensures that issues of strategic importance are discussed as a priority.
vii. Is responsible for the adoption of appropriate corporate governance standards across the Company.
Principle G: Board balance and decision-making
The Board has 11 members. Of these: a) three members, namely the Chair & CEO, the Vice Chair B and one other member are Company executives, b) Vice Chair A’ is non-executive and c) seven members are independent non-executive. Both Board committees, the Audit Committee and the Remuneration and Nomination Committee, are completely independent. The separation of responsibilities between the executive management and the Board of Directors is clear, as described in the Company’s Internal Regulation and the Terms of Reference of the Board of Directors. Prevention of excessive burden arising from the professional commitments of the members, outside the Company, is regulated in the Policy for the Suitability Assessment of the Board of Directors of the Company and the Terms of Reference of the Board of Directors and falls within the competence of the Remuneration and Nomination Committee.
Non-executive Board members’ other assignments are considered at the nomination process as to avoid over-boarding and reviewed every year by the Remuneration and Nomination committee. Other appointments and commitments are reported in Section 2.1.9.
Principle H: The role of non-executive directors
The Non-Executive Members of the Board do not have executive responsibilities regarding the management of the Company within their remit, beyond the general duties stemming from their capacity as Board members and have been entrusted with the role of systematic supervision and monitoring of Management’s decision-making.
According to the Policy for the Suitability Assessment of the Members of the Board of Directors of the Company, which was approved by resolution of the AGM of MYTILINEOS, dated 15 June 2021, and the Terms of Reference of the Board of Directors, approved in 2022, Board members should not sit in the boards of directors of more than five (5) companies whose shares are traded in a regulated market. The Terms of Reference of the Board of Directors also provide that assumption of any significant external commitments by existing non-executive members of the Board, such as, but not limited to, directorships in other listed companies, may not be made without the prior approval of the Board of Directors.
The Board Profile matrix is reported in Section 2.2 and the biographies of each individual Board member are available in Section 8.
More information on the role of non-executive directors is available under Provision 13.
Principle I: Board policies and processes
The Board of Directors has appointed the Corporate Governance Director of the Company as Company Secretary so to have the necessary guidance and advice on corporate governance issues. The Board and its committees worked together with the Company Secretary during 2022 to draft their terms of references, procedures and operating policies.
Provision 9 Chair and Chief Executive
The Board Chair is also the CEO of the Company. The Board evaluates the topic of split vs dual role for the Chair/CEO position.
The dual role under the founder of the Company Mr. Mytilineos has helped the Company streamline its operating model and leverage synergies between its different BUs as well as delivering outstanding results. In this context, it is the Company's belief that any change in its current organizational model would not be beneficial to the Company. Given his unique experience and leadership capacity, the Company's Founder, Mr. Mytilineos will continue to play a critical role going forward.
Given the dual role, the Company has introduced a number of initiatives to ensure an elevated level of independence which include:
i. strengthening of the role of the Lead Independent Director;
ii. ensuring a majority- independent Board;
iii. enhancing the functioning and impact of the Board Committees with independent members and the establishment of a Sustainability Committee;
iv. strengthening of the Compliance processes, under the Audit Committee and
v. launching a Succession Planning exercise as well as a Board Effectiveness Review (both collective as well as individual) to ensure initiatives to enhance the Group’s organisational and process capabilities are accelerated.
Provision 10. Independence of directors
Independent non-executive Board members are approved as such by the shareholders at the time they stand for election. As noted above, under Principle G, seven out of eleven Board members are Independent Non-Executive Directors. Specifically, the Independent Non-Executive Members are the following:
Panayiota Antonakou,
Anthony Bartzokas,
Emmanouil Kakaras,
Konstantina Mavraki,
Natalia Nicolaidis,
Ioannis Petrides,
Alexios Pilavios.
More information on the Independent Non-Executive Members of the Board of Directors is available in Section 2.2 and in Section 8. Independent non-executive members at the time of their appointment and during their term of office, do not hold, directly or indirectly, a percentage of voting rights greater than zero-point five percent (0.5%) of the Company's share capital and do not maintain any economic, business, family or other kind of dependency relationship, which may influence their decisions and affect their independent and objective judgment.
In that sense, a dependency relationship, shall exist, indicatively, in the following cases:
a) Where the Board member receives any remuneration or allowance by the Company, or by a related company, or participates in a share option scheme or any other remuneration or allowance scheme related to the performance, except for fees received for the member’s participation in the Board or its committees, in accordance with the Remuneration Policy of the Company;
b) Where the Board member or any person closely associated with it, has or has had (directly or indirectly through participation in another entity), within the last three (3) financial years from the Board member’s appointment, a business relationship with the Company, or a person related to the Company, or a shareholder who holds, directly or indirectly, at least ten percent (10%) of the share capital of the Company or of a related company during the last three (3) financial years prior to the Board member’s appointment, provided that such relationship affects or is likely to affect the business activity of either the Company, the Board member concerned, or the person closely associated with it. Such a relationship shall exist in particular when the person concerned is a significant supplier or customer of the Company.
c) Where the Board member or any person closely associated with it:
i. has served as member of the Board of the Company or of a related company for more than nine (9) financial years from the date of the Board member’s first appointment;
ii. has been a manager, or employee, or partner under service contract or mandate under paid mandate contract, of the Company or a related company, within the last five (5) financial years prior to the Board member’s appointment;
iii. is related up to the second degree by blood or marriage, or is the spouse or partner equivalent to a spouse, of a member of the Board of Directors or a senior manager or shareholder, with a percentage equal to or exceeding 10% of the share capital of the Company or an affiliated company;
iv. has been appointed directly by a shareholder of the Company;
v. represents shareholders holding, directly or indirectly, equal or more than five percent (5%) of the Company’s voting rights at the General Meeting of the Company's shareholders during his/her term of office, without written instructions;
vi. has conducted a statutory audit in the Company or in a related company, either through a company or himself or a relative of his up to the second degree by blood or marriage or his spouse, during the last three (3) financial years before the Board member’s appointment;
vii. is an executive board member in another company, in whose board an executive member of the Company participates as a non-executive member.
The criteria by which Board members’ independence is assessed are determined in detail in the Company’s Policy on Board Members’ Independence, which also establishes the procedure and rules to be followed, on the one hand, for notifying any dependency relationship of the independent Board members and of the persons closely associated with them; and, on the other hand, for assessing the fulfilment of independence criteria.
The Independent Non-Executive members of the Board may submit, jointly or separately, reports to the General Meeting (ordinary or extraordinary) of the Company, independently of the reports submitted by the Board of Directors. Such reports shall include, as a minimum, the following:
(a) monitoring and reviewing the Company's strategy and its implementation and the achievement of its objectives,
(b) ensuring effective supervision of the executive members of the Board, including monitoring and reviewing their performance,
(c) considering and expressing views on proposals made by executive members of the Board on the basis of existing information.
It is in the Remuneration and Nomination Committee's remit to review the independence of the non- executive directors before nomination and to this end it adopted in 2022 a specific Procedure for the Determination and Assessment of the Independence Criteria of Board Members and Disclosure of the Dependency Relationships. Specifically, the Remuneration and Nomination Committee reviews:
— the balance of the number of independent non-executive directors;
— the length of service of independent non-executive directors;
— any situational conflict which a director may have with the interests of the Group and
— any other relevant matter.
As of 2019 the Remuneration and Nomination Committee reviews the independence of Board members annually.
Provision 11. Half the board to be independent
On 31.12.2022 the Board of Directors consisted of 11 members, seven (64%) of whom were independent. At the AGM of 2 June 2022, the shareholders approved the re-appointment and the appointment as independent non-executive members of the Board of Directors of: a) Panayiota Antonakou, b) Anthony Bartzokas c) Emmanouil Kakaras, d) Konstantina Mavraki, d), e) Natalia Nicolaidis, f) Ioannis Petrides, and g) Alexios Pilavios.
The Board of Directors confirmed to the General Meeting that they meet the independence criteria of article 9 of Law 4706/2020, as well as the independence criteria provided for in the approved Policy on the Suitability of Board Members, the Policy on the Independence of Board Members and the Procedure for the Determination and Assessment of the Independence Criteria of Board Members and Disclosure of the Dependency Relationships.
Provision 12. Lead Independent Director
Pursuant to the Terms of Reference of the Board of Directors, approved in 2022, the Board of Directors shall appoint one of its independent non-executive members as "Lead Independent Director", who has the following responsibilities and obligations:
(a) Is charged with coordinating the non-executive members and chairing their meetings.
(b) chairs the procedure concerning the evaluation of the Board Chair by the Board members.
(c) Proposes to the Board Chair topics for discussion and informs the Board Chair of the important issues raised by the non-executive members in their meetings, also discussing them with the Chair.
(d) Is available and attends the General Meetings to discuss corporate governance issues, as and when the need arises.
Where the Chair is a non-independent Board Member or where the Chair is also the CEO of the Company, the Lead Independent Director:
(a) Is charged with coordinating the executive and non-executive members of the Board and ensuring effective communication between them.
(b) Leads the shareholder engagement process with the stewardship teams of investors.
(c) May, whenever deemed appropriate, meet privately with senior management involved in the governance of the Company, including the CEO, to be informed about or discuss specific issues.
(d) Is expected to work closely with the Board Chair and the other Board members and/or the shareholders, to resolve significant issues and ensure stability (indicatively, in cases where shareholders or non-executive members of the Board have expressed concerns that have not been addressed by the Board Chair, or where the Company's strategy is not supported by the entire Board or the Board’s succession planning is being ignored).
Provision 13. Role of non-executive directors
The non-executive members of the Board, including the independent non-executive members, act in a supportive manner to improve the Board’s functioning based on their knowledge and experience. In particular, they have the following obligations:
(a) To monitor and review the Company’s strategy and its implementation, as well as the achievement of its objectives.
(b) To ensure effective supervision of the executive members, including monitoring and reviewing their performance at individual and collective level.
(c) To consider and express views on proposals submitted by the executive members, based on existing information, and to participate constructively and critically in the Board’s decision-making.
(d) To provide strategic guidance and expert advice based on their knowledge and experience, and to hold senior management accountable when they deem it appropriate.
(e) To participate (the independent non-executive members), according to their area of responsibility, in the Audit Committee and the Remuneration and Nomination Committee, as well as in any other committee in which their participation is provided for by law or is deemed necessary. The Non-Executive Members met during 2022 under the chairmanship of the Lead Independent Director without the presence of the Executive Members four times according to a schedule set at the beginning of the year. At the separate meetings they hold, the Non-Executive Members:
i. evaluate the performance of the Chair and of the executive members and senior management against the performance targets set for them;
ii. discuss the Board’s modus operandi;
iii. examine in detail the strategy of the Business Units, as well as general strategic issues;
iv. discuss important organizational issues of the Company;
v. are informed of and discuss important regulatory developments affecting the Company;
vi. are informed of and discuss developments regarding corporate governance and consider their impact on the Company.
The Non-Executive Board members may at their discretion invite, whenever deemed appropriate, senior management involved in the Company’s governance, including the CEO, to be informed about or discuss specific items on the agenda.
The activity of the Non-Executive Directors in 2022 is described more specifically in Section 2.5.
Provision 14. Written responsibilities and attendance
The roles and responsibilities of the Chair, CEO, Lead Independent Director and Board committees are included in the Company’s Articles of Association which have been approved by the shareholders at the 2019 AGM, the Terms of Reference of the Board of Directors, approved in 2022 and the Terms of Reference of the Board Committees. Furthermore the aforementioned roles and responsibilities are part of the company’s Internal Regulation which also include internal policies and processes. The Terms of Reference of the Board committees which portray the remit, the functioning, and the reporting responsibilities of the committees in detail, are approved by the Board and can be seen on Company’s website. Also details of meetings, agendas and individual attendance of directors during the year are reported under the relevant provisions in this document, i.e. under Provision 23, Provision 26, Provision 41 and Section 2.4. The responsibilities of the Chair are described in detail under Principle F, the Chief Executive Officer under Section 2.1, the Vice Chairmen of the Board under Section 2.1 and the Lead Independent Director under Provision 12.
Provision 15. Other appointments
Board members must have sufficient time to perform their duties in accordance with the Policy for the Suitability Assessment of the Members of the Board of Directors. Pursuant to the Terms of Reference of the Board of Directors, irrespective of any permission granted by the General Meeting, the Board members should not sit in the boards of directors of more than five (5) companies whose shares are traded in a regulated market.
When appointing its new members, the Board should also take into account any other commitments/requirements affecting the availability of future Board members. Candidate Board members must notify the Board of their significant commitments, if any, prior to their appointment, also stating the corresponding time required for those commitments, so that the Board considers any external professional commitments before nominating candidates for election by the General Meeting of Shareholders. Similarly, the assumption of any significant external commitments by existing non-executive members of the Board, such as, but not limited to, directorships in other listed companies, may not be made without the prior approval of the Board.
Before acquiring any additional position in boards of other entities, every member must consider the necessary time they should devote for discharging their duties as a member properly, which (time) should in no case be impaired.
The Board considers all external commitments of executive and non-executive directors including the not-for-profit ones. No director holds more than five external appointments. With the exception of the CEO, two executive directors hold positions in non-listed companies none of whom is the CEO.
Full list of other appointments is available in Section 2.1.9.
Provision 16. Company secretary
The Βoard has appointed the Company's Corporate Governance Director as Company Secretary. According to the Terms of Reference of the Board of Directors, the Company Secretary has the following responsibilities:
i. ensuring compliance with the Board's procedures and advising the Board Chair and Board members, as well as the Board committees, on all corporate governance matters , in accordance with the applicable legislation and the Corporate Governance Code that the Company applies;
ii. ensuring the effective flow of information between the Board and its committees, as well as between the Senior Management and the Board;
iii. providing comprehensive practical support and guidance to Board members at both an individual and collective level, with particular emphasis on supporting non-executive members.
iv. planning the induction training programme for newly elected Board members immediately after their election, including the assessment of any special training needs of Board members, and facilitating their training.
v. highlighting issues that may require the attention of the Board.
3 Composition, succession and evaluation
Principle J: Board appointments and succession planning
The Remuneration and Nomination Committee is responsible for making recommendations to the Board on appointments against objective criteria and with due regard for the benefits of diversity on the Board, including gender, breadth of experience, amongst other criteria, in accordance with the Policy for the Suitability Assessment of the Members of the Board of Directors of MYTILINEOS, which was approved by the AGM on 15 June 2021. It is in the Committee’s remit to prepare a description of the role, capabilities and personal attributes required for a particular appointment; to develop criteria for identifying and evaluating director candidates. Also it is part of the Committee’s remit to care for the orderly succession and make recommendations for appointment and reappointment by the Board of both executive directors and independent non-executive directors.
The first ever formal succession planning exercise was completed in late 2021 with facilitation provided by Egon Zehnder. The results of this project were taken into account for the new organisational structure of the Company, which will be completed in 2023.
The Company applies a Diversity Policy in which it acknowledges that diversity at the workplace in the broader sense may increase the potential for accessing a greater range of solutions to issues of business strategy, thus increasing its competitive advantage. The Company had set measurable targets concerning the representation of women by 2020. In 2022 the Company exceeded the set goal, as the new members elected on 02 June .2022 raised the number of women on the Board of Directors to three, that is to 27%. The Company intends to adopt a new Board diversity policy in 2023, in which, among other, it will set new targets for gender representation on the Board of Directors.
Principle K: Skills, experience and knowledge
It is up to the Remuneration and Nomination Committee to make recommendations for approval by the Board of the membership of Board committees. The current Board of Directors was elected by the General Meeting of the Shareholders on 02.06.2022 for a term of four (4) years. The Board skill matrix is available in Section 2.2.
The table with the CVs of the Board members is available in Section 8.
Principle L: Board and director evaluation
It is in the Remuneration and Nomination Committee’s remit to establish and oversee an objective and rigorous evaluation process of the Board and committees of the Board. The Chair of the Committee has overall responsibility for the process and should involve the Board Vice Chair A’ and the Lead Independent Director as appropriate; the Board Vice Chair A’ leads the process that evaluates the Βoard and the Lead Independent Director leads the process that evaluates the Chair of the Board. Board, committee and individual Βoard and committee members evaluations shall take place every year and externally facilitated every three or sooner and the outcomes of Board evaluation shall be shared and discussed with the Board and inform and influence the succession process.
During 2022, the Board continued on its path towards continuous improvement of its effectiveness. Following the first external assessment of the Board’s collective suitability in 2020, an assessment was completed in 2022 that focused on the competencies of individual Board members and the impact of the Board. The views of Board members, the Company Secretary and Committee Secretaries were sought. Egon Zehnder assisted the Remuneration and Nomination Committee in this assessment.
The individual assessment of the Board members completed in 2022 included personal interviews of all members, as well as the Company Secretary, completion of an electronic questionnaire and then the use of Egon Zehnder’s psychometric tools. The key competencies analysed included Board results orientation, strategic orientation, cooperation and influence, independence and integrity, interpersonal characteristics and relevant experience. Following this exercise, the key areas of Board oversight were aligned and assigned to the Non-Executive Directors based on their areas of expertise. These areas include digital technology, capital markets, new energy technologies, rganizational effectiveness and regulatory compliance. By decision of the Board, the Board Committees will be assessed by an external evaluator.
Provision 17. Nomination committee
The Company has a combined Remuneration and Nomination Committee which examines and processes issues pertaining to: (a) the remuneration of Board members and of senior and other executives; and (b) the suitability of existing and candidate directors, within the scope of its remit under its Terms of Reference. The Committee revisited its Terms of Reference, which were approved and put into effect by the Resolution of the Board of Directors dated 26.07.2021, following relevant proposals submitted by the Committee.
Details on the composition, tenure, functioning, decision-making and meetings of the combined Committee are available under Provision 32.
The nomination responsibilities of the Committee include the following:
i. to review the independence of the non-executive Directors;
ii. to develop meritocratic and objective criteria for identifying and evaluating candidate Directors in accordance with the Policy for the Suitability Assessment of the Members of the Board, as well as for assessing and planning the succession of Directors, and to describe the role, knowledge, skills, experience, abilities and the required personal attributes of a specific candidate Director;
iii. to make recommendations to the Board on the appointment of Directors against objective criteria;
iv. to plan for the orderly succession of the Directors and senior executives and make recommendations to the Board;
v. to establish and oversee an objective and rigorous evaluation process of the Board and Board Committees, including assessing suitability at individual and collective level;
vi. to oversee the induction process of new Directors and their ongoing training in accordance with the relevant Training Policy that the Company has adopted and applies;
vii. to regularly assess and review the Board’ s size, structure, composition and operation and, if it identifies weaknesses, to recommend to the Board relevant changes as appropriate;
viii. to be responsible for drawing up the Company’s Policy for the Suitability Assessment of the Members of the Board, which shall then be submitted to the Board for its approval, as well as any amendments thereof.
Provision 18. Director election
The current Board was appointed by the 2022 AGM. Nominees were submitted unbundled to the General Meeting of the Shareholders of 2022 for approval.
In particular, the General Meeting was invited following unanimous proposal of the Board of Directors, in accordance with the relevant proposal of the Company's Remuneration and Nomination Committee, to elect a new eleven-member Board of Directors. Specifically, it was proposed to re-elect each of the existing eleven (11) members of the Board of Directors for a four-year term of office, as well as to appoint Panayiota Antonakou, Emmanouil Kakaras, Konstantina Mavraki, Anthony Bartzokas, Natalia Nicolaidis, Ioannis Petrides, and Alexios Pilavios as Independent Non-Executive Members of the Board of Directors.
The composition of the Board of Directors has been assessed and reviewed by the Remuneration and Nomination Committee, so that the Board of Directors can satisfy itself that the Board collectively, as well as its Committees, have the right balance of knowledge, skills, experience, diversity and independence for effective performance of their duties, as well as that each of the members of the Board nominated for re-election continue to contribute substantially to the activities of the Board and to show commitment to its role.
In particular, the Remuneration and Nomination Committee, assessed and reviewed the nominee members of the board, individually, as well as the board collectively, considering:
i. the external independent assessment of the collective and individual capabilities of the Board of Directors,
ii. the annual evaluation of the Chairman and CEO, led by the Lead Independent Director taking into account the views of all the Non-Executive Members, and reviewed by the Remuneration and Nomination Committee,
iii. the skills, experience and knowledge, as well as the qualifications of the members of the Board of Directors, as well as their CVs,
iv. the other professional commitments of the members of the Board of Directors,
v. the provisions of Law 4706/2020, the approved Policy for the Suitability Assessment of the Members of the Board of Directors of the Company, the Diversity Policy of the Company, the UK Corporate Governance Code, as well as the Policy on Board Members’ Independence and the Procedure for Assessing Independence Criteria and for Notifying Dependency Relationships, determined that the following requirements are met:
a. sufficient gender representation (women account for 27% of all directors),
b. the total number of independent members of the board of directors (7 out of 11, i.e. 63%),
c. independence of the Independent Non-Executive Members of the Board of Directors, and
d. the suitability criteria set out in the current regulatory framework and the Company’s internal regulation.
More specifically, the Remuneration and Nomination Committee determined that each member of the Board of Directors is adequately qualified, both in terms of the adequacy of knowledge and skills, including academic and professional qualifications, to perform the duties assigned to them, the member’s professional experience, as well as their position and the prerequisites of the Company, the absence of any obstacles or incompatibilities in its face, honesty and integrity, good reputation, as well as the adequacy of time.
In addition, the Remuneration and Nomination Committee evaluated and ratified the collective suitability of the Board of Directors, that its composition reflects the knowledge, skills and experience required to perform its duties and that the members of the Board of Directors at board level have the necessary skills to present their views, as well as that the Board of Directors collectively have adequate knowledge in all of the areas that the Company is active, as well as in relevant objectives (such as indicatively finance and capital markets).
Pursuant to Article 19(2) of the Company’s Articles of Association, Board Members are elected by the General Meeting of Shareholders of the Company for a term of four (4) years, to be extended until the expiration of the time period within which the immediately next Ordinary General Meeting is to be held and until the adoption of the relevant resolution. In the Greek market, there is a long-standing tradition that members of the Boards of Directors of listed companies are elected for a term of more than one year, mainly for reasons of ensuring the smoothness and continuity of management in companies, as well as to avoid additional administrative burden. However, the General Meeting of Shareholders of the Company reserves in any case the right to recall, whenever it wishes or deems appropriate, the Board of Directors in whole or in part. In addition, every year, an assessment of the Board of Directors is carried out both at individual and collective level as well as a control on the fulfilment of the independence criteria of the Independent Non-Executive Directors.
Provision 19. Length of service of Chair
The Chair has been serving for over 30 years. With the completion in 2023 of the new corporate transformation, the organisation structure of Mytilineos now has two business lines: a) the new Energy Sector and b) the Metallurgy Sector, which are fully integrated and complementary. Following the formal succession planning exercise completed at the end of 2021, the Company used the relevant findings as to the new organisational structure launched at the end of 2022, the BIG 2 initiative. The new organization structure basically was implemented with 2 objectives in mind. Firstly, aligning the human organization to the strategic direction of the Company and secondly creating a platform that will allow the Company to develop key leaders that have future potential in broader executive roles within the Group.
The new organization will allow for the further development of our leadership bench to meet future succession needs, whilst ensuring that all the critical competencies required in this new era for Mytilineos, both individual as well as collective, are in place.
Mr. Mytilineos is the architect of the Company transformation and the Company strategy, hence his vision, knowledge, and involvement are integral to its materialization. In view of the new challenges facing the Group, the Company believes that any change today in its organisational model would not be beneficial to the Group. Given his unique experience and leadership capacity, our Founder Mr. Mytilineos will continue to play a critical role going forward.
Provision 20. Appointment process
In accordance with its Terms of Reference, in order to assist it in the search process for suitable candidates for Board members, the Remuneration and Nomination Committee may request the assistance of an external consultant to whom it may assign specific tasks. These tasks may, where appropriate, include conducting a survey of potential Board members, drawing up a list of preferred candidates and assessing their suitability, in accordance with the instructions of the Remuneration and Nomination Committee. The Remuneration and Nomination Committee shall then assess the suitability of the candidates to fill the positions on the Board and submit its proposals to the Board with the assistance, where appropriate, of the Lead Independent Director.
The Remuneration and Nomination Committee, in view of submitting its proposal to the Board of Directors for the re-election of the Board members by the General Meeting in 2022, was supported in assessing the suitability (individual and collective) of the Board members who were candidates at the General Meeting of 02/06/2022 by Egon Zehner.
Provision 21. Board evaluation
Board effectiveness was evaluated by an external evaluator, as mentioned above, in two stages: First, by conducting an assessment of the collective suitability of the Board completed in 2020 and second, by conducting an assessment completed in 2022 that focused on individual capabilities and Board impact. Following a review of available providers, the Remuneration and Nomination Committee proposed Egon Zender to facilitate the process based on their leading position in the Greek marketplace, knowledge of the Mytilineos Group and the value of their proprietary global template in evaluating Board performance. The facilitator was granted full access to the operating details of the Board functioning and also attended one of the Board meetings.
The collective review of Board effectiveness was executed via face-to- face interviews and utilization of the firm’s evaluation tools. The review confirmed that the Board is on a journey of continuous improvement with the opportunity to improve in the areas of deeper engagement of the non-executive Directors in-between Board meetings coupled with an improved knowledge of the operating and strategic model of the Company.
The individual assessment review completed in early 2022 involved face to face interviews of all Board Directors as well as of the Company Secretary, completion of an online questionnaire and subsequent utilization Egon Zender’s psychometric tools. Key competencies analyzed included Board Results Orientation, Strategic Orientation, Collaboration and Influencing, Independence and Integrity, Interpersonal Style and Relevant Experience. The findings further reinforced the findings of the collective evaluation as well as progress achieved.
As a conclusion, the 2 Board evaluation exercises strengthened the Board’s effectiveness whilst the initiatives executed have already shown a material improvement in the ability of the Board to add value.
By resolution of the Board, the Board Committees will be specifically assessed by an external evaluator within 2023 for the effectiveness of their operation in accordance with best corporate governance practices and the UK Corporate Governance Code, which the Company applies.
Independently of the evaluation of the Board of Directors, the annual evaluation of the Chairman & CEO, led by the Lead Independent Director, was conducted and subsequently reviewed by the Remuneration and Nomination Committee. The evaluation was carried out along different areas of CEO accountability, including Strategic Development, Organizational effectiveness, Board Effectiveness, ESG progress and delivery of 2022 Financial Targets. The evaluation was discussed with the Chairman & CEO both individually and at Board level and was a critical input into the 2022 STIP review.
Furthermore, in the Terms of Reference of the Board of Directors, it was explicitly provided for, among other, that the person being evaluated shall also participate in the evaluation and performance review process, shall be informed in advance of the evaluation rules by means of an open information process, and shall have the opportunity to record any objections or complaints. It was also foreseen that the results of the evaluation and performance review of the Executive Board members should be shared with and discussed by the Board as a whole, while at the same time they should be taken into consideration in the Board succession process. The Chair should take appropriate action based on the results of the evaluation, acknowledging the strengths and addressing any weaknesses of the Board, whilst each member of the Board should actively engage with this process and take appropriate action when improvement needs have been identified.
Provision 22. Evaluation follow-up
On the conclusion of the evaluation, the Board of Directors discussed in detail the results of the 2022 evaluation and approved a programme of actions to further improve its operation. The Company adopted a number of key initiatives, including strengthening the role of the Lead Independent Director, establishing 4-5 Non-Executive Directors' meetings annually to further enhance the participation and impact of the Non-Executive Directors, and adopting the Terms of Reference of the Board of Directors to enhance the effectiveness of the Board's operations. The Remuneration and Nomination Committee will monitor the progress of the implementation of the action plan. In addition, the Non-Executive Directors met separately and discussed additional actions to leverage the responsibilities of their role and enhance the effectiveness of the Board.
Provision 23. Reporting on the Nomination Committee
The Remuneration and Nomination Committee held eight (8) meetings. All members of the Committee attended all the meetings.
Assessment of the suitability of Board members and the fulfilment of the independence criteria of the Independent Non-Executive Directors
For the purpose of assessing the suitability of the Board members who were candidates for re-election at the General Meeting of 2 June 2022, the Remuneration and Nomination Committee discussed in detail and approved the individual assessment of the individual and collective competencies of the Board members, which was prepared by Egon Zehnder and invited Egon Zehnder to inform the Board accordingly.
Furthermore, the Remuneration and Nomination Committee, taking into account the applicable legislative framework, the Company's Policy for the Suitability Assessment of the Members of the Board of Directors and the UK Corporate Governance Code, considered whether the Board of Directors met the requirements:
a. on adequate gender representation,
b. the total number of independent non-executive directors on the Board,
c. independence for the Independent Non-Executive directors, and
d. the eligibility criteria.
Furthermore, it reviewed and assessed whether the members of the Audit Committee meet the required independence and suitability criteria and informed the Board of Directors accordingly.
The Remuneration and Nomination Committee, after examining the fulfilment of the above criteria, found that:
i. The representation of women on the Board of Directors is 27%.
ii. The total number of Independent Non-Executive Members is 7 out of 11 members, i.e. 63%, and the requirements of Law No. 4706/2020, the UK Corporate Governance Code adopted and applied by the Company and the Company's Independence Policy are fulfilled.
iii. The Independent Non-Executive Members of the Board of Directors, in particular Panayiota Antonakou, Emmanouil Kakaras, Konstantina Mavraki, Anthony Bartzokas, Natalia Nicolaidis, Ioannis Petrides, and Alexios Pilavios, each of them fulfil the independence criteria of article 9 of Law No. 4706/2020, the UK Corporate Governance Code, as well as the Company's Independence Policy, as they have responsibly declared.
In accordance with the Company's Policy for the Suitability Assessment of the Members of the Board of Directors, each Board member was found to have sufficient knowledge, skills and experience, independence of mind, integrity and good repute. In particular, the members of the Remuneration and Nomination Committee, having considered the assessment of the independent external evaluator, ascertained:
i. The suitability of each Board member individually, in terms of both the adequacy of knowledge and skills, including academic and professional qualifications, to perform the duties of the role assigned to him/her, the adequacy of his/her professional experience, as well as the position and the competencies required by the Company.
ii. The honesty and integrity and the presumed good reputation of each member of the Board of Directors, in particular as each member of the Board of Directors has declared responsibly that no final court decision has been issued within the last one (1) year recognizing his/her liability for any loss-making transactions of a listed or unlisted public limited company with related parties, and has undertaken the responsibility to inform the Company immediately, by submitting a new declaration, in case of any change in the above.
iii. the sufficiency of each member's time required to perform his/her duties, as the members have responsibly declared a) the total number of positions held as executive or non-executive directors in Group companies, or other companies, which for any member does not exceed the requirements set by law and the Policy for the Suitability Assessment of the Members of the Board of Directors and b) that after obtaining any position on the board of directors of another entity, the member must inform the Company without delay.
iv. The collective suitability of the Board of Directors, that its composition reflects the knowledge, skills and experience required for the exercise of its responsibilities and that the members of the Board of Directors collectively have the necessary skills to present their views, as well as that collectively, with sufficient expertise of its members, all general areas in which the Company operates, as well as related subjects (such as, but not limited to, finance and capital markets) are covered.
The members unanimously resolved and recommended to the Board of Directors the re-election of each of the existing eleven (11) members of the Board of Directors for a four-year term of office, as well as the appointment of Panayiota Antonakou, Emmanouil Kakaras, Konstantina Mavraki, Anthony Bartzokas, Natalia Nicolaidis, Ioannis Petrides, and Alexios Pilavios as independent non-executive members of the Board of Directors.
Succession Planning
The Remuneration and Nomination Committee discussed and evaluated the progress and results of the project "Succession Planning" and submitted a recommendation to the Board of Directors.
Approval of corporate governance procedures
In order to more effectively implement the Policies approved by the Board of Directors regarding individual corporate governance issues, the Remuneration and Nomination Committee discussed in detail and unanimously approved the following procedures in 2022:
a) Procedure for Determining and Assessing the Independence Criteria of Board Members and Disclosure of Dependency Relationships: This procedure describes the main actions that take place to define the criteria against which the independence of MYTILINEOS Board members is assessed, to evaluate the fulfilment of these criteria and to disclose any dependency relationships of the Independent Non-Executive Directors and persons with close links to them.
b) Procedure for Drafting, Approving, Monitoring the Implementation and Reviewing the Training Policy of the Board of Directors' Members: This procedure describes the main actions that take place for the drafting, approval, monitoring of implementation and revision, if necessary, of the Training Policy for MYTILINEOS Board Members.
c) Procedure for the Drafting, Approval, Review and Monitoring of the implementation of the Policy for the Suitability Assessment of the Board of Directors: The procedure describes the main actions that take place for the drafting, approval, monitoring of implementation and revision, if required, of the MYTILINEOS Policy for the Suitability Assessment of the Board of Directors. The procedure concerns the selection, replacement and renewal of the term of office of Board members in the context of the assessment of suitability in accordance with the Company's Policy, which is the set of principles and criteria applied in the selection, replacement and renewal of the term of office of Board members in the context of the assessment of their suitability at individual and collective level. It also concerns the drafting, approval, monitoring of the implementation and revision, if necessary, of this Policy.
d) Compliance Framework and Monitoring of Compliance with the provisions of Law 4706/2020 on corporate governance: This procedure describes the main actions that take place for the compliance and monitoring of MYTILINEOS' compliance with the provisions of Law 4706/2020 on corporate governance. In particular, compliance with the relevant provisions refers to the responsibility of the Divisions involved in implementing the requirements set out, while compliance monitoring aims to ensure compliance with what is described regarding the Company's compliance with the provisions. Considering that the authority and responsibility for the implementation of the individual provisions on corporate governance of Law 4706/2020 is shared by several different Divisions of the Company, the procedure specifically identifies the relevant responsibilities.
e) Procedure for the briefing of Non-Executive Members by the Executive Members of the Board of Directors: This procedure concerns the provision of information by the Executive to the Non-Executive Directors to ensure that the latter obtain timely, adequate, specific and objective information regarding the duties of the former and how they are performed, their performance, the general way in which the Executive Directors handle corporate matters, as well as issues that generally arise in the performance of the duties of the Executive Directors.
f) Procedure for the Preparation of a Succession Plan for the Board Members: This procedure outlines the main actions that take place for the preparation of a succession plan for MYTILINEOS' Board members in order to ensure the smooth continuity and proper functioning of the Company's Board in the event of a planned or unforeseen resignation or loss of Board membership by one or more Board members.
Human Resources issues
The members of the Remuneration and Nomination Committee also discussed and were informed about the Company's actions to fill the position of the General Manager of Human Resources. The new General Manager took office around mid-June 2022, has extensive experience in HR matters and has served as Senior HR Business Partner at ING in the Netherlands. The new HR General Manager discussed with the Committee the progress of a) the Long Term Incentive Plan pursuant to the AGM resolution of 15.06.2021 ("LTIP") and b) the program for the Free Share Allocation to Executive Board Members and/or Executive Committee Members other than the Chairman and CEO pursuant to the AGM resolution of 15.06.2021 ("LEGACY") for the year 2022. The Committee also discussed the priorities of the General Division of Human Resources and, in particular, a) the strengthening of HR systems and procedures and b) the training of the Company's executives. The implementation of a Performance Management System, which is currently being developed, was also discussed, as well as the Organizational Grading.
Results of consultation with the stewardship teams of the Company's major institutional investors and proxy advisors
The Committee also discussed the results of the consultation with the stewardship groups of the Company's major institutional investors and proxy advisors, ISS and Glass Lewis, conducted during the 2022 Corporate Governance Roadshow, where the need to enhance the representation of women on the Company's Board was highlighted and it was decided that the relevant percentage should be increased to a minimum of 30%, as according to international best practices, gender diversity enhances the Board's functioning and adds value to the Company. It was also decided to review and update the Board Diversity Policy to incorporate current best practices and set new gender representation targets. This Policy is expected to be completed in 2023 and the Remuneration and Nomination Committee will submit it to the Board for approval.
Training of Board Members
In the context of the training of the Board members, during 2022 two training programmes were completed (via an online platform) on the following topics of Regulatory Compliance: a) Code of Business Conduct (which includes in particular the following: Anti-Bribery, Competition Law, Confidential Information Management, Conflicts of Interest, Human Rights, Integrity of Financial Information, Gifts, Entertainment and Hospitality, Abuse of Privileged Information, Complaints Line) and b) Protection of Personal Data under EU legislation (GDPR).
The Remuneration and Nomination Committee informed the Board about its work in the year 2022.
4 Audit, risk and internal audit
Principle M: Internal and external audit
The Audit Committee of the Company has been established with the purpose of assisting the Board of Directors to fulfil its oversight responsibilities of the audit procedures for complying with the legal and regulatory framework regarding: (a) financial information, (b) internal audit, (c) the system of internal controls and the risk management system, and (d) supervision of the (external) statutory audit of the Company's individual and consolidated financial statements.
While all members of the Board individually and collectively have a duty to act in the interests of the company, the Committee has a particular role, acting independently from the executive Board Members, to ensure that the interests of shareholders are properly protected in relation to financial reporting and internal control and risk management systems. However, the Board has overall responsibility for the Company's approach to risk management and the system of internal controls.
The Audit Committee revisited its terms of reference. No amendments were necessary.
Principle N: The company’s position and prospects
At the end of each business year, the Board of Directors prepares the annual financial statements, the annual consolidated financial statements and the management report.
The financial statements constitute a single comprehensive set and give a fair presentation of the recognized assets, liabilities, equity, income, expenses, profit and loss, as well as the cash flows of the period concerned, as the case may be, in conformance with the law. More specifically, the Board of Directors is required to prepare, pursuant to the above provisions: (a) the Balance Sheet or Financial Position Statement, (b) the Income Statement, (c) the Statement of Equity Change, (d) the Cash Flow Statement, (e) the Notes to the Financial Statements.
The management report provides:
(a) A fair review of the development and performance of the Company business and its position, together with a description of the principal risks and uncertainties faced by the Company;
(b) A review that presents a balanced and comprehensive analysis of the development and performance of the Company business and position, consistent with the size and the complexity of the Company;
(c) To the extent necessary for an understanding of the development, performance or position of the Company, the said analysis includes both financial and, where appropriate, non-financial key performance indicators relevant to the particular business of the Company, including information on environmental and labour issues. In the context of this analysis, the report includes, where appropriate, references and additional explanations on the amounts shown in the annual financial statements.
In the management report the Company includes:
(a) a non-financial statement that includes information, to the extent necessary for an understanding of the development, performance, position and impact of its activities in relation, as a minimum, to environmental, social and labour issues, the respect of human rights, anti-corruption and anti-bribery practices
(b) the corporate governance statement; this statement is included as a separate part in the management report.
Principle O: Determining and managing risks
The Board defines the strategy and is informed on significant risk factors such as financial, environmental, social, health and safety, and governance.
The Company has defined risk as a set of uncertain and unpredictable situations that may affect all its activities, its business operation and its financial performance, as well as the implementation of its strategy and the achievement of its goals.
In line with this approach, it has established a specific risk management approach in all its areas of activity where certain risks have been recognized. This approach consists of the following steps:
i. Identification and assessment of risk factors
ii. Planning of the risk management policy
iii. Implementation and evaluation of the risk management policy.
The Company has defined specific and comprehensive Risk Management Procedures. All executives are involved in the process of identifying and initially assessing risk to facilitate the work of the management of each business sector and the Board of Directors in the planning and approval of specific actions within the approved Risk Management Procedures.
With regard to Non-Financial Information, since 2010 the Company has introduced a specific Stakeholder engagement process for evaluating the materiality of the sustainability issues which are related to its activity sectors. This process, combined with the corresponding prioritization of these issues by the Company’s Business Units, is at the core of the accountability policy applied by the Company.
The process for determining the material sustainability issues is an ongoing exercise that is constantly developed and improved. The purpose of this process is to highlight the issues that reflect the Company’s significant environmental and social impacts and influence substantially the decisions of its Stakeholders.
By identifying and understanding the material sustainability issues, the Company formulates and develops its uniform business strategy and its aims, targets and social and environmental initiatives.
Last but not least, the Company conducts regular internal audits to ensure the appropriate and effective implementation of the risk identification and assessment processes and of the management policies for such risks.
Provision 24 Audit committee composition
At the AGM of 15 June 2021, the shareholders decided that the Audit Committee shall be a committee of the Board of Directors, which shall consist from three independent non-executive members whose term of office shall be the same as their term in the Board of Directors.
The Committee members as a whole have sufficient knowledge in the sectors in which the Company operates and at least one of its members has proven sufficient recent knowledge in auditing and accounting and is required to attend the meetings of the Committee concerning the approval of financial statements.
The assessment for the selection of the candidate Committee members is conducted by the Board of Directors, on the recommendation of the Company’s Remuneration and Nomination Committee.
The Committee has a Secretary, which cooperates with the Corporate Secretary and is responsible for supporting the operation of the Committee in general, including the keeping of the minutes and the proper implementation of the Committee meetings.
The Committee Chair is appointed by the committee members. The chair of the Board cannot be a member of the Committee.
Note: The term of office shall be four years, which shall be extended until the first ordinary general meeting following the expiry of the term of office.
Attorney Mrs Vassiliki Prantzou is the Committee’s Secretary.
The AGM of the Company's shareholders of 2021, in accordance with the provisions of article 44 of Law 4449/2017, as amended and in force, decided that the Committee will be a committee of the Board of Directors, which will consist of three independent non-executive members of the Board of Directors. Following the AGM of 2022 at which the Board of Directors of the Company was re-elected, the General Meeting appointed Mr. Alexios Pilavios, Ms. Konstantina Mavraki and Mr. Anthony Bartzokas as members of the Audit Committee. The Audit Committee was constituted as a body and re-elected Mr Alexios Pilavios as its Chairman.
Provision 25. Role of the audit committee
The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities on the audit procedures to ensure compliance with the legal and regulatory framework regarding:
(a) financial information;
(b) the System of Internal Controls, including the Internal Audit Division, the Risk Management Function, and the Regulatory Compliance Function; and
(c) supervision of the (external) statutory audit of the Company's individual and consolidated financial statements.
The main responsibilities of the Audit Committee are:
i. to monitor the financial reporting process with the view to ensure its integrity;
ii. to monitor the effectiveness of the Company’s system of internal controls, quality assurance and risk management and, where appropriate, of the Internal Audit Division as regards financial information (without impairing the independence of this Division and in accordance with the applicable legal and regulatory framework), as well as to have the day-to-day responsibility for management of the System of Internal Controls (the Board of Directors has ultimate responsibility for the effectiveness of the Company’s System of Internal Controls);
iii. to review and approve the role and mandate of the Internal Audit Division, approve the annual internal audit plan and monitor, inspect and review the effectiveness of the function and work of the Internal Audit Division;
iv. to monitor the statutory audit of the annual and consolidated financial statements of the Company, and in particular its performance, as well as to review the effectiveness of the audit process, and to oversee the Company's relations with the statutory auditor (responsibility for the process of selecting the statutory auditor, annual assessment of its qualifications and independence, proposals to the Board on the appointment, reappointment and/or removal of the statutory auditor, etc.).
When requested by the Board, the Audit Committee assesses whether the annual financial report, including the annual financial statement and the management report, reflects in a true, fair, balanced and understandable manner the development, performance and financial position of the company and of the businesses included in group consolidation, taken as a whole.
The Committee considers and examines the most significant issues and risks that may have an impact on the Company's annual and interim financial statements and other periodic financial information, as well as the critical judgments and estimates made by Management in their preparation. For the above issues and risks the Committee has regard to matters communicated to it by the External Auditor, as well as his view of Management's estimates, and informs the Board.
The Board has ultimate responsibility for the Company's internal control and risk management systems, including the System of Financial Internal Controls and the Financial Risk Management System. It is in the Audit Committee's remit to oversee them and to inform the Board accordingly. There is no separate risk committee at board level.
The Committee has primary responsibility for the appointment of the key audit partner (external auditor). This includes negotiating the fee and scope of the audit, initiating a tender process, influencing the appointment of an engagement partner and making formal recommendations to the board on the appointment, reappointment and removal of the external auditors.
The Internal Audit Division is functionally independent of any other organizational unit of the Company. The Director of the Internal Audit Division is appointed by the Board on recommendation of the Audit Committee. It is up to the Committee to ensure that the internal audit functions in accordance with the International Standards for the Professional Practice of Internal Auditing. The Committee reviews and approves the role of the Internal Audit Division, approves the annual audit program and monitor, inspects and examines the effectiveness of its work.
The Audit Committee assesses the independence and objectivity of the annually in accordance with articles 21, 22, 23, 26 and 27 of law 4449/2017 and with articles 4 and 6 of Regulation (EU) no. 537/2014 and in particular assesses the appropriateness of the provision of non-audit services to the Company in accordance with article 5 of Regulation (EU) no. 537/2014.
The Audit Committee takes into account the regular auditor's annual declaration of independence and discusses with him threats that may call into question his independence, as well as ways to ensure that these threats are addressed. The Audit Committee examines whether the relationships, taking into account the views of the external auditor, the Management and the internal auditor, as appropriate, appear to affect the auditor's independence and objectivity.
The Committee assesses the effectiveness of the audit process considering of mind-set and culture; skills, character and knowledge; quality control; and judgment, including the robustness and perceptiveness of the auditors in handling key judgements, responding to questions from the Committee, and in its commentary where appropriate on the systems of internal control.
The Committee is responsible for approving non-audit services, that are not prohibited by law. The Committee ensures that the provision of such services does not impair the External Auditor’s independence or objectivity by applying judgement, including assessing:
i. threats to independence and objectivity resulting from the provision of such services and any safeguards in place to eliminate or reduce these threats to a level where they would not compromise the auditor’s independence and objectivity;
ii. the nature of the non-audit services;
iii. whether the skills and experience of the audit firm make it the most suitable supplier of the non-audit service;
iv. the fees incurred, or to be incurred, for non-audit services both for individual services and in aggregate, relative to the audit fee, including special terms and conditions (for example contingent fee arrangements), and
v. the criteria which govern the compensation of the individuals performing the audit.
The Company's statutory auditors, namely Grant Thornton, were appointed for the first time by the resolution of the Annual General Meeting of Shareholders of 25/06/2003. Since then, their appointment has been continuously renewed for a total period of 20 years based on the resolutions adopted annually by the Annual General Meeting of Shareholders.
Further information on the remit, responsibilities and the modus operandi of the Audit Committee are available in the Committee’s Terms of Reference, which have been released in the Company’ s website www.mytilineos.gr at the following
Provision 26. Reporting on the audit committee
For 2022, the Committee met frequently (14 times in total) and discussed all the topics falling under the areas of its responsibilities, with its main focus on: a) External Audit and Financial Reporting process, b) Internal Audit, c) Internal Control System, d) Organisational matters, e) Other topics relevant to the mandate of the Committee. All the Committee’s decisions were unanimous.
All members of the Committee attended all the meetings for 2022. The meetings of the Committee that concern the approval of the financial statements were attended by all the members of the Committee that have sufficient knowledge and experience in auditing or accounting.
In addition to the members of the Committee, the Secretary and the Corporate Secretary participate in the meetings when they are not the same person. It is at the discretion of the Committee to invite, whenever deemed appropriate, other members of the Board, or other key persons from inside and outside the Company, to inform it and / or attend a specific meeting or specific items of the agenda. The Chief Financial Officer (CFO), the Treasury General Manager, the Internal Audit Director, the Compliance Director, the Non-financial enterprise risk Manager as well as the statutory auditor or audit firm are invited regularly to the Committee meetings, at the Committee Chair's initiative.
Financial Reporting
Publication of non-audited financial figures and other key information — «Flash Notes»
The Finance Division presented to the Committee the preliminary financial results which were published subsequently by the Company in the form of a "Flash Note", for the financial year ended 31 December 2021, as well as for the period from 01 January 2022 to 30 June 2022 respectively. The aforementioned «Flash Notes» referred to non-audited financial figures and estimates of the Management and forecasts relating to financial data or other events of the above periods. It is noted, however, that the external auditor carried out specific pre-agreed procedures on the «Flash Notes», for the purpose of issuing "Comfort Letter" to the Company's Management. In the "Comfort Letter" of the external auditors, no disagreements were expressed with regards to the data reported through the «Flash Notes». The Committee did not identify any gaps or deviations in the information and safeguards provided to it and recommended to the Board the approval of the publication of the «Flash Notes». Finally, the Committee reviewed the relevant press releases on the «Flash Notes».
Financial Statements 2022
In March 2023, the Committee was informed by the Finance Division about the Company's Financial Statements, both at company and at consolidated level, which were prepared in accordance with the IFRS for the year ended 31 December 2022. The Committee was also informed regarding the main accounting assumptions the Company adopted for preparing the Financial Statements which did not differ from those adopted by the Company in 2020, and regarding the key issues the Finance Division considered while preparing these Statements.
The Committee discussed with the external auditor (Grant Thornton) and the Finance Division the key audit matters during the audit of the Company's annual financial statements for the financial year ended 31 December 2022. The Committee drafted an explanatory report for the Board of Directors and recommended that the Board approves the Financial Statements. In this report, the Committee explained to the Board how the mandatory audit contributed to the integrity of financial reporting and what the role of the Committee was in this process. In this context, the Committee evaluated and concluded that the annual financial report, along with the annual financial statements and the annual management report of the Company, reflect in a true, fair, balanced and understandable manner the evolution, performance and position of the Company, as well as of the companies included in the consolidation, and provide the required information to the shareholders. The Committee also informed the Board that the external auditors have contributed substantially to the integrity of the Financial Statements with their experience and independent assurance that the financial statements reasonably present, in all material aspects, the financial position of the Company and the Group as at 31st December 2022, their financial performance and their cash flow for the year ended on that date.
Financial Results 1st quarter 2022
The Finance Division informed the Committee on the financial results of 1st quarter 2022 and brought to its attention the draft relevant announcement to the investors. The Committee, after receiving assurance on the correctness and accuracy of the information that will be made public, expressed its satisfaction for the Company’s progress.
Semi-Annual Financial Results 2022
The Finance Division informed the Committee on the semi-annual financial results of 2022 and no gaps or deviations were identified in the assurance provided on the correctness and accuracy of the information. The Committee drafted an explanatory report on the review of the Company's half-yearly individual and consolidated financial statements to the Board.
Financial Results 3rd quarter 2022
The Finance Division informed the Committee on the financial results of 3rd quarter 2022 and brought to its attention the relevant draft announcement to the investors. The Committee, after receiving assurance on the correctness and accuracy of the information that will be made public, expressed its satisfaction for the Company’s progress.
External (Statutory) Auditors
Appointment of the external auditors
The Committee has primary responsibility for the appointment of the key audit partner (external auditor). This includes negotiating the fee and scope of the audit, initiating a tender process, expressing an opinion regarding the appointment of an engagement partner and making formal recommendations to the Board on the appointment, reappointment and removal of the external auditors.
In April 2022, the Committee, after assessing the work of Grant Thornton, which is the Company's external auditor, and taking into account, inter alia, the opinion of the Finance Division, decided to propose to the Board of Directors the reappointment of the audit firm Grant Thornton as external auditor for the fiscal year 2022.
In 2023, the Committee is scheduling the conduct of a tender for the selection of a new external auditor, in the context of the implementation of Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 and the relevant transitional provisions of article 52 of Law 4449/2017 regarding the specific requirements for the statutory audit of public-interest entities, since Grant Thornton has been appointed as external auditor for the past 20 years.
Safeguarding independence and objectivity, and maintaining effectiveness
In its relationship with the external auditors, the Committee needs to ensure that they retain their independence and objectivity and are effective in performing the statutory audit. Both the Board and the external auditor have policies and procedures designed to protect the independence and objectivity of the external auditor.
The Committee considers the external Auditors’ annual declaration of independence and discusses with them threats, that may threaten their independence, as well as ways to ensure that these threats are addressed. The Committee examined whether the relationships, considering the views of the external auditor, of the Management and of the internal audit, as appropriate, appear to affect the auditor's independence and objectivity.
In 2022, the external auditors submitted to the Committee the declaration of their independence from the Company in accordance with the Code of Ethics for Professional Accountants of the International Ethics Standards Board for Accountants (IESBA Code) and the ethical requirements related to the audit of the financial statements in Greece.
Financial Statements
The Committee has devoted a significant amount of time during its meetings in order to be informed and to discuss the process for the preparation of the annual and semi-annual Financial Statements. Main matters and activities performed were as follows:
Use of the external auditors for non-audit services
The Committee monitors the external auditors’ compliance with the provisions of Regulation (EU) No 537/ 2014, as in force, regarding the level of the total fees paid by the Company to them in proportion to the overall fee income of the external auditors or their overall fee income from audit services, as well as other related regulatory requirements, so that the external auditors’ independence and objectivity is not impaired by the amount of work provided to the Company.
The Committee is responsible for approving non-audit services to the Group entities that are not prohibited by law. The Committee considers that the external auditors have significant knowledge of the Group’s business and of how accounting policies are applied. That means it is sometimes cost-efficient for them to provide non-audit services. There may also be confidentiality reasons that make the external auditors the preferred choice for a particular non audit assignment.
However, safeguarding the external auditors’ objectivity and independence is an overriding priority. For this reason, the Committee ensures that the provision of such services does not impair the external auditors’ independence or objectivity.
In the context of non-audit services, whose provision by the Statutory Auditor is not prohibited by law, the Committee should apply judgement on and assess the following:
i. threats to independence and objectivity resulting from the provision of such services and any safeguards in place to eliminate or reduce these threats to a level where they would not compromise the auditors’ independence and objectivity;
ii. the nature of the non-audit services;
iii. whether the skills and experience of the audit firm make it the most suitable supplier of the non-audit services;
iv. the fees incurred, or to be incurred, for non-audit services both for individual services and in aggregate, relative to the audit fee, including special terms and conditions (for example contingent fee arrangements), and
v. the criteria which govern the compensation of the individuals performing the audit.
During 2022, the Committee examined the non-audit services that were proposed to be performed by the external auditor for the Company or subsidiaries of the Group, where the Committee, after evaluating the nature of proposed services and receiving relevant clarifications, declarations and assurance from the external auditor, considered that they did not pose a threat to the external auditor's independence in accordance with the provisions of article 44 of Law 4449/2017 and article 5 of Regulation (EU) 537/2014. The relevant non-audit services concerned pre-agreed procedures (a) in relation to the preparation of the financial statements (including the Explanatory Notes), which would concern fund agreements, calculations, drafts, data collection, analysis and related processing thereof, with the note that these analysis would be based on an approved trial balance by each Management function, as well as that the adjustment entries would be subject to the approval of the each Management function of the subsidiaries, (b) in the context of supporting the respective Management function for the technical implementation of the conversion processes to IFRS, (c) on the calculation of financial indicators of the Company and its subsidiaries in the context of their compliance with the requirements of loan agreements with the creditors (banks), (d) regarding the proper compilation of the company's financial statements per activity / sector, in accordance with the provisions of Law 4001/2001, (e) for the audit of the 2021 Remuneration Report of the Company, (f) on each Flash Report and Trading Update of the Company, (g) for the issuance of assurance reports in the context of the examination of the implementation of the financial scope of the Company's investment plans and its subsidiaries that have been subject to the provisions of Law 4399/2016, and (h) on the financial data for the table "CONSTRUCTION EXPERIENCE AND COMPETENCE DATA" in the context of the Company's participation in public tenders. The external auditors, during 2022, apart from the regular audit and the tax certificate report, provided non-audit consulting services for a total amount of €153 thousands, corresponding to 20.23% of the total fee it received for the financial year 2022.
Neither the work done, nor the fees payable of the assigned non audit services, compromised the independence or objectivity of our external auditors.
Internal Audit
Following relevant recommendation by the Committee, the BoD appointed Mrs. Mariza Melliou as new Internal Audit Director as of 14.03.2022. In monitoring the activity, role and effectiveness of the Internal Audit Division (IAD) and its audit program, the Committee had frequent meetings with the Internal Audit Director. The main matters examined through 2022 related to the following:
Internal Control System
Specific related matters that the Committee considered for the year 2022 included the following activities:
Other Significant Matters
The Committee expressed its satisfaction for the above information and the progress of the relevant work/projects in progress.
Provision 27. Confirmation that the annual report is a fair, balanced and understandable representation
The directors certify that (a) the annual financial statements of the Company drawn up in accordance with the applicable accounting standards, reflect in a true manner the assets and liabilities, equity and results of Mytilineos, as well as of the businesses included in the Group consolidation, taken as a whole and also that (b) the Management Report of the Board of Directors reflects in a true manner the development, performance and financial position Mytilineos and of the businesses included in the Group consolidation, taken as a whole, including the description of the principal risks and uncertainties. The directors state that they consider the annual report and accounts, taken as a whole, as fair, balanced and understandable.
Provision 28. Risk assessment
Financial and non-financial risk assessment is provided in the Board's Management Report included in the Annual Report.
Provision 29. Risk management and internal controls
The Board of Directors re-examines in a continuous and consistent way the corporate strategy and the principal business risks, especially in a constantly changing financial and business environment. Moreover, the Board receives at regular intervals from the Audit Committee reports on the activities of the audits carried out, based on the annual schedule of audits planned by the Company's Internal Audit Division. The above allow the Board to form a detailed opinion of the effectiveness of the systems, processes and regulations of the Company.
The conclusion of the Company's Internal Audit Division in its annual report for the year 2022 is as follows: "In accordance with our audit program and after considering the scope of the audits completed and the limitations described in the report, nothing has come to our attention that leads us to conclude that there are material weaknesses in the Corporate Governance System and the Internal Control System of MYTILINEOS for the year 2022."
In addition, the Company, by resolution of its Board of Directors, entrusted Grant Thornton Chartered Company of Business Consultants (Independent Auditor) with the assessment of the adequacy and effectiveness of the Internal Control System (ICS) of the Company and its significant subsidiary, as of 31/12/2022, in accordance with the provisions of para. 3 and para. 4 of article 14 of Law 4706/2020 and Resolution 1/891/30.09.2020 of the Board of Directors of the Hellenic Capital Market Commission, as applicable. The work of the Independent Auditor was performed in accordance with the International Standard on Assurance Engagements 3000 Assurance Engagements Other Than an Audit or Review of Historical Financial Information. Grant Thornton's conclusion, which is included in the final report assessing the adequacy and effectiveness of the ICS dated 14/02/2023 states the following: "Based on our work performed, as described above in the Scope of Work Performed paragraph, and the evidence obtained, on our assessment of the adequacy and effectiveness of the ICS of the Company and its significant subsidiary as at the reporting date of 31 December 2022, nothing has come to our attention that might be considered a material weakness in the ICS of the Company and its significant subsidiary in accordance with the Regulatory Framework.". The same report on the "Scope of Work Performed" states the following: "Our work is based exclusively on the assurance procedures provided for in the Program, which was designed with the purpose of assessing the adequacy and effectiveness of the ICS of the Company and its significant subsidiary in accordance with the Regulatory Framework, on 31 December 2022, in order to identify any material weaknesses in the ICS. A material weakness in an ICS is a deficiency, or a combination of deficiencies in the ICS controls in terms of their design or effectiveness, such that there is a reasonable possibility that a significant risk identified by the Company’s management will not be prevented or detected on a timely basis (in compliance with the provisions of the Regulatory Framework and related to the operation of the Company and its significant subsidiaries. Pursuant to the Company’s policy included in its Internal Regulation Code, the Company’s Board of Directors decides on the scope of the engagement".
Provision 30. Going concern statement
In the annual and half-yearly financial statements, the Board states that such statements have been compiled based on the historic cost principle as amended by the readjustment of specific asset and liability items into market values, the going concern principle and are in accordance with the International Financial Reporting Standards (IFRS) that have been issued by the International Accounting Standards Board (IASB) and their interpretations that have been issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB.
Provision 31. Viability statement
The Company does not prepare a separate viability statement. The annual report includes an assessment of the going concern activity for a period of 12 months from the date of the financial statements as well as an analysis of the risks to which the Group is exposed, with a list of the actions that limit them, as well as sensitivity analyses to various variables. In combination, the above disclosures provide information on the viability of the Group and are in line with both the accounting framework followed (International Financial Reporting Standards) and the requirements of Greek Legislation regarding the obligations and responsibilities of the members of the Board of Directors and those responsible for the preparation of the annual report.
5 Remuneration
Principle P: Long-term focused remuneration
The Board Remuneration Policy was approved in its original form by the AGM’s resolution of the shareholders of Mytilineos dated June 24, 2019 and has been amended by virtue of the AGM’s resolution of the shareholders dated June 15, 2021. The main amendment put into effect the Long-Term Incentive Plan so to further support the long-term focus of the remuneration practices of the Company. All of the amendments are marked in blue in the table that follows. The Policy shall be effective for four [4] years from the date it was originally approved, i.e. until June 2023. The Policy was prepared with the help of an external consultant, Korn Ferry, and is in accordance with the EU Shareholder Rights Directive, as incorporated into Greek legislation by virtue of Law 4548/2018.
The Policy applies to the remuneration of all Company’s members of the Board of Directors. The Policy sets out details of both (i) the current rights and obligations; and (ii) the terms under which future remuneration may be offered to current and / or new Directors as long as the Policy is in Force.
The Policy considers European best practices for listed entities, whilst reflecting the current Executive Directors’ remuneration arrangements. In addition, the Policy takes into consideration the provisions of the Company’s articles of association, the Company’s corporate governance code and the Company’s by-laws.
In short the board remuneration policy is as follows:
Executive Directors of the Board
Principles of Remuneration Policy
The remuneration policy for the Executive Directors contributes to the Company’s business strategy and long-term interests and sustainability by:
i. Providing a fair and appropriate level of fixed remuneration that does not result in over reliance on variable pay and undue risk taking, thereby encouraging the Executive Director to focus on sustained long-term value creation.
ii. Providing a balance of short and long-term incentives to ensure there is focus on short term objectives that will over time build to create long-term value creation, as well as long-term goals.
iii. Expecting Executive Directors to acquire and retain shares in the Company thereby being aligned to the long-term performance and sustainability of the Company and its shareholders.
iv. Including long-term incentives where the reward is delivered in shares which aligns Executive Directors to shareholder interests and value, as well as the performance of the Company over the longer term.
v. Requiring performance measures in any long-term incentive to be measured over the longer-term.
Short-Term Incentive Plan
Long-Term Incentive Plan
Non-Executive Directors
Key Remuneration Principles
The Non-Executive Directors are paid a basic board fee which is fixed and covers for the time required to perform their duties. This fixed fee covers for the time to attend in Board meetings and includes travelling and preparation time. Supplemental fees may be paid to the Non-Executive Directors for additional responsibilities and activities, which exceed the scope of the duties assigned including but not limited to, attending site visits, and meetings with management. The Remuneration Policy was amended to clarify that there are no fees payable to independent non-executive directors other than for their participation to the Board and/or its Committees.
There is no performance-based variable pay or pension provided to the non-executive Chairman or Non-Executive Directors.
Reasonable business expenses incurred by the Non-Executive Directors in carrying out their duties may be reimbursed by the Company such as professional courses, purchasing reading material to ensure they are up to date on any relevant matters, taking into account any internal policy that is applicable.
The complete remuneration policy document is available on the
Principle Q: Transparent remuneration procedures
The Remuneration and Nomination Committee of the Company (the "Committee") has worked with all relevant units of the Company, as well as an independent remuneration consultant (Korn Ferry), to arrive at the Remuneration Policy, which has been recommended to and approved by the Board of Directors by virtue of a resolution dated 9 May 2019. Further the abovementioned amendments have been recommended by the Committee to and approved by the Board by virtue of a resolution dated 12 May 2021.
The process for the approval of the Policy (and any amendments thereto) is determined by the Company’s articles of association and Law 4548/2018.
The Committee submits the Policy for approval to the Board of Directors. No member of the Board of Directors shall be present when their own remuneration is discussed. Once agreed by the Board of Directors, the Policy is submitted for approval at the Company’s AGM of Shareholders.
The Committee considers regularly whether the Policy continues to be aligned to the Company’s business strategy or whether amendments should be recommended to the Board of Directors. Every four years (or earlier on a need for change) on the recommendation of the Committee, the Board of Directors will seek the Shareholders’ approval of any new Policy.
Principle R: Exercising discretion
The aim of the Remuneration Policy is to ensure the Company is remunerating its Directors on the basis of the Company’s short and long-term business plan, so as to continue creating value for customers, shareholders, employees and the Greek economy.
The level of fixed pay — salary and directors' emoluments — for both Executive and Non-Executive Directors is established on the basis of paying fair and reasonable remuneration for the best and most appropriate person for the role, taking into account the level of responsibility, as well as the knowledge and experience required to deliver upon expectations, while ensuring that the Company pays no more than is necessary, always supporting its longer-term interests and sustainability.
The Policy provides for variable compensation arrangements for Executive Directors to further align the Executive Directors’ interests with those of the Company as the performance conditions used will be based on indicators of the long-term success and sustainability of the Company.
The Policy does not include any variable compensation for Non-Executive Directors to ensure that there is no conflict of interest in the decision making of the Non-Executive Directors and their ability to challenge management’s risk-taking decisions.
Provision 32. Remuneration and Nomination Committee composition
As mentioned under Provision 17, the Company has a combined Remuneration and Nomination Committee which examines and processes issues pertaining to: (a) the remuneration of Board members (the "directors") and of senior and other executives; and (b) the suitability of existing and candidate directors, within the scope of its remit under these Terms of Reference. The Committee revisited its Terms of Reference, which were approved and put into effect by the Resolution of the Board of Directors dated 26.07.2021, following relevant proposals submitted by the Committee.
The remuneration responsibilities of the Remuneration and Nomination Committee include the following:
i. to propose the Remuneration Policy to the Board, which shall then be submitted for approval at the General Meeting of the Company’ s Shareholders, as well as the framework for the type and amount of remuneration of the directors (particularly that of the Chairman of the Board, the Chief Executive Officer and the executive directors), and the type and amount of remuneration of senior management who are members of the Executive Committee; and to formulate proposals to the Board regarding the remuneration of the other Company executives, in particular of the head of the Internal Audit Division;
ii. to determine the policy for and scope of pension arrangements for executive Directors;
iii. to review the appropriateness and relevance of the Remuneration Policy for Directors;
iv. to propose the annual Remuneration Report to the Board.
The Committee Chair informs the Board regarding the Committee’s work on all matters falling within its remit and the manner in which it has fulfilled its duties; submitting a report in this regard in accordance with the UK Corporate Governance Code, which the Company implements.
The Committee Chair has served on a remuneration committee for 15 months prior to his appointment. The Chairman of the Board may be a Committee member only if they are an independent non-executive Director on appointment as Chairman of the Board. In any case, the Chairman of the Board cannot chair the Committee.
The Remuneration and Nomination Committee was constituted into a body, under its current composition, by the resolution of the Board of Directors of the Company dated 02.06.2022 and is composed of three (3) Independent Non-Executive Members of the Board of Directors.
The Remuneration and Nomination Committee meets regularly and informs the Board following each meeting.
Information on the composition, meetings and activities of the Remuneration and Nomination Committee during the year 2022 are listed below.
Note: The term of office shall be four years, which shall be extended until the first ordinary general meeting following the expiry of the term of office.
The Committee’ s Secretary is the Company Secretary Mrs Leda Condoyanni, with Mr Panagiotis Psarreas as her Deputy Company Secretary.
Further information on the remit, responsibilities and the modus operandi of the Remuneration and Nomination Committee are available in the Committee’s Terms of Reference, which have been released in the Company’ s website www.mytilineos.gr at the following
Provision 33. Role of the remuneration committee
The Committee has not delegated responsibility but submits the policy for executive director remuneration to the Board for approval. However, the Committee recommends the Remuneration Policy to the Board for approval and the Board submits the Remuneration Policy to the General Meeting of Shareholders for approval. Any matter submitted for approval by the General Meeting of Shareholders shall be approved by the Board.
Fixed pay for the Chair, who is also the CEO currently, and for the executives of the Company is set by the Board of Directors upon the recommendation of the Committee, taking into account levels of pay at other companies of a similar size for roles of similar scope and responsibility. Additionally, the contract for the Chair/CEO has been approved by a resolution of the general meeting of shareholders.
The Remuneration Policy for the Executive Directors, as for all employees, is based on the principle of paying fair and reasonable remuneration for the best and most appropriate person for the role while ensuring that the Company pays fairly and competitively and in the longer-term interests and sustainability of the Company. The Company is considering the possibility of establishing a remuneration and benefits policy for employees.
The Committee and Board of Directors receive periodic updates on the wider employee remuneration structure and practices within the Company, which are considered when establishing and revisiting the Policy. This is to ensure that remuneration practices and structure are as consistent as possible across the Company, while acknowledging that the structure of remuneration for Executive Directors is necessarily different to that of less senior employees as a result of their role and ability to impact the performance of the business.
In addition, the Committee and Board of Directors are provided with information on remuneration trends across the Company including average pay increases along with any relevant economic data, such as the rate of inflation to take into account when operating the Policy.
Provision 34. Non-executive director remuneration
The remuneration of the non-executive directors is determined by the Board on the recommendation of the Chairman and CEO in accordance with the remuneration policy. The remuneration of non-executive directors is not comparable to the structure of remuneration for the employees and executive directors of the Company.
The Non-Executive Directors are paid a basic board fee which is fixed and covers for the time required to perform their duties. Supplemental fees may be paid to the Non-Executive Directors for additional responsibilities and activities, which exceed the scope of the duties assigned including but not limited to, attending site visits, and meetings with management. The Remuneration Policy was amended to clarify that there are no fees payable to independent non-executive directors other than for their participation to the Board and/or its Committees.
Provision 35. Use of remuneration consultants
The Remuneration and Nomination Committee appointed Korn Ferry, an independent remuneration consultant, to work with the committee in drafting the policy. The consultant assisted the Committee in their engagement with the Management Team and worked with all the relevant management units of the company. To arrive at the Policy the consultant discussed with the Committee the requirements of Law 4548/2018, which transposed the SRDII, and the UK Corporate Governance Code. The consultant also assisted the Committee for the amendments of the Remuneration Policy of 2021. Korn Ferry is not affiliated with members of the Board of Directors and provides remuneration consulting services to the General Division of Human Resources.
Provision 36. Durations of retention
In the Long-Term Incentive Program, the fees are set at 30% in year 4, 30% in year 5 and 40% in year 6. With the approval of the Board of Directors, the payment can be made in shares or in the equivalent of value in cash with the obligation of the Executive member of the Board of Directors to buy shares of the Company, at a rate of 30% of the total value granted, as well as to hold them for 2 years.
Provision 37. Discretion and recovery
Temporary derogations from the Policy may be allowed in exceptional circumstances, for example in circumstances of recruitment or retention, where it is considered by the Board of Directors necessary to serve the long-term interests and sustainability of the Company as a whole, or to assure its viability. Any derogation is required to be considered and approved by the Board of Directors. The elements of the Policy from which a derogation is possible are those which determine short and long-term incentives.
Payments under the short-term incentive scheme will be subject to recovery for a period of at least 3 years from payment in the event of certain specified events including inaccurate financial statements of previous years or otherwise erroneous financial data used to calculate such short-term incentive scheme payouts and misconduct.
Provision 38. Pension Contributions
Retirement allowance is offered to executives in order to provide market competitive retirement benefits for recruitment and retention purposes. The Company may operate — not currently in force — a defined-contribution pension plan in which the Executive Directors may participate. The Company is considering providing a pension plan in 2023 with a Company contribution limit for Executive Directors of up to 15% of fixed remuneration.
Provision 39. Contract periods and bonuses on appointment and departure
The Remuneration and Nomination Committee ensures compensation commitments in directors' terms of appointment do not reward poor performance.
In case of termination of contractual arrangements with Executive Directors at the initiative of the Company, notice periods and termination payments shall be as provided by the current legal requirements in the Board Remuneration Policy.
Currently, according to law, notice periods are up to 4 months based on the years of employment while the maximum amount for severance are up to 12 monthly salaries based on the years of employment. Executive Directors of the Board, in their capacity as such, are not entitled to severance payments or other compensation by the Company, for loss of office or otherwise howsoever arising.
Last, payments under both the short-term and long-term incentive schemes will be subject to recovery for a period of at least 3 years from payment in the event of certain specified events including inaccurate financial statements of previous years or otherwise erroneous financial data used to calculate such short-term incentive scheme payouts and misconduct.
Provision 40. Design of remuneration policy
The remuneration policy for the Executive Directors, as for all employees, is based on the principle of paying fair and reasonable remuneration for the best and most appropriate person for the role while ensuring that the Company pays fairly and competitively and in the longer-term interests and sustainability of the Company.
Shareholder voting guidelines on Executive Directors’ remuneration and best practice were taken into consideration as part of the process in formulating the Board Remuneration Policy.
The Committee and Board of Directors receive periodic updates on the wider employee remuneration structure and practices within the Company, which are considered when establishing and revisiting the Policy. Also the General Manager of Human Resources is invited to attend all or part of any meeting of the Committee to provide input on employment trends.
Provision 41. Reporting on the remuneration committee
The Remuneration and Nomination Committee held eight (8) meetings. All members of the Committee attended all the meetings.
Remuneration report
The Remuneration and Nomination Committee prepared for the third time and with the assistance of an external consultant (KornFerry), a Remuneration Report for the members of the Board of Directors in accordance with the applicable legislation and the EU Directive on Shareholders' Rights, which was incorporated into Greek law by Law 4548/2018 [
The Report describes how the Remuneration Policy 2019 was implemented, taking into account the basic remuneration principles, remuneration design planning, as well as the actual performance achieved at Company and executive level, during the year 2021. The Report describes how the views of key institutional shareholders of the Company, where taken into account following the shareholder engagement that took place during the first CG Roadshow.
The Remuneration and Nomination Committee has ensured that the remuneration of the Executive Members of the Board of Directors is in line with and the operational strategy of MYTILINEOS and that they support it. This alignment is achieved as strategic business objectives are taken as the basis for setting the financial and strategic individual objectives of the Executive Board members.
The Report was submitted to the Board for approval and to the 2022 AGM for an advisory vote and received positive votes at a rate of 95.61% [
Implementation of a long-term incentive scheme
The Committee discussed the implementation of the first phase, out of a total of five phases, of the long-term incentive plan approved by the Company's Annual General Meeting of June 15, 2021 and confirmed that a) the performance evaluation period remains as provided for by the aforementioned resolution of the Annual General Meeting, i.e. 2021-2023 and b) that the Plan will be activated by June 2022, creating the necessary reserve for the first phase together with the reserve for the second phase with a performance evaluation period.
Benchmarking of the remuneration of Board members and review of the Peer Group
During 2022, the Remuneration and Nomination Committee assigned the consultancy firm KornFerry to carry out a study on "Benchmarking of the remuneration of the Executive and Non-Executive Board Members" and a review of the "Peer Group". Both studies were completed in 2022 and, after being discussed in detail by the Remuneration and Nomination Committee, were submitted to the Board of Directors for approval.
Review of the Remuneration Policy
In addition, the Remuneration and Nomination Committee discussed and decided to review the Remuneration Policy for Executive and Non-Executive Directors and to submit a recommendation to the Board of Directors within the first quarter of 2023.
Remuneration of the Internal Audit Director
The Remuneration and Nomination Committee discussed the proposed the total remuneration of the Company's Internal Audit Director and made a recommendation to the Board of Directors.