Codes of Conduct for Good Corporate Governance
Our commitment at CEMEX Latam Holding is to create value for our shareholders, encouraging the development of the countries where we operate through innovative building solutions that foster well-being and meet the needs of our customers.
CEMEX LATAM HOLDINGS, S.A. (“CEMEX Latam” or the “Company”) was incorporated in Spain on April 17, 2012 and its shares were listed on the Colombian stock exchange on November 16, 2012. As a Spanish entity, CEMEX Latam is governed by the Ley de Sociedades de Capital (Royal Legislative Decree 1/2010, as of July 2, 2010), as well as by the provisions of its bylaws, the regulations of the board of directors, the regulations of the general shareholders' meetings and any other code of conduct for good corporate governance regulations duly approved and adopted by the competent bodies.
Given that CEMEX Latam is an Spanish entity listed on the Colombian stock exchange but not in Spain, the Company is not required to comply with Spanish regulations related to corporate governance (Buen Gobierno Corporativo) that are applicable to companies listed on Spanish stock exchanges. As a Spanish company listed on the Colombian Stock Exchange, we are not subject to the same best practice provisions applicable to Colombian issuers whose shares are listed on the Colombian Stock Exchange.
CEMEX Latam has decided, however, to voluntarily comply with some of the codes of conduct for good corporate governance provisions contained in the Unified Spanish Corporate Governance Code, as well as with best practice provisions applicable to Colombian issuers, and, since the public listing, CEMEX Latam has aligned its codes of conduct for good corporate governance system to these best practices, as well as to international best practices.
In the framework of this codes of conduct for good corporate governance system, CEMEX Latam has either approved or adopted, among others and without being exhaustive, the following resolutions, measures, and/or recommendations on the matter:
- Approval of “Regulations for the General Shareholders Meeting”, as well as “Regulations for the Board of Directors”, that are part of the Internal Norms of the Company, that include provisions that regulate the norms within the Company’s bylaws, including and adopting voluntarily best practices in terms of good Corporate Governance.
- Creation, with a permanent nature, of four Committees of the Board of Directors, as bodies with an internal informational and consultative nature, with no executive functions, but with the duty to inform, advice and make proposals within their scope.
These committees are: 1) Executive Committee; 2) Audit Committee; 3) Compensation and Nomination Committee; 4) Corporate Governance Committee. All these committees are comprised of three members, and according with provisions and regulations approved by the Company: i) the Audit Committee is formed by external independent directors; ii) the Compensation and Nomination Committee and the Corporate Governance Committee are formed by a majority of external independent directors.
The duties and operating rules of these Committees are set forth in the Company’s bylaws and the Regulations of the Board of Directors.
- Nomination of a Lead Independent Director, whose duties and responsibilities are set forth in the Regulations of the Board of Directors.
- Nomination of a Oficial de Cumplimiento, whose functions, duties and responsibilities are set forth in the Regulations of the Board of Directors.
- Approval of a CEMEX Code of Ethics and Conduct applicable to all employees, including our senior management, and of several corporate and institutional policies on different matters.
- Framework Agreement with CEMEX S.A.B. de C.V. (“CEMEX”) and CEMEX España, S.A. (“CEMEX España”), to regulate in a clear and transparent way on different topics the relationship between i) the Company and its subsidiaries (“CEMEX Latam Group”), ii) its main shareholder, CEMEX España, and its subsidiaries other than those within CEMEX Latam Group (“CEMEX España Group”), and iii) CEMEX and its subsidiaries as holding of the CEMEX Group Worldwide (“CEMEX Group”). This Agreement has as main objective the protection of our shareholders’ interests in the context of the relationship between CEMEX Latam Group and the other companies part of the international group, and regulates, among other issues, matters related to competition, solicitation of employees, corporate opportunities, compliance with CEMEX’s debt agreements, financial information, policies and procedures, shares transfer rights, shares acquisition rights, litigation, dispute resolution, further actions and assurances. Any changes to the Framework Agreement need the approval of the external independent directors.
In addition, among its different duties, the Corporate Governance Committee is responsible for: i) knowing, reviewing and informing on any potential transaction between the CEMEX Latam Group and any other company, not part of the CEMEX Latam Group, within the CEMEX Group; ii) previously report on CEMEX Latam Holdings’ renunciation of the exploitation of any business opportunity referred to in the Framework Agreement; iii) report, on a regular basis, on the compliance of the Framework Agreement; iv) issue a report on any amendments to the Framework Agreement.
The Bylaws and the Regulations of the General Shareholders Meeting and Board of Directos, include several provisions to protect shareholders interests.
- Creation of a Shareholders’ Office, as channel of communication between the Company and its shareholders regarding the information related to a general shareholders' meeting. The Shareholders' Office will perform the functions set forth in the Regulations for General Shareholders' Meetings.
- Creation of an Investor Relations Department (“IR”), as the entity responsible for the communication and permanent relationship with shareholders as well as analysts and other stakeholders.
- Disclosure in the Annual Corporate Governance Report (Spain) and the Encuesta Código País (Colombia) of the Company’s level of compliance with corporate governance best practices.
- Implementation of internal control procedures and adequate mechanisms to disclose and certify the accuracy of financial information and other relevant information disclosed to the market.
- Creation of a corporate website (www.cemexlatam.com), with information on different topics. In particular, the section “Investor Center” contains information relevant to our shareholders, including information related to the codes of conduct for good corporate governance.
- Documents governing the practices of Good Corporate Governance of CEMEX Latam Holdings S.A.