CORPORATE
GOVERNANCE
The capacity to bring paths together, to guide everyone along different routes that lead to the same end, managing with conviction while caring for each member of the chain.
Governance
Framework
At Molymet diverse areas of our company work together to ensure that our corporate governance functions properly. These areas are responsible for not only leading the organization to obtain the best results for all our stakeholders, but also for doing business ethically and in strict adherence with the laws and regulations in each country where we operate. This is done by implementing best practices and comprehensively analyzing risk to guarantee correct, timely risk management so that our operations always generate positive impacts for our employees, society and the environment. Our governance framework consists of:
CORPORATE GOVERNANCE STRUCTURE
Policies
We have a series of policies in place designed to promote market transparency, detect and manage conflicts of interest or conduct that could affect free and loyal competition and prevent corruption, asset laundering and terrorism financing. These policies give our employees a framework of action based on our business principles and market regulations.
Each policy is made available to our employees and publicized through internal communication channels.
- Conflicts of Interest Policy
- Policy on Organizational Values and Principles of Conduct
- Policy to Prevent the Crimes of Asset Laundering, Terrorism Financing and Bribery
- Policy on Interactions with Public Officials
- Contributions and Donations Policy
- Policy on Company Purchasing, Services and Authorizations
- Stakeholder Engagement Policy
- Intellectual Property Policy
Ethics
At Molymet we have implemented an ethics hotline to receive complaints of violations of company policies, values or current regulations in diverse areas, and specifically matters related to conflicts of interest and the crimes outlined in Law No. 20,393. Complaints filed through this platform are received, investigated and monitored confidentially.
We also have a certified Crime Prevention Model and make a special effort to publicize it within the company in order to prevent crimes and behaviors that violate our ethical and legal frameworks.
Innovation
As innovation is essential to our company, we have outlined a path for promoting research and development in Molymet’s Intellectual Property Policy. To further this calling to innovate, we have an R&D Department that specializes in researching and developing new technologies and has patented several inventions in the past few years. Meanwhile, the Market Development Department explores new products, applications and business lines.
Training
We have an ongoing training program for matters related to Law No. 20.393, including:
- Law No. 20,393
- Free Competition
- Crime Prevention Model
Sustainability Approach
Protecting the environment and caring for people are at the center of everything we do at Molymet. They are part of our corporate purpose and considered one of the organization’s strategic responsibilities. As such, they are monitored at many levels, including by the Board of Directors and the Chief Executive Officer.
We also have a Corporate Sustainability Department and other units at each industrial facility responsible for measuring and identifying gaps in social, labor and environmental matters. The results, progress and commitments resulting from this work are disclosed annually in our Sustainability Report. Using our corporate purpose as a foundation, we have identified the following stakeholders: employees, customers, the community, suppliers, authorities, investors and the environment. Our engagement framework for each stakeholder is outlined in the Stakeholder Engagement Policy.
Organizational Barriers
In order to identify and reduce organizational, social and cultural barriers that could inhibit Molymet’s diversity, we have several bodies and instruments to help build an organization that welcomes everyone:
This index was used to survey our employees about trust within the organization, the quality of people management and the effectiveness of labor management, placing people at the center of our business model in order to generate economic value and comprehensively develop people.
Our recruitment, selection and hiring policies consider incorporating people with disabilities into our organization and also prohibit any type of arbitrary discrimination in accordance with Chilean law.
Our code of conduct discourages bad practices related to any type of discrimination within the company. We have set up an ethics hotline to report any behavior that deviates from these standards.
We are currently designing a corporate diversity, gender equity and inclusiveness strategy to be implemented in 2022. The policy’s main objective is to promote diversity and equality among our employees and cultivate a sense of belonging, which will enable us to harness the benefits of a diverse, highly committed workforce.
We have developed job descriptions at Molymet using the HAY method, an international methodology developed by Edward Northup Hay that concretely identifies the know-how, experience and skill profile needed to satisfactorily perform each job. These descriptions are used in recruiting and selection processes and adhere to strict anti-discrimination standards.
Likewise, we have chosen leaders with suitable skill sets and conduct frequent leadership training courses with them to help them build rapport with their teams, regardless of social status, religious beliefs, nationality, etc.
Organizational Chart
Board of Directors
Board Composition
Board Compensation
At the annual general meeting on April 20, 2021, shareholders agreed to the following Board compensation structure:
Profit sharing: 0.2% share of net profit for each director up to US$220,000; an additional 0.1% for the Chairman up to US$330,000 and 0.05% for the Vice Chairman up to US$275,000. This represents 2.15% of the company’s net profit and a maximum of US$2,365,000 to be distributed among the directors.
General allowance: compensation for attending Board meetings of 18 UTM for the Chairman, 15 UTM for the Vice Chairman and 12 UTM for each director.
Committee allowance: compensation of 4 UTM for attending Directors’ Committee meetings for directors who sit on that committee.
(*) Board members in 2020
Advisory Contracts
During the year, the Board retained the services of the external auditing firm EY for UF 280 to provide training and analyze the effectiveness of its meetings.
The Board may contract accounting, tax, financial or legal advisory services whenever it deems necessary.
It has not contracted any advisory services from its external auditing firm that are material in relation to the annual budget.
Remote Data System
The Board has 24/7 remote access to a secure digital data system housing all supporting documentation for meetings, including agendas and topics for the next meeting, as well as draft minutes and final signed electronic versions from 2019 forward. A whistleblower system or channel is available to the general public on the company’s website. The Internal Audit Department briefs the Board on the number of complaints filed through the channel and supporting documentation. Upon request, the Board has permanent access to detailed information on complaints filed.
Meetings with Management Units
Our Board of Directors meets at least every six months with the Risk Management and Internal Audit departments, and meets every three months with our external auditors.
Sustainability matters, including corporate social responsibility, are part of our strategic agenda and are reported to the Board on a quarterly basis. Starting the last quarter of 2021, the Board receives monthly reports on sustainability management.
Furthermore, at least once a year we issue a progress report on all sustainability-related activities, including corporate social responsibility and community engagement initiatives.
In line with Molymet’s corporate purpose, sustainability and corporate social responsibility are important elements of the company’s strategy, business plan and budget.
Performance Evaluations
The Board as a whole analyzes areas for improvement, meeting effectiveness and changes to its agenda on an ongoing basis. To date, the Board has not analyzed potential organizational or cultural barriers that might affect the natural diversity of its capacities or visions.
In 2021, it hired an external specialist to analyze the Board’s effectiveness and opportunities for improvement. Furthermore, after electing a new Chairman, the Board implemented new meeting formats designed to help it understand, address and analyze the main topics on its agenda, including topics on the company’s business or projects that the Board wants to understand in greater detail.
The Board has at least 12 ordinary meetings each year. Each member allocates the time he deems appropriate to analyze the matters to be addressed at each meeting. Information is made available to the Board at least five days before the respective meeting.
When contingencies arise, the company forms a Crisis Committee made up of different executives depending on the nature of the situation.
Site Visits
Although corporate governance best practices call for the Board to visit company facilities at least once a year, no subsidiaries were visited in 2021 because of the pandemic and mobility restrictions. The Board is planning to visit one of the industrial units in 2022. In lieu of an on-site meeting, in 2021 the Board was taken on a virtual tour of the Research and Development Lab to learn about projects underway and progress.
Orientation and Training
All directors have permanent access to our Diligent system containing information of interest about Molymet and go through an orientation process with presentations about:
– Corporate presentation
– Main aspects of Annual Report
– Market Information Manual
– Policy on Organizational Values and Principles of Conduct
– Policy to Prevent the Crimes of Asset Laundering, Terrorism Financing and Bribery
– Policy on Interaction between Molymet and Subsidiaries and Public Servants
– Contributions and Donations Policy
– Institutional magazine
In addition, whenever the need arises to explain a specific topic, business, contingency or legal or other matter to the Board in greater detail, it is added to the agenda and experts are hired if necessary.
Board Committees
Board Committee
N In accordance with article 50 bis of Law No. 18,046, we have a Directors’ Committee with the following members:
Director Non-Independent
Director Independent
Director Independent
Director Non-Independent
Director Independent
Director Independent
Committees in Operation
Committee
Objective
to review the company’s financial statements, internal auditing, proposals of external auditing firms and risk rating agencies; review related party transactions; draft and review conflict of interest policies, among other responsibilities. The Directors’ Committee prepares a report for the Board after each of its meetings.
Members
Raúl Álamos Letelier, Luis Felipe Cerón Cerón (independent director), Karlheinz Wex
Frequency
quarterly
Meetings in 2021
5
Committee
Objective
to analyze compensation plans for the company’s senior executives.
Members in 2021
Eduardo Guilisasti Gana, Juan Manuel Gutiérrez Philippi, Karlheinz Wex
Members in 2020
Eduardo Guilisasti Gana, George Anastassiou Mustakis, Bernhard Schretter (independent director)
Frequency
yearly, in March
Meetings in 2021
1
Committee
Objective
primarily to analyze risks involved in investing the company’s cash flows, the general financing structure and other issues.
Members 2020 and 2021
Raúl Álamos Letelier, José Miguel Barriga Gianoli, Boris Buvinic Guerovic.
Frequency
yearly, in March
Meetings in 2021
1
The Finance Committee also meets during the month of March to analyze the risks involved in investing the company’s cash flows, short- and medium-term financing needs and better available alternatives.
Development Committee
Objective
to analyze the preparation and development processes for the company's executives and succession plans and programs for multiple positions.
Members in 2021
Hernán Cheyre Valenzuela, Eduardo Guilisasti Gana, Karlheinz Wex.
Members in 2020
George Anastassiou Mustakis. Hernán Cheyre Valenzuela. Eduardo Guilisasti Gana. Karlheinz Wex
Frequency
Twice a year
Meetings in 2021
2
The Succession and Executive Development Committee met in March 2021 to analyze progress on succession plans for critical positions and executive development programs.
Directors' Committee Activities and
Compliance with Obligations
- a. Examined external auditors’ report, balance sheet and financial statements of the company and subsidiaries as of December 31, 2020.
- b. Approved and agreed to submit the external auditors’ report, balance sheet and consolidated financial statements as of December 31, 2020, to the company’s Board.
- c. Reviewed process of evaluating external auditing firms for 2021.
- d. Agreed on rating agencies for 2021.
- e. Reviewed and verified that the transactions with related companies referred to in Title XVI of Law No. 18,046 conducted during 2019 either adhere to the agreement from Board Meeting No. 819 dated January 26, 2010, establishing the General Policy for Routine Related Party Transactions or are transactions between legal entities in which Molymet directly or indirectly owns at least 95% of the counterpart. They meet current legal regulations, are meant to contribute to corporate interests and reflect arm’s length prices, terms and conditions. The Committee agreed that these transactions did not need to be individually listed because they are not material.
- f. Reviewed and approved the Committee’s 2020 Management Report.
March 16, 2021
- a. Agreed propose external auditing firms for 2021 to the Board and, if approved, at the annual general meeting.
May 25, 2021
- a. Approved Conflicts of Interest Policy.
August 24, 2021
- a. Approved external auditing plan for 2021.
- b. Met with external auditors to review:
- i. Interim consolidated statement of financial position for the company and subsidiaries as of June 30, 2021.
- ii. Interim consolidated statements of income and comprehensive income for the six- and three-month periods ended June 30, 2021 and 2020.
- iii. Interim consolidated statements of cash flows and changes in equity for the six-month periods then ended.
November 23, 2021
- a. Analyzed the internal control report prepared by external auditors and agreed to present it to the Board and recommend implementing the suggested improvements.
- b. Approved the financial statements as of September 30, 2021. The committee left record that director attendance at board meetings during 2021 was 99%.
Directors' Committee Compensation
2020
2021
Advisory Contract
The Directors’ Committee can hire third-party advisors for specific purposes on an as-needed basis. In 2021, the committee did not hire any independent experts.
Meetings with Management Units
Any director may participate in Directors’ Committee meetings. Committee members meet each quarter with the company’s external auditors. At those meetings, they agree on the annual external auditing plan and analyze the main findings detected. In addition, the full Board meets with the Internal Audit and Risk Management departments every six months. The company’s Chief Executive Officer and executives from other areas also participate in those meetings.
The Board has not scheduled meetings with the Sustainability and Corporate Social Responsibility departments on its annual activity calendar. However, it continuously receives information on our company’s sustainability management efforts provided in a summarized format each month and in detail once a year, as explained above.
Senior Executives
Senior Executives
Our organization’s leadership consists of nine vice presidents, 21 corporate managers and seven production unit managers. All report directly to the company’s Chief Executive Officer.
Corporate Managers
Production Unit Managers
Compensation
In 2021 the senior executives received compensation equivalent to ThUS$ 9.506.312. A total of ThUS$ 457.124 in termination benefits was also paid to executives.
*Information provided for 2021 is for the period from December 2020 to December 2021.
**Dollar values used: US$ 810 for 2021 and US$ 710.95 for 2020.
Compensation Plans
Directors and Executives with Ownership Interests
In 2021 one director and one senior executive had minority interests in the company, detailed as follows:
Management Committees
Committee
Objective
Support the CEO in decision making about certain matters.
Members
John Graell Moore, Claudia Avendaño Rozas, Gonzalo Bascuñán Obach, Edgardo Cisternas Jara, Gonzalo Concha Parada, Miguel Dunay Osses, María Inés Gómez González, Edgar Pape Arellano, Jorge Ramírez Gossler, Juan Cristóbal Valenzuela Bejares, Godfried Van Schuylenbergh.
Frequency
monthly
Meetings in 2021
11
Committee
Objective
Verify and analyze engineering projects within the company.
Members
Gonzalo Concha Parada, Braulio Cid Díaz, Miguel Dunay Osses, Alfredo Ortega Terán, Edgar Pape Arellano, Daniel Ureta Vial, MolymetNos executives, Molynor executives.
Frequency
monthly
Meetings in 2021
12
Committee
Objective
Review and propose technological innovation and industry 4.0 projects.
Members
Juan Cristóbal Valenzuela Bejares, Claudia Avendaño Rozas, Gonzalo Bascuñán Obach, Braulio Cid Díaz, Edgardo Cisternas Jara, Gonzalo Concha Parada, Miguel Dunay Osses, María Inés Gómez González, José Mengido, Alfredo Ortega Terán, Edgar Pape Arellano, Jorge Ramírez Gossler, Daniel Ureta Vial, Godfried Van Schuylenbergh
Frequency
monthly
Meetings in 2021
10
Committee
Objective
Propose, review and define strategic guidelines for the company’s sustainability, including environmental aspects and engagement with the community, authorities, employees, shareholders and other stakeholders.
Members
Edgar Pape Arellano, Miguel Dunay Osses, Claudia Avendaño Rozas, Gonzalo Bascuñán Obach, Braulio Cid Díaz, Edgardo Cisternas Jara, Gonzalo Concha Parada, María Inés Gómez González, Alfredo Ortega Terán, Carlos Pinto Fornés, Jorge Ramírez Gossler, Alejandra Salas Muñoz, Juan Cristóbal Valenzuela Bejares, Daniel Ureta Vial, Godfried Van Schuylenbergh.
Frequency
monthly
Meetings in 2021
8
Committee
Objective
Examine the status of operations and propose operational improvements regarding each production unit.
Members
Edgar Pape Arellano, Braulio Cid Díaz, Oscar Ley García, Alfredo Ortega Terán, Daniel Ureta Vial, Godfried Van Schuylenbergh.
Frequency
monthly
Meetings in 2021
11
Committee
Objective
Review and propose long-term improvements to employee relations, including supporting diverse collective bargaining processes.
Members
María Inés Gómez González, Miguel Dunay Osses, John Graell Moore.
Frequency
monthly
Meetings in 2021
12
Committee
Objective
Analyze various trends and commercial matters, logistics, customer contracts, etc.
Members
Gonzalo Bascuñán Obach.
Sales Staff
Samuel Baeza Cienfuegos, Ricardo Carmona Molina, Diego Casali Casanave, Mauricio Fernández Rodríguez, Sebastián Friedl Uribe, Javier Guevara Blanco, Mario Lama Acosta, Diego Martin Lema, Hugo Moreno Licea, Arturo Verderau del Río, Carlos Villa.
Plant Staff
Ricardo Araya Cereceda, Braulio Cid Díaz, Marcelo Baladrón Manríquez, Rodrigo López O., Jesús Sánchez, Alfredo Ortega Terán, Edgar Pape Arellano, Philippe Quere, Eduardo Riquelme Álamos, Godfried Van Schuylenbergh, Daniel Ureta Vial.
Frequency
twice a month
Meetings in 2021
24
Committee
Objective
Review intangible assets and evaluate protection strategies for each case and monitor patent and trademark registration processes.
Members
Edgardo Cisternas Jara, Miguel Dunay Osses, John Graell Moore.
Frequency
twice a year
Meetings in 2021
2
Committee
Objective
Report progress on projects and investments and approve new strategic innovation and modernization initiatives proposed by the Vice President of Engineering.
Members
John Graell Moore, Edgardo Cisternas Jara, Edgar Pape Arellano.
Frequency
monthly
Meetings in 2021
12
Committee
Objective
Propose projects involving technological innovations, processes and/or automation that contribute to the strategic initiative to achieve and maintain “Zero Industrial Solid Waste (ISW) Disposal by MolymetNos”
Members
Daniel Ureta Vial, Fernando Bórquez Martínez, Sergio Botto González, Edgardo Cisternas Jara, Edgar Pape Arellano.
Frequency
quarterly
Meetings in 2021
5
Committee
Objective
Manage innovation at a corporate level, reviewing the budget and the number of projects
and initiatives that make up the innovation portfolio. In addition, it has the task of
preparing the innovation roadmap.
Members
John Graell Moore, Claudia Avendaño Rozas, Gonzalo Bascuñán Obach, Edgardo Cisternas Jara, Gonzalo Concha Parada, Miguel Dunay Osses, María Inés Gómez González, Edgar Pape Arellano, Jorge Ramírez Gossler, Juan Cristóbal Valenzuela Bejares, Godfried Van Schuylenbergh, Edgardo Cisternas Jara.
Frequency: monthly
Meetings in 2021: 5
Risk Management
We have specialized units in place for risk detection and internal control, as well as technology for monitoring these elements. The Board, management and all business areas are charged with managing, preventing and promptly reporting situations that could put operational continuity at risk, harm people or negatively impact the organization, the community, customers, employees or any other stakeholder.
General Board Guidelines
At Molymet we have a risk management system aimed primarily at addressing strategic risks at a corporate level. Risks are defined jointly by management and the Board and then each user area is responsible for managing and implementing preventative measures.
Risks are identified and appraised using a methodology developed by the Committee of Sponsoring Organizations of the Tradeway Commission (COSO). From an operational risk perspective, each subsidiary has its own procedures for handling the “Integrated Management System.”
Every six months, the Directors’ Committee meets with the CEO and the Vice President of Corporate Compliance and Risk to review risk management based on indicators and other material information that serves as the basis for action plans.
The strategic risk matrix is divided by type of risk based on the events that affect each one. Each event is given a value that factors into the final assessment of the 12 defined risk types, explained as follows:
sustainability
risks related to maintenance, stock, provisions, environmental impact and regulations, hazardous substances, climate change, etc.
exposure
risks related to prices, own positions, the quality of raw materials acquired and the supply chain.
solvency
risks related to working capital, covenant compliance, exchange rates, cash flows, financial derivatives, expenses, material accounting matters, global crises, etc.
resources
risks related to occupational health and safety, attracting talent and know-how, which are fundamental components of good organizational performance.
Risks and opportunities that can affect performance and financial conditions
Our company is also exposed to financial risks such as credit risk, liquidity risk and market risk. These risks are managed according to our Corporate Financial Risk Management Policy, which aims to safeguard financial stability and sustainability at all times, under both normal and exceptional conditions. This Board-approved policy has a simple, transparent and flexible structure. Generally speaking, the policy outlines the management guidelines for addressing all components of financial uncertainty considered relevant to the operations of Molymet and its subsidiaries and determines the Group organization for those purposes. From a risk management perspective, we have analyzed opportunities in the fields of circular economy and energy matrix efficiency, new applications for our products in clean energy generation and possible business lines in other areas, while preserving the company’s industrial nature and commercial structure.
Given the structure of Molymet’s market, little risk involving free competition and consumers has been detected to date. In 2021 our sales staff participated in training with experts on the matter. Cybersecurity risk is managed using ongoing monitoring of infrastructure and systems and by generating a safe culture throughout the organization. Measures taken include: monthly management of critical weaknesses, device encryption, updating and patching servers, yearly ethical hacking with external service providers. To reinforce a culture of digital security, we conduct online and print-based periodic ethical phishing and communication campaigns on security topics. These risks are described in detail in note 3 to the financial statements.
Risk Governance
Diagram
Risk Management Department
The Risk Management Department is charged with detecting, quantifying and monitoring risks. From an operational point of view, strategic risk management is centralized in a system known as M-Risk. This platform is used to log risks and their causes, control activities in development and monitor and track action plans designed to improve the control environment and thus reduce exposure to operational risk. Furthermore, the Internal Audit Department conducts reviews focused largely on evaluating the effectiveness of controls for these strategic risks, which helps ensure the effectiveness of management efforts.
The Vice President of Corporate Compliance and Risk is responsible for tracking proper platform use and corporate risk management by monitoring the centralized platform and leading quarterly risk committee meetings with the areas responsible for managing each risk and other areas related to or involved in risk management.
Determining Materiality of Risks
The Board’s Role
As indicated, twice a year the Vice President of Corporate Compliance and Risk reports to the Board on risk management during the period, including possible changes detected and how the company has worked to reasonably decrease the likelihood of occurrence.
While the Vice President of Corporate Compliance and Risk is responsible for detecting, monitoring and analyzing risks, the executives in charge of each
area are responsible for implementing measures, such as different control activities and action plans, to reduce the likelihood of the main strategic risks taking place. Consequently, a portion of these executives’ variable compensation is linked to these objectives.
Internal Audit Department
The company has an Internal Audit Department that reports to the Vice President of Corporate Compliance and Risk. This unit is responsible for verifying the effectiveness of and compliance with policies, procedures, controls and codes implemented for risk management, as well as overseeing annual risk review plans. It also has a Risk and Compliance Unit, which is in charge of implementing the methodology and updating information
regarding the responsibilities of each user area. This unit also issues periodic reports to inform senior management, the CEO and the Board. To complement its supervisory role, the Internal Audit Department defines its audit plan each year based largely on the strategic risk matrix.
Prevention, Information and Disclosure
The company has programs for distributing information and training personnel on risk management policies and procedures.
For that purpose, the Vice President of Corporate Compliance and Risk continually conducts informational campaigns to teach employees about these matters and compliance with Law 20,393, a key component of risk management. For this, the company has developed policies and codes that regulate ethical conduct within the company, as well as means for promptly communicating the framework or reporting situations that violate our principles and values.
Code of Ethics and Conduct
In 2021 Molymet published its Corporate Code of Conduct, which is applicable to the parent company. Each subsidiary has also issued its own code of conduct.
This document sets out the ethical principles that drive our conduct and are based on the purpose that inspires our culture, the business and the company’s role in society, outlining the rules that each member of the company must keep in mind in doing their job and in the decisions they make.
This code was distributed in October 2021 as part of the “Play Fair” campaign.
Information Disclosure and Training Programs
The company’s financial information is disclosed to the market and interested parties through a quarterly press release. In addition, the company presents its earnings in quarterly conference calls.
Molymet’s Communications Department coordinates with different areas in the company to disclose policies, procedures and other related information.
The Compliance Department, which reports to the Vice President of Corporate Compliance and Risk, prepares a communications plan each year to publicize policies, procedures and training sessions that impact the integrity and behavior of company personnel.
In addition, all individuals hired by Molymet participate in an orientation program on the company’s most important policies, among other topics.
Whistleblower Channel
Molymet has a whistleblower channel known as the “Ethics Hotline,” which is available for all employees and related parties such as customers, suppliers, shareholders and third parties that need to report any situations. This communication channel guarantees the informant’s anonymity and allows them to anonymously review the status of the report and the results of the investigation. The Board receives a weekly summary of complaints received and is given access to information regarding each report upon request.
Crime Prevention Model
Molymet has a Crime Prevention Model that complies with all recommendations set forth by law. It has been certified since 2014 for the crimes of asset laundering, terrorism financing, bribery and handling of stolen property. The certification process entails a review of crime control best practices and ethical integrity performed by an external certifier.
This prevention model is divided into internal control structures that are tested annually by the certifying company and a communications strategy on ethics and integrity for the entire organization.
Executive Succession Plan
A list of critical positions at the parent company and its subsidiaries is updated each year. We have also mapped the potential of all individuals currently in these positions who have development plans in place. This is done by first establishing their potential and then generating development plans to address gaps and develop key competencies for possible future positions.
We also formed an Internal Development Committee, which works alongside the Chief Executive Officer, the Vice President of Corporate Human Resources and Communications and the vice president of the corresponding area to periodically review critical positions, the talent pool in each vice president’s area, progress on individual development plans and readiness for possible succession. We rank possible successors for each critical position and evaluate the possible risks of loss of talent in each area.
Currently, possible successors for the job of CEO and all other executive positions have been analyzed and have development programs in place to prepare them to take on more complex responsibilities.
Review of Salary Structures
The Compensation Committee meets once a year and then reports to the Board on salary structures and executive compensation policies.
Each position is properly defined using a job description and a Compensation Salary Study is conducted annually based on the HAY methodology, which analyzes the salary structure of diverse internal units, provides a realistic market benchmark and forecasts salary increases using an objective internal and external framework.
Executive Compensation and Termination Benefits
Although the Compensation Policy is used to define the organization’s wage scales, we do not have procedures for approving salary structures, compensation and termination benefits for the Chief Executive Officer or other executives that are reviewed by shareholders or any third parties. Neither do we disclose these structures or compensation plans to the general public. The salary structures for the Chief Executive Officer and other senior executives are reported to and approved by the Board’s Compensation Committee on a yearly basis.
Engagement with Stakeholders and the General Public
Identified Stakeholders
Shareholders
We seek to obtain superior results and create sustainable economic value for our shareholders and investors, fostering a corporate culture where individuals consistently conduct themselves responsibly, ethically, morally and transparently.
Community
We strive to build respect-based relationships that generate mutual benefit for the company and the community and incorporate their expectations, needs and requirements into our decision making.
Suppliers
The main procurement-related challenge for Molymet is to guide our suppliers towards developing and implementing sustainable management practices in their own businesses, aligning them with our purpose and driving them towards development of a clean supply chain that helps ensure business continuity. Our suppliers provide us with inputs and services.
People
At Molymet we place people at the center of our business. Our focus is on consolidating a model that ensures the integrity, development and wellbeing of our
employees, while encouraging sustainable practices. The value of people and the conviction that they are the driving force for achieving our purpose translates into daily, ongoing effort to make the experience of working at Molymet highly motivating.
Authorities
Despite dealing with different regulatory systems in each country, our objective is to achieve the highest management standards at each of our subsidiaries, aiming for sustainable development and strictly and continually going beyond regulations in order to generate an environment of trust and be a role model for the industry.
Environment
We are committed to our environment and to adopting measures to reduce our negative impacts and strengthen natural ecosystems. Adequate environmental management requires a systemic approach and consideration of the variables that can be affected.
Customers
Our ambition is to continue being a first-rate company that provides services and products that create value for our customers. Our customers are individuals or entities that purchase our company’s products and/or services and include mining suppliers.
How we contribute to:
Customers
Authorities
Suppliers
Environmental
Community
Wages
Dividends
Engagement with Stakeholders, the Media and the General Public
At Molymet we have a dedicated Investor Relations Department that is responsible for providing investors support and answering their questions regarding risks, the company’s financial situation and other matters. In addition, our website has a special investor section containing information of interest to the market and quarterly earnings presentations. According to company policy, media relations are always directed by the Chief Executive Officer, with assistance from the Vice President of Corporate and Legal Affairs.
We prepare an annual Sustainability Report and share it with our employees, suppliers, customers, shareholders and local authorities through specially designed initiatives. It is also available on our corporate website for other stakeholders. This report details our company’s environmental, social and economic performance and the progress we have achieved in each of these areas based on commitments made in prior years.
In compliance with regulations from the Financial Market Commission regarding the company’s annual report, this document also provides information on our financial and risk management and results for stakeholders like authorities, shareholders, investors and the community at large.
The company does not have a procedure for shareholders to obtain, prior to electing directors, information about the diversity of capabilities, conditions, experiences and visions that the Board advises having in order for the Board to be in the best possible condition to look out for the company’s interest.
However, information on the candidates’ experience and education is made available on our website.
Beginning April 2020, the Board implemented a videoconferencing mechanism for shareholders’ meetings. This procedure meets current regulations and allows shareholders to participate and vote online, while safeguarding the principle of simultaneous or secret voting. In addition, third parties can also request online viewing access for shareholders’ meetings.
We continuously evaluate the channels we use to provide information to the market in order to identify ways to enhance it. To accomplish this, we apply corporate governance best practices outlined in current regulations and the Vice President of Corporate and Legal Affairs collaborates with other Molymet departments to analyze the following:
– National and international corporate governance guidelines and improvements (Inversor IR in Colombia and the OECD’s corporate governance best practices).
– Corporate governance best practices published by global investors (Blackrock Stewardship Expectations 2021).
Our challenge lies in implementing best practices for both third-party information access and shareholder relations.
Furthermore, during the period we implemented two corporate governance initiatives, participating for the first time ever in the Dow Jones Sustainability Index (DJSI) and the Stakeholder Sustainability Index (SSI) in order to address metrics, benchmarks and continuous improvement of diverse aspects, including transparency and enhancing market information.
