English Version
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DEPENDABLE GOVERNANCE
One of the objectives sought for
in the transformation of the hydrocarbon sector in Colombia was
to insure that Ecopetrol could perform as an efficient and competitive
company, detached from the state role and having a greater business
focus. In order to materialize such intent, consigned in decree
1760, it would require clear rules to guarantee a transparent administration
before the groups of interest of the company, especially after transforming
into a public corporation.
As a result, one of the tools identified by the Board of Directors
of Ecopetrol to properly conduct the business endeavour was the
adoption and implementation of the principles and practices of corporate
governance which are currently applied by large companies and enjoy
high levels of acceptance in the different levels of world economy.
It is internationally and widely acknowledged that adequate governance
structures of the companies reduce risks, foster efficient performance
and encourage Boards of Directors to make decisions in the light
of long range greater returns to the investors.
The adoption of a summary of rules leading to a transparent and
responsible administration that allows for periodic report of results
to the shareholders and to the society as a whole, was driven worldwide
after the scandals of companies like Enron and Worldcom, among others
where problems of parallel accounting, conflicts of interest and
lack of timely and dependable information were apparent.
The experience of these and other organizations show that the codes
of Good governance area now a must for those companies engaged in
improving their reputation, generating confidence and, a the end,
getting a better valuation for their shares, specially those traded
at stock exchanges. It is, then, not a new wave or an isolated initiative
of some organizations.
Corporate governance is a commitment for modern administrations;
and companies not taking this step will sooner or later be punished
by the most implacable judge: the market.
GREATER COMPETITIVENESS
The legal framework of corporate governance has mainly been addressed
to issuing companies trading its shares in the stock exchange.
In 1995, the reform of the Code of Commerce brought about mechanisms
for governance of companies, such as flexibility of the majority
vote for decision taking and the right to withdraw for minority
shareholders.
Notwithstanding, Resolution 275 of 2001 issued by the Superintendence
of Securities was the norm that endowed some compulsory fulfilment
of the principles of corporate governance by establishing them as
a condition to be accredited by both private and public companies
interested in investments from pension funds in the securities they
issue.
Ecopetrol, as a public corporation not trading its shares in the
public market, is not obliged to adopt the rules of corporate governance.
Therefore, the business decision to adopt this self-regulating mechanism
is of great importance. For this purpose, the company was supported
by Confecamaras through its Program of Corporate Governance. Ecopetrol’s
Code of Good Governance recently approved by the Board of Directors
was inspired by the principles that on this matter has the “Organización
para la Cooperación y el Desarrollo Económico (OCDE)”
and in the “Código Marco de Buen Gobierno” for
Colombia.
For the International Financing Corporation (Corporación
Financiera Internacional), better processes and better government
structures provide solidity to the taking of decisions in the companies,
insure the effectiveness of the plans of succession of key executives
and strengthen long range sustainability of the companies, regardless
of the kind of company and source of financing.
Ecopetrol’s Code of Good Governance will constitute the navigation
chart of the company for the coming years, in interacting with its
audiences. Such document, at the end, is only one more step in our
endeavour to perform as a modern and competitive company which supplements
other internal initiatives for measuring performance through results
and unification of the computing platform.
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THE KEYS OF THE CODE
Among the mechanisms considered for optimizing the relationship
with shareholders and interest groups the Code of Good Governance
include the following:
- Mechanisms to insure equitable treatment and effectiveness
of the rights of the shareholders, among which stand out
the demand that every decision, regardless the majority
required by bylaws or statutes must always be adopted a
plural number of shareholders.
- Mechanisms to insure the independence, responsibility
and efficiency of the Board of Directors, such as the conformation
with members of the same Board of the permanent Committees
of Auditing, Compensation and Nomination and Corporate Governance;
and the election by the General Assembly of Shareholders
of four members of the executive organ subject to the profiles
previously defined by the Committee for Compensation and
Nomination.
- Concrete mechanisms allowing for prevention, management
and divulgation of conflicts of interest which may arise
from suppliers, buyers and majority shareholders with the
executive and administrative organs of Ecopetrol S. A.
Mechanisms insuring the revelation, transparency, fluidity
and integrity of information from the company which are relevant
to shareholders and other investors, government organizations,
members of the Board of Directors, Auditors, control organizations
and the general public. |
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