Stakeholder: Shareholders and Investors
A trustworthy company
Ecopetrol's transformation into mixed economy company with private shareholders has led the implementation of a solid Corporate Governance system that ensures the trust of all stakeholders and the sustainability of the Company.
IN 2009 ECOPETROL HAD THE SECOND BEST SCORE in the first classification process for Corporate Governance Practices in Colombia, conducted by the firm BRC Investor Services. In awarding this distinction the firm took in account in particular that during that year, there was not a single complaint for violations of the Corporate Governance Code.
This record is due to the successful implementation of multiple Corporate Governance mechanisms, including dispute resolution, which allowed direct settlement with 22 foreign investors and three Colombian legal persons who had acquired shares without the full with all requirements of law. Also several disputes were resolved with partners through direct settlement or arbitration tribunal.
Ecopetrol's Corporate Governance is one of the cornerstones of the new strategic framework, aligned to the competition objectives in domestic and international oil markets and in stock markets. "It is a priority from the company's Presidency to the frontline levels, because it is important in adding value to the company, making its operation more transparent and bringing calm and good messages to national and international markets, " said Ignacio Sanín, who has led this process as a member of the Board of Directors.
"The purpose of corporate governance is to gain the trust of stakeholders, because when that trust is achieved, this makes the company sustainable over time, but in addition it adds value," said the Secretary General of Ecopetrol, Margarita Obregón. She adds that corporate governance takes place through three mechanisms: governance, transparency and control.
In 2004 Ecopetrol adopted its first Corporate Governance Code, at the same time it began to strengthen its control systems. The Code gathered all the company's social responsibility policies, its code of ethics, best practices from the Country Code, the international practices of the World Trade Organization, and the corporate governance codes of stringent companies in the United States, Britain and Sweden.
"The market should be reassured that Ecopetrol not only complies with the law, but have practices of respect within the company and with all the segments of the company, its shareholders, its suppliers, its workers, " Ignacio Sanín states.
The first share issue in 2007, brought about the implementation of minor adjustments to the Corporate Governance Code. "We defined our seven stakeholder groups and made a declaration that those were our rules of conduct for relating to them and not only with our shareholders. At that time we reaffirmed that the key should be transparency, "says Obregón.
In developing this approach, the Government issued a statement in which it promised to respect the rights of minority shareholders, to support their initiatives, and to pay dividends annually, forgoing the option it has as majority shareholder to not do so and capitalize instead..
In 2009 the Board of Directors approved new amendments to the Corporate Governance Code. "We have carried out periodic reviews depending on the company's evolution and on the changes that have been presented in the internal and external environment, " said Ignacio Sanín.
Solid management structure
Ecopetrol's high trust level, certified by various international assessments, is related to the existence of a clear governance structure, within whose pyramid is the Shareholders General Assembly, followed by the Board of Directors, Board Committees, the Presidency and the various management teams and executives.
Another instrument of Corporate Governance is the Code of Ethics, set in 2009 in accordance with international standards. It has been widely released amongst Board members, employees, suppliers and company contractors, through workshops, lectures, forums, announcements and messages, plus the content is part of the induction and contracting processes.
On the other hand, the internal control systems have been strengthened by implementing the process control system, the adoption of international measures and the move towards self-control as a major objective in this area.
Similarly, we have developed mechanisms to ensure transparency: the office of Citizen Participation, monitoring processes established regarding what stakeholders think, and a results measurement system." Everything here is public, there is no barred information, there are no secrets. If we have negative experiences our predicate is to communicate them and to communicate what the lessons learned were," said Margarita Obregón.
The existence of these Corporate Governance instruments ensures compliance with the rights and commitments to all stakeholders, and provides Ecopetrol with high a degree of trust and sustainability.
“The purpose of corporate governance is to gain the trust of stakeholders, because when that trust is achieved, this makes the company sustainable over time, but in addition it adds value”