The Krka Group maintains high standards of corporate governance, ethical and moral integrity and business transparency.
Krka’s corporate governance is based on Slovenian legislation, the company’s bye-laws and established good domestic and foreign practices. It operates a two-tier governance system in which the Krka Group is managed by the Management Board and supervised by the Supervisory Board.
In relation to its stakeholders, Krka responsibly exercises its rights and discharges its obligations defined in the Corporate Governance Policy published publicly.
The Krka Group governing bodies are:
- the General Meeting,
- the Supervisory Board and
- the Management Board.
CORPORATE GOVERNANCE CODE
In collaboration with the Managers’ Association of Slovenia and the Slovenian Directors’ Association, the Ljubljana Stock Exchange developed the Slovenian Corporate Governance Code for Listed Companies (the Code). The Code was designed to establish a transparent and professional corporate governance framework for companies in Slovenia.
The Code is available in Slovenian and English and can be accessed at the Ljubljana Stock Exchange website. Krka publishes Code compliance statements in its annual report, the Ljubljana Stock Exchange electronic information dissemination system (SEOnet) and on Krka’s website.
KRKA GROUP’S ARTICLES OF ASSOCIATION
Among other things, the Articles of Association govern:
- The company’s share capital, and any increase or decrease,
- Shareholder rights,
- Composition and remit of company bodies (Management Board, Supervisory Board and General Meeting),
- Shareholder notification.
The General Meeting is the highest body, where the company’s shareholders can participate directly and make key decisions. At the General Meeting, each share, except for treasury shares, represents one vote. Krka has one share class only: ordinary no-par value shares.
The Management Board convenes the Annual General Meeting once a year – at least 30 days before the due date. Upon request, all materials for each AGM may be viewed at the Company’s registered office from the AGM notice date.
All shareholders registered in the shareholder ledger on the cut-off date published in the notice have the right to attend the Annual General Meeting and vote, as do their representatives and proxies.
At the AGM, the Management Board provides shareholders with all the information required to assess the agenda, taking into account all legal or other restrictions regarding disclosure of information.
The Supervisory Board supervises the Company’s operations and business management, and selects and appoints members to the Management Board. The Supervisory Board meets at least four times a year, usually after each quarter.
The composition of the Supervisory Board is stipulated by the Company’s Articles of Association. Supervisory Board members are appointed for a five-year term and may be reappointed.
The salaries, reimbursement and other benefits of board members do not directly depend on the Company’s performance and are disclosed in the financial report published in the annual report. The same chapter also discloses how many Krka shares are held by board members. Supervisory Board members are required to report any acquisition or disposal of company shares to the Company and competent institutions; Krka makes this information public.
Supervisory Board members pursue the Company’s objectives and must subordinate any personal interests or interests of third parties accordingly. Each board member must inform the Supervisory Board if they sit on any other supervisory board of other companies. The Supervisory Board Standing Orders outline how members should proceed in the event of a conflict of interest.
Supervisory Board committees:
- Audit Committee,
- Human Resource Committee and
- Nomination Committee.
The composition and work of the Supervisory Board and its committees are presented in the annual report and the Supervisory Board report.
Management Board duties:
- Manage the Company and make business decisions directly and independently;
- Adopt the Company’s development strategy,
- Ensure appropriate risk management, and
- Act with the reasonable care and diligence of a good and honest manager and protect business secrets.
The Management Board consists of five members:
- President of the Management Board,
- three members, and
- a Worker Director who represents the employees’ interests regarding human resources and social issues, but is not authorised to represent the Company.
The term of office of Management Board members is six years. Members may be reappointed.
The Management Board’s operational functions and assignment of duties are set down in the Management Board’s Standing Orders. Its prevailing approach is to coordinate opinions and make decisions by consensus rather than on the basis of votes. In line with the Rules of Organisation and the Standing Orders of the Management Board, Management Board members also have executive management duties.
The following Company bodies support the work of the Management Board:
- Director’s Committee,
- Sales Committee;
- Development Committee;
- Quality Committee;
- Sustainability Commitee;
- Investment Committee;
- Human Resource Committee;
- Information Technology Committee;
- Economics and Finance Committee; and
- Corporate Identity Committee.
The committees bring together experts from individual sectors in Krka. They prepare business policies and strategic guidelines by individual area and also have some decision-making responsibilities relating to the implementation of annual plans.
Remuneration, reimbursements, and other benefits for Management Board members are defined in work contracts drawn up between the Supervisory Board and individual Management Board members. The Supervisory Board adopts the Rules governing the Bonus Element of Management Board Remuneration, and also fixes remuneration for Management Board members.
Krka Management Board members are not remunerated in the form of options schemes, shares, or share-based derivatives. Remuneration, reimbursements, and other benefits for Management Board members are presented in the financial report of the annual report.
Management Board members and their related parties are required to report any acquisition or disposal of the Company’s or related parties’ shares they may make to the Company and the competent institutions. Krka publishes this information. Management Board members must disclose any conflicts of interest to the Supervisory Board and also notify other Management Board members. Management Board members do not act as members of the management or supervisory bodies of unrelated companies during their term-in-office for Krka.
Corporate integrity is an important part of corporate governance and compliance with Krka’s business model.