Policy for appointing
POLICY FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS, COMMITTEES AND EXECUTIVE BOARD OF ROMI S.A.
1.1. This Policy for the Appointment of Members of the Board of Directors, its Advisory and Executive Board Committees (“Policy”) of Romi S.A. (“Company”) has the purpose of establishing the criteria and procedures to be observed for the composition of the Board of Directors Management, its Committees and the Company’s Executive Board (“Executive Board”).
2.1. The appointment of the members of the Board of Directors, its Committees and the Company’s Executive Board shall comply with the provisions of this Policy, the Company’s Articles of Incorporation, the Bylaws of the Board of Directors and its Committees, the Novo Mercado Rules, Law No. 6404/76 (“Corporations Law”), as well as, in other applicable laws and regulations.
2.2. The appointments for the Company’s Board of Directors, Committees and Executive Board must seek to achieve a multidisciplinary composition, with complementary experiences, seeking, among its members, diversity of knowledge, professional experiences, strategic vision of the business and knowledge of good corporate governance practices, in order to benefit the Company with a variety of arguments and a decision-making process with greater quality and safety.
2.3. The Human Resources Committee will also participate in the process of appointing members of the Company’s Executive Board appointed pursuant to the Articles of Incorporation.
3. BOARD OF DIRECTORS
3.1.1. The Board of Directors shall be composed of, at least, five (5) and, at most, eleven (11) members, resident in the country or not, elected by the Shareholders’ Meeting and dismissed thereby at any time, with unified term of office of one (1) year, reelection being permitted, noting that, at the time of the election, the Shareholders’ Meeting shall first determine the number of members of the Board to be elected.
3.1.2. The offices of chairman of the Board of Directors and of Chief Executive Officer or head executive of the Company may not be accumulated by the same individual, with exception of events of vacancy, which shall be subject matter of specific disclosure to the market, until the business day following the occurrence, and for which measures to cease accumulation within one hundred and eighty (180) days.
3.1.3. It is recommended that the Board of Directors has professionals with experience in diverse subjects.
3.1.4. The Board of Directors’ self-assessment will be carried out annually.
3.2. Independent Director
3.2.1. At least two (2) or twenty percent (20%) of the members of the Company’s Board of Directors, whichever is greater, shall be Independent Directors, as defined in the Novo Mercado Regulation, the characterization of the appointed person to the Board of Directors as independent directors must be resolved at the General Shareholders’ Meeting that elects said member(s). In the event of fractional number of board members, as a result of observance of the percentage referred to in this paragraph, such fractional number shall be rounded up to the next whole number:
3.2.2. The characterization of the appointed person to the Board of Directors as an independent director shall be decided at the Shareholders’ Meeting, which may base its decision:
(i) in the declaration of the appointed person as an independent Director to the Board of Directors, attesting his/her qualification in relation to the independence criteria established in this Policy, considering the respective justification, if any situation provided for in item 3.2.5 is verified; and
(ii) in the manifestation of the Company’s Board of Directors, included in the management’s proposal regarding the Shareholders’ Meeting for the election of managers, as to whether or not the candidate fits the independence criteria.
3.2.3. Any board members elected according to the provisions of article 141, paragraphs 4 and 5 of Law No. 6404/76 shall be further deemed Independent Board Members, in the event of a controlling shareholder.
3.2.4. An independent director does not qualify if he/she:
(i) is a direct or indirect controlling shareholder of the Company;
(ii) has voting rights at the Board of Directors’ meetings bound by a shareholders’ agreement whose object is matters related to the Company;
(iii) a spouse, partner, relative or similar, in a straight or collateral manner, up to the second degree, of its controlling shareholder, of a Company’s manager or of a manager of its controlling shareholder; and
(iv) has been, in the last three (3) years, an employee or Director of the Company or its controlling shareholder.
3.2.5. The situations listed below must be analyzed in order to verify whether they imply the loss of independence of the independent director due to the characteristics and extent of the relationship:
(i) family relationship up to the second degree of the controlling shareholder, a manager of the Company or a manager of the controlling shareholder;
(ii) in the last 3 (three) years, he/she has been an employee or officer of affiliated, controlled or under common control;
(iii) has commercial relations with the Company, its controlling shareholder or associated, controlled or jointly controlled companies;
(iv) holds a position in a company or entity that has commercial relations with the Company or its controlling shareholder that has decision-making power in the conduct of the activities of said company or entity;
(v) receives other compensation from the Company, its controlling shareholder, affiliated, controlled or jointly controlled companies in addition to that related to the performance as a member of the Board of Directors or Committees of the Company, of its controlling shareholder, of its affiliated, controlled or jointly controlled companies, except for cash earnings resulting from participation in the Company’s capital stock and benefits arising from supplementary pension; and
3.3. Process of Appointment
3.3.1. The appointment of members for the composition of the Board of Directors may be made by the Board of Directors, or by any shareholders of the Company.
3.3.2. For the appointment of members of the Board of Directors, compliance with the criteria is essential:
(i) having an immaculate reputation;
(ii) being aligned and committed to the values and culture of the Company;
(iii) being exempt from conflict of interests with the Company, including not having a position in a company or entity that may be considered a competitor to the Company;
(iv) having professional experience in strategic roles;
(v) having reasonable time available to dedicate themselves adequately to the assumed role and responsibility.
3.3.3. The appointments made by the shareholders must be sent to the attention of the Company’s Investor Relations Officer, through the electronic address disclosed in the Reference Form, and must contain:
(i) the appointed person’s full name;
(ii) their resume, containing their qualification, professional experience, education, main professional activity exercised at the time and indication of what roles they have on boards of directors, tax or advisory boards at other companies, if applicable, among other information deemed relevant;
(iii) copy of the instrument of statement of clearance or representation obtained from the appointed person the information that they are able to sign such an instrument, indicating any reservations; and
(iv) in the case of appointment of candidate for the position of independent director, in addition to the information listed in item (ii), a statement signed by the appointed person must also be sent, attesting their compliance with the independence criteria determined in the Novo Mercado Regulation, as provided for in item (i) of Clause 3.2.2 of this Policy.
3.3.4. The election of the members of the Board of Directors shall be through the Shareholders’ Meeting, as provided for in article 19 of the Company’s Articles of Incorporation and applicable law.
4. BOARD OF DIRECTORS’ ADVISORY COMMITTEES
4.1. Criteria for the Composition
4.1.1. When applicable, the Board of Directors shall determine the formation of advisory committees (“Committee” or “Committees”) and/or the hiring of specialists and/or experts, with clearly defined purposes, to assist the Board of Directors in fulfilling their duties and to better instruct the matters subject to their deliberation.
4.1.2. Annually, the Board shall define which Committees will eventually be constituted, as well as the purpose and scope of work of each Committee, under the terms of its bylaws.
4.1.3. It shall be up to the Board, for each Committee:
(i) to appoint who will be part of it, who may be members of the Board, Officers or employees of the Company or even contracted third parties, respecting the rules of the Audit Committee;
(ii) to designate its Coordinator, who must necessarily be a member of the Board;
(iii) to designate its Secretary, who must necessarily be an Officer or employee of the Company; and
(iv) to define the compensation of its members within the global limit established by the Company’s Shareholders’ Meeting, in accordance with the Compensation Policy.
4.1.4. Each Committee shall be composed of at least three (3) members among:
(i) Board members, Officers and Company Employees and, also
(ii) Market professionals with specific technical knowledge in the area of operation of the respective Committee.
4.1.5. The Audit Committee, in particular, must be composed of at least three (3) members, being that:
(i) at least one (1) member must be an independent director of the Company;
(ii) at least one (1) member must have recognized experience in corporate accounting matter, pursuant to the regulation issued by the Brazilian Securities and Exchange Commission that provides for the record and practice of the activity of independent audit within the scope of the securities market and defines the duties and responsibilities of the directors of the audited entities and in the relationship with the independent auditors; and
(iii) the same member of the Audit Committee may accumulate the two characteristics in subitems (i) and (ii) above.
4.1.6. The participation, as members of the Company’s Audit Committee of its Officers, officers of its subsidiaries, its controlling shareholder, affiliates or companies under common control, is forbidden.
4.2. Process of Appointment
4.2.1. The appointment of members for the composition of the Committees must be carried out by the Board of Directors, according to item 4.1.4 of this Policy.
4.2.2. The appointment of members of the Committees must observe the same criteria established for the appointment of members of the Board of Directors, pursuant to item 3.3.2.
5. EXECUTIVE BOARD
5.1. Criteria for the Composition
5.1.1. The Executive Board of the Company shall be composed of, at least, three (3) and, at most, ten (10) members, out of which: one (1) Chairman, one (1) Vice-Chairman, one (1) Executive Officer of Investors Relations, and up to seven (7) Executive Officers, with term of office of one (1) year, reelection being permitted.
5.1.2. The composition of the Executive Board should harmoniously combine the interests of the Company, its shareholders, managers and employees, as well as the social and environmental responsibility of the Company, guided by legality and ethics.
5.2. Process of Appointment
5.2.1. The appointment of members to be part of the Executive Board shall be made by the Board of Directors, as indicated in Clause 26 of the Company’s Articles of Incorporation.
5.2.2. The appointment of members of the Executive Board must observe, at least, the following criteria:
(i) having an immaculate reputation;
(ii) being aligned and committed to the values and culture of the Company;
(iii) being exempt from conflict of interests with the Company;
(iv) having academic training in recognized Brazilian or international educational institutions;
(v) having professional experience in strategic roles in business management;
(vi) having the skills to implement the strategies, face the challenges and achieve the purposes of the Company;
(vii) not having a position in a company or entity that may be considered a competitor to the Company; and
(viii) being entirely and exclusively dedicated to the assumed role and responsibility.
5.2.3. The election of the members of the Executive Board shall be carried out as provided for in the Company’s Articles of Incorporation and in the applicable legislation.
5.2.4. The proposal for the re-election of the members of the Executive Board should take into account the annual individual evaluations that consider the Officer’s performance and potential.
6.1. Any breach of this Policy shall be submitted to the Company’s management, and any relevant penalties shall be applied, without prejudice to the penalties provided for in the current legislation.
7. APPROVAL, TERM OF EFFECTIVENESS AND AMENDMENTS
7.1. This Policy was approved by the Company’s Board of Directors at the meeting held on December 10, 2019, and shall come into force on March 2, 2020, for an indefinite period, until there is a resolution to the contrary, which can be found on the company’s website: https://www.romi.com.
7.2. In case of doubts about the application or interpretation of this Policy, the Legal and Compliance Department should be consulted.
7.3. Updates to this Policy, when necessary, shall be previously evaluated by the Audit Committee and submitted to the Board of Directors for deliberation.