Our Board of Directors is made up of six members, in accordance with the provisions of Legislative Decree No. 043 – Ley de la Empresa Petróleos del Perú S.A. Five of them are elected by the State as the sole shareholder, and one by our employees.
Likewise, at least two of the members of the board must be independent directors. All members of the Board of Directors are of Peruvian nationality.
For us, the formation of the Board of Directors is a fundamental pillar for the existence of an efficient Board of Directors that provides value to shareholders, and it is the General Shareholders’ Meeting that is responsible for the appointment and appointment of the members of the Board of Directors.
The Board of Directors is the highest decision-making body of Petroperú, whose main mission is the administration, control and supervision of the company. In the exercise of their functions, the directors must ensure the benefit, interests and rights of Petroperú.
The Articles of Association and the Internal Rules of Organization and Operation of the Board of Directors establish the functions of the Board of Directors; among the main ones we find:
Likewise, the following related functions are considered:
The aforementioned topics are brought to the attention of the Board of Directors through the different departments of the company: Corporate Finance Management, Corporate Sustainable Development Management, Corporate Communications and Institutional Relations Management, Corporate Processes and Risks Management and the General Secretariat.
During 2022, the Board held 64 sessions, in which the majority of directors attended, indicating alignment with the activities envisaged in the Board’s Annual Work Plan for 2022.
As of January 1, 2022, the composition of our Board of Directors was as follows:
| Director | Position |
|---|---|
| Mario Candelario Contreras Ibárcena | Chairman/Independent Director |
| Luis Rafael Zoeger Núñez | Vice President/Independent Director |
| Juan Donato Pari Choquecota | Independent Director |
| Hugo Ángel Chávez Arévalo | Non-independent Director |
| Carlos Alberto Palacios Olivera | Non-independent Director |
| Oscar Electo Vera Gargurevich | Director representative of the workers |
Source: General Secretariat.
On April 1, 2022, the General Shareholders’ Meeting approved the appointment of five new members of the Board of Directors, who exercised functions as of April 2 of the same year.
| Director | Position |
|---|---|
| Humberto Juan David Campodónico Sánchez | Chairman/Independent Director |
| Carlos Edgar Vives Suárez | Vice President/Independent Director |
| Víctor Murillo Huamán | Non-independent Director |
| José Andrés Olivares Canchari | Non-independent Director |
| Luis Antonio Gonzales Talledo | Non-independent Director |
| Oscar Electo Vera Gargurevich | Director representative of the workers |
Source: General Secretariat.
On September 12, 2022, Mr. Luis Antonio Gonzales Talledo submitted his resignation as a member of our Board of Directors.
At the meeting of the General Shareholders’ Meeting on October 26, 2022, it was approved to appoint Mr. Edmundo Raúl Antonio Lizarzaburu Bolaños as a member of the Board of Directors, as of October 27, 2022.
On October 27, 2022, Mr. Humberto Juan David Campodónico Sánchez submitted his resignation, which was formalized on November 2, 2022 at the universal meeting of the General Shareholders’ Meeting.
Finally, on December 11, 2022, Mr. Oscar Electo Vera Gargurevich submitted his resignation as director representative of our workers, to assume the position of Minister of Energy and Mines. Consequently, Mr. Antonio Leonardo Manosalva Alarcón assumes the position of workers’ representative director, who previously had the status of alternate director.
| Director | Position |
|---|---|
| Carlos Edgar Vives Suárez | Vice President/Independent Director |
| Víctor Murillo Huamán | Non-independent Director |
| José Andrés Olivares Canchari | Non-independent Director |
| Edmundo Raúl Antonio Lizarzaburu Bolaños | Non-independent Director |
| Antonio Leonardo Manosalva Alarcón | Director representative of the workers |
Source: General Secretariat.
Independent Director
Vulnerable Social Group: Elderly person (72 years old)
Start date: 02.04.2022
Specialization: Petroleum engineer, graduate of the Universidad Nacional de Ingeniería, with forty years of experience in the petroleum industry in the phases of exploration and exploitation of hydrocarbons (upstream), and related activities such as oil negotiation and contracting, environmental protection, community relations and prior consultation. He worked 18 years in Petroperú, 2 years in private activity and 20 years in PERUPETRO. In the latter company he held positions of Manager in important management: Contracts (including Contract Negotiation), Promotion, Environmental Protection and Community Relations and General Management.
Non-independent Director
Vulnerable social group: elderly (60 years old)
Start date: 02.04.2022
Specialization: Electrical Engineer from the National University of Central Peru, Master’s Degree in Economics from the Pontifical Catholic University of Peru and Master’s Degree in Economic Regulation of Public Services from the University of Barcelona, Spain. He has more than 30 years of experience in the Peruvian energy sector, leading public and private organizations. His experience as a specialist and manager of companies and institutions (state and private), as well as the exercise of university teaching, and having served as deputy minister of Hydrocarbons, allows him to have a transversal approach to the Energy sector. He also currently serves as Chairman of the Board of Directors of Generación del Sur.
Non-independent Director
Start date: 02.04.2022
Specialization: Degree in Economics from the Universidad del Pacífico and master’s degree in Financial Engineering from the Universidad de Alcalá de Henares (Spain). Fellow of the Carolina Foundation to follow the program Expert in Management of Financial Institutions by the Foundation of Savings Banks of Spain (FUNCAS).
With 24 years of experience in treasury management, debt management, risk management, corporate finance, asset and liability management, capital markets, valuation of financial and credit assets, credit portfolio management, investment portfolio management, structuring and issuance of debt instruments and financial regulation. He also currently serves as a Board Member at Caja Sullana.
Non-independent Director
Start date: 27.10.2022
Specialization: PhD in Management, Master in Research, PON in Negotiation, Global MBA and Industrial Engineer. Senior executive with more than 22 years working in companies and developing research and consulting in the technology, banking, stock exchange, hydrocarbons, retail and business sectors in Latin America and the United States. Experience in operations development, process improvement, risk management, integrity, corporate governance, compliance and auditing. Oriented to results, innovation and business profitability, as well as change management and leadership of multifunctional and multicultural teams. He also currently holds positions as Vice Chairman of the Board of Directors at Inversiones Coril Sociedad Gestora de Fondos S.A. and Chairman of the Board of Directors at Esvicsac.
Director representative of the workers
Start date: 11.12.2022
Specialization: Electrical Mechanical Engineer from the University of Piura and Master in Business Administration from the Pontifical Catholic University of Peru – CENTRUM, with Master in Management certification from the Grenoble Ecole de Management School in France.
Since 2012, he has been a member of the Beta Gamma Sigma Society (The International Business Honor Society). He has more than 17 years of experience in Petroperú., and has held positions such as: Head of Integrity and Reliability, Head of Engineering and Head of Management Control of the Pipeline Department Management. Currently, he is in charge of the position of Pipeline Department Manager.
It should be noted that the Board of Directors publicly maintains an affidavit of interest during the term. This statement details the companies in which the directors hold shares, as well as other information of interest. To access this document, you can visit the following link.
In our Internal Regulations for the Organization and Operation of the Board of Directors, the requirements for the election of independent members are detailed:
To qualify an independent director, in addition to what is established in the corporate documents, we are aligned with the Guidelines for the Qualification of Independent Directors, approved by SMV Resolution No. 016-2019 SMV/01, as we are registered in the Public Registry of the Securities Market. It should be noted that, during 2022, directors qualified as independent have been incorporated into the collegiate, those who met the requirements described in this section.
The General Shareholders’ Meeting is the competent body to appoint the members of the Board of Directors, in accordance with the General Companies Law and the Bylaws. In addition, we have a director who is elected by our workers, in universal, direct and secret election. This process is supervised by the National Office of Electoral Processes (ONPE) and subsequently ratified by the Board.
To implement and comply with the decisions of our Board of Directors, embodied in agreements and orders, we use a web tool called the System for Tracking Agreements and Orders (SSAP). With this platform, we seek to have effective control of the requests made by the different corporate bodies.
During 2022, the positions of Chairman of the Board and General Manager fell to different people. Each of them exercised their functions in accordance with the provisions of the Internal Regulations for the Organization and Operation of the Board of Directors and the Articles of Association. It should be noted that, during this period, at least one of the members of the Board of Directors held a management position.
In addition, actions were taken to strengthen the autonomous action and the segregation of functions of the company’s governing bodies, such as the approval of the Draft Law on the Strengthening and Appointment of Members of the Board of Directors of Petróleos del Perú – Petroperú, aimed at strengthening the independent action of the Board and making effective its control role with respect to Management.
Our Articles of Association establish that the Board of Directors may constitute such committees as it deems necessary for the operation of the company. Each committee must be headed by an independent director, and composed of an independent director and an additional non-independent member of the Board, who are appointed for a period of two years.
During 2022, our Board of Directors has had four support committees:
Each of our Board of Directors committees is composed of three directors, two of whom have the status of independent directors. The chairmanship of each committee was held by the independent directors.
President
Members
Purpose
Recommend to the Board of Directors mechanisms that allow the adoption, monitoring and improvement of Good Corporate Governance practices.
Features
During 2022, this committee focused on overseeing the following topics:
President
Members
Objective
To supervise the issues related to risk management and internal control, the system for the prevention of money laundering and terrorist financing, the anti-bribery management system and the system for the prevention of corruption crimes; in addition to the process of preparing the relevant economic-financial information.
Monitor and review the results obtained in the execution of external and internal audit work, as well as the Office of the Comptroller General of the Republic.
Features
During 2022, this committee focused on overseeing the following topics:
President
Members
Objective
Support the management carried out by the Board of Directors, in charge of supervising the acts of management, direction and administration provided for in our Articles of Association.
Roles
During 2022, this committee focused on overseeing the following topics:
President
Members
Objective
Support the management carried out by the Board of Directors in the implementation of research, development and innovation strategies in order to guarantee our continuity as a leading company in the energy sector.
Roles
During 2022, this committee focused on overseeing the following topics:
Our Board of Directors is responsible for reviewing, updating and approving the policies and guidelines that govern the good conduct of the company and its critical stakeholders.
You can find our policies at the link below.
Our Board Evaluation Policy, Board Committees and Directors approved in November 2018, establishes two evaluation systems:
Annually, our directors must go through a process of evaluation of their work, individually and collectively. This allows us to ensure the correct performance of their functions and optimise their work.
Based on these evaluations, we highlight the work carried out by the directors regarding their participation in the Board of Directors, in the Board Committees and individually. This is how we give value to their individual and group work to each of our directors. It should be noted that, during 2022, no performance evaluation of the Board of Directors was carried out ***.
On the other hand, the training and inductions carried out for our directors are based on the Induction Policy for new directors. During the incorporation of the members in the Board of Directors for the period 2021-2022, induction activities were carried out for the new members, in the months of April, May, June and November 2022. The trainings and inductions include topics related to sustainability.
The Remuneration Policy of the Board of Directors was approved by the General Shareholders’ Meeting Agreement of June 27, 2018. This established the amount of remuneration of the members of the Board of Directors amounting to three thousand soles (S/ 3,000) for attendance at the sessions of the Board of Directors, with a maximum of two (02) paid sessions per month.
In addition, this policy establishes the amount of the remuneration of the members of the Board of Directors equivalent to 50% of the established diet for each session of the Board of Directors for participation in the sessions of the Board of Directors committees, with a maximum of one (01) paid session per month.
On April 22, 2021, we approved the new salary policy with Board Agreement No. 043-2021-PP, which establishes the payment of a Monthly Variable Remuneration for Level 1 and Level 2 Management personnel with a report to General Management, which would be paid based on the fulfillment of objectives and goals established for each Management and aligned with the objectives of the Petroperú Strategic Plan. Subsequently, with Board Agreement 131-2021-PP of November 18, 2021, the payment of the Variable Remuneration is void.
However, as a result of a restructuring process of the company, carried out in 2021 by the company Arthur de Little (ADL), it was recommended to re-implement a variable remuneration system, linked to the business indicators (EBITDA and ROE, fundamentally) to leverage the commitment at a critical moment for the company, which is in the process of evaluation and formulation for the next two years.
It should be noted that, to date, the members of the Board of Directors do not participate in a specific committee related to the designation of remuneration within the company; however, on this point, the aforementioned restructuring plan establishes, specifically in relation to the strengthening of Governance, the creation of an Appointment and Remuneration Committee, in order for it to determine the policy and remuneration of the management levels.
It is the Board of Directors of the company who approved with Board Agreement No. 043-2021- PP the implementation of a new Salary Policy, the Salary Administration Procedure and the Single Salary Scale of the Company that allow to have a flexible remuneration administration tool, aligned with the objectives of the Strategic Plan and the Principles of Good Corporate Governance of Petroperú.
The approved Salary Administration Procedure contains the methodological proposal for the design of a new Salary Structure of the Company, which is firmly based on the relative value of the positions, resulting from the application of the job valuation/approval system and the analysis of external competitiveness of the salaries of the hydrocarbon sector, with the aim of enabling and facilitating horizontal and vertical development, in order to grant greater autonomy for the salary administration of personnel at all levels of the organization.
The new salary structure for the administration of the Management Level with the highest projection is aligned with the average trend of the basic remunerations of the Oil & Gas sector, according to the latest salary survey of the Oil & Gas Club 2020 prepared by the Consultancy Korn Ferry (HAY GROUP S.A.).
It should be noted that, during 2022, we did not make any salary increase to the staff of our company. When considering the highest compensation of a worker in 2022, which amounts to S/ 494 576.84, divided by the total median remuneration of Petroperú staff, which amounts to S/ 139 674.51, we obtained 3.54 as a value ratio for remuneration for 2022.
* Information as of the end of 2022.
** Social Management Policy
*** Due to internal changes in Petroperú S.A.
