Governance

„Fortenova Group consists of the parent (holding) company Fortenova grupa d.d. (“Company“) and operating companies. The governance of Fortenova grupa d.d. and its subsidiaries (“Group”) is based on statutory regulations, healthy business practices and general corporate governance principles.“

The Board of Directors appoints executive directors who represent the company and manage the Group’s affairs. The board of directors and executive directors as the highest management bodies make and approve decisions and adopt business plans and policies related to strategy and objectives related to operational business, including environmental, social and management topics.

In 2023, an organizational unit for ESG was formally established at the Group level, located in the Marketing and ESG business area, which reports directly to the company’s CEO. The main role of the ESG unit at the Group level is the establishment of a system for group consolidated sustainability reporting and the coordination of the strategic sustainability framework. Also, formal work positions for sustainability have been established in companies, so ESG in agriculture and food companies is primarily positioned in the departments responsible for quality, while in retail, given the nature of the business, the organizational structure of ESG is within the departments dealing with strategy or quality and business support. During 2024, additional work will be done on the sustainability policy and procedures for ESG processes, while the organizational structure will be further evaluated, both with regard to the positioning of ESG within the system and the number of necessary executors.

In 2023, the Committee for Sustainable Development continued its work, whose members are representatives of all companies in all markets. The Committee also includes representatives of support functions at the level of the Fortenova Group, and the overall coordination of the Committee’s work is led by ESG Group. For the needs of the board and companies in 2023, the focus was on education, so during the year four workshops were held on the subject of EU taxonomy and the same number of workshops related to the calculation of greenhouse gas emissions, two workshops on climate risks, one on diversity, fairness and inclusiveness, and one about packaging. The committee actively participated in the collection of data for the report, but also on climate risks, issues related to packaging and food waste, in support of working groups dealing with data analysis related to the company’s ESG goals.

Our approach

To commit to high standards of corporate governance we developed the Corporate Governance Code in 2019 based on relevant legislation and sound business practices. The Code prescribes in detail the principles we commit to, clearly defines the structure, roles and responsibilities of our Board of Directors, its members and committees, the decision-making process, the frequency of board meetings, the remuneration policy, and terms of reference for each committee.

In order to commit to high standards of corporate governance, 2019. In 2008, we created the Corporate Governance Code, which is based on the relevant legislation and sound business practice. The Code prescribes in detail the principles to which we have committed ourselves, clearly defines the structures, roles and responsibilities of the Board of Directors, its members and sub-committees, the decision-making process, the frequency of meetings of the Board of Directors, the remuneration policy and the job description of each of the sub-committees.

The Code of Ethics of Fortenova Group establishes a basic set of rules and principles regarding morals and professional ethics that are applied to the Group’s daily activities in order to establish and maintain corporate responsibility and organizational culture among all Group stakeholders.

The basic ethical principles that must be protected and respected according to the

Code of Ethics are:

Protection of dignity and respect for human rights
Freedom of work and prohibition of child labour and forced labour
Professional and personal development of employees
Environment, health and safety protection.

The Code applies to all persons, natural or legal, who are in any business relationship with Fortenova Group, including but not limited to employees of the Group, its subsidiaries, business partners, consultants, suppliers, clients, etc

During 2021, the development of its own business compliance policies began – general Business Compliance Policy, Bribery and Corruption Prevention Policy – Gifts and Rewards, Money Laundering Prevention Policy and Conflict of Interest Prevention Policy. During 2022, implementation activities were carried out with regard to the adopted policies and a new policy was adopted – the Policy for the Protection of Market Competition. During 2023, new group policies were adopted and implementation activities were carried out, namely the Diversity, Equity and Inclusion Policy and the Corporate Communications Policy.

All the most important business compliance policies have been adopted as group policies and must be adhered to by all companies within the Group.

The Compliance Policy establishes the main requirements with regard to the compliance framework across the Group as well as the minimum safeguards and standards that need to be applied.

The main principles of compliance are:

Integrity
Tone-at-the-top principle
Compliance is owned by the management
Compliance is the responsibility of each employee.

In 2021 we started to develop our compliance policies – the general Compliance Policy, the Anti-Bribery & Anti-Corruption Policy – Gifts & Gratuities, the Anti-Money Laundering Policy and the Prevention of Conflict of Interests Policy.

The Compliance Policy sets out basic requirements for the compliance framework across the Group and the minimum safeguards and standards that should be applied. The Policy defines our main compliance principles as shown below.

Fortenova Group has zero tolerance for corruption and other illegal activities. Corruption is considered an extremely serious violation of the Code of Ethics and may result in the termination of the relevant stakeholder’s relationship with the Fortenova Group. As already stated, in September 2021 we adopted the Policy for the Prevention of Corruption and Bribery – Gifts and Rewards, which complements the Code of Ethics by prescribing the threshold for gifts of high value, the appropriate way to act in cases of giving or receiving gifts, the prohibition of advantages as described below , and obligations to report such events and consequences in case of non-compliance. The policy also provides the Group and its employees with the tools and necessary support to identify and combat the risks of corruption and bribery in general. This Policy will be reviewed annually and updated in line with new best practice or as required by regulatory or market changes or changes in the Group’s strategy and organizational structure.

Our initiatives

In 2023, the procedure for the adoption of the Fortenova Group Supplier Code was initiated. The Code lays the foundation for conducting business operations in accordance with high standards of social responsibility, including environmental care, social issues and efficient management. This document, in compliance with the Code of Ethics, constitutes a transparent approach to procurement.

Creating the prerequisites for driving sustainable development through the supply chain

During the last materiality analysis carried out with consumers, the sustainable supply chain as been identified as an important topic for consumers. Given that Fortenova Group’s sustainability journey is only at its beginning, the focus within the procurement process is on creating clear expectations and a structure for supplier assessment.

In 2023, the procedure for the adoption of the Fortenova Group Supplier Code was initiated. The Code lays the foundation for conducting business operations in accordance with high standards of social responsibility, including environmental care, social issues and efficient management. This document, in compliance with the Code of Ethics, constitutes a transparent approach to procurement. The main objectives of the Code are to identify and promote corporate social responsibility and create a sustainable and profitable business that improves the overall value of the Group.

This is achieved by harmonising business operations with key principles such as business ethics, respect for fair working conditions and human rights, environmental protection, health at work, and product quality assurance. The Code will be publicly available and its adoption is expected in the first quarter of 2024.

By adopting the Diversity Charter, we have publicly accepted responsibility for supporting, developing and implementing diversity and equal opportunities in the workplace in all our operating companies and the business environment as a whole. As our CEO stated, signing the Diversity Charter is a logical extension of Fortenova Group’s commitment to sustainable development, given that both sustainability and diversity are fundamental values of Fortenova Group and an integral part of our corporate culture.

After the adoption of the Diversity Charter, the Diversity and Inclusion Policy was adopted at the beginning of 2023. The policy complements and defines in more detail the principles established by the Group’s Code of Ethics on the subject, and relies on three pillars – strengthening gender equality, inclusion – especially of people with disabilities, and employee well-being.

MAIN AREAS OF THE GROUP’S ACTIVITIES REGARDING HUMAN RIGHTS:

Protection of dignity and unconditional respect for human rights
Freedom of individuals to work and choose their job and prohibition of child labour or forced labour
Professional and personal development of employees
Protection of privacy
Zero tolerance for discrimination, harassment and mobbing, and accordingly strict prohibition of any discrimination, harassment and mobbing against any person
Diversity and inclusion
Health and safety for everyone

Governance

Our approach

Our initiatives

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