Governance structure

The company’s Management Board consists of no more than seven members, including the President, Vice Presidents and other Members. The number of Management Board members is defined by the governing body competent to appoint the Management Board. Members of the Management Board are appointed for a joint three-year term of office. The Management Board manages the company’s affairs and represents the company in all court and non-judicial activities.
Any matters outside the ordinary course of the company’s business require a resolution of the Management Board.

One of the Management Board members appointed by the Supervisory Board is elected by the company’s employees as long as the average annual head count at Grupa Azoty S.A. exceeds 500 employees.

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The Supervisory Board consists of five to nine members appointed by the General Meeting, subject to the provisions of the company’s Articles of Association stipulating that:

• the State Treasury of Poland, as a shareholder, has an individual right to appoint and remove one member of the Supervisory Board, 
• the Supervisory Board includes members elected by the company’s employees. 

Members of the Supervisory Board are appointed for a joint three-year term of office. At least two of them are independent members, meeting all the relevant independence criteria. In 2022, the independent members were: Monika Fill, Marcin Mauer, and Michał Maziarka. The met the independence criteria set out in the Act on Statutory Auditors, Audit Firms and Public Oversight, and had no actual and material relations with any shareholder holding 5% or more of total voting rights in the company. 

The Chair of the Supervisory Board is appointed by the General Meeting. The Deputy Chair and the Secretary are elected by the Supervisory Board, at its first meeting, from among that body’s members. Key powers and responsibilities of the Supervisory Board include:

• appointing, suspending and removing from office members of the Management Board,
• assessing the Management Board’s proposals on distribution of profit or coverage of loss, 
• assessing the Directors’ Report on the operations of Grupa Azoty S.A. and the Grupa Azoty Group, as well as of separate financial statements of the company and the consolidated financial statements of the Group for their consistency with accounting records, supporting documents and relevant facts,
• appointing an audit firm to review and audit the financial statements of the company and the consolidated financial statements of the Group,
• approving the company’s long-term strategic plans,
• granting consent for the Management Board to execute material legal transactions,
• approving annual budgets including capital expenditure budgets,
• issuing opinions on all matters submitted by the Management Board for consideration to the General Meeting, 
• delegating Supervisory Board members to temporarily replace Management Board members who are unable to perform their duties. 

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In 2022, the following committees operated as consultative and advisory bodies within the Supervisory Board: 

• Audit Committee, 
• Strategy and Development Committee, 
• Corporate Governance Committee. 

The Audit Committee’s main tasks are those prescribed for that body in the Act on Statutory Auditors, Audit Firms and Public Oversight, the company’s Articles of Association and resolutions of the Supervisory Board. The Audit Committee has the right to demand that the Management Board supply any information, materials and explanations required for the performance of its tasks.

The role of the Strategy and Development Committee is to provide opinions and recommendations to the Supervisory Board regarding the company’s strategic plans, capital projects, long-term strategies, capital project implementation reports, strategy operationalisation and capital expenditures. In addition, it monitors changes in the Group’s industry relations and projects covered by the Group’s strategic agreements.

The remit of the Corporate Governance Committee is to support the Supervisory Board in matters related to corporate governance, encompassing principles and standards for the effective management and achievement of strategic objectives. This involves providing opinions and recommendations to the Supervisory Board on legal and regulatory matters concerning the company’s operations, as well as nominations and remuneration for members of the Management Board and Supervisory Board. 

For further details on the powers and activities of the Supervisory Board, the Management Board, and the biographies of their members, refer to the Directors’ Report on the operations Grupa Azoty.

ESG management

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he vision, values, strategies, policies, and objectives related to sustainable development at our Group are collaboratively developed with the involvement of the Management Board which, together with the Supervisory Board, approves their final shape. Oversight of the sustainability management process is the responsibility of a designated member of the Management Board whose remit includes ESG aspects. Given that the pursuit of sustainable development spans all areas of the Group’s activities, representatives from various departments and organisational levels are also actively engaged. In 2023, a Corporate ESG Department was established and its Head was appointed.

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The Group’s governing bodies continuously enhance their ESG expertise through regular meetings with experts and employees responsible for sustainable development. In 2022, the Corporate Communication and Marketing Department informed the Management Board and the Supervisory Board about the new ESG reporting procedures and the company’s preparations for the upcoming changes.

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All members of the Management Board are obligated to meet the management objectives, contributing to the delivery of the Grupa Azoty Group Strategy for 2021-2030 (including its ESG strategy) to ensure the long-term interests, development, and stability of the company. The Supervisory Board is responsible for overseeing the activity of the Management Board. In 2022, the Supervisory Board held 11 meetings.

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Executive-level responsibility for economic, environmental, and social topics. Primary responsibility for these topics is vested in the Management Board. Relevant responsibilities at the key Group companies have been divided as follows:

Grupa Azoty S.A.:

• economic matters: Head of the Corporate Finance Department and Head of the Corporate Controlling Department, 
• social matters: Head of the Corporate Organisation and Human Resources Department and Head of the Corporate Communication and Marketing Department,
• environmental matters: Head of the Corporate Technology and Energy Department. 

Grupa Azoty Kędzierzyn: 

• economic matters: Head of the Finance Department, Head of the Controlling Department,
• social matters: Head of the Management and Human Resources Department,
• environmental matters: Head of the Safety Department. 

Grupa Azoty Puławy:

• economic matters: Head of the Finance Division/Chief Controller,
• environmental matters: Head of the Support Division, 
• social matters: Head of the Human Resources Division/ Head of the Corporate Division.

Grupa Azoty Police:

• economic matters: Head of the Finance Department and Head of the Controlling Department,
• environmental matters: Head of the Plant Safety Department and the Project Manager for GHG Emissions, Technological and Environmental Analysis,
• social matters: Head of the Human Resources and Management Department.

The holders of these positions at the respective companies report to the Management Board with the frequency reflecting internal and external needs. 

Remuneration policies

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Grupa Azoty S.A.’s senior managers, including senior officers and the holders of key managerial positions, receive remuneration based on the provisions of the collective bargaining agreement or the Rules for Remunerating Management Personnel. Management personnel hold employment contracts, but are excluded from the collective bargaining agreement, having their remuneration and bonuses specified in the Rules for Remunerating Management Personnel and in their individual contracts. Remuneration of other senior managers is determined based on the provisions of the collective bargaining agreement.

The remuneration of senior managers comprises a fixed monthly amount, as specified in the contract, and an annual bonus capped at three times the fixed amount. The bonus is contingent on the performance against individual objectives set out in the MBO sheets, and evaluation of the manager’s overall performance performed by the Management Board. The rules for remunerating other managers (encompassing fixed and variable components) are set out in the collective bargaining agreement.

We have also implemented the Remuneration Policy for Members of the Management Board and Supervisory Board, approved by the General Meeting in 2020, which defines the rules and conditions for remunerating members of these corporate bodies, ensuring delivery of the company’s business strategy, securing its long-term interests, stability, development, and value growth. According to the Policy, total remuneration received by a member of the Management Board comprises a fixed monthly amount and a variable amount, representing additional remuneration for the company's financial year. Fixed remuneration payable to individual members of the Management Board ranges from seven to fifteen times the average monthly remuneration in the enterprise sector (net of bonuses paid from profit) in the fourth quarter of the preceding year, as announced by the President of Statistics Poland (GUS). Variable remuneration for a financial year depends on each member’s performance against individually assigned management objectives and may not exceed 100% of the total fixed remuneration received for the financial year for which the variable remuneration is calculated. Members of the Management Board are entitled to severance pay upon meeting relevant conditions for contract termination specified in the Remuneration Policy. The Policy does not provide for additional pension schemes or repayment of remuneration. 

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The remuneration policy for all employees of the Grupa Azoty Group is based on arrangements agreed with the trade unions. Annually, by the end of February, parties to the collective bargaining agreement (including members of the Management Board and employee representatives) negotiate and conclude pay agreements, determining the average pay growth rate and rules of the incentive scheme. If no agreement is reached by the end of March, the average pay growth rate is set unilaterally by the Group. External consultants or other stakeholders are not involved in the remuneration process. In 2022, the annual total compensation ratio at the¹ four main Group companies was 4.62, having changed² by 0.52.

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Annual total compensation ratio³