CORPORATE
GOVERNANCE
The CAP Group considers corporate governance good practices as a permanent source of value creation and a condition to build long-lasting trust with its stakeholders.
CAP Group is an open stock company. 31.3% of it is owned by Invercap; 19.3% by the Japanese Mitsubishi consortium; and 49.4% by other minor investors. Its shares are traded in the Santiago Stock Exchange and, in 2017, it joined the Dow Jones Sustainability Index Chile.
The Board of Directors is the highest governance authority. This body, chaired by a President who holds a non-executive position, is integrated by seven Directors who serve terms of three years and can be reelected indefinitely. All CAP Group Directors are male members; 75% of them are over 50 years while 25% are between 30 and 50 years.
The company’s strategic steering, approval of corporate policies, the monitoring of value creation processes and efficient use of resources are among the main responsibilities entrusted to the Board. Likewise, it oversees the company’s general performance as well as its economic, social and environmental risks.
CAP Board| CAP S.A. | CAP Minería* | CAP Acero | Cintac | Tasa | Aguas CAP | |
|---|---|---|---|---|---|---|
| Board composition by gender | ||||||
| Female Directors | 0 | 1 | 0 | 0 | 2 | 0 |
| Male Directors | 6 | 12 | 5 | 7 | 5 | 5 |
| Age group | ||||||
| Under 30 years | 0 | 0 | 0 | 0 | 0 | 0 |
| Between 30 and 50 years | 1 | 7 | 0 | 1 | 0 | 2 |
| Over 50 years | 5 | 6 | 5 | 6 | 7 | 3 |
| *CAP Minería is the only company that reports incumbent and deputy Directors. | ||||||
Committees and areas assisting the Board
Directors Committee: This group is presided over by an independent Director. It safeguards the transparency of transactions, financial statements and internal and external audits.
Ethics Committee: Created in 2013, it is integrated by three Directors responsible for solving ethics-related conflicts and complaints reported to the company.
Internal Control Management: This committee ensures that internal processes, transparency and the accuracy of internal and external information are complied with.
Risk Management Committee: Created in 2017 with the purpose of defining a model and the policies that will rule the management of risks and/or events that might potentially prevent or compromise the fulfillment of CAP Group mission, vision, values or strategic objectives.
Strategy Committee: Formed in 2017 with the object of identifying and analyzing, together with the company’s administration, the business environment where the CAP Group companies do business and, on its basis, set up its strategic goals and monitoring processes.
Sustainability training for the Board
In 2017, the Board members received training sessions based on researches on the impact caused by sustainability/ESG in the world and the Chilean situation in corporate governance issues.
The program was focused on 3 main objectives:
Macro level: Build awareness on the importance ESG has been gaining in the world through researches and studies, media coverage, volumes and trends.
Market level: Include worldwide-used tools for ESG measurement and management purposes. ESG COMPASS was introduced as a solution to internally manage the alignment of stakeholders and the key variables it considers.
Firm level: The dimensions capable of impacting sustainability were identified while practical methods to manage such dimensions were introduced. The exercise was illustrated with a case from an international firm.
At CAP Group, the Board id the body responsible for setting up the corporate priorities, strategies and policies in sustainability-related matters. To that effect, its members are provided permanent training and discuss information regarding company performance in dimensions such as ethical management, labor safety, inclusion & diversity, internal development, environmental impact management and community relationships.
The General Management, together with the leadership teams from each Group company, are responsible for the execution, follow-up and evaluation of these guidelines. Additionally, these business units are accountable for the definition of their specific objectives in sustainability matters and the plans to guarantee their fulfillment, all of which must be periodically briefed to the corresponding committees.
People and sustainability committee
CAP Group’s Corporate People and Sustainability Management, replicated in each affiliate, and the People and Sustainability Committee are in charge of carrying out all corporate work regarding these areas.
This committee was created as a formal entity with the purpose of discussing guidelines on responsible management. This group must ensure that progress is made on CAP-defined priorities in its Strategic Sustainability Pillars. To this end, it defines governance structures for different programs and matters championed by the organization, leads the supporting technological systems to ensure commitments are controlled and complied with and it manages the indicators on whose basis initiatives and projects are evaluated. In all these areas, the committee draws on risk maps and policies regarding the sustainability and relationships with the stakeholders defined by the Group Board.
Communities of practice (COPS)
Groups created by CAP where people can share good practices between Group companies and co-create sustainable strategies. At corporate level, there is a total of nine COPs integrated by 95 professionals, approximately. These teams maintain a collaborative relationship through the SAP-hosted JAM platform.
CAP Group works with different control tools and systems in order to measure its sustainability program progress status, monitor compliance of the goals set up in each management area and assess the perception and impact these practices have on the environment and stakeholders. The following are some of these instruments:
- Quarterly sustainability reports:
In order to keep a systematic account of the execution level reached by its sustainability strategy, the company submits a quarterly report explaining the evolution of 23 management indicators. These KPI reflect the pace and most relevant action lines contained in CAP’s responsible management model. Some of these indicators are:
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Management system:
In order to systematize their management work in key operational areas, in recent years CAP Group affiliates have incorporated internationally recognized management and certification systems. Some of them are ISO 9001 (quality), ISO 14001 (environment), ISO 500001 (energy management) and OHSAS 18001 (occupational health and safety) standards. These standards guarantee compliance levels beyond the legal requirements and support some of the most relevant commitments contained in the sustainability strategy.
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Perception of sustainability management:
Since 2016 CAP Group has been conducting the ESG Compass survey among its collaborators. In 2017, customers, community representatives, suppliers and investors were incorporated to this measurement tool with the purpose of generating a broader-scope assessment to accurately identify the improvements required by its management activity and design the corresponding action plans. Below are the general conclusions drawn from this process conducted by the end of the year:
WORKERS
3,132 participants
85% response rate
Conclusions: 62% of CAP Group collaborators “agrees” or “strongly agrees” with the general management of ESG matters. This ranks the company in a mid-high performance level. The exception is Tubos Argentinos with 32%.
CUSTOMERS
92 participants
48% response rate
Conclusions: 66% of Cintac customers has a favorable perception of CAP work in social, environmental and corporate governance issues. As for CAP Acero customers, this perception jumps to 82% and places the company in a very high level.
SUPPLIERS
257 suppliers
74% response rate
Conclusions: The favorable assessment of CAP ESG management reached 87% among CAP Minería suppliers and 86% among CAP Acero and Cintac suppliers. In general, the largest gaps were identified in environmental culture, payments and operations.
COMMUNITIES
247 participants
100% response rate
Conclusions: 53% of respondents coming from CAP Minería sphere of influence delivered a favorable assessment of CAP ESG management. This results decreases to 44% among people from the communities located around CAP Acero.