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Effective governance and demonstration of leadership
affects the way in which we manage the environmental,
social and economic concerns in creatingvalue for the key
stakeholders. Maintaining stability of the organization’s
governance structure is critical to ensure resilience
against disruptive changes in the internal and external
environment and thus to the value creation process.
Commitment
VIVACOM is committed to the highest standards of
ethical behaviour from our directors, management and
employees. In line with this commitment, we continue
to enhance and align policies, systems and processes to
embed sound corporate governance principles and ethical
standards. Guided by these principles and standards,
directors and management are required to exercise
rigorous ethical judgement in leading the business and
acting in the best interests of key stakeholders.
VIVACOM’s primary objective is the creation of value for
all its stakeholders through the provision of innovative
customer and market focused solutions. In pursuing this
objective, we have committed to the highest standards of
governance and we strive to embed a culture that values
and rewards exemplary ethical standards, personal and
corporate integrity, as well as respect for others.
We believe that corporate governance is an ethically
driven business process that is committed to values aimed
at enhancinganorganization’swealthgenerating capacity.
This is ensured by taking ethical business decisions and
conducting business with commitment to values, while
meeting stakeholders’ expectations.
Approach
Our approach to governance is based on the belief that
there is a link between high quality governance and
the creation of sustainable value for all stakeholders. It
is our view that governance is not just a matter for the
Managing Board – a good governance culture must be
fostered throughout the organisation.
The current economic environment underscores the
need for adopting the highest standards of corporate
governance. This is also clearly a timewhere engagement
with stakeholders is more important than ever. Key
part of our approach to governance is ensuring that
stakeholders’ views are heard and understood. The
Managing Board governs the Company in accordance
with its commitment to a transparent and high quality
governance system.
Our corporate governance framework ensures that we
make timely disclosures and share accurate information
regarding our financials and performance, as well as the
leadership and governance of the Company. At VIVACOM,
it is imperative that our Company affairs are managed in
a fair and transparent manner. This is vital to gain and
retain the trust of our stakeholders and helps us evolve
with changing times.
Bodies
As per the statutes of the Company, our top-line
governance system is based on two corporate bodies:
Managing Board, in charge of the strategic management
of the Company, and Supervisory Board, responsible
for supervision and control. This traditional two-tier
management system allows for the clear exchange
of views between management and shareholders on
fundamental elements of governance.
Supervisory Board
The Members of the Supervisory Board are elected by
the sole owner of the Company for a five-year term and
can be re-elected without limitations. The Supervisory
Board supervises the policy pursued by the Managing
Board, the Managing Board’s performance of its
managerial duties and the Company’s general course of
affairs, taking account the interests of all the Company’s
stakeholders. The Supervisory Board can approve
business transactions reported by the Managing Board
as per the statutes of the Company and the existing
legislation, as well as to assist the Managing Board by
providing advices. In 2018 the Supervisory Board held 10
meetings in total.
Managing Board
The Managing Board manages the business of the
Company. Its members are elected by the Supervisory
Board for five-year terms and can be re-elected without
limitations. Managing Board is responsible for the
Company’s strategy, portfolio policy, deployment of
human and capital resources, risk management system
and financial performance. The Managing Board is also
entitled to appoint the Chief Financial Officer and Chief
3.1.
Governance
Accountant, selects the type of accounting policies,
approves staff support programs, prepares and presents
to the Supervisory Board the annual financial report, as
well as proposing a profit distribution scheme, taking
decisions on the management of strategic assets, etc.
Following a Supervisory Board approval, the Managing
Board takes decisions on strategic and operating plans,
the annual budgets and business plans of the Company.
The Managing Board reports to the Supervisory Board
and to the Sole owner. During the year the Managing
Board held 80 meetings in total.
Remuneration
Our remuneration philosophy is interlinked to our
approach, aiming to support current and evolving
business priorities. The philosophy includes our desire
to attract, motivate and retain talent and to execute
business strategy in a sustainable manner over the long-
term.
We aim to promote an action-oriented culture focussed
at delivering results, and our remuneration programs
therefore includes variable pay and long-term value
creation. The Managing Board members are entitled to
an annual bonus remuneration at the amount of 50%
of the paid for the previous calendar year annual gross
remuneration, if the Company meets the projected
and agreed annual performance goals. If the Company
exceeds these goals, members of the Managing Board
will be paid a total bonus of up to a maximum of 100%
of the paid for the previous calendar year annual gross
remuneration. In our opinion, this relationship and
ratio between base salary and performance-related
incentives adequately reflects the balance between
the Company’s objectives and its entrepreneurial
spirit. Moreover, we are confident that the level and
structure of Managing Board remuneration is in line with
management development goals and pay differentials
within the Company. This enables us to attract, motivate
and retain senior management of the necessary calibre
and leadership background.
Furthermore, members of the Supervisory and
Managing boards are obliged to deposit guarantees
for their governance duties. The exact amount of the
guarantees is determined by a resolution of the sole
owner but cannot be less than the contracted quarterly
gross remuneration per member. The guarantees for the
relevant periods are released following a resolution of
the sole owner for discharge of liability which could be
performed only on the basis of an audited annual report
for the financial year.
Remuneration amounting to BGN 3,772 thousand
relating to the members of the Managing Board and to
key management personnel has been accrued for the
year ended December 31, 2018.
3. GOVERNANCE AND
COMPLIANCE
10
80
57
46
ANNUALREPORT
2018
INTEGRATED
Meetings of the
Supervisory Board
Meetings of the Managing
Board
Average age of Supervisory
Board members
Average age of Managing
Board members
40
41