Regulations governing conflicts of interest and related-party transactions

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Regulations governing conflicts of interest and related-party transactions

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Human
Intellectual

GRI:

2-15
Conflicts of interests

2-15
Conflicts of interests

Conflict of Interest

ORLEN and the ORLEN Group have internal regulations in place for managing conflicts of interest, as well as procedures for dealing with material transactions involving related parties.

The Conflict of Interest Management Policy at the ORLEN Group defines and implements systemic solutions and actions to prevent, minimize, and eliminate the occurrence of fraud and to detect it when it occurs. This policy defines conflicts of interest and outlines the actions that must be taken to ensure transparency in business processes where a conflict of interest could arise.

The Rules of Procedure for the Management Board and the Rules of Procedure for the Supervisory Board of ORLEN, as well as the Executive Compensation Policy adopted by the General Meeting on June 5th 2020 in accordance with the Act of July 29th 2005 on public offering, conditions governing the introduction of financial instruments to organised trading, and public companies contain provisions on the management of conflicts of interest, consistent with the matters addressed in the Policy.

According to the Rules of Procedure for the Management Board, the Management Board members are required to notify the Supervisory Board of any actual or potential conflict of interest which has arisen or may arise in connection with the positions held by them. Should the Company’s interest be in conflict with the personal interests of a Management Board member, the Management Board member should abstain from deciding on such matter and request that a relevant note be made in the minutes of the meeting. In the case of doubt as to whether a conflict of interest exists, the matter is resolved by the Management Board by way of a resolution. According to the Rules of Procedure for the Management Board, a conflict of interest is understood as a circumstance in which a decision made by a member of the Management Board may be influenced by a personal interest of the Management Board member or his/her close person, i.e. their spouse, children, persons related to them through blood or marriage in the first or second degree, or any persons to whom the member is personally related.

According to the Rules of Procedure for the ORLEN Supervisory Board, if a conflict of interest arises or may arise, a Supervisory Board member should inform other members, abstain from participating in discussions on the matter, abstain from voting on relevant resolutions, and request that the fact be recorded in the minutes. No breach of the provisions of the preceding sentence may render the Supervisory Board’s resolution invalid. In the case of doubt as to whether a conflict of interest exists, the matter is resolved by the Supervisory Board by way of a resolution.

The Executive Compensation Policy follows the division of powers outlined in Art. 378 and Art. 392 of the Commercial Companies Code to prevent conflicts of interest in determining the amount and rules of remuneration governed by the Policy. The Supervisory Board’s monitoring, analysis and supervision of the remuneration system and payment of additional benefits to Management Board members in accordance with the Company's Articles of Association and the Rules of Procedure for the Supervisory Board also serve the above purpose.

If a Management or Supervisory Board member identifies a potential conflict of interest related to matters governed by the Executive Compensation Policy, they must report it to the Chair of the Supervisory Board.

ORLEN has also established a procedure setting out the principles and processes governing material transactions between ORLEN and related parties within the ORLEN Group. It outlines the necessary steps to determine the status of transactions, the internal circulation of information about them, and the disclosure obligations associated with such transactions.

Furthermore, in accordance with the Company's Articles of Association, a resolution of the Supervisory Board concerning:

any performance to be rendered or benefits to be granted by the Company or any of its related entities to members of the Management Board,
approval of material transactions (as defined in the Articles of Association) executed by the Company with its related parties, taking into account the exemptions and detailed arrangements provided for in Section 4b of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, and of agreements concluded by the Company or its subsidiary with a Management Board member or Supervisory Board member, save for agreements commonly concluded in petty current matters of everyday life, requires consent of at least half of the independent members of the Supervisory Board. The foregoing provisions do not exclude the application of Art. 15.1 and Art. 15.2 of the Commercial Companies Code.

In addition, the Supervisory Board:

approves material transactions with related entities within the meaning of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies,
performs periodic reviews of material arm’s-length transactions entered into in the ordinary course of business of ORLEN in accordance with the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies,
where a transaction to be entered into by the Company with a related party within the meaning of the Company’s Articles of Association requires the Supervisory Board’s approval, the Supervisory Board assesses the need for prior consultation with a third party which will perform a valuation of the transaction and an analysis of its economic impact,
where entering into a transaction with a related party within the meaning of the Company’s Articles of Association by the Company requires approval from the General Meeting, the Supervisory Board draws up an opinion on the appropriateness of the transaction and assesses the need for prior consultation with a third party which will perform a valuation of the transaction and an analysis of its economic impact.

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ORLEN Group 2022 Integrated Report

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Regulations governing conflicts of interest and related-party transactions

ORLEN and the ORLEN Group have internal regulations in place for managing conflicts of interest, as well as procedures for dealing with material transactions involving related parties.

Read also:

Key policies and internal acts

Counteracting corruption and bribery

Short-cuts:

ORLEN Group 2022 Integrated Report