Corporate governance model
The governance model implemented in Portugal Telecom has proven to be appropriate to catalyse national and international corporate governance best practices and to contribute to the transparency and accountability of the Company and its management vis-à-vis its shareholders, investors and the market.
PT follows the Anglo-Saxon governance model, which is based on the existence of a Board of Directors, an Audit Committee composed of non-executive directors specifically appointed by the General Meeting of Shareholders and a Chartered Accountant (“ROC”) elected by the General Meeting of Shareholders upon proposal by the Audit Committee.
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Most CMVM Recommendations on the governance of listed companies published in January 2010 – available in www.cmvm.pt – are fully adopted by Portugal Telecom, and are reflected on its corporate governance model. The integrity, transparency and strictness of this model have been reinforced by the Company’s compliance with the binding rules and best practices applicable to foreign private issuers with securities listed on the New York Stock Exchange (“NYSE”).
PT’s governance includes an Executive Committee with powers delegated by the Board of Directors, which acts on a predominantly operational basis, while the Board of Directors is entrusted with the supervision of corporate activities, with the support of the Corporate Governance Committee and of the Evaluation Committee, each such internal committee acting within the scope of its specific powers delegated by the management body. This supervision task is further reinforced by the action of the non-executive independent members of the Board of Directors.
The Consultive Council, the Disclosure Committee and the Sustainability Committee are Executive Committee’s supporting structures, which together with several operational departments ensure an effective and transparent management of the Company.
The Audit Committee, together with the Chartered Accountant, perform the supervision functions set forth in the applicable laws and regulations. In particular, the Audit Committee is responsible for representing the Company in its relations with the external auditors and for monitoring PT’s internal control and risk management system. PT’s organization structure includes a Compensation Committee elected by the General Meeting of Shareholders, which is responsible for determining the remunerations of the members of corporate bodies.
The members of the corporate bodies and of the Board of the General Meeting of Shareholders are elected for a three-year term of office, and they may be re-elected once or more times within the limits of the law.