Annual Report - EDP

: corporate governance :The website of the company (www.edp.pt)provides shareholders and the general publicwith the updated Articles of Association as wellas the Rules of Procedure of the Executive Boardof Directors, the General and Supervisory Boardand its respective committees, to promotea better understanding of how EDP works interms of corporate governance.Moreover, the General and Supervisory Boardand Executive Board of Directors have approvedthe Corporate Governance Manual which is alsoavailable to shareholders and the general publicon the EDP website (www.edp.pt).The primary objective of this manual is to recordand share the understanding of the two corporatebodies relative to the recommendations of goodcorporate governance practices applying to EDP,as well as the guidelines considered appropriateto comply with such.EDP sought to go beyond the legal requirementsand regulations of this area, particularlyconcerning information reporting, given theexigency and ambition of EDP as regards thequality of its corporate governance practices.Thus, the drawing up of the CorporateGovernance Manual sought to meet the followingpurposes in order to achieve the referredto fundamental goal:º º Reflect critically on the recommended bestpractices set out in the CMVM CorporateGovernance Code in order to make an activecontribution to enhancing EDP’s practicesº º Select the recommendations deemed mostappropriate to EDP’s governance model,with special focus on the measures takenand indicating potential measures to beimplemented for full adoption of good practicesº º Identify the recommendations that are not deemedappropriate for EDP’s interests, giving reasonsfor this position and indicating other practicesthat allow the same goals indicated in the CMVMCorporate Governance Code recommendationsto be achieved in a different wayº º Support those to which the recommendationsare addressed to reflect on the best governancepractices to be followed in EDPº º Draft a formal document that will helpcompliance with reporting obligations oncorporate governance practices, such asdrawing up the annual report required by lawº º Describe EDP’s governance practices that arenot set out in the Corporate Governance Codebut achieve the goal shared by the General andSupervisory Board and the Executive Boardof Directors to develop and broaden the qualityof EDP’s governance processes.Powers of the Generaland Supervisory BoardThe powers of the General and SupervisoryBoard, pursuant to Article 22 of the Articlesof Association, are as follows:º º Permanently monitor the management activityof EDP and its subsidiaries and providemanagement advice and assistance to theExecutive Board of Directors, particularlywith regard to strategy, achieving goals andcompliance with the lawº º Issue opinions on the annual report and accountsº º Oversee, on a permanent basis, the work of theStatutory Auditor and the External Auditor of thecompany and, with regard to the former, issue anopinion on its respective election or appointment,removal from office, conditions of independenceand other relations with the company104º º Permanently monitor and assess the internalprocedures for accounting and auditingmatters, as well as the efficacy of the riskmanagement system, the internal controlsystem and the internal auditing system,including the way in which complaints andqueries are received and processed, whetheroriginating from employees or notº º Propose to the General Meeting the removalfrom office of any member of the ExecutiveBoard of Directorsº º Monitor the definition of criteria and necessarypowers in the internal structures and bodies ofthe company or the group, or those for whichsuch is appropriate, and their impact on therespective composition, as well as drawingup succession plansº º Provide for, in accordance with the law, thereplacement of members of the ExecutiveBoard of Directors in the event of absenceor temporary incapacityº º Issue, on its own initiative or when requestedby the Chairman of the Executive Boardof Directors, an opinion on the annual voteof confidence in the directors referred to inArticle 455 of the Portuguese Companies Codeº º Monitor and assesses matters pertaining tocorporate governance, sustainability, internalcodes of ethics and conduct and compliance withthose codes, assessment systems and solvingconflicts of interest, including those concerningthe company’s relations with shareholders, andissue opinions on these mattersº º Obtain the resources, financial or otherwise,which are reasonably considered necessary forits work and request that the Executive Boardof Directors adopt the measures or correctionsit deems appropriate, being authorised tocontract the necessary resources to obtainindependent advice, if necessaryº º Receive regular information from theExecutive Board of Directors on significantcommercial relations between the company orsubsidiaries and shareholders with a qualifyingshareholding and related personsº º Appoint the Remuneration Committee andCommittee on Financial Matters/AuditCommitteeº º Represent the company in its relations with directorsº º Supervise the work of the Executive Boardof Directorsº º Oversee compliance with the law and Articlesof Associationº º Select and replace the company’s externalauditor, giving the Executive Board of Directorsinstructions to hire and dismiss the external auditorº º Monitor, when and how it deems appropriate,the bookkeeping, accounting records andsupporting documents, as well as the statusof any assets or securities held by the companyin any capacityº º Supervise the process of preparing anddisclosing financial informationº º Convene the General Meeting when it deemsappropriateº º Approve internal rugulations, including ruleson relations with the other structures andcorporate bodiesº º Exercise any other powers that may beconferred by law, the Articles of Associationor by the General Meeting.Under the corporate governance model in placein EDP, the General and Supervisory Board isalso assigned a power of particular importance.In effect, although it has no management powers,pursuant to Article 442 (1) of the PortugueseA World Full Of Energy