Annual Report - EDP

: corporate governance :EDP has no remuneration schemes involvingprofit sharing or bonuses.k) Compensation owed to former executivedirectors for cessation of employment duringthe periodThere are no agreements between the company andthe members of the management or supervisorybody providing for compensation in the event ofresignation or dismissal of a director or in the eventof resignation of a worker, dismissal without duecause or cessation of employment due to a takeoverbid. No compensation was paid or is owing toformer directors for cessation of employment.l) Reference to the contractual limitation oncompensation payable for dismissal withoutdue cause of a director and its associationwith the variable component of remunerationNot applicable.m) Amounts of any kind paid by other subsidiaryor group companiesSee Chapters II.28 and II.31.n) Description of the main characteristics ofsupplementary pension or early retirementschemes for directors and an indication ofwhether they were appreciated by the GeneralMeeting of ShareholdersEDP has no specific retirement benefit schemesfor its directors. The remuneration fixed by theRemuneration Committee of the General andSupervisory Board provides for a retirementsavings-plan-typefinancial product for themembers of the Executive Board of Directors,who contribute 10% (ten percent) of their fixedannual remuneration. This product does notinvolve any cost to EDP in the future in that itis merely the subscription of a financial productwhile the members of the management bodyremain in office and does not fall under Article402 (1) of the Company Code.o) Estimated value of relevant non-monetarybenefits considered to be remuneration notcovered by the previous situationsNot applicable.p) Mechanisms that prevent the executive directorsfrom signing contracts that jeopardise thejustification of their variable remunerationNone of the members of the management bodyhas signed any contract with the companyor third parties to mitigate the risk of variationsin remuneration.II.35. Whistle-blowingpolicyThe EDP Group’s activity has always beenoriented by constant measures to ensure goodgovernance of its companies including theprevention of wrongful practices, especiallyin the areas of accounting and finance.EDP provides Group employees with a channelenabling them to report directly and confidentiallyto the Committee on Financial Matters/AuditCommittee of the General and Supervisory Boardany alleged illicit practice or accounting and/orfinancial irregularity in their company, in compliancewith the provisions of CMVM Regulation 1/2010.EDP’s aim in setting up this channel for reportingirregular accounting and financial practices is:º º Guaranteeing conditions that allow employeesto freely report any concerns they may havein these areas to the Committee on FinancialMatters/Audit Committeeº º Facilitating the early detection of irregularsituations which, if they occurred, mightcause serious damage to the EDP Group,its employees, customers and shareholdersEDP - Annual Report 2012The Financial Matters Committee on/AuditCommittee can be contacted by e-mail, fax andpost mail, and access to the information receivedin this context is restricted. Only the membersof the committee are authorised to receive thesecommunications.All complaints or reports to the Financial MattersCommittee/Audit Committee are treated withthe strictest confidentiality. The whistle-blowerremains anonymous provided that this doesnot prevent investigation of the complaint.In accordance with its regulations, EDPguarantees that no employees will be the targetof any retaliatory or disciplinary action asa result of exercising their right to reportirregular situations, provide information or assistin an investigation.On 27 October 2011 the General and SupervisoryBoard approved new regulations, which wereregistered with the Portuguese Data ProtectionAuthority. The application as approved on6 July 2012.On January 2013, the Financial MattersCommittee/Audit Committee informed the Generaland Supervisory Board on its work on thewhistle-blowing mechanism in 2012.It concluded that the eighteen reports receivedhad no impact on accounting, finance, internalcontrol or audit matters and the Financial MattersCommittee/Audit Committee closed them afteranalysing the responses received from theappropriate departments at EDP.SECTION V – SPECIALISEDCOMMITTEESII.36. Performanceassessment committeesand governance modelWhere assessment of EDP’s corporategovernance model is concerned, the ExecutiveBoard of Directors considers from experiencethat the current governance organisation at EDPenables it to pursue the company’s managementgoals without jeopardising the necessary divisionof duties between the management and thesupervisory body. The use of this model hasenabled the supervisory body to permanentlymonitor the EDP Group’s activity. It is operationallydemanding but has appropriate communicationand information mechanisms so that each bodycan perform its duties without interferenceor constraints.Given its competences in this regard, the Generaland Supervisory Board’s Annual Report set outits main conclusions on the governance model ineffect at EDP. They can be summarised as follows:º º Assures that distribution between differentcorporate bodies - management, monitorand audit accounts - is healthy;º º It is gifted with a high level of flexibility, whichstrengthen that synergies resulting from thereferred distribution are maximized;º º It is appropriate to EDP’s corporateorganizational context, guarantying stabilitybetween the necessary extent of managementpowers and the effectiveness of supervisionand monitoring of the Company’s activity;º º It demonstrates the existence of a functionalrelation between General and SupervisoryBoard and Executive Board of Directors witha balance clearly positive, regarding itemstreated as well as the way the same areconducted; nevertheless, aspiration ofa continuous improvement is always present;º º Promotes high levels of governance practice133