Governance principles – corporate governance and organizational culture

PSE is a single-shareholder company owned by the State Treasury, operating as a joint stock company with its registered office in Konstancin-Jeziorna at 165 Warszawska Street. The company has been operating as an independent electricity transmission system operator for 17 years.

The sole shareholder of PSE is the State Treasury, whose powers are exercised by the Government Plenipotentiary for Strategic Energy Infrastructure with the Ministry of Funds and Regional Policy. In the case of both subsidiaries of the PSE Capital Group, i.e. PSE Inwestycje and PSE Innowacje, the function of the general meeting of shareholders is performed by the Management Board of PSE with the assistance of appointed proxies.

On the corporate front, the company's operations are overseen by a Supervisory Board whose members are appointed by the General Meeting of Shareholders. The term of office of the Supervisory Board members is 3 years. The company's Supervisory Board is composed of seven persons.

The Supervisory Board acts pursuant to the Commercial Companies Code and other laws, the Company's Articles of Association, resolutions of the General Meeting and the Rules of the Supervisory Board.

The composition of the Supervisory Board as at the Date of report is as follows:

The Committee was appointed by the Supervisory Board. It consists of at least 3 members appointed for the term of office of the Supervisory Board from among its members.

The Audit Committee supports the Supervisory Board in particular in supervising:

• implementation and control of financial reporting processes in the company and the capital group,
• functioning of internal control systems in the company,
• operation of risk identification and management systems,
• independence of internal and external auditors,
• the company's relations with the related entities within the meaning of the Accounting Act of September 29, 1994.

The composition of the Management Board as at the Date of report is as follows:

1. Eryk Kłossowski – President of the Management Board
2. Jarosław Brysiewicz – Vice President of the Management Board
3. Tomasz Sikorski – Vice President of the Management Board
4. Jakub Kozera – Vice President of the Management Board
5. Włodzimierz Mucha – Vice President of the Management Board

The Management Board of PSE manages the affairs of the company and represents it in any proceedings before the court as well as in any out-of-court proceedings. Members of the Management Board are appointed by the General Meeting or the Supervisory Board for a three-year term of office.

The Management Board acts pursuant to the Commercial Companies Code and other laws, the Company's Articles of Association, resolutions of the General Meeting, and the Rules of the Management Board adopted by the Management Board and approved by the Supervisory Board.

Regular supervision and coordination of activities in areas of particular importance to the company are carried out by Committees established by the Management Board. Committees, as opinion-giving, advisory and decision-making bodies, support the Management Board in designated areas under strictly defined (by the Management Board) powers and responsibilities. Environmental issues fall under the purview of several Committees, as they concern many different aspects of the company's operations. There is a clear environmental impact, for example in the work of the Investment Committee and the Standards Committee.

The Committees are composed of the President and Vice Presidents of the PSE Management Board responsible for the respective areas and managing the units, as well as experts in a given field:

• GRI 103-2 Investment Committee – the area related to management of the investment process in the PSE Capital Group, and taking key decisions concerning PSE projects assigned to the programs implemented as part of the Committee. The Committee is chaired by the President of the Company's Management Board;
• Standards Committee – the area related to typification of technical solutions used in electric power transmission and distribution systems. The Committee is chaired by the Vice President of the Management Board overseeing the unit responsible for defining the aforementioned standards;
• Security Committee – the area related to maintaining and enhancing physical security at the PSE Capital Group. The Committee is chaired by the President of the Management Board;
• Data Governance Committee – data governance area. The Committee is chaired by the President of the Management Board;
• GRI 103-2 Innovation Committee – the area related to adequacy and continuity of research and development projects. The Committee is chaired by the Vice President of the Management Board overseeing the unit responsible for research and development;
• Committee  – othe area related to coordination of the implementation of obligations under the REMIT Regulation and secondary legislation. The Committee is chaired by the Vice President of the Management Board overseeing the organizational unit responsible for communications;
• Network Codes Implementation Committee – the area related to regular supervision and coordination of PSE's actions concerning the implementation of rights and obligations resulting from the Network Codes and Guidelines – regulations issued under Articles 6 and 18 of the Regulation (EC) 714/2009 of the European Parliament and of the Council of July 13, 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No. 1228/2003 (OJ L 211/15). The Committee is chaired by the Vice President of the Management Board overseeing the organizational unit responsible for the area of international cooperation;
• GRI 103-2 Social Activity Committee – the area related to Corporate Social Responsibility in the PSE Capital Group. The Committee is chaired by the Vice President of the Management Board;
• GRI 103-2 Cyber Security Committee – the area related to coordination of ICT and cyber security in the PSE Capital Group. The Committee is chaired by the President of the Management Board;
• GRI 103-2 Department of System Management Committee (DO) – the areas related to the following:
  • coordination and supervision of the work of the System Management Department, in particular the effective integration of the various activities carried out by the department, i.e. technical as well as those related to market and decision-making process support tools,
  • policy making and effective integration of project and operational activities,
  • making key decisions resulting from the power sector transformation process, requiring collective decisions within the DO.
    The Committee is chaired by the Managing Director of the Department of System Management.

Special functions are performed in the company to carry out specific tasks. The existence of most of them is a direct result of the requirements of the relevant standards.

In our organization, we have implemented and have been improving the Compliance System, which ensures that the company's actions comply with the law, internal regulations and ethical standards.

PSE employees are bound by the Code of Ethics, which is publicly available in the internal network (intranet). The Code is an important element of the HR Policy which defines the attitudes expected from the employees. In addition, for our contracting parties we have posted the Rules of Conduct for Business Partners in the external network (on the website).

We have adopted a zero-tolerance policy on all types of fraud and inappropriate behavior, which includes situations such as accepting material benefits from service providers, theft and failure to keep company secrets, as well as other forms of unacceptable behavior such as mobbing and harassment. Every PSE employee is required to unconditionally adhere to a zero tolerance policy regarding such behavior.

Employees can report any wrongdoing anonymously to the e-mail address and contact phone number of the Compliance Representative, which are listed on the home page of the intranet site.

We operate a regular “Compass Towards a Start” program dedicated to new hires. Its component is the Compliance System, including ethical behavior. In 2020, mandatory e-learning trainings for all PSE employees were conducted, both on the Code of Ethics, as well as separate trainings on Compliance Policy.

In 2021, we began developing a dedicated Compliance Risk Map as a tool to implement compliance controls.

As part of the first stage of the work, legal acts resulting in sanctions for an organization were compiled. Regulations (over 100 of them) have been assigned to business process owners, and meetings are currently underway with these owners to assess the risk of sanctions. Risk valuation is being performed in the criminal and administrative area as well as the reputational area. Once this stage is finalized, the map will be permanently implemented into PSE's Compliance System and will be the basis for defining annual controls.

Values- and ethics-related training is planned for our contracting parties in 2021, which is dependent on the epidemiological situation.

The anti-corruption system at PSE is based on thoroughly developed internal regulations. This system was expanded to include the position of the Management Board Anti-Corruption Representative. The necessary changes were also introduced in the Compliance Policy, from which the anti-corruption domain was separated. However, we have maintained the internal regulations on which the PSE’s Anti-Corruption and Fraud Prevention System is based, i.e. the Compliance Policy, which regulates the issues of conflict of interest, as well as the Gift Policy and the Instruction for Prevention of Corruption Threats and Fraud, which regulates the system for responding to incidents of a corrupt nature in the company.

GRI 103-2 GRI 103-3
Actions taken in 2020 as part of PSE's anti-corruption efforts:

• mandatory contractual clauses (the so-called Anti-Corruption Clause) were introduced in contracts between PSE and its contracting parties,
• the issue of the Gift Policy was refined by introducing a "Gift Register", which covers both gifts given by PSE and received by company representatives,
• control mechanisms were implemented with regard to implementation of investment projects,
• the Anti-Corruption System was verified by conducting external and internal audits,
• the Central Anti-Corruption Bureau (CBA) conducted a training for PSE employees, and dedicated training was organized for employees participating in the capacity market auctions,
• anti-corruption trainings were introduced as a mandatory part of basic trainings for employees starting work in our organization,
• key processes of the company's operations were evaluated in order to diagnose and develop methods to prevent corruption and fraud,
• educational campaigns were conducted for PSE employees.

Outsiders can report their concerns regarding potential fraud by sending e-mails at sygnal@pse.pl or by calling the Management Board Anti-Corruption Representative, whose contact details are available on the PSE website in the subsection entitled “ Anti-Corruption and Fraud Prevention System”.
For transmission network development projects that are subsidized with funds coming from the Operational Program Infrastructure and Environment, irregularities or fraud may be reported by e-mail at naduzycia.POIS@mfipr.gov.pl or by using the form published on the following website: www.pois.gov.pl/strony/zglaszanie-nieprawidlowosci.

All members of the PSE Management Board have approved the introduction of a solution relating to counteracting corruption at our company, and are regularly informed about the implementation of the tasks by the Management Board Anti-Corruption Representative and the Director of the Security Department.

The organization's anti-corruption compliance policy and anti-corruption procedures have been communicated to all persons working for the organization.

Our business partners are not only required to confirm that they have familiarized themselves with the Anti-Corruption Policy, but also, as part of each agreement (new or annexed) they are informed, through appropriate contractual clauses, of the “Zero Tolerance for Corruption and Fraud” standard in place at PSE. This means that they commit themselves at all times to prevent corruption offenses, and confirm that, during the term of the agreement, their actions are not and will not be subject to such wrongdoings. The principles of the PSE's anti-corruption policy are communicated in writing to all suppliers and business partners of the company. The company also has a multi-level contract reliability testing system in place. Agreements, draft internal regulations, agreement annexes and Requests to the Management Board are reviewed for potential irregularities or abuse.