Shareholder Meeting, Supervisory Board and Management Board

In accordance with the Articles of Association, the Supervisory Board is composed of seven to eleven members. The number of Supervisory Board members is specified by the Shareholder Meeting.

Members of the Supervisory Board are appointed by the Shareholder Meeting for a joint term of office which lasts three consecutive full financial years. At least one member of the audit committee appointed by the Supervisory Board must hold qualifications in accounting or auditing financial statements within the meaning of the Act on Statutory Auditors, Audit Firms and Public Supervision. Furthermore, in accordance with the said Act, the majority of the audit committee members should meet the statutory independence criteria (independent member) concerning, without limitation, professional or family ties, especially to managers or supervisors of PZU or PZU Group entities. An independent supervisory board member is obligated to present a written declaration on satisfying all the independence criteria and advise the Company of ceasing to satisfy these criteria. In addition, the Articles of Association give the State Treasury the right to appoint and dismiss one member of the Supervisory Board by way of a written statement submitted to the Management Board. This right will expire if the State Treasury ceases to be a Company shareholder. A candidate to be a Supervisory Board member named by the State Treasury should meet the requirements set forth in Article 19 of the Act of 16 December 2016 on Rules for Managing State Property.

As at 1 January 2018, the following persons sat on the PZU Supervisory Board:

• Katarzyna Lewandowska – Supervisory Board Chairwoman;
• Aneta Fałek – Supervisory Board Deputy Chairwoman;
• Alojzy Nowak – Supervisory Board Secretary;
• Maciej Zaborowski – Supervisory Board Member;
• Marcin Chludziński – Supervisory Board Member;
• Bogusław Marian Banaszak – Supervisory Board Member;
• Paweł Górecki – Supervisory Board Member;
• Agata Górnicka – Supervisory Board Member;
• Robert Śnitko – Supervisory Board Member. 

On 8 January 2018, Aneta Fałek tendered her resignation from membership in the Supervisory Board effective as of that date. As at 8 January 2018 Maciej Łopiński was appointed by letter. On 9 January 2018, the Supervisory Board entrusted the function of Chairman to Maciej Łopiński and the function of Deputy Chairman to Paweł Górecki.

Accordingly, the composition of the PZU Supervisory Board was as follows:

• Maciej Łopiński – Supervisory Board Chairman;
• Paweł Górecki – Supervisory Board Deputy Chairman;
• Alojzy Nowak – Supervisory Board Secretary;
• Bogusław Marian Banaszak – Supervisory Board Member;
• Marcin Chludziński – Supervisory Board Member;
• Agata Górnicka – Supervisory Board Member;
• Katarzyna Lewandowska – Supervisory Board Member;
• Robert Śnitko – Supervisory Board Member;
• Maciej Zaborowski – Supervisory Board Member.

On 9 January 2018, due to his death, the mandate of Bogusław Marian Banaszak as a Supervisory Board Member expired.

On 9 March 2018 the Extraordinary Shareholder Meeting appointed Robert Jastrzębski. Accordingly, the composition of the PZU Supervisory Board was as follows:

• Maciej Łopiński – Supervisory Board Chairman;
• Paweł Górecki – Supervisory Board Deputy Chairman;
• Alojzy Nowak – Supervisory Board Secretary;
• Marcin Chludziński – Supervisory Board Member;
• Agata Górnicka – Supervisory Board Member;
• Robert Jastrzębski – Supervisory Board Member;
• Katarzyna Lewandowska – Supervisory Board Member;
• Robert Śnitko – Supervisory Board Member;
• Maciej Zaborowski – Supervisory Board Member.

The current term of office of the PZU Supervisory Board started on 1 July 2015 and ended after the elapse of three full financial years, i.e. on 31 December 2018. 2016 was the first full financial year of this term of office. The mandates of members of the Supervisory Board will expire not later than on the date of the Shareholder Meeting approving the financial statements for the last full financial year of their term.

Presented below is the period of discharging the function in the Supervisory Board (according to the composition as at 31 December 2018):

Powers

The Supervisory Board continuously oversees the Company’s business in all areas of its operation. In accordance with the Articles of Association, the powers of the Supervisory Board include:

• evaluating the Management Board’s report on the Company’s activity and the Management Board’s report on the activity of the PZU Group and the Company’s financial statements and consolidated financial statements of the PZU Group for the previous financial year for compliance with the accounting ledgers and documents as well as the facts;
• approving the solvency and financial condition report of the Company and the solvency and financial condition report of the PZU group;
• evaluating the Management Board’s motions to distribute the profit or cover the loss;
• submitting a written report to the Shareholder Meeting on the results of the evaluation referred to in the foregoing items and submitting a concise annual evaluation of the Company’s standing with an assessment of its internal control system and the system for managing significant risks to the Company, and an annual report on the Supervisory Board’s work;
• concluding, terminating and amending agreements with Management Board members and setting the rules for their compensation;
• appointing, suspending and dismissing the President of the Management Board, Management Board members or the entire Management Board and making decisions to discontinue such a suspension;
• granting consent to transferring an insurance portfolio in its entirety or in part;
• accepting motions submitted by the Management Board to purchase, subscribe to or sell ownership interest and shares in companies and on the Company’s participation in other entities – the Supervisory Board may define the maximum amount, the terms and conditions and the procedure that the Management Board may use to conduct the foregoing activities without the obligation to obtain approval from the Supervisory Board, except in cases where the decision in this respect is made by the Shareholder Meeting pursuant to § 18a of the Articles of Association;
• seconding members of the Supervisory Board to perform temporarily the functions of members of the Management Board who have been dismissed, resigned or cannot perform their functions for other reasons;
• accepting instructions on how the Company’s representatives should vote at Shareholder Meetings of PZU Życie in matters on increasing or decreasing the share capital, issuing bonds, selling or leasing PZU Życie’s enterprise or establishing a usufruct right on the enterprise, dividing PZU Życie, merging PZU Życie with another company, liquidating or dissolving PZU Życie;
• selecting the audit firm to carry out the mandatory audit of the financial statements, including the annual financial statements of the Company and the annual consolidated financial statements of the PZU Group, and the solvency and financial condition report of the Company and the solvency and financial condition report of the PZU Group, and reviews of the financial statements in accordance with the obligations following from the prevailing laws;
• deciding on the consolidated text of the revised Articles of Association,
• approving the Company’s long-term development plans and annual financial plans prepared by the Management Board;
• approving the Bylaws of the Management Board;
• examining and consulting matters submitted by the Management Board for deliberation at the Shareholder Meeting.

Moreover, one of the the Supervisory Board’s powers is to give consent to the following:

• acquisition or disposal of real property, perpetual usufruct or share in real property or in perpetual usufruct with a value exceeding the equivalent of EUR 3.0 million;
• execution of a material agreement, as construed by the the Regulation on Current and Periodic Information, by the Company with its related party, except for standard agreements executed by the Company on an arm’s length basis as part of its operating activities;
• executing an agreement with an underwriter of the kind referred to in Article 433 § 3 of the Commercial Company Code;
• paying out an interim dividend;
• creating and shutting down regional or foreign branches; 
• executing an agreement to provide legal, marketing, public relations and public communication services or management consulting services if the total net fee to be paid for such services is greater than PLN 500 thousand annually;
• amending an agreement to provide legal, marketing, public relations and public communication services or management consulting services by increasing the said fee above and beyond the net amount of PLN 500 thousand annually;
• executing an agreement to provide legal, marketing, public relations and public communication services and management consulting services which do not specify the maximum amount of the fee;
• executing a donation or other agreement having a similar effect, the value of which exceeds PLN 20 thousand or 0.1% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements;
• executing a debt release or other agreement having a similar effect, the value of which exceeds PLN 50 thousand or 0.1% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements.

The PZU’s Supervisory Board composition as at 31 December 2018

Maciej Łopiński

Supervisory Board Chairman In the Supervisory Board since 8 January 2018

Graduate of the University of Gdańsk. Editor-in-Chief of Tygodnik Gdański, a journalist of Głos Wybrzeża and Tygodnik Czas, among others. A member of parliament in the 7th term of office. Secretary of State in the Office of President Lech Kaczyński in 2005- 2010 and in turn in the Office of President Andrzej Duda in 2015-2016. He has many years of experience in company law and corporate governance also gained in supervisory bodies in commercial law companies, among others, KGHM Poland Miedź SA, PZU Asset Management SA, Telewizja Polska SA.

Paweł Górecki

Supervisory Board Deputy Chairman

In the Supervisory Board since 8 February 2017

Graduated from the Faculty of Law, Administration and Economics of the University of Wroclaw. He received the degree of Doctor of Law. He was a legal advisor trainee and a court trainee and has been entered in the registry of legal advisors. A university lecturer. He has authored several dozen peer-reviewed papers on the subject of law published by Polish and international journals and has authored numerous unpublished legal opinions. He has been an active participant of conferences organized by Polish academic centers. He specializes in the providing legal services to companies and applying administrative, fiscal and court-and-administrative procedures.

Alojzy Nowak

Supervisory Board Secretary

In the Supervisory Board since 30 May 2012

Professor ordinary at the University of Warsaw, a graduate of the Department of Foreign Trade of the Central School of Planning and Statistics. Completed, among others, economics studies at the University of Illinois Urbana- Champaign in the US and completed studies in banking, finance and capital markets at the University of Exeter in the UK. Head of the Department of National Economy at the Management Faculty of the University of Warsaw, Director of the European Center of the University of Warsaw, Dean of the Management Faculty of the University of Warsaw. Member of the National Development Council at the President of the Republic of Poland, adviser to the Prime Minister. He has extensive experience in corporate governance, gained, among others, while serving as a member of the supervisory boards of PTE WARTA S.A., PKO BP S.A. and JSW S.A. 

Marcin Chludziński

Supervisory Board Member

In the Supervisory Board since 7 January 2016

Graduate of the European Regional and Local Studies and the Faculty of Journalism and Political Sciences of the University of Warsaw. From 2004, associated with Invent Grupa Doradztwa i Treningu. From 2009, President of the Management Board of Urbino sp. z o.o., a licensed coach and consultant specializing in strategic and organizational planning and project management.He has been working for the University of Warsaw, the Collegium Civitas and the Łazarski University as a lecturer. Has gained extensive experience in corporate governance in companies with a State Treasury shareholding and municipal companies. Author of articles on public management.

Agata Górnicka

Supervisory Board Member

In the Supervisory Board since 8 February 2017

Graduate of the Faculty of Journalism and Political Science at the University of Warsaw and. She has obtained a post-graduate diploma in media management from the Kozminski University in Warsaw. From 2006 to 2012 she was professionally associated with Telewizja Polska S.A., in 2012-2013 she was a Project Coordinator at the Bank Zachodni WBK S.A. Foundation, in 2013- 2014 she was an Assistant to the President of the Bank Zachodni WBK S.A. Management Board. From 2014 to 2015, she was the Manager of the Office of the Management Board and Supervisory

Board at Bank Zachodni WBK S.A. Since December 2015, she has served as the Director of the Political Office at the Ministry of Development.

Robert Jastrzębski

Supervisory Board Member

In the Supervisory Board since 9 March 2018

Graduate of the Faculty of Law and Administration at the University of Warsaw. In 2001 he obtained the academic degree of doctor of legal sciences in the law, and in 2009 he obtained the academic degree of a habilitated doctor. He is the author of more than 80 academic publications. Winner of awards and distinctions, including, among others, an Award from the Faculty of Law and Administration at the University of Warsaw for outstanding academic achievement. Employed since 2001 by the Faculty of Law and Administration at the University of Warsaw. Since 2015 Head of the Workshop on 20th century Polish law. Member among others of the program council of the magazine Przegląd Ustawodawstwa Gospodarczego (2010) (Business Legislation Review), editorial team of the magazine Zeszyty Naukowe Biura Analiz Sejmowych (2016) (Research Bulletin of the Parliamentary Research Office).

Katarzyna Lewandowska

Supervisory Board Member

In the Supervisory Board since 12 April 2017, she served as the Supervisory Board Chairwoman from 13 April 2017 to 8 January 2018.

Graduated from Warsaw School of Economics. From 1996 to 2017, an employee of the State Treasury Ministry where she gained extensive experience in exercising corporate governance in companies operating in the defense industry, operating in the coal mining industry, managing sea ports and exercising the State Treasury’s monopoly in number games and cash lotteries. From March 2017 Deputy Director of the State Treasury Department in the Prime Minister’s Office. Member of the Supervisory Board of the LOTOS S.A. Group. Acting Director of the State Treasury Department.

Robert Śnitko

Supervisory Board Member

In the Supervisory Board since 12 April 2017

Graduate of the London School of Economics and Political Science, University of London, School of Oriental and African Studies, University of London, Faculty of Economics at the Radom Technical University. Holder of a Scholarship awarded by the Minister of National Education (Minister of Science and Higher Education), the United Kingdom’s Ministry of Foreign Affairs and non-governmental organizations from the United Kingdom and the United States. Ph.D. in economics obtained from the Warsaw School of Economics. Member of the International Institute for Strategic Studies. 

Maciej Zaborowski

Supervisory Board Member

In the Supervisory Board since 7 January 2016

Graduated from the Law and Administration Department at the University of Warsaw. Completed post-graduate studies in intellectual property law and postgraduate studies in evidence law. Graduate of the Center for American Law Studies, Leadership Academy for Poland. Advocate and professional mediator of the Mediation Center at the Polish Bar Council. Lecturer of advocate training at the Bar Association in Warsaw. Currently, he runs his own legal practice and is a Managing Partner at the law firm Kopeć Zaborowski Adwokaci i Radcowie Prawni sp.p. He has acquired experience in corporate governance as a member of the supervisory boards in various companies.   

Mode of operation

The Supervisory Board adopts the Rules and Regulations of the Supervisory Board which define its organization and manner of acting. The Rules and Regulations of the Supervisory Board were adopted by its Resolution of 24 February 2016 (as amended), specifying the composition of the Supervisory Board and the way in which its members are appointed, the tasks and the scope of its activities and the manner of convening its meetings and conducting debates.

The Articles of Association stipulate that the Supervisory Board should meet at least once every quarter. The Supervisory Board may delegate its members to fulfil specific supervising activities on their own and to this effect appoint temporary committees. The scope of responsibility of a delegated member of the Supervisory Board and the committee is specified in a resolution of the Supervisory Board.

The Supervisory Board adopts its resolutions by an absolute majority of votes. In the event of a voting tie, the Chairman of the Supervisory Board has the casting vote. Resolutions of the Supervisory Board may be adopted using means of direct remote communication and circular vote. Additionally, the Articles of Association stipulate that a vote may be cast in writing through another member of the Supervisory Board.

Resolutions of the Supervisory Board are adopted in an open ballot, except for resolutions concerning the appointment of the Chairperson, Deputy Chairperson or the Secretary of the Supervisory Board, delegation of members of the Supervisory Board to temporarily fill in for members of the Management Board and for resolutions on appointing, suspending and dismissing the President, members of the Management Board or the entire Management Board as well and making decisions to stop such suspension, which are adopted in a secret ballot. Moreover, a secret ballot may be held at the request of a member of the Supervisory Board.   

The Supervisory Board elects from among its members the Chairperson and Deputy Chairperson and may also elect the Secretary from among its members.

In accordance with the Rules and Regulations of the Supervisory Board, apart from appointing the audit committee and the nomination and compensation committee, provided for in the Articles of Association to properly perform its supervision, the Supervisory Board may appoint other permanent advisory and consultative committees whose competencies, composition and manner of operation are laid down in the rules and regulations of the committee in question adopted by the Supervisory Board. The Bylaws provide for the possibility for the Supervisory Board and its appointed committees to use the services provided by experts and consulting firms.

Members of the Management Board, the Company’s employees relevant to the issue under consideration selected by the Management Board and other persons invited by the Supervisory Board may take part in the meetings of the Supervisory Board without the right to vote. In specific cases, the Supervisory Board may also invite members of the management board or supervisory board of other PZU Group member companies. Moreover, members of the Supervisory Board, with the consent of the Supervisory Board, may select no more than one advisor authorized to take part in the meetings of the Supervisory Board devoted to reports and financial statements and give their advice, provided that such a person adheres to the rules of confidentiality and signs a confidentiality undertaking.

At present, the following committees operate as part of the PZU Supervisory Board:

• audit committee;
• nomination and compensation committee;
• strategy committee.

The Articles of Association provide for the appointment of an audit committee by the Supervisory Board. The audit committee shall include at least three members. Pursuant to the Act of 21 June 2017 on Statutory Auditors, Audit Firms and Public Supervision, at least one member of the audit committee appointed by the Supervisory Board should hold qualifications in accounting or auding financial statements. Furthermore, the majority of the audit committee members, including its chairman, should meet the statutory independence criteria (independent member) concerning, without limitation, professional or family ties, especially to managers or supervisors of PZU or PZU Group entities. The detailed tasks and for appointing members of the audit committee and its operation are specified in a resolution of the Supervisory Board which takes into account the relevant competencies and experience of candidates in respect of the matters entrusted to this committee.

In accordance with the rules and regulations of the audit committee adopted by a resolution of the Supervisory Board, the audit committee is an advisory and consultative body to the Supervisory Board and is appointed to improve the effective supervision of the correctness of financial reporting and the effectiveness of internal control, including internal audit and risk management, exercised by the Supervisory Board. Moreover, the audit committee may request the Supervisory Board to commission the performance of specific control activities in the Company, and such commissioned control activities may be performed by an internal unit or an external entity.

The Audit Committee was appointed by a Supervisory Board resolution of 3 June 2008. Composition of the audit committee as at 1 January 2018:

• Bogusław Banaszak – Committee Chairman;
• Marcin Chludziński – Committee Member;
• Maciej Zaborowski – Committee Member.

Bogusław Banaszak and Maciej Zaborowski were indicated as independent members within the meaning of Article 129 Section 3 of the Act on Statutory Auditors, Audit Firms and Public Supervision, and Marcin Chludziński was indicated as a member holding accounting or financial audit qualifications.

On 9 January 2018, due to his death, the mandate of Bogusław Banaszak as the Committee Chairman expired.

On 9 February 2018 the PZU Supervisory Board resolved that the audit committee will be composed of 3 persons and simultaneously established the following composition of the committee:

• Alojzy Nowak – Committee Chairman;
• Marcin Chludziński – Committee Member;
• Maciej Zaborowski – Committee Member.

Alojzy Nowak and Maciej Zaborowski were indicated as independent members within the meaning of Article 129 Section 3 of the Act on Statutory Auditors, Audit Firms and Public Supervision, and Marcin Chludziński was indicated as a member holding accounting or financial audit qualifications.

As at 31 December 2018, the composition of the committee was unchanged.

All Members of the audit committee have the knowledge and skills in the industry in which PZU operates.

The qualifications of committee members in accounting and auditing financial statements and the knowledge and skills in the insurance industry stem from the education, experience and professional practice gained by the various committee members.

In 2018, 8 meetings of the Audit Committee were held.

In accordance with the Rules and Regulations of the Supervisory Board, once PZU’s shares are listed on a regulated market within the meaning of the Financial Instruments Trading Act of 29 July 2005, the Supervisory Board may appoint a nomination and compensation committee.

In accordance with the Articles of Association, detailed responsibilities and the method of appointing members of the nomination and compensation committee, the manner of its operation and remunerations are defined by a Supervisory Board resolution. The committee should include at least one independent member. If the Supervisory Board includes five members elected in a vote, the nomination and compensation committee is not appointed and its tasks are carried out by the entire Supervisory Board.

According to the regulations of the nomination and compensation committee adopted by a resolution of the Supervisory Board of 4 April 2013, the committee is an advisory and consultative body to the Supervisory Board and is appointed to improve the effectiveness of the Supervisory Board’s oversight activities related to establishing the management

structure, including organizational issues, the remuneration system and principles and the selection of properly qualified staff.

The committee is dissolved once five members of the Supervisory Board are elected by group voting, following which its powers are taken over by the whole Supervisory Board.

Composition of the nomination and compensation committee as at 1 January 2018:

• Aneta Fałek – Committee Chairwoman;
• Paweł Górecki – Committee Member;
• Katarzyna Lewandowska – Committee Member.

In connection with the changes in the PZU Supervisory Board, on 9 January 2018 the PZU Supervisory Board resolved that the nomination and compensation committee will be composed of 3 persons and established the following composition of the committee:

• Paweł Górecki – Committee Chairman;
• Agata Górnicka – Committee Member;
• Katarzyna Lewandowska – Committee Member.

On 14 March 2018 the PZU Supervisory Board resolved that the nomination and compensation committee will be composed of 4 persons and simultaneously established the following composition of the committee:

• Paweł Górecki – Committee Chairman;
• Agata Górnicka – Committee Member;
• Katarzyna Lewandowska – Committee Member;
• Maciej Łopiński – Committee Member.

As at 31 December 2018, the composition of the committee was unchanged.

According to the rules and regulations of the strategy committee adopted by a resolution of the Supervisory Board of 4 April 2013, the committee is an advisory and consultative body to the Supervisory Board and is appointed to improve the effectiveness of the Supervisory Board’s oversight activities related to issuing opinions on all strategic documents presented by the Management Board (in particular, the Company’s development strategy) and providing the Supervisory Board with recommendations on planned investments that materially impact the Company’s assets.

Composition of the strategy committee as at 1 January 2018:

• Alojzy Nowak – Committee Chairman;
• Bogusław Banaszak – Committee Member;
• Marcin Chludziński – Committee Member;
• Agata Górnicka – Committee Member;
• Robert Śnitko – Committee Member;
• Maciej Zaborowski – Committee Member.

In connection with the changes in the PZU Supervisory Board, on 14 March 2018 the PZU Supervisory Board resolved that the strategy committee will be composed of 6 persons and established the following composition of the committee:

• Alojzy Nowak – Committee Chairman;
• Marcin Chludziński – Committee Member;
• Agata Górnicka – Committee Member;
• Robert Jastrzębski – Committee Member;
• Robert Śnitko – Committee Member;
• Maciej Zaborowski – Committee Member.

As at 31 December 2018, the composition of the committee was unchanged.