Introduction

In line with the ESG Strategy, the Bank strives to maintain the highest standards of corporate governance and develops an ethical approach to business. The goal of corporate governance is to create tools to support effective management, effective oversight, respect for shareholder rights and transparent communication of the company with the market.

In its day-to-day operations, the Bank face ever-increasing challenges related to the rapidly changing regulatory environment. In the area of corporate governance, a key activity remains the prevention of violations and protection of the Bank from any improper conduct, in compliance with applicable laws, regulations and accepted ethical standards. The corporate governance applied at the Bank derives from the provisions of the law (in particular, the Commercial Companies Code, the Banking Law and the regulations governing the functioning of the capital market), as well as from the principles contained in the “Best Practice for WSE Listed Companies”, the “Corporate Governance Principles for Supervised Institutions” issued by the Polish Financial Supervision Authority and the “Code of Banking Ethics” of the Polish Bank Association. Pekao Group’s Code of Conduct, which is available to the public, is the primary regulatory act on ethical conduct.

In 2021, the Management Board of Bank Pekao S.A. adopted a resolution, also effective in 2022, for the Bank to adopt the Best Practices for WSE Listed Companies 2021 (hereinafter: “Best Practices”) issued by the Stock Exchange. The Best Practices replaced the Best Practices of WSE Listed Companies 2016, which the Bank applied until June 30,2021. The Best Practices are a set of corporate governance principles to which issuers of shares listed on the WSE’s Main Market have been subject since 2002, based on the provisions of the Regulations of the Warsaw Stock Exchange. The Best Practices take into account the current state of the law and the latest trends in the area of corporate governance, as well as the demands of market participants interested in increasingly better corporate governance in listed companies. The Best Practices also include requirements related to the ESG area, including issues of sustainability, diversity in the composition of company bodies and equal pay.

The Best Practices are an important element in building the competitive position of companies and significantly contribute to strengthening the attractiveness of the Polish capital market. The Bank makes every effort to ensure that the Best Practices are applied in full. In accordance with the requirements of the Regulations of the WSE, information on the current status of application of corporate governance principles is published, including explanations of the reasons for not applying the principles in accordance with the comply or explain principle. The benefit of implementing the Best Practices was to raise the standards and transparency of the Bank’s operations.

In terms of protecting specific groups of stakeholders, contractors and customers, the Bank has and applies the Rules for the sale of credit and payment products to consumers at Bank Polska Kasa Opieki Spółka Akcyjna and Policy for the sale of investment products.

The Bank adheres to the highest standards in handling confidential information within the meaning of the Regulation of the European Parliament and of the Council of April 16, 2014 on Market Abuse (hereinafter: MAR). A precise regulation has been implemented that clearly defines the rules for handling confidential information within the meaning of MAR and protecting it from unauthorized disclosure or use. The regulation sets out the rules related to the execution of transactions on financial instruments by the Bank’s employees, including employees with access to insider information within the meaning of MAR. For the Bank, it is very important that persons discharging managerial responsibilities and persons closely related to them observe restrictions on transactions in financial instruments related to the so-called “closed periods” preceding the publication of the Bank’s periodic reports. For this reason, in addition to the information received due to applicable laws, persons discharging managerial responsibilities regularly receive information about any upcoming closed period and related restrictions on transactions in the Bank’s financial instruments. Any information about the execution of a transaction by a person discharging managerial responsibilities or a person closely related to him/her is reported in accordance with applicable laws. The Bank constantly monitors employee activity in financial instrument transactions.

The Pekao Group operates in accordance with applicable laws and market standards, and promotes ethical business behavior, i.e. conduct based on accepted values and principles. The current Code of Conduct of the Pekao Group (hereinafter: “Code of Conduct”) contains the most important principles to be followed by all employees of the Pekao Group, regardless of their position or basis of employment.

In the Code of Conduct, the Pekao Group expresses its support for sustainable economic and social development and environmental protection and climate change efforts. The Code of Conduct refers to the adopted ESG Strategy, which summarizes the environmental, social and corporate governance approach and priorities.

The Code of Conduct evokes the values of #straightforward, #together, #boldly and #responsibly that shape the Bank’s organizational culture.

The Code of Conduct contains the most important rules of conduct for all persons in an employment or other legal relationship of a similar nature with Bank Pekao or another legal entity of the Bank Pekao Group, including members of the statutory bodies of the Bank or other Bank Pekao Group entities. The above principles apply to interactions with stakeholders: customers, business partners, representatives of local communities, the business environment and colleagues. They apply to all areas of Pekao Group operations so as to ensure the highest standards of service delivery.

Compliance with the provisions of the Code of Conduct is the primary obligation of each employee of the Bank and each employee of other entities of the Pekao Group. Newly hired employees are required to familiarize themselves with the contents of the Code of Conduct and confirm this in writing or through the information system before starting work and performing their duties. Completion of e-learning training on the Code is mandatory for all employees.

The Code of Conduct commits employees to acting ethically, adhering to the values that shape Pekao Group’s organizational culture, honesty, integrity, and professionalism.

Those in management positions at all levels are expected to promote ethical attitudes among employees and point out the required standards, thereby building a comprehensive Pekao Group culture based on ethical values. The Code of Conduct shapes the attitude of an employee who is aware that his or her conduct, both in the course of his or her duties and in his or her free time, can affect the way the Pekao Group is perceived. Everyone should act in a way that does not expose the Pekao Group to reputational risk – when performing official duties, representing companies or claiming employment with them.

The Code of Conduct contains examples of acceptable and unacceptable behaviors and actions (case studies), developed on the basis of the Recommendations of the Committee on Banking Ethics at the Polish Bank Association on the formation of ethical culture in banks.

Superiors who manage employees are to pay attention to compliance and reputational risks in their area of responsibility, according to the Code of Conduct, and ensure that subordinate employees act appropriately in this regard.