Business ethics and corporate governance – introduction

The Bank operates in a responsible, transparent and sustainable manner, taking into account ESG criteria. In its ESG Strategy, the Bank pledged to strive to maintain the highest standards of corporate governance and develop an ethical approach to business. Corporate governance activities are aimed at creating tools to support effective management, efficient supervision, respect for shareholders’ 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 2021”, 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 (hereinafter: “Code of Conduct”). The principles of ethical conduct apply to all employees of the Bank. The Code of Conduct addresses the most important issues to watch out for in the performance of official duties. The principles contained therein should be a guideline in the decision-making process.

In 2021, the Management Board of Bank Pekao S.A. adopted a resolution, also effective in 2023, 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 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 Rules 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”) adopted by a Resolution of the Management Board of the Bank of December 3, 2021 and by a Resolution of the Supervisory Board of the Bank of December 13, 2021 contains the most important principles to be followed by all employees of the Pekao Group, regardless of their position or basis of employment.

The Code of Conduct contains statements of values, the Bank’s mission and vision for the business covering key principles and standards of conduct, shaping employees’ ethical choices and behavior.

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 Bank’s environmental, social and corporate governance approach and priorities, declaring the Bank’s development with high standards of corporate governance and an ethical approach to business.

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. Any amendments to the provisions of the Code of Conduct are communicated immediately to the employees of the Bank and other Pekao Group entities.

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.

The Code of Conduct also includes provisions for conducting periodic review and evaluation of compliance with ethics principles in order to adapt them to the changing internal situation and the Bank’s environment.

The contents of the Code of Conduct in Polish and English versions have been published on the Bank’s website.