02 APPENDIXES CORPORATE GOVERNANCE
SUSTAINABILITY REPORT 2021 / CORPORATE GOVERNANCE
OUR CORPORATE GOVERNANCE
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ARAUCO IS A CLOSELY HELD CO SUBJECT TO CERTAIN INFORMA DISCLOSURE REQUIREMENTS T TO PUBLICLY TRADED COMPAN COMPANY’S BEGINNINGS DATE
10 / 28/ 1970
ORPORATION ATION AND THAT APPLY NIES. THE BACK TO
CELULOSA ARAUCO Y CONSTITUCIÓN S.A., AS IT IS KNOWN TODAY, WAS ESTABLISHED IN SEPTEMBER 1979 FROM THE MERGER OF THE COMPANIES CELULOSA ARAUCO AND CONSTITUCIÓN S.A., TWO COMPANIES CREATED BY THE CORPORATION FOR THE PROMOTION OF PRODUCTION (CORPORACIÓN DE FOMENTO DE LA PRODUCCIÓN, CORFO).
ITS LEGAL NAME IS CELULOSA ARAUCO Y CONSTITUCIÓN S.A, AND IS
CELULOSA ARAUCO Y CONSTITUCIÓN S.A., AS IT IS KNOWN TODAY, WAS ESTABLISHED IN
SEPTEMBER 1979 FROM THE MERGER OF THE COMPANIES CELULOSA ARAUCO AND CONSTITUCIÓN S.A., TWO COMPANIES CREATED BY THE CORPORATION FOR THE PROMOTION OF PRODUCTION (CORPORACIÓN DE FOMENTO DE LA PRODUCCIÓN, CORFO).
99.98%
OWNED BY EMPRESAS COPEC S.A., A HOLDING COMPANY WHOSE PRINCIPAL ACTIVITIES ARE FORESTRY, ENERGY, FUEL DISTRIBUTION, FISHING, AND MINING.
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SUSTAINABILITY REPORT 2021 / CORPORATE GOVERNANCE
BOARD OF DIRECTORS
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THE MISSION OF CELULOSA ARA MAXIMIZE THE C ENVIRONMENT RESPONSIBLE W NINE MEMBERS YEARS AND CAN MEMBER HOLDS THE COMPANY.
F THE BOARD OF DIRECTORS OF AUCO Y CONSTITUCIÓN S.A. IS TO COMPANY’S VALUE IN A SOCIALLY, TALLY, AND ECONOMICALLY WAY. THE BOARD CONSISTS OF S WHO HOLD OFFICE FOR THREE N BE REELECTED. NO BOARD S AN EXECUTIVE POSITION WITHIN
THE BOARD REGULARLY MEETS WITH THE CHIEF EXECUTIVE OFFICER AND THE PRESIDENT & CHIEF OPERATING OFFICER, WHO PROVIDE UPDATED INFORMATION ON ARAUCO’S MANAGEMENT AND BUSINESS AREAS. UNDER CHILE’S CORPORATION LAW, THE COMPANY MUST HOLD A SHAREHOLDERS MEETING AT LEAST ONCE A YEAR.
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SUSTAINABILITY REPORT 2021 / CORPORATE GOVERNANCE
SENIOR MANAGEMENT
ARAUCO’S BOARD DESIGNATES THE COMPANY’S SENIOR MANAGEMENT MEMBERS. THEY ARE RESPONSIBLE FOR IMPLEMENTING ACTIONS RELATING TO THE COMPANY’S ECONOMIC, SOCIAL, AND ENVIRONMENTAL PERFORMANCE, OCCUPATIONAL HEALTH AND SAFETY, AND WORKPLACE RELATIONSHIPS. IN ADDITION, OVERSEAS MANAGEMENT IS UNDER THE LEADERSHIP OF:
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JOSÉ MANU HERN
ARAUCO MEXICO
PABLO FRANZINI ARAUCO NORTH AMERICA, UNITED STATES AND CANADA.
UEL NÁNDEZ
RUI CORREA SONAE ARAUCO
O
CARLOS ALTAMIRAS ARAUCO BRAZIL
DIEGO WOLLHEIM MONTES DEL PLATA, URUGUAY
PABLO RUIVAL
ARAUCO ARGENTINA
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SUSTAINABILITY REPORT 2021 / CORPORATE GOVERNANCE
CORPORATE BEST PRACTICE MANAGEMENT
ARAUCO’s vision and values inspire the directors and employees of the Company and all its subsidiaries. Accordingly, they must comply with the Company’s commitments and guidelines, especially those outlined in the Code of Ethics and the Company’s internal policies and regulations which are made available to all workers.
In 2021, the Company ce crime of non-compliance lockdowns into our crim 372 employees were tra 4,427 employees were tr water contamination cap
ARAUCO has an Ethics and Compliance Committee that ensures the Company follows all its ethical, legal, mandatory, and governing regulations on compliance, which receives information on the existence and functioning of processes established to achieve said purpose.
Furthermore, the Compa Code of Ethics and the p reinforcing the importan plying with it. In addition provided to employees.
There is also a Chief Compliance Officer who regularly reports to the Board and the Ethics and Compliance Committee. The mission of The CCO is to establish a robust, efficient, and effective system for ARAUCO’s compliance with ethical and governing regulations in Chile and abroad. Furthermore, The CCO takes on the different compliance tasks that are currently performed, as well as those associated with free competition, ethics, the policy framework, and the Crime Prevention Model (CPM), among others.
Finally, the Company has of Net Income; a Habitua Market Disclosure Manu rivatives Policy; a Corpo tition Principles and Reg Crime Prevention Model in Board Sessions by Te vices Provided by ARAU Community Contribution Relationship Policy; Biod Quality, and Occupationa ring Consultants and Se Policy; Invitations and G Interest and Relations w lly Exposed Persons Pol
Regarding the CPM established for Celulosa ARAUCO y Constitución S.A. and its subsidiaries in Chile, hich was certified by an independent certifying company , ARAUCO (conservar coma antes de la palabra ARAUCO) continues to develop its compliance and monitoring program.
ertified the incorporation of the e with quarantines and sanitary me prevention model. Additionally, ained on Free Competition, and rained on Crime Prevention and psules.
any constantly disseminates its principles and values it contains, nce of understanding and comn, training on these subjects is
s a Policy for the Determination ality Policy; a Dividend Policy; a ual; a Finance, Liquidity, and Deorate Risk Policy; a Free Compegulations Compliance Program; a l Policy; a Director Participation echnological Means Policy; SerUCO’s External Auditors Policy; a ns Policy; a Mapuche Community diversity Policy; an Environment, al Health and Safety Policy; Hiervices for the Board of Directors Gifts Policy and a Conflicts of with Public Officials and Politicalicy.
REPORTING PROCEDURES ARAUCO has a Complaints Channel administered by an independent third party, which is available to all countries on the Company’s website (www.ARAUCO.com) and corporate intranet. This mechanism allows telephone and written reports to be made, ensuring anonymity and confidentiality. The Company has adopted a Reporting Procedure to receive, investigate, and act –as applicable– upon reports submitted by employees, customers, suppliers, shareholders, and people in general, regarding violations of the Company’s Code of Ethics, Crime Prevention Model, or other company regulations or policies, as well as any other behavior that may be perceived as being unethical. A total of 147 complaints were received in 2021. In addition, in Chile, we do not have any complaints that, if proven to be true, could involve the commission of any of the offenses under Law No. 20,393, and that could give cause for ARAUCO’s criminal liability.
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SUSTAINABILITY REPORT 2021 / CORPORATE GOVERNANCE
RISKS AND CHALLENGE
ARAUCO IS EXPOSED NOT ONLY THE COMP SUSTAINABILITY. TO RISKS IT IS EXPOSED POLICY IN PLACE, A AND A HIGH-IMPACT FOR THIS PURPOSE I STANDARDS SUCH AS DEVELOPMENT OF T BASED ON STANDAR CONCERNING THE RI INFORMATION, IN 201 AN INTENSIVE DISSE INTERNAL CONTROL THE COMPANY’S FINA AIMS TO DISSEMINAT
D TO A VARIETY OF RISKS, WHICH MAY AFFECT PANY’S FINANCIAL PERFORMANCE BUT ITS MINIMIZE THE IMPACT AND PROBABILITY OF THE D TO, THE COMPANY MAINTAINS A RISK MANAGEMENT CORPORATE FRAMEWORK FOR RISK MANAGEMENT, CORPORATE RISKS MATRIX. THE METHOD USED IS BASED ON INTERNATIONAL RISK MANAGEMENT S ISO 31.000 AND COSO ERM. IN ADDITION, THE THE COMPANY’S BUSINESS CONTINUITY PLANS IS RD ISO 22.301. ISKS FOCUSED ON THE RELIABILITY OF ACCOUNTING 018, ARAUCO DEVELOPED AND IMPLEMENTED EMINATION PLAN OF THE SOX [1] CORPORATE L MODEL, WHICH ADDRESSES THE RELIABILITY OF ANCIAL ACCOUNTING INFORMATION. THE PROGRAM TE, PROVIDE TRAINING, AND FURTHER DELVE INTO
THE IMPORTANCE OF THIS MODEL IN ARAUCO AND THE ROLE THAT THE COMPANY’S DIFFERENT AREAS HAVE IN ITS MANAGEMENT. IN ADDITION, THE GRC PROCESS CONTROL TOOL [2] WAS ALSO ENCOURAGED TO MANAGE AND MONITOR FINANCIAL ACCOUNTING RISKS AND CONTROLS. IN THIS REGARD, SEVERAL INITIATIVES WERE CARRIED OUT WITH BUSINESS MANAGEMENT DIVISIONS AND COMPANY-WIDE MANAGEMENT DIVISIONS IN CHILE, BRAZIL, AND ARGENTINA TO ADDRESS THE ISSUES MENTIONED ABOVE. CONCERNING OPERATIONAL RISKS, THE PRODUCTION OF AN INDUSTRIAL PLANT DEPENDS ON PEOPLE, INPUT MATERIALS, PROCESSES, AND EQUIPMENT THAT ARE ESSENTIAL FOR OPERATIONAL CONTINUITY. FOR EXAMPLE, WOOD, WATER, STEAM, AND ELECTRIC POWER ARE INPUT MATERIALS WHOSE ABSENCE CAN STOP THE REGULAR OPERATION OF A PROCESS AREA OR AN ENTIRE INDUSTRIAL FORESTRY COMPLEX. LIKEWISE, FACTORS OUTSIDE THE OPERATION, SUCH AS NATURAL DISASTERS AND FOREST FIRES, ARE RISKS TOO.
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