Corporate Governance
- Steering with integrity -
General principles
The principles of corporate governance aim to establish clear rules of operation and monitoring for companies and to verify whether their managers have the necessary means and capacity to manage the company for which they are responsible.
This management must be performed in the interests of the company and all the shareholders and with the aim of maximising the share value in the medium to long-term.
Cobepa is organized to abide by these essential principles. The same principles apply to Cobehold, the shareholder that holds directly and indirectly 100% of Cobepa and that brings together its ultimate shareholders. It is the role of Cobepa, as a professional shareholder, to ensure the enforcement of the principles of corporate governance in the companies of which it is a significant shareholder.
Transparency of information is an essential element of shareholding in today’s world. That is the specific aim of this report. Up-to-date information is also always accessible on Cobepa’s website (www.cobepa.com).
Particular aspects relating to the company’s organization
Board of Directors
The composition and organization of the Board of Directors are governed by articles 9 to 15 of the articles of association of Cobepa.
The Board of Directors must consist of at least three members. The term of office of the Directors cannot exceed six years. Directors may be re-elected. The Board of Directors may duly deliberate and take a decision only if at least half of its members are present or represented, with at least two Directors being personally present.If provided in the convening notice, Directors may also deliberate by conference call. The Board of Directors may also take decisions in writing if they are adopted unanimously, except for any decisions which must be established by an authentic deed.
All decisions of the Board of Directors are taken by minimum an absolute majority of the voters.
The appointment of Directors and the renewal of their terms of office are conferred by a Shareholders’ Meeting upon a proposal from the Board of Directors.
In addition to the Chairman, the Board of Directors is composed of 12 Directors of whom 11 are non-executive Directors related to the shareholders.
The Shareholders’ Meeting cannot appoint more than half of the Directors from the candidates proposed by a single shareholder or one single group of shareholders.
Currently, the composition of the Board of Directors of Cobepa reflects that of the Board of Directors of Cobehold.
Pursuant to the company’s internal rules, the age limit for Directors is set at 70 years. Exceptions are possible for a proportion that may not exceed one third of the total number of Directors of Cobepa.
The mandates of the Directors (including the Managing Director) and the Auditor expire at the Annual Shareholders’ Meeting of 2028 (accounts 2027).
The Board of Directors meets whenever the interest of the company so requires and whenever two Directors so request. It deliberates on all matters within its legal competence, in particular the appointment of the Chief Executive Officer, the organization of the company’s representation, the preparation of the annual accounts and the management report, the convening of Shareholders’ Meetings and the drafting of the resolutions to be decided by the Shareholders’ Meetings.
The decisions to make investments and divestments also fall within the competence of the Board of Directors.
The work of the Board of Directors is organized and systematically documented to allow it to monitor and supervise the day-to-day management and the development of the results, risks and value of the company.
The Auditor is invited to attend the meetings devoted to the half-yearly and annual accounts.
In 2024, the Board of Directors met seven times.
The Remuneration Committee
The Remuneration Committee is composed of Messrs Charles de Liedekerke (Chairman), Grégoire de Spoelberch, François Henrot and William Wyatt. The Chief Executive Officer attends the meetings of the Remuneration Committee for the part that does not concern him.
The Remuneration Committee makes recommendations to the Board of Directors on the following matters: fixed and variable remuneration of the Chief Executive Officer, terms and conditions of any long-term incentive plan granted to the Chief Executive Officer and the employees (both senior and junior). It also reviews the compensation proposals presented by the Chief Executive Officer for the employees.
The Remuneration Committee meets at least once a year. In 2024, the Remuneration Committee met once.
The Audit Committee
The Audit Committee is composed of Messrs Charles de Liedekerke (Chairman), Olivier Davignon, Tom Leader (representing William Wyatt) and Justus Braatz (representing Hubertus von Baumbach). It reviews the preparation of the accounts and the audit procedures and analyzes the risks facing the company.
Twice a year, the Audit Committee also determines Cobepa’s Net Asset Value (NAV) and Cobepa’s Estimated Transactional Value (ETV). The NAV and ETV are then submitted to the Board of Directors for approval.
In 2022, the methodology to calculate the NAV and the ETV (that was adopted in 2004) was slightly modified. The updated methodology was approved by the Board of Directors and was applied for the first time to calculate the NAV and the ETV as of 30 June 2022.
The methodology to assess Cobepa’s NAV and ETV is based on the following key principles:
For the Net Asset Value:
The Net Asset Value of each investment will be estimated by applying the valuation methodology which appears the most adequate for assessing the Fair Market Value of the investment (i.e. the amount for which the investment should exchange on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after a proper marketing wherein the parties each acted knowledgeably, prudently and without compulsion).
- For quoted investments, the Net Asset Value is the stock price (average of closing price of the last 20 trading days preceding the date of the valuation).
- For unquoted investments, the generally accepted valuation methodologies can be used following a priority grid:
- the acquisition price for investments having been acquired since less than 12 months, except in case of impairment. Additional investment in an existing investment (having been acquired since more than 12 months) will not be considered as a new investment;
- value based on a predefined valuation formula agreed among the parties of a shareholder’s agreement and used for assessing the value of the investment at exit or assessing the value in case of capital increases;
- value of a relevant third-party transaction having taken place in the last 12 months before the date of the valuation;
- value based on the entry multiples, which is revised at each exercise to progressively reach the anticipated exit multiples;
- value based on market multiples (if relevant);
- value based on the discounted cash flow; and
- other valuation methodology.
For each investment, the retained valuation methodology will be applied as much as possible in a consistent way from one year to another.
For the Estimated Transactional Value:
To calculate the ETV, a discount will be applied to the NAV of each asset. The level of the discount depends upon the liquidity of the asset. Three categories of discount have been adopted: 5%, 15% and 25%.
In this report, we only mention the Net Asset Value of Cobepa. The Estimated Transactional Value is communicated only to our shareholders.
The Audit Committee meets at least twice a year. In 2024 the Audit Committee met two times. A meeting is valid only if at least half of the members are present.
Day-to-day management
Day-to-day management is entrusted to Jean-Marie Laurent Josi in his capacity as Chief Executive Officer.
