Grand City Properties is wholly committed to stringent standards of ethical behavior and transparency throughout its operations. Its core values of integrity, respect, performance, accountability, and sustainability apply to customers, business partners, and employees alike. These values also form the foundation for the corporate governance structures GCP has implemented to ensure its commitment is upheld.
Sustainable development is a decisive factor for success in the property market, and market-leading corporate governance is a tool for achieving this. Comprehensive compliance is a core tenet of GCP’s risk reduction philosophy. Annual assessments of internal and external compliance risks are used to tailor the company’s management of environmental issues, workplace health and safety topics, and the potential for corruption.
Where our value creation chain is concerned, awareness of our partners’ business practices and contractual commitments to sustainability standards foster comprehensive transparency. The upholding of standards of decent work and respect for human rights are non-negotiable components of GCP’s business premise. Our concrete policies, two-person-assurance structures, and other commitments are presented in our Sustainability Report.
More in-depth information on our corporate governance strategy can be found in the Sustainability Report
Annual General Meeting
The Annual General Meeting takes place within 6 months after the end of the financial year.
Board of Directors
The Company is administered by a Board of Directors, which is vested with the powers to perform and manage in the Company’s best interest.
The Board of Directors represents the shareholders as a whole and makes decisions solely in the Company’s best interest and independently of any conflict of interest. The Board of Directors and senior management regularly evaluate the effective fulfillment of their remit and compliance with strong corporate governance standards. This evaluation is also performed by the Audit Committee and the Risk Committee.
The members of the Board of Directors are elected by the shareholders at the AGM for a term not exceeding six years and are eligible for re-election after such term. The directors may be dismissed with or without any cause at any time and at the sole discretion of the shareholders at the AGM. The Board of Directors, a majority of whom are independent, resolves on matters on the basis of a simple majority, in accordance with the articles of association. The Board of Directors chooses amongst the directors a chairperson who shall have a casting vote.
Internal controls and risk management system
The Company closely monitors and manages potential risks and sets appropriate measures in order to mitigate the occurrence of possible failures to a minimum. The risk management is led by the Risk Committee, which constructs the risk management structure, organisation, and processes. The Risk Committee monitors the effectiveness of risk management functions throughout the organisation, ensures that infrastructure, resources, and systems are in place for risk management and are adequate to maintain a satisfactory level of risk management discipline. The Company categorises the risk management systems into two main categories: internal risk mitigation and external risk mitigation.
Internal controls are constructed from five main elements:
● Risk assessment – set by the Risk Committee, supported by the Risk Officer, and guided by an ongoing analysis of the organisational structure and by identifying potential weaknesses.
● Control discipline – based on the organisational structure and supported by employee and management commitments. The discipline is founded on the foundations of integrity and ethical values.
● Control features – the Company sets physical controls, compliance checks, and verifications such as cross departmental checks. Grand City Properties S.A. puts strong emphasis on separation of duties, as approval and payments are done by at least two separate parties. Payment verification is cross checked and confirmed with the budget and the contract. Any payment exceeding a certain set threshold amount requires additional approval by the head of the department as a condition for payment.
● Monitoring procedures – the Company monitors and tests unusual entries, mainly through a detailed monthly actual vs. budget analysis and check. Strong and sustainable control and organisational systems reduce the probability of errors and mistakes significantly. The management places significant value in constantly improving all measures, adjusting to market changes and organisational dynamics.
● ESG risk-related expenditures – the Group has included identification of potential financial liabilities and future expenditures linked to ESG risks in the organisational risk assessment. Future expenditures on ESG matters and opportunities are included in the financial budget.
Through ordinary course of business, the Company is exposed to various external risks. The Risk Committee is constantly determining whether the infrastructure, resources, and systems are in place and adequate to maintain a satisfactory level of risk. The potential risks and exposures are related, inter alia, to volatility of interest rate risks, liquidity risks, credit risks, regulatory and legal risks, collection and tenant deficiencies, the need for unexpected capital investments, and market downturn risk.
Grand City Properties S.A. sets direct and specific guidelines and boundaries to mitigate and address each risk, hedging and reducing to a minimum the occurrence of failure or potential default.
The Company respects the rights of all shareholders and ensures that they receive equal treatment. All shareholders have equal voting rights and all corporate publications are transmitted through general publication channels and are also available in a specific section on the Company’s website. The Company discloses its share ownership and additionally discloses any shareholder position above 5% when it is informed by the respective shareholder. Shares held and/or acquired by the Company, either directly or through subsidiaries, pursuant to its buy-back program, are suspended from their voting rights.
The shareholders of Grand City Properties S.A. exercise their voting rights at each General Meeting of the shareholders, whereby each share is granted one vote. The AGM of the shareholders takes place within 6 months after the end of the financial year at the registered office of the Company, or at such other place as may be specified in the notice of the meeting. At the AGM of the shareholders the Board of Directors presents, among others, the management report as well as the statutory and consolidated financial statements to the shareholders.
The AGM resolves, among others, on the statutory and consolidated financial statements of Grand City Properties S.A., the allocation of the statutory financial results, the appointment of the approved independent auditor, and the discharge to the (re-)election of the members of the Board of Directors. The convening notice for the AGM of the shareholders contains the agenda and is publicly announced in the Recueil électronique des sociétés et associations in Luxembourg (RESA), in a Luxembourg newspaper and on the Company’s website at least thirty days before the AGM and in accordance with applicable Luxembourg law.