CHINA

Henan Shuanghui Investment & Development

Co.,Ltd
Corporate Governance
Dimensions
According to OECD Governance Principle, the V. Disclosure and
Transparency VI. The responsibilities of the board are demonstrated
perfect for Shuanghui. Here we analyze it through the following six
dimensions.
Executive compensation and equity interest
Shuanghui has its own share incentive mechanism, it changed several
times, because this stock ownership incentive was introduced into
shuanghui is not long enough, it exists

defects about the system design. In December 26, 2012, the

Shuanghui shares were
awarded to qualified senior management personnel, and Shuanghui 43
management personnel received equity incentive, their total shares
accounted for the reward received 89.75% of the total shares. As of
December 31, 2014, the incentive shares received by the group's senior
management staff were adjusted from 84.25% to 86.25%. As of December
31, 2015, the group's qualified senior managers incentive share
proportion were adjusted from 36.92% adjusted to 29.37%.
Ownership concentration

The equity structure shows that Shineway group occupied 60.24% shares
of shuanghui, Rotary Vortex Limited Company account for 13.2%. The
chairman of Shuanghui is Wan Long, who also worked as Board chair of
Rotary Vortex Limited Company. We can reasonably infer to a conclusion
that Wan Long owns decision-making power.
Owner active participation

Wan Long actively participated in operation of Shuanghui as Chairmen of

the board. This is
effective for management and quick strategic decision making.
Exposure to the market for corporate control
Its not easy for Shuanghui to be taken over by bidders hostile to
management ,while the company performs badly in a short time .The
reason is the Board designed Commitment to share lock. Shineway
group and Rotary Vortex Limited Company made commitment, that they
are not allowed to transfer their shares for 36 months since the
subscription of shares in China Securities Depository and Clearing Co.,
Ltd. Moreover, main stakeholders also have limit to sell shares. The
commitments are still valid now.
Board activism and independence
Shuanghui developed the rules of the board of directors in accordance
with the law. The board of directors has established an independent
director system with three standing independent directors, and the
number of personnel of the board of directors, directors' employment is in
accordance with the requirements of laws and regulations, conscientiously
performing their duties, safeguarding the overall interests of the company,
especially for the legitimate rights and interests of small shareholders.
Shuanghui, in accordance with the resolution of the shareholders'
meeting, established committee, the audit committee, the nomination
committee and the remuneration and appraised committee duties. These
actions is beneficial for the company's long-term development.
Exposure to non-equity stakeholders

Wan Long actively participated in operation of Shuanghui as Chairmen of

theMarch
board.
This
is CCTV news channel "weekly quality report" 15 / 3
In
15,
2011,
special program broadcast Jiyuan Shuanghui food Co. Ltd. was reported
that use meat contains lean meat

powder, the report had aroused widespread concern in society,

Shuanghui experienced a huge hit. Shuanghui requested the relevant
government departments to detect Jiyuan Shuanghui products. This
event got costumers and government involved ,and sounded the quality
control and risk avoidance alarm to Shuanghui .

BRAZIL
M. DIAS BRANCO

USA
KELLOGS
Impact of Corporate Governance on Kelloggs
Kelloggs has continually delivered high value to its shareholders, in spite of, not due to its corporate governance.
By most applicable measures, Kelloggs fails as a steward of good corporate governance. Its secrecy and lack of
visibility into compensation, entrenched board, and diminished shareholder voting rights allow the company to act
as it pleases with little oversight or market control.
A well governed company explicitly ties performance goals to executive compensation. At Kelloggs, this is not the
case as there is little visbility into executive compensation packages and what is shown implies that CEO
incentives are awarded irrespective to company performance. In addition, the low level of share ownership by
members of management and the board of directors also brings into question whether these executives are
working towards common goals with their shareholders.
Company governance is rooted in a strong, independent board of directors. While it does not imply that Kelloggs
is a poorly run firm, and there is little in their record of performance that would depict hostility towards the greater
good of shareholders, Kelloggs board is far from independent. The company allows for, and currently has, a CEO
that is also the Chairman of the Board. This is an environment that fosters unchecked control. Additionally,
Kelloggs maintains a classified board of directors. In 2014, shareholders voted 62% in favor of eliminating the
classified board, but as a supermajority was not reached, the classified board remains. While this can be seen as
a positive way to protect the company from unwanted takeovers, it allows company insiders to remain firmly
entrenched. The Kelloggs board is a prime example of an entrenched board with multiple former members of
executive management presiding on the board. Even board members that are new maintain ties to former board
chairmen and significant stock holders. For all these reasons, it can be questioned whether the Board of Directors
in its current form can act as an effective counterbalance to executive management.
It is easy to brush aside these issues in corporate governance as Kelloggs is seen as a good steward of
shareholder interests with a long history of driving value and returning high dividend yield. However, it is easy to
question whether a few changes to the corporate structure could allow Kelloggs to perform even better and
provide even more value to its shareholders.

Exhibit 4: Corporate Governance Dimensions

1. Executive Compensation and Equity Interest
No. Executives are not compensated in a manner that aligns their interests with the interests of shareholders.
Kelloggs has not disclosed performance objectives for the CEO that align with financial rewards. Upon
termination, unvested equity awards are allowed to accelerate, allowing the CEO to earn pay without, or in direct
contrast to, the performance of the company. Kelloggs allows executives to earn long term incentive plans without
requiring the company to exceed the performance of peer firms thus incentivizing mediocre performance. There is
no sign that executive compensation was adjusted over the years as the company missed performance targets.
2. Ownership concentration
Kelloggs ownership is diffuse. 83% of Kelloggs stock is owned by Institutional and Mutual fund investors, with the
majority of these shares held in amounts less than 5%. Only 0.25% of shares are held by insiders and other
company management. This would suggest a low degree of concentration. However, 19.6% of total shares are
owned by the Kelloggs Foundation Trust. The Trust is the single largest shareholder in Kelloggs, and the CEO of
the trust maintains a place on the Kelloggs Board of Directors. Kelloggs offers one type of common stock to all
investors and does not have preferred stock or non-voting shares. CEO share ownership has declined over time
reducing the alignment between management goals and those of the shareholders.
The company allows for direct voting by shareholders on many issues; both financial and non-financial such as
the recent move to cage-free eggs. However, these votes often require a supermajority in order to enact policies
or authorize mergers. Shareholders are unable to call special meetings and no actions can be taken without a
meeting by written consent. Directors may only be removed for cause and only by supermajority vote of
shareholders.
3. Owner active participation
No. A single owner does not control the company. Kelloggs is governed primarily by retail and institutional
investors.
4. Exposure to the market for corporate control
Kelloggs has staggered board terms and a classified board. Each of these elements allow the company to exert
control in lieu of market forces. There are no poison pills to the best of our knowledge.
5. Board activism and independence
Kelloggs states that their goal is to have a 12 member board of directors at all times. Board members should not
serve on more than 4 other boards of public companies and should not serve as a director, employee, or officer of
a competitor. Board of Director Bylaws allow for the role of CEO and Chairman of the Board to be held by the
same individual. This is currently the case as John Bryant serves both roles. Mr. Bryant was appointed as CEO in
2011 and has served as Chairman of the Board on July 1, 2014. The current Board consists of 13 members
inclusive of Mr. Bryant. Of that group, 9 of the members were elected during Mr. Bryants time as CEO. The
compensation committee of the Board includes 5 members and is chaired by the former Board Chairman John
Dillon. The independence of the Kelloggs board should be carefully monitored as multiple members have been on
the board for significant terms, and/or served previously in management roles within the company. In addition,
Board Member Zachary Gund is related to former lead Director Gordon Gund, and George Gund III, one of
Kelloggs largest shareholders. The Board also maintains a spot for the CEO of the Kellogg Foundation; the
companys largest shareholder.
6. Exposure to non-equity stakeholders
Within the formal governance structure, there are no non-equity stakeholders. However, Kelloggs must maintain
good relationships with a variety of non-equity groups such as labor unions and employee pension funds.
Although also an equity stakeholder, the role of the Kellogg Foundation in the management of the firm cannot be
understated. Due to the size of the firm and traditional role of the company in local issues, the jurisdictions of
Battle Creek, Michigan and the state of Michigan as a whole have significant impact of Kelloggs.

MEXICO
GRUPO BAFAR
(i)

Executive Compensation and Equity Interest

In the annual General Meeting of Shareholders, the company determine the
compensation and benefits for its Board of Directors and senior executives.

(ii)

Ownership Concentration
Shareholder structure is:

Befeficiaries shareholders with more than 10% of sharesholding who

performance significant control or influence in the business.
o Main Befeficiary shareholder Oscar Eugenio Baeza Fares

Directors and Senior Executives whose indivisual shareholding is greater

than 1% and less 10%
o Jorge Alberto Baeza Fares- President of Consumer Products and
Dairy Division 8.6%
o Eugenio Baeza Montes President of the Cattle Division 1.1%

Investors with more than 5% of shareholdres with entitle to vote

o Fideicomiso Bancomer
o GBM Grupo Bursatil Mexicano representig a group of investors

Person who has significant influence in the business: Lic Orcar Eugenio
Baeza Fares and C.P. Guillermo Enrique Baeza Fares.
Shares are divided in two series: Series " B" will consist of common shares
representing at least 75 % of the total share capital and at all times turn
represent 100 % of the ordinary shares. They are free subscription.
The " L" * Series will consist of restricted voting shares and the limitation of
other corporate rights. At no time exceed 25 % of the capital and will be free
subscription and prior authorization of the Comision Nacional Bancaria y de
Valores under the terms of the Securities Market Act will be issued .
* Up to 2015 the Company did not have series " L".
All shares have the same rights and obligations within their respective
series.
These shares may be acquired by Mexicans, foreign individuals or legal
persons , companies or entities that are understood as Foreign Investors in
Foreign Investment Law .
The General Shareholders' Meetings will be held at least once a year within
four months after the close of the fiscal year .

(iii)

Owner active participation;

The business is manage through Board of Directors with different advisors
o Independent Advisor
o Owner Advisor
o Related Advisor
The Board of Directos is supported by two commettees:
o The Audit Committee consists of three independent directors and its
principal mission to support the Board of Directors of the Group in
assessing the quality and integrity of accounting and business
processes ; also identify the level of compliance strategies , established
policies and operational legal framework and its consistency with
business objectives defined by the shareholders.
o The Corporate Practices Committee is composed of three independent

directors and has as its principal mission to support the Board of

Directors in the reporting, and monitor the performance of the Relevant
Directors , evaluating related party transactions and review of the
emolument packages delivered to the director General and Executive
Officers
(iv)

Exposure to the market for corporate control;

There is no information about laws for provision for an hostile take over in
the annual reports.

(v)

Board Activism and Independence;

Grupo Bafars Board of Directors is active. The firms has a minimum
meeting every three months. In 2015 annual report established that the
company had six independent members of the Board of Directors. Together
with two Committees for ensure the Quality, Integrity, and monitoring the
performance of the Directors.

(vi)

Exposure to non-equity stakeholders.

The company has no close relationship with any specific non-equity
stakeholder.

EUROPE - ITALY
PARMALAT
Exhibit 4: Corporate governance dimension
1. Executive compensation and Equity interest

Parmalat has created a Nominating and Compensation Committee that supervise the
compensation scheme of the directors and executives in accordance with the
prescription by Borsa Italiana. The compensation of the Directors and Executives is
defined by the committee in order to mutually safe guard the interests of the Directors
as well as the one of the shareholders over the medium and long- term. For the
executive directors the compensation is manly driven by a performances scale, while
for the other directors it is defined time-to-time by the Committee.

II. Ownership Concentration

The majority of shares are concentrated into 2 different shareholders:

Sofil Sas, with 86% of the hares

Amber Capital UK llp, has 2% of the shares

III. Owner Active Participation

Almost all the components of the Board of Directors are nominated by the Nominating
Committee, and are up to Sofil Sas. None of the board has an executive role.

IV. Board Activist and Interdependence

The interdependence of the Board of Directors is granted following the Article 1467ter, Section 4, of the TUF, as cited in Article 12 of the Company Bylaws.
The Board of Directors assesses the independence of the Directors periodically, and
the assessment is due

to

ensure

that

none

of

the

Directors are parties

relationships that could affect their independence of judgment.

to