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Home - Corporate Governance

Ethics and compliance

On principle, all the people and entities related to Lar España must conduct their corporate activities in keeping with prevailing legislation, steering clear of unethical or unprofessional conduct which could harm the Company’s image.

In order to guarantee ethical conduct and enforce regulatory compliance, Lar España has established a number of control and supervision mechanisms to ensure that all employees and members of the company’s governing bodies behave in accordance with the Company’s ethics principles and uphold moral standards which enable every individual to behave with honesty, truthfulness and transparency, with the ultimate aim of preventing any form of legal breach or professional misconduct.

Code of Conduct and Whistle-blowing Channel

The Code of Conduct, approved by the Board of Directors in 2015 to complement the Internal Securities Markets Code of Conduct, applies and is binding upon all the members of the Board of Directors, the senior officers and management team of Grupo Lar, to all the executives and employees of the investees and to third parties who have professional dealings with Lar España. It establishes the rules of conduct to be followed by all those who act in the name of Lar España and its subsidiaries.

Framed by a commitment to analysing and responding to queries and complaints arising in relation to the Company’s in-house governance rules, Lar España set up a Whistle-blowing Channel, which has its own Operating Rules and is governed by the principles of good faith, confidentiality and protection. The Company has also set up an Ethics Committee which is tasked with the duties deriving from implementation of this channel. Failure to comply with the Code’s provisions constitutes an infraction and may derive in the application of disciplinary measures.

Crime Prevention Model

Framed by its commitment to stringent compliance with prevailing legislation and the prevention of illicit practices which could harm the Company’s reputation, in 2015, Lar España defined and adopted a Organizational and Management Model for the Prevention of Crime (hereinafter, the Crime Prevention Model or CPM) with the following characteristics:

1


It is articulated around the various processes and activities of Lar España.

2


For each process and activity, it identifies the criminal risk to which it is most exposed.

3


For each risk factor identified, it associates one or more internal controls that mitigate or in some way eliminate or diminish the probability that each criminal risk will materialise.

4


It includes controls which belong to the Internal Control over Financial Reporting (ICFR) system which are deemed preventive in terms of mitigating the probability of the commission of crime. These controls notably include those associated with the management of Lar España’s financial resources.

5


The internal controls that mitigate or in some way eliminate or diminish the probability that each criminal risk will materialise are, for the large part, officially enshrined in internal policies and rules.

The Board of Directors is the body ultimately responsable for the CPM’s implementation and effective execution.

In addition, the Audit and Control Committee and the person responsible for oversight of the CPM have been tasked with its correct functioning and enforcement. In turn, because it has delegated a large part of its management, Lar España requires the companies it has contractual relationships with to comply with prevailing legislation. To this end, Lar España requires those companies to have crime prevention models which mirror the company’s own CPM and reserves the right to ask for information evidencing its existence. Meanwhile, the Whistle-blowing Channel can be used to report any perceived model breaches.

Anti-Money Laundering Manual

The real estate sector is subject to strict regulations designed to prevent money laundering and establish the rules of engagement with the Executive Branch of the Commission for the Prevention of Money Laundering and Monetary Infractions (“SEPBLAC” for its acronym in Spanish). Against this backdrop, Lar España is working to develop an Anti-Money Laundering Manual, which it expects the Board to approve in 2016, as required under Spanish Law 10/2010, of 28 April 2010, on the prevention of money laundering and terrorist financing.

The Company is striving to follow best practice in this effort, prioritising ethical and transparent conduct and abolishment of any form of fraudulent or illicit activity. In addition, information will be exchanged with all parties related to Lar España and its management company (Grupo Lar) to detect potentially-suspicious transactions.