Governance at GS1 Presentation for MEMA September 2012

© 2012 GS1 Contents 1.Role of a GS1 Member Organisation (MO) 2.MO Rights & Obligations within GS1 3.Internal Compliance Committee

Role of a GS1 Member Organisation (MO)

© 2012 GS1 Key Role To be User Driven & User Governed To promote, deploy and support GS1 standards, solutions & services on behalf of its members To comply with the GS1 membership rules

© 2012 GS1 User Driven & User Governed What does it mean? Rigorous corporate governance, accountability and financial transparency to the members Members participate in the governance and decision making (Management Board, General Assembly) Delivering quality solutions and services based on global GS1 standards & members’ needs Delivering value for money to all of the members (big, medium & small) Providing appropriate representation at national & international level

© 2012 GS1 Role of MO Management Board To provide overall strategic direction To represent and be accountable to the members ensuring robust corporate governance & financial transparency To ensure optimum performance of the organisation in terms of Strategy, Operating plan, Budget, Membership and revenue To make proposals to the members (General Assembly) on strategic direction, annual budgets, operating plan, membership fees, changes to the Statutes, etc. Delegates the day-to-day management and operations to a CEO/General Manager & staff

© 2012 GS1 Typical MO Structure Membership Services Marketing & Communications Business Development Chief Executive / Managing Director Reports to Management Board. Ensures day-to-day management Chief Executive / Managing Director Reports to Management Board. Ensures day-to-day management Management Board Composed of Users Elected by an accountable to all members Management Board Composed of Users Elected by an accountable to all members Finance & Administration General Assembly Represents GS1 Users (members)

MO Rights & Obligations within GS1 (GS1 Statutes: Articles 5 & 6)

© 2012 GS1 Rights Exclusive license to administer the GS1 System and provide GS1 products & services in its territory under GS1 brands and trademarks Exclusive license to distribute GS1 standards and publications Can vote and participate at GS1 General Assembly meetings Can submit nominations for membership of GS1 Management Board (together with MOs from its region) Ongoing information, assistance & training from GS1 Global Office

© 2012 GS1 Key Obligations To promote the Mission & Vision of GS1, Comply with the GS1 Statutes, rules & General Assembly decisions, Administer & deploy the GS1 System & standards in its territory Deliver the GS1 Core Services (see ICC slides) Pay annual fees to GS1 Global Office, Operate on a not-for-profit basis (see ICC slides) Be an independent legal entity (see ICC slides) Be user driven & user governed (see ICC slides).

Internal Compliance Committee (ICC)

© 2012 GS1 Introduction 12 ICC approved by eBallot in January 2012 ICC Membership approved by the MB in October 2011: Pierre Georget (Chairman) Maria Palazzolo Gary Lynch David Calleja Ravi Mathur Miguel Angel Peralta Bo Raattamaa Miguel Lopera Philippe Wéry (Secretary)

© 2012 GS1 Objectives of the ICC Objective: Ensure MOs comply with GS1 Statutes, Regulations and General Assembly decisions 1 st priority - Governance Issues: User Driven and User Governed Operate on a not-for-profit basis Auditor’s Letter Obligations Respect GS1 Brand 2 nd priority - Business Methods: Objective: Ensure all MOs offer a minimum and consistent level and quality of services Priority: focus on Core Services which, if not properly implemented, can damage the GS1 system and/or the users 13

© 2012 GS1 Roles & Responsibilities PROCESS *Global Office (GO)ICCMBGA 1. Set Priorities - Key areas of Compliance ProposeApprove-- 2. Compliance Criteria/Metrics *ProposeSupportApproveRatify 3. Assessment Methodology *ProposeSupportApproveRatify 4. Compliance AssessmentsPerform & report-- 5. Compliance Issues / Infringements IdentifySupport-- 6. Compliance Plans Propose,coordinate & support Approve-- 7. Inform the MO about their non compliance GS1 CEO and ICC Chairman to inform the MO Assessment of Compliance Plan implementation & Reporting Report outApprove-- If Compliance Plan is not implemented / not successful MB Remedy PlanProposeSupportApprove & Implement- If MB Remedy Plan does not work SanctionsProposeSupportApproveRatify Sanctions ImplementationDo--- * For the compliance areas that are clearly defined in the GS1 Statutes and Regulations (e.g. user driven, not for profit), the steps 2 and 3 are not needed 14

© 2012 GS1 MO Governance 15 Governance PrinciplesExplanation User Driven & User GovernedMO has a Management Board composed in majority of GS1 user companies (member companies) Management Board is accountable to the users/members Members can participate in the decision making (i.e. via General Assembly) Operate on a not-for-profit basis Income of MO only used to further the aims & objectives of the MO No distribution of MO income among the members or shareholders Submit Auditor’s letterEach year MO to submit letter from local accredited Auditors confirming MO’s Financial Strength according to definition agreed by GS1 General Assembly. New wording & requirements since May 2012 Respect the GS1 BrandMO must observe the GS1 Trademarks License and Branding Guidelines

© 2012 GS1 Business Methods: Assessment Business Method (Core Service) Assessment Method 1.GS1 System Integrity & Unique Identification MO to complete a Self assessment on methodology and procedure used to allocate GS1 numbers. GO will provide a Self-assessment tool for this purpose. 2.GS1 System Understand & Support to Users 50% of GS1 MO staff and a minimum one person per MO must successfully pass the GS1 Certificate training via LEARN. Each MO to provide information on GS1 standards, services and solutions on its website. Each MO to have its own website. 3.Training of UsersAll MOs to provide evidence that they offer training to their users through class room training or eLearn 4.Technical Documentation Each MO to make GS1 General Specs available from its website (English version) and technical information available (local language). 5.Connection to GEPIR MO member data is connected to GEPIR is accurate and up-to-date New - Agreed by 2012 GA

APPENDIX

© 2012 GS1 Governance: Key areas of MO Compliance 18 User Driven and User Governed  Majority of the members of the Management Board are users of GS1 standards  Exceptions allowed for countries under State system  The MO has a structure or mechanisms in place which ensures the Management Board is held accountable to the users Operate on not-for-profit basis  No distribution of MO revenue/profit to members, Board members, owners and management except:  legitimate payments for out-of-pocket expenses and reasonable remuneration in return for services actually rendered to the MO (e.g. travel expenses for attending Board meetings, management fees, etc.)  reasonable remuneration to Board members (and not their companies) Fees Obligations  Pay annual fees on time.  Annually submit letter from Auditor  Role of the ICC is:  to clarify, in case of doubt or uncertainty, whether the MO’s calculation of its gross revenue complies with the definition for MO Gross Revenue agreed by the GA and  to ‘chase’ MO’s late in the payment of their fees but only once all actions taken by the Global Office and the Finance & Audit Committee have proved unsuccessful. Respect GS1 Brand (as per the Brand Architecture Guidelines approved by the GA)  For naming the MO legal/trading entity: use GS1 + country (logo or text)  Use GS1 logo with registered trademark ® (no alteration allowed)

© 2012 GS1 Changes to the Auditor’s Letter - Changes in red – Approved at 2012 GA We have examined the declaration of the Financial Strength of [name of the GS1 organisation] to GS1 Global Office and confirm that the declared Financial Strength is in conformity with the GS1 Financial Model agreed by the GS1 Extraordinary General Assembly in Brussels on 19 February 2009 and modified by the GS1 General Assembly on 23 May 2012 and is in conformity with the list of examples of included and excluded items of income as agreed by the GS1 General Assembly. We confirm that the Financial Strength of [name of the GS1 organisation] amounts to [amount in local currency] and represents y% of the total revenues of [name of the GS1 organisation]. The Financial Strength of [name of the GS1 organisation] includes the revenues generated by the following entities and activities: [list the activities and entities included in the Financial Strength] and excludes the revenues generated by the following entities and activities: [list the activities and entities excluded from the Financial Strength]. We certify that our firm, [name of the auditing company] is certified by the [name of the national or international certification body] and attach evidence of such certification. Signed (local Auditor). 19

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