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 GovernedWhat 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

Membership Services

Marketing & Communications

Marketing & Communications

Business Development

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 BoardComposed of Users

Elected by an accountable to all members

Management BoardComposed of Users

Elected by an accountable to all members

Finance & Administration

Finance & Administration

General AssemblyRepresents GS1 Users (members)

General AssemblyRepresents 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 GS112

Introduction

• ICC approved by eBallot in January 2012

• ICC Membership approved by the MB in October 2011:• Pierre Georget (Chairman)

Maria PalazzoloGary LynchDavid Calleja

Ravi MathurMiguel Angel PeraltaBo RaattamaaMiguel Lopera Philippe Wéry (Secretary)

© 2012 GS113

Objectives of the ICC

Objective: Ensure MOs comply with GS1 Statutes, Regulations and General Assembly decisions

• 1st priority - Governance Issues:• User Driven and User Governed • Operate on a not-for-profit basis• Auditor’s Letter Obligations• Respect GS1 Brand

• 2nd 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

© 2012 GS114

Roles & ResponsibilitiesPROCESS * Global Office (GO) ICC MB GA1. Set Priorities - Key areas of Compliance

Propose Approve - -

2. Compliance Criteria/Metrics * Propose Support Approve Ratify3. Assessment Methodology * Propose Support Approve Ratify4. Compliance Assessments Perform & report - -5. Compliance Issues / Infringements

Identify Support - -

6. Compliance Plans Propose,coordinate & support

Approve - -

7. Inform the MO about their non compliance

GS1 CEO and ICC Chairman to inform the MO

- -

8. Assessment of Compliance Plan implementation & Reporting

Report out Approve - -

If Compliance Plan is not implemented / not successfulMB Remedy Plan Propose Support Approve & Implement -

If MB Remedy Plan does not workSanctions Propose Support Approve RatifySanctions Implementation Do - - -

* 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

© 2012 GS115

MO Governance

Governance Principles Explanation

User Driven & User Governed

• MO 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 letter • Each 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 Brand • MO 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 Users All 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 GS118

Governance: Key areas of MO Compliance

• 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).

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