YPF is Argentina’s leading energy company: it is the country’s most important producer of hydrocarbons and refined products, the largest investor, and one of the greatest generators of employment – more than 46,000 people are directly or indirectly employed by the company.

It is a leader in corporate governance, identifying its transparency, shareholders’ participation, proper performance of its board of directors and its external auditors’ independence as the basic pillars of its governance structure. In light of its sustained growth, the company is justifiably proud of its practices.

YPF operates a fully integrated chain of the oil and gas business, with market leadership in all segments of its activity. To sustain its business and get the good corporate governance level it desires, the company has a board of directors that assumes management of the company in a diligent and prudent way, in accordance with good business practice under the Argentine Corporations Law.

The board approves the strategic plan, as well as management objectives and annual budgets, for which it analyses the investment and financial policies alongside the macroeconomic situation.

Across the board
YPF currently has 17 regular directors, five of whom are independent. This number of directors is considered adequate for the scope of the company, and the experience provided by its members is extremely positive for the company’s management. In this regard, shareholders seek that board membership is bestowed on individuals of recognised national and international solvency, know-how and expertise from the most varied corporate fields.

In line with good corporate governance practice, the board has adopted and implemented a rule of ethics and conduct applicable to the board and all employees, which govern the conduct of the company and its employees with respect to their positions and commercial and professional relations.

As another part of its policies, YPF has approved and implemented a code of conduct in the context of the securities market – defining its principles and framework for action – to promote transparency and protect the legitimate interests of the investment community.

Since 2007, YPF has been implementing a plan to recognise its corporate and social responsibilities. The company believes that responsible behaviour not only contributes to a better community but also creates corporate value – by reducing risk, strengthening its intangible assets, helping to identify new opportunities, and increasing investor confidence.

The plan consists of 61 actions across nine programmes, created to ensure the company conducts its business according to good ethics, with respect for human rights, and within a diminishing environmental footprint.

The aforementioned actions are related to ethical behaviour and the fight against corruption; promoting human rights; commitment to the people; increased security; community integration; sustainable energy and climate change matters, control and minimisation of environmental impact; influence regarding all these matters to our suppliers, contractors, subcontractors, partners and customers, incorporating them in the sustainable value chain and social and environmental performance.

The board of directors verifies the implementation of the company’s strategies and policies, compliance with the annual budget and operating plan, and observes and controls management performance. The board also has policies on management and risk control, which are regularly updated with market best practices through its audit committee and internal audit department.

YPF has aligned its internal control system for financial reporting with the requirements established by Section 404 of the US Sarbanes-Oxley Act (following the Internal Control Framework guidance issued by the Committee of Sponsoring Organisations of the Treadway Commission), a process which is supervised by the audit committee.

In order to carry out its mission effectively and efficiently, the board has two committees: an audit committee and a disclosure committee. The audit committee’s primary function is to support the board in its supervisory duties, through regular reviews of the process of economic and financial disclosure, its internal controls, and external auditors’ independence. Its members can be proposed by any director of the board and currently all regular members are independent directors.

The disclosure committee’s purpose is to promote and reinforce the company’s policy in relation to the information disclosed by the company to its shareholders, to the markets where its securities are listed, and to the regulatory entities of these markets. The information should be accurate and complete, should properly represent the company’s financial situation and results of its operations, and should be communicated in compliance with the requirements of the rules and general principles regarding market operation and good governance practices. The committee is made up of executive directors, some of whom are also members of the board.

Getting the right feedback
YPF complies with regular disclosure regimes defined by the Comisión Nacional de Valores (Argentina’s National Securities Commission), the Buenos Aires Stock Exchange, and the Securities and Exchange Commission regulations. Among others obligations, YPF annually presents the report on Corporate Governance Code, issued in compliance with the provisions of the Comisión Nacional de Valores General Resolution No. 516, which discloses the implementation status of the resolution’s recommendations.

The company also has an office for shareholders to address their questions and concerns. YPF’s strategic vision establishes a framework to ensure the human organisation is a key competitive advantage for the company’s leadership.

YPF has a high profile in society, and accordingly contributes to the communities where it works. It is at the forefront of corporate responsibility: developing innovative policies on safety and environmental protection, research and technology, and quality and process management. In addition, every year it consolidates its links and support to professional and amateur sport, and through the YPF Foundation promotes educational, cultural, social and environmental projects.

Stocks and shares
YPF’s upstream operations consist of the exploration, development and production of crude oil, natural gas and LPG. The downstream operations include the refining, marketing, transportation and distribution of oil and a wide range of petroleum products, petroleum derivatives, petrochemicals, LPG and bio-fuels. It is also active in the gas separation and natural gas distribution sectors – both directly and through its investments in several affiliated companies.

YPF is a stock corporation organised under the laws of the Republic of Argentina. It was a state-owned company until November 1992, when the Argentine government established procedures for its privatisation. In accordance with the Privatisation Law, in July 1993 it completed a worldwide offering of 160 million Class D shares which had previously been owned by the government. As a result of that offering and other transactions, the Argentine government’s ownership interest in the capital stock was reduced from 100 percent to approximately 20 percent by the end of 1993.

Since 1999 the company has been part of Repsol YPF, an integrated oil and gas company with headquarters in Spain, operating all over the world. Repsol controlled 99 percent of YPF capital stock from 2000 until 2008. In 2008 the Petersen Group purchased shares representing 14.9 percent of the capital stock from Repsol YPF, and in 2011 increased its stake to 25.46 percent.

Since September 2010 Repsol YPF has sold approximately 16.57 percent of the company to the stock market. As of September 30, 2011 Repsol YPF controlled 57.43 percent, Petersen Group holds 25.46 percent, and the majority of the remainder is free-float traded in the New York Stock Exchange and the Buenos Aires Stock Exchange.