When Compania de Cemento Argos, S.A. was founded in Medellin, Colombia, 70 yearsago, its founders could scarcely have imagined that their small entrepreneurial venturewould one day become the biggest cement company in Colombia, the fifth-largest pro-?ducer in Latin America and one of the pioneers of good governance in the region.
In the beginning, the founders realized that they would need co-investors to moveahead with plans to build their first cement factory.
The City of Medellin and theAntioquia Railroad were the business’ first partners.
Two years later, the factory was oper-ating and the company began a history of fruitful creation of new plants and several sub-sidiary companies.
At the end of 2005, the old Compania de Cemento Argos was transformed into aholding company and renamed Inversiones Argos, S.A. (Inversiones Argos).
Its eightColombian cement subsidiaries were merged to form a single new operating company,Cementos Argos, S.A. (Cementos Argos).
Today, Inversiones Argos is the owner of 70% of the shares of Cementos Argos. Theremaining 30% of shares of Cementos Argos are in the hands of smaller shareholders.
Minority shareholders have no guarantee of tag-along right in case of transfer of control.Seventy-seven percent of the portfolio of Inversiones Argos is represented by itsinvestment in Cementos Argos, with the remainder largely invested in finance and insur-ance companies.
The largest and controlling shareholder of Inversiones Argos is theGrupo Empresarial Antioque?o (Colombia’s largest conglomerate), while the remaining46% of Inversiones Argos’s shares are in free float and held by assorted investors.Specifically, international investors and local pensions and severance payments adminis-tration companies hold approximately 11% of the shares of Inversiones Argos, withanother 35% of shares in the hands of smaller minority shareholders.
Both Inversiones Argos and Cementos Argos are publicly-held corporations listed onthe Bolsa de Valores de Colombia.

Impacts:
The companies do not rule out the possibility of issuing shares on the NYSE in the future. Shares of Inversiones Argos and Cementos Argosare included in IGBC Index of the Bolsa and perform similar to the performance of thewhole Index. Cementos Argos and its subsidiaries have more than 10,500 employees.

When Cementos Argos first decided to adopt good governance practices, it faced analmost complete lack of knowledge on the subject in the Colombian market. Yet, intaking the decision to move towards good governance practices, it was essential toconvey to the market what corporate governance meant for the company, and that theprinciples of good governance were not just a fad—they were here to stay. The company initially adopted a basic Code of Corporate Governance, which wassubsequently amended in line with international benchmarks. The revised Code,emphasizing aspects of disclosure and free flow of information, was discussed with avariety of stakeholders, from employees to the Board of Directors. Cementos Argos,following recommendations by its shareholders, the Board of Directors and other?stakeholders, challenged itself to comply with the highest corporate governance stan-dards advocated by international organizations. In 2004, the company finalized andpublished its Good Governance Code, which complies with the majority of NYSE,OECD, International Finance Corporation (World Bank Group), Brazilian Instituteof Corporate Governance (IBGC) and other local institutions’ recommendations forcompanies.