Board of Directors

The Board of Directors is a collegiate and representative body, whose role is to implement and monitor compliance with the decisions of the shareholders, as well as conducting activities necessary to plan, manage, and implement good governance in management, conduct and execution of the society’s business.

Main functions of the Board of Directors

In accordance with the provisions of the Corporations Law and the Law of Credit Institutions, the Unified Banks and the Banco Base bylaws, the Board of Directors shall be responsible for the functions of management, representation and regulation.

a.     Business functions

b.     Representation and Management functions

c.     Regulatory functions

a. Business Functions
The main duty of the Board is to define, plan and propose to shareholders, the strategies to be executed upon.

This includes:

  • Define the Bank's strategic vision.
  • Participate in decision-making.
  • Approve significant transactions with related parties.

b. Representation and Management Functions
Here, the Board of Directors is responsible, with due diligence, for the procedures needed for the development of shareholders’ assemblies, as well being representative of the company before third parties.

  • The Board may appoint from its members, a delegate for the implementation of specific acts.
  • The Council shall exercise the powers conferred by the assembly, to carry out its functions.
  • The Council may, if granted by the General Assembly, confer powers on behalf of the company, which may be revoked at any time.
  • According to the bylaws, calls for Shareholders' Meetings shall be made by the President, Secretary or Assistant Secretary of the Board.
  • Invitations to shareholders’meetings shall be signed by the Chairman of the Board of Directors or by the Secretary, or where appropriate, by a designated director or group of directors.
  • Monitor compliance with the resolutions carried out in the shareholders' meetings.
  • Submit to the shareholders an annual report concerning all financial information, in accordance with Article 166 and 172 of the General Law of Commercial Companies.
  • Directors must recuse themselves from voting on any matter that involves a conflict of interest.
  • Matters discussed at meeting are confidential, and discretion to be used regarding all things regarding Banco Base".

c. Regulatory Functions
According to the Circular of Banks, the Board of Directors must perform audits in order to provide transparency into the actual state of the society.

Establish internal controls to ensure that the society runs according to the guidelines and objectives set by the Board.

Similarly, the Board should establish an appropriate and effective risk management program to anticipate events that might create an adversity for the Bank.

In order to perform what has been described above, the Board of Directors, shall do the following:

  • Approve the acquisition, leasing and disposition of real and personal property belonging the Bank.
  • Propose the creation and integration of the various committees (Audit, Risk, Remuneration, Communication and Control, among others), and to develop their policies, guidelines and goals.
  • Make changes, when necessary, to the objectives, policies and guidelines of the committees.
  • The Board must approve the appropriations of the institution or delegate that assignment to the committees.
  • Must approve the limits for risk exposure and the mechanisms for carrying out corrective actions.
  • Approve, on a case-by-case basis, any exception that exceeds the specific limits of established risk exposure.
  • Develop plans to address breaches in funding and / or internal controls.
  • Approve the objectives and guidelines of the internal control system.
  • Approve, at least until the second hierarchical level, the Bank's organizational structure (Directors and Managers), and any amendments made to those levels.
  • Analyze the internal control system to ensure it is working properly.
  • Approve the code of conduct and promote its dissemination and implementation in coordination with the office of the CEO.
  • Appoint the external auditor.
  • Appoint the bank's internal auditor.
  • Review, at least annually, the objectives of the internal control system and its implementation guidelines.
  • Evaluate the functions of the Audit Committee and the General Directorate according to the internal control objectives.
  • Define and implement appropriate actions to correct the deficiencies of which the Board is aware.

The Board of Directors, as a collegial body, will carry out the above activities. However, there are certain functions that correspond to some Board Members, such as the President and the Secretary. These functions are described below.

Integration of the Board of Directors

The Board of Directors of the Bank shall consist of a minimum of five and a maximum of fifteen directors, of which at least twenty-five percent shall be independent of the Bank. For each director, there shall be appointed an alternate director, of like kind.

The appointed bank directors must have technical skills, integrity and a satisfactory credit history – as well as an extensive experience in financial, legal or administrative matters.

Most of the directors must be Mexican nationals or foreign residents of Mexico

The person who is to be appointed as a director of a commercial bank and is also a director of another financial institution, shall disclose that fact to the shareholders of that institution prior to accepting the appointment.

In no case may directors be

I.         Officials and employees of the institution, with the exception of the CEO and company executives holding positions from the two immediate hierarchies below the former, and they should not constitute more than a third of the board of directors;

II.        The spouse or significant other of any of the persons referred to in the preceding section. They may not be blood relatives, nor may they be equal to or less than twice removed with more than two directors;

III.       Those with pending litigation with the institution;

IV.       Persons convicted of crimes against property, those who have had their business duties/right to work curtailed or suspended or revoked;

V.        Declared bankruptcy or in a state of bankruptcy

VI.       Those persons with supervisory roles over credit institutions;

VII.      With the exception of those involved with the Federal Government or the Institute for the Protection of Bank Savings in their capital, or receiving support from the latter, and

VIII.     Those participating in the board of directors of another commercial bank or a holding company of a financial group that belongs to a commercial bank.

Independent Directors
An independent director is the person who is unrelated to the administration of the respective commercial bank, and who meets the requirements and conditions established by the National Banking and Securities through general regulations, which also establishes the assumptions under which a director shall be deemed to cease to be independent for the purposes of this article.

In no case shall be independent directors:

I.         Employees or directors of the institution;

II.        Persons who are in any of the cases provided for in Article 73 of this Act, or who have power or control;

III.       Partners or persons who are employed, or have a position or a commission in companies or associations that work for the institution or companies belonging to the same group of companies of which it is a part. It is believed that a society or association is valuable when the income received for providing services to the institution or to the same group of which it is a part, represents more than five percent of the total income of the company or association;

IV.      Customers, suppliers, service providers, debtors, creditors, partners, directors or employees of a company that is a customer, supplier, service provider, debtor or creditor of the institution. It is considered that a customer, supplier or service provider is important as the services they provide to the institution or sales that they make to it -- represent more than ten percent of total sales or services of the customer, supplier or service provider, respectively. It is also considered that a debtor or creditor is valuable when the amount of the respective operation is greater than fifteen percent of the assets of the institution or its counterparty;

V.       Employees of a foundation, association or civil society receiving significant donations from the institution.

VI.      Employees of a foundation, association or civil society receiving significant donations from the institution.

VII.     Significant donations are those that account for more than fifteen percent of the total donations received by the foundation, association or civil society;

VIII.    CEOs or senior managers of a company of which they are members of the board of directors;

IX.      Top Executives or employees of companies belonging to the financial group to which the institution belongs;

X.       Spouses, significant others, and relatives by blood, marriage or civil unions up to a first degree relation, of any of the people mentioned in sections III to VII above, or through a third degree relation, in some of those listed in sections I, II, IX and X of this article;

XI.      Directors or employees of companies in which the institution's shareholders exercise control;

XII.     Those with conflicts of interest or subject to personal, real or economic interests from any people who maintain control of the institution or consortium or group of companies belonging to the institution, or people who have administrative or strategic control in any of these.

XIII.    Those who have been included in any of the cases above, during the year prior to the intended appointment.

Meetings of the Board of Directors

For the proper exercise of its functions, the Board of Directors must meet according to the following guidelines:

  • Periodicity
    The Board of Directors shall meet at least quarterly, or whenever convened by its chairman or by directors representing at least twenty five percent of the total membership of the Board or any of the commissioners of the institution.
  • Quorum
    To hold regular and special meetings of the board, the meeting should take place with Directors representing at least 51% percent of all board members, of which at least one shall be an independent director.
  • Place
    According to the bylaws, sessions may be held at any locale in Mexico, as long as the venue is mentioned on the call.