At GFF we laid out our corporate governance taking into consideration best international practices, legal requirements, and our social statutes. It’s also in line with the set of values that defines us.
We understand that a solid structure regarding our corporate governance allows us to build value for the whole company, a proper risk management, and the company’s sustained growth in time, along with the confidence of our shareholders and the rest of our stakeholders.

Our model of Corporate Governance includes in its scope the parent company and the subsidiary companies, and includes the set of practices and processes through which they are controlled and managed. We consolidated the key directives in our Code of Good Corporate Governance, available for our employees, shareholders, and members of the Group’s Board of Directors.

The General Shareholder’s Assembly is Grupo Financiero Ficohsa’s supreme and sovereign body, and it encompasses in a joint manner the keepers of our titles, articulating their rights to intervene in decision-making. It is responsible for approving financial statements, how profits are used, and the payment of dividends. It designates the external auditor and approves or ratifies certain strategic of extraordinary operations. It is convened ordinarily once a year.

The Board of Directors is the main decision-making body, except for the Board’s own responsibilities. Among its duties, it is responsible for establishing the corporate strategy and authorizing the annual budget, as well as approving and caring for the compliance of policies and internal procedures, including the running of internal control systems. Given our operation in the financial sector, it is tasked with defining credit policies.

Each subsidiary also has its own Board of Directors, which are key in considering the characteristics of local markets for the decision-making process. The Covenant between Member Companies guides the relationship between our subsidiaries, in order to act in a coordinated manner in the main decision-making processes, while respecting the autonomy due to its Boards of Directors.

The members of each Board of Directors are designated by their corresponding Investors Assembly. Proposing candidates for directors is a responsibility that falls mainly on the very Board of Directors, even though shareholders may also formulate their own proposals.

The Corporate Governance Committee studies the competences, knowledge, and experience necessary, as well as the candidate’s adequacy.

The Directors must be known for being honorable, must have knowledge of the banking industry and / or key matters such as information technology and human capital, while also being exempt from conflicts of interest with the Group and any of its companies. They are elected for periods of two or three years, with the possibility of being elected indefinitely.

There are three possible categories of Directors:

Internal or Executive Directors: those professionally linked to and compensated by Group’s companies; they may be shareholders.

Equity-holding external Directors: holders of shares and are not part of any of the Group’s companies

External Independent Directors with no work relation or shares in the Group and / or its companies. The requirements to be a director are extended in this case in order to avoid previous relations which affect its independence

In order to ensure the creation of value for our stakeholders, we have created a performance guide for the Board of Directors, as well as covering the competencies set forth for the Corporate Governance:

Competencies of the Corporate Government

     1     Development and long-term growth, on firm and sustainable bases.

     2     Respect for the requirements imposed by the legal framework.

     3     Fulfillment of commitments to our different stakeholders.

     4     Observance of ethical duties.

  1. The Group’s assembly is completed with our subsidiary’s companies own Boards, in which the Group holds the total or the majority of stocks depending on each case. See chapter on Profile and Strategy

The Director’s compensation is defined by the General Shareholder’s Assembly, based on the specific Compensation Policy, which takes into consideration allowances for attendance to meetings and a fixed monthly allowance. The frequency with which each Board of Directors meets varies according to what is needed.
Below is the makeup of GFF’s Board of Directors, re-elected in 2020’s ordinary Assembly; the average seniority of its members as Directors is 10 years.

The Board of Directors relies on a series of Committees, with support, study, and proposal duties; they are formed by Directors who specialize in the areas they participate in. There are also executives who can’t vote; they act according to established rules.

We have formed the following Committees at Group level:

CommitteeDescriptionDetail
Audit and
Regulatory Compliance
Committee
Assists the Board of Directors in the compliance of its responsibilities of overseeing and supervising in matters of control, information, and internal communication systems, as well as in auditing services (internal and external), compliance, conflicts of interest, transparency, among others.3 members
Risk Management
Committee
Assists the Board of Directors regarding its risk supervision functions. Its responsibility is not to plan or execute risk management tasks, since these are the responsibility of the members of senior management in business areas.4 members
Nominations and
Compensation
Committee
Assists the Board of Directors in defining and organizing the
development of human talent in the Group, as well as checking and
proposing compensation structures of the Group’s executives and
provide a succession or substitution of the Executive President and
the rest of the members of senior management and / or key
executives.
4 members
LA-FT
Compliance
Committee
Assists the Board of Directors in exercising its supervision
function as it relates to the institutional management of the
compliance system in matters of prevention and detection of
money laundering, financing of terrorism, and anti-corruption.
3 members
Finance CommitteeAssists the Board of Directors of Grupo Financiero Ficohsa
in the compliance of its functions as they relate to the Group’s
structure of investment and financing, as well as for the Member
Companies.
6 members
Corporate Governance
Committee
Assists the Board of Directors of GFF in periodically evaluating the compliance of the Corporate Governance practices included in the statutes, regulations, and code of governance.
It is tasked with studying the competencies, knowledge, and experience which are necessary for the Board of Directors of GFF and the other Member Companies, and informs on the adequacy of the candidates for members of the Board of Directors proposed by the shareholders and proposes to the Board of Directors the directors who must be a part of each of the committees
It is also tasked with informing regarding appointment or termination proposals of the Corporate Secretary, Vice-president of Internal Audit, and of the Secretaries of the Boards of Directors of the Member Companies.
3 members

At a country level there are specific Audit, Risk, and LA-FT committees, which in turn depend on their counterparts at Group level. Likewise, we have different coordination teams between both levels of committees.

In the structure of our corporate governance, we also have the figure of Corporate Secretary, with competencies over the different companies. Performed by one of the Group’s executives, it is tasked with acting as secretary of the Auditing and Regulatory Compliance Committee, the Risk

Management Committee, and the LA-FT Compliance Committee; it also participates as part of the mentioned coordination teams and is responsible for the introduction of new directors.

The responsibilities of the ordinary management fall on the senior management, which participates in the committees and maintains a fluent communication with the Board of Directors. It is made up of executives with broad knowledge, experience, and commitment.