Board Committees & Charters
The board delegates certain functions and activities to executives or committees, some of which involve directors.
The Directors' Committee is responsible for upholding Art. 50 bis of Law 18,046.
For the last two years the following board members served on the Directors' Committee:
- Hernán de las Heras Marín (appointed on 05/16/2013)
- Jorge Eduardo Marín Correa (appointed on 05/16/2013)
- Horacio Pavez García (appointed on 04/28/2016)
- Álvaro Vial Gaete (until 04/28/2016)
1. Examined the independent auditors' report, balance sheet and other financial statements addressed to shareholders of Grupo Security and its subsidiaries, as of December 31, 2015.
It did not make any comments.
The audit partner from Deloitte and the Corporate Chief Accounting Manager from Grupo Security also participated in this meeting.
2. Requested bids for external auditing services for 2016 from the following audit firms:
(a) Deloitte; (b) KPMG; (c) PwC and (d) EY.
EY decided not to present a bid for independence reasons (Article 242 of Law 18,045). The committee evaluated the proposals received from Deloitte, PwC and KPMG, and agreed to propose Deloitte to the Board of Directors to recommend to shareholders at the ordinary shareholders' meeting as the preferred choice for external auditor for Grupo Security and subsidiaries for 2016.
It proposed KPMG as an alternative.
Among the factors taken into account in proposing external auditors, the committee considered:
a) Experience and knowledge of the Group's business areas, especially in auditing banks, insurance companies and other financial companies in Chile.
b) Presence and participation as independent auditors in the financial and insurance markets.
c) Audit and partner independence (Art. 242 to 245 of Law 18,045).
d) Suitable technical skills and partner experience with risks addressed by IFRS.
e) Value, coverage and scope of service.
3. The committee also recommended that the Board of Directors of Grupo Security S.A. propose that the shareholders reappoint Fitch Ratings and ICR as risk raters.
4. Approved the committee's annual performance report for 2015 to be presented to the Board of Directors and included as a note in the Company's annual report in accordance with Art. 50 Bis of Law 18,046.
5. Reviewed and approved the Group's Annual Internal Auditing Plan, its main scope and risk approaches.
6. Reviewed the Annual External Auditing Plan for 2016 prepared by Deloitte for Grupo Security and subsidiaries, which included the Management Report (internal control evaluation), the Auditor's Report on the Financial Statements as of December 31, 2016, and other reports such as:
the Provision Adequacy Report (methodology and calculations), the Report on Circular 979, the Report on Chapter XX and XXI, the Report on Internal Control Law 20,712 (Single Funds Law) and Circular 1441 on insurance, the Report on Circular 1962, as well as the schedule, the assigned team, and principal audit focuses for 2016, all with a focus on risk.
7. Reviewed the planning for quarterly income tax reviews, and instructions to the auditors in Peru, in order to facilitate consolidation in Chile of the life insurance subsidiary.
8. Reviewed and monitored tasks aimed at preventing the laundering of money and receipt of stolen goods, fraud and bribery of public officials.
Reviewed notifications received through the complaints channel, and progress with training with respect to Laws 20,393 and 19,913 regarding corporate crime prevention.
Monitored the biannual renewal process that certifies that Grupo Security and its subsidiaries comply with Law 20,393, and reviewed the Common Reporting Standard (CRS), which must be implemented by Grupo Security subsidiaries.
9. Regularly reviewed the most important operational, technological, compliance and credit risks, as identified through comprehensive risk management and implemented at each subsidiary.
10. Regularly reviewed loss events and claims reported by Group companies.
11. Regularly reviewed the main audit findings from Grupo Security's businesses and companies, as well as ensured that commitments arising from the audit are resolved, with an emphasis on enforcing action plans, especially those that are behind schedule.
12. Reviewed and approved the proposed change to the audit scope.
13. Reviewed the regulatory changes issued by the regulatory bodies during the period. The committee dedicated particular time to the proposed response to the "Corporate Governance Self-Assessment" questionnaire referred to in SVS GCS 385.
14. Reviewed the main lawsuits affecting the subsidiaries of Grupo Security.
15. Reviewed the Corporate Governance Panel, which contains indicators that reflect Corporate Governance at the Group's main subsidiaries.
16. Reviewed and monitored the implementation of core banking software at Banco Security, a subsidiary of Grupo Security.
Reviewed the proposal to update the Comprehensive Risk Management Policy for Grupo Security and subsidiaries to be submitted and approved by the Board of Directors of Grupo Security.
18. Reviewed the Comprehensive Risk Management Model, a software tool used to manage, control, monitor and report every month on risks, and reviewed progress on implementing the updated version of the Comprehensive Risk Management Policy in subsidiaries.
19. Reviewed the proposal to update the Code of Ethics and Behavior Manual for Grupo Security and subsidiaries to be submitted to and approved by the Board of Directors of Grupo Security.
Reviewed the implementation schedule for the updated version of the Code of Conduct.
20. Reviewed the compensation and incentive plans for Grupo Security managers, senior executives and employees.
21. Reviewed the Management Report issued by the external auditors on November 30, 2016, and presented by the partner at Deloitte.
This document incorporated comments on the Group and its subsidiaries arising from the audit of the financial statements as of December 31, 2016.
22. Reviewed transactions between Grupo Security related parties and associates.
In particular, the Directors' Committee verified compliance with the General Transitory Policy on Routine Customary Transactions with Related Parties, approved at Board meeting 211 on April 29, 2010, and the subsequent amendments made at its subsidiaries. The committee verified that the policy has been fully upheld.
23. The committee did not make any recommendations to the shareholders.
Compensation and expenses
- Compensation for attendance:
- UF15, subject to a minimum of 10 meetings per year.
- 2016 Budget: UF1,000
- Important matters:
- Compensation for attendance has not changed over the last two years.
- This committee did not incur any administrative or consulting expenses in 2016.
- The committee met twelve times during the year.
The objective of this committee is to regularly review the implementation of strategic plans for each Group company and Corporate Services, and report to the Board of Directors.
- Analyze company results, opportunities and challenges arising from technological, commercial and financial issues.
- Increase the visibility of strategic plans that impact the Group's medium and long-term results.
This committee, together with the Directors' Committee, is responsible for informing the Board about compensation issues.
- Examine the compensation systems and plans for Company managers, senior executives and employees.
- Encourage a conservative approach to risk within the organization, which is in the best interest of the shareholders and the general public.
This committee is led by the Controller, whom the Board has appointed as responsible for crime prevention. The remaining committee members are the compliance officers at all companies and the Corporate Compliance Department.
- Plan, coordinate and set guidelines to ensure that the policies and procedures established in the Group's Crime Prevention Model are fully implemented and operative, in accordance with Law 20,393 on the Criminal Liability of Legal Entities.
Planning and development committee
This committee focuses on the planning and control of financial and commercial management across all Group companies, and monitors corporate strategic initiatives.
- Define and monitor corporate expense control policy and budget scheduling.
- Manage the corporate governance model.
Marketing and quality committee
The Marketing Committee is focused on brand management and control and the customer experience, based on metrics that are monitored through committees.
It meets quarterly.
- Define and monitor company plans, and verify their alignment with corporate objectives and strategy regarding marketing, quality and BI.
- Define and control the quality models implemented in all companies, and verify their alignment with the Security Customer Experience Model.
- Structure and monitor a common model for processing requests, complaints and claims.
- Define, monitor and control implementation of the Comprehensive Customer Value Proposition Model.
- Protect the Security brand at each subsidiary.
Operations and it committee
This committee is key in defining and implementing operational and IT processes.
- Plan and monitor operational and technological issues.
- Review operational and technological continuity.
- Analyze, evaluate and plan IT projects.
Other Committees that support the Grupo Security Board of Directors to manage the Security companies are:
- Culture and Business Ethics Committee.
- Corporate Risk Committee.