Grupo Financiero Ficohsa, understands Corporate Governance as the set of practices, values, principles, policies, rules, means and processes through which the Group’s companies and the group as a whole are controlled and managed, seeking business efficiency, transparency and coherence in their actions, respect for those who invest in them and compliance with their commitments to their various stakeholders.
Based on the governance structure defined by Resolution No. 300 /15 -03- 2005, the group explored the mechanisms to strengthen its governance model, since it understands that a solid governance structure makes it possible to reduce “governance risk.” It facilitates the appropriate management of other risks that are easily transmitted from one industry to another and, in short, is a basic pillar for maintaining sustainable growth levels over time, for the benefit of its shareholders and other stakeholders, including the supervisor himself.
The objective of this model is to ensure transparency and efficiency of its actions as the Group’s parent company.
The GFF Corporate Governance Model it is based on a group vision and an internal control architecture (comprising risk, internal and external audit, and regulatory compliance and AML/CFT prevention) in which there is a parent company and subsidiary companies (or Member Companies) operating in the Central American region. In other words, the Board of Directors is the highest decision-making body, except for decisions reserved for the General Shareholders’ Assembly.
GFF’s Board of Directors is the Group’s ultimate source of information and consolidation. The other Boards of Directors are “treated differently” according to the reality of each member company and the characteristics of the local market.
- STRUCTURE OF FICOHSA GFF
- CORPORATE GOVERNANCE STRUCTURE
- GENERAL CONSIDERATIONS
- COMMITTEES OF THE GFF BOARD OF DIRECTORS:
- TRANSPARENCY, ELECTIONS AND RISKS
The general shareholders’ Assembly is the supreme and sovereign body of the company, through which the corporate will is expressed and the right of the shareholder to intervene in the decision making of the company in the matters within its competence is articulated.
The criterion that guides the actions of the Board of Directors is the creation of value for stakeholders.
Corporate Governance Competencies:
- Long-term development and growth, with a sound and sustainable basis.
- Full respect of the requirements mandated by the legal framework.
- Compliance of commitments with the different stakeholders.
- Respect of ethical duties.
Except for regulatory requirements or extraordinary circumstances, the policy of the Board of Directors is to delegate ordinary management to the senior management team.
At also concentrates its activity on the general functions of: strategic planning; management control; supervision; governance and advice, reserving the approval of certain operations (extraordinary or large).
The remuneration of the Board of Directors and its committees is the responsibility of the General Shareholders’ Meeting.
The remuneration policy in force for Directors consists of the following components:
- Allowance for attendance in Board of Directors meeting.
- Fixed monthly allowance.
- Audit and Compliance Committee (3 members)
The purpose of the Audit Committee is to assist the Board of Directors in fulfilling its oversight and supervisory responsibilities in the following areas: control architecture, application of risk policy, internal control systems, internal information and communication systems, internal audit and external audit services, compliance, transparency and disclosure of information, conflicts of interest and transactions with related parties.
- Risk Committee (4 members)
The purpose of the Risk Committee is to support the Board of Directors in the function of risk supervision and, consequently, its responsibility is not to plan or execute risk management tasks, as these are the responsibility of the members of Senior Management and the business areas.
- Nominating and Compensation Committee (4 members)
In relation to the nomination process, this committee reports, prior to the decision of the Board of Directors, on the proposed appointment of the Executive Chairman of GFF and other Officers and evaluates the candidates for Executive Chairman or General Manager proposed by the Boards of Directors of the Member Companies.
It is also in charge of defining and organizing the succession or substitution process in a planned manner in the event of the dismissal, announcement of resignation, incapacity or death of the Executive Chairman and Officers of GFF, the Executive Chairmen and CEOs of the Member Companies, as well as in the other senior management and key executive positions of GFF and the Member Companies, making the corresponding proposal to the Board of Directors.
- Corporate Governance Committee (3 members)
The Corporate Governance Committee supports the GFF Board of Directors in the periodic evaluation of compliance with the Corporate Governance practices included in the Articles of Association, Regulations and Code of Governance, taking into account the commitments undertaken with each of the stakeholders, the results obtained and the conflicts that may have arisen, and proposes any adjustments and reforms it deems appropriate. As of 2016, this committee is responsible for studying the skills, knowledge and experience required by the Board of Directors of GFF and other Member Companies and reports on the suitability of the candidates proposed by the shareholders for appointment to the Board of Directors; each Director who must form part of each of the Committees.
- AML/CFT Compliance Committee (3 members)
The GFF Board of Directors’ AML/CFT Compliance Committee supports GFF and the other Boards of Directors in the oversight function related to the institutional management of the compliance system to prevent and detect money laundering and financing of terrorism.
This committee is conceptualized as a body with a broad scope on the entire group, and its main function is to know the results of the application and effectiveness of the prevention program in the area of money laundering and financing of terrorism. This, in order to propose to the Board of Directors of GFF actions aimed at strengthening it for its proper application in each of the Member Companies according to their own jurisdiction.
- Financial Committee (6 members)
Consistent with the need to maintain a coordinated financial policy in relation to the Group’s investment and financing structure, the GFF Financial Committee assumes these functions for the group of Member Companies, including among its permanent Executives, officials who are experts in the field.
These committees are headed by Directors of GFF as well as by Guest Executives of its member companies, with extensive experience and knowledge to deal with the matters that fall within the competence of each of the Committees, thus ensuring that the issues are dealt with the required depth and professionalism. It is important to highlight the balance between the Directors of the Board of Directors of GFF and external and internal directors.
In 2015, it was decide to create the “Country Committees” for Risk, Audit and AML/CFT, so that each country in which GFF operates has its local committee as follows:
- Audit and Compliance Committee Honduras (4 members)
- Audit and Compliance Committee Guatemala (3 members)
- Audit and Compliance Committee Panama (3 members)
- Audit and Compliance Committee Nicaragua (4 members)
- Honduras Risk Committee (6 members)
- Guatemala Risk Committee (4 members)
- Panama Risk Committee (3 members)
- Risk Committee Nicaragua (3 members)
- AML/CFT Compliance Committee Honduras (4 members)
- AML/CFT Compliance Committee Guatemala (3 members)
- AML/CFT Compliance Committee Panama (3 members)
- AML/CFT Compliance Committee Nicaragua (4 members)
- Facilitate the process of managerial accountability.
- To facilitate the knowledge on GFF by the different stakeholders (employees, customers, suppliers, regulator/supervisor, community and market in general).
- Communicate the governance reforms undertaken by GFF’s shareholders, aimed at differentiating themselves from other companies, and always be up front with their managerial model.
- The information transmitted is relevant to the recipients.
- The information transmitted is correct and truthful.
- The information is transmitted in an equitable manner.
- The information is transmitted in a timely manner.
The Chairman of the Board of Directors of GFF performs executive functions as Executive Chairman Grupo Financiero Ficohsa, S.A.
For the process of nomination, the Corporate Governance Committee studies the skills, knowledge and experience that are necessary in the Board of Directors of GFF and other Member Companies and reports on the suitability of the candidates proposed by the shareholders and proposes to the Board of Directors, the Directors that should form part of each one of the Committees. It also reports on the proposals for the appointment or removal of the Corporate Secretary, Vice President of Internal Audit, of the Secretaries of the Boards of Directors of the Member Companies.
GFF has a Best Practices Policy for the Prevention of Conflicts of Interest that is applicable to all employees. This policy focuses on preventing particular situations of conflict of interest, current or potential, between internal and external clients, suppliers and shareholders.
The areas responsible for monitoring the application of this policy are the Vice President of Human Resources, the Manager of Corporate Social Responsibility and the Ethics Committee, the last one, acting under the supervision of the Audit and Regulatory Compliance Committee.
In addition, there are a number of associated policies such as Gifts and Courtesies, Anti-Corruption and Bribery, and Anti-Discrimination and Harassment.
The functions of the Board of Directors are duly detailed in GFF’s Board of Directors Regulations, which are concentrated in four (4) main categories:Strategy Functions, Supervisory Functions, Control Functions and Governance Functions.
The International Finance Corporation (IFC) gave a presentation to the members of the Board of Directors and the Credit Committee of Banco Ficohsa Honduras on the IFC Performance Standards and the importance of their application to control risk and reputational damage and to responsibly take on the challenge of good environmental and social risk management of Banco Ficohsa in Honduras.
GFF has issued an environmental and social risk policy that applies to Honduras, Guatemala and Panama, and it has been updated to keep it current.
The Board of Directors of Grupo Financiero Ficohsa, S.A. is periodically inform about the risk dashboards that summarize aspects such as operational risk monitoring, legal, liquidity and credit, reputational among others of the countries where it operates.
During the review of the risk tables, in the event that an out of range indicator is found, the members of the Board of Directors appoint the Chairman of the Risk Committee of Grupo Financiero Ficohsa, S.A., so that it may manage with the corresponding member company, so that it may be mitigated.
GFF’s Board of Directors receives an annual report on the risk area that includes information on institutional risks at the regional level.
Monitoring of impacts, risks and opportunities it’s done at least four times per year.
The regional Corporate Social Responsibility committee, made up of a chairman and four board members from the four areas of the organization’s corporate social responsibility management model, is responsible for reviewing and approving the report, including the materiality chapter.
Through Corporate Governance: Audit and Compliance, Risk, Nomination, Compensation and AML/CFT Committees, the matters that deserve the maximum attention are channeled through their regular reports prepared for the meeting.