06 BOARD OF DIRECTORS - Bci

Annual Report 2006
06 BOARD OF DIRECTORS
THE PRINCIPAL POLICIES GOVERNING THE BANK ARE CONSTANTLY BEING STATED
Lionel Olavarría Leyton
General Manager
Dionisio Romero Seminario
Director
Sergio De Amesti Heusser
Director
Daniel Yarur Elsaca
Director
Alberto López-Hermida Hermida
Director
Pedro Corona Bozzo
Director
Luis Enrique Yarur Rey
Chairman
Jorge Cauas Lama
Vice Chairman
Modesto Collados Núñez
Director
Manuel Valdés Valdés
Director
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Annual Report 2006
The members of the board were elected at the
ordinary shareholders meeting held on April 12,
2004 for a period of three years. Consequently,
the meeting now called should elect the persons to
form the board for the next three years.
The board is constantly dictating the principal
policies governing the Bank’s actions including
commercial strategy, budget review, portfolio
diversification, credit risk, financial risk,
operational risk and external markets risk, the
equity position, profitability, sufficiency of
allowances, voluntary allowances, service quality
and working conditions.
It receives monthly a complete presentation on the
performance of Bci and the results being obtained.
Since 2000, it analyzes and pronounces every
year on the results of the performance evaluation
process carried out by the offices, both of the
Bank and of its subsidiaries, following a procedure
that takes into account an extensive separated
composition of activities in the different risk areas.
As well as knowing the performance report, the
board examines the actions or measures to be
adopted to resolve those activities in which some
risks are noted that have an inadequate cover.
It is also informed monthly of matters of a special
nature examined or approved in its Executive,
Directors’ and Corporate Governance and
Corporate Social Responsibility committees.
The chief executive officer, Lionel Olavarría Leyton, acts as the secretary of board
meetings, assisted by the advisor to the chairman and chief executive officer, Humberto
Béjares Jara, and the senior legal counsel, Pedro Balla Friedmann.
Executive Committee of the Board
The Executive Committee meets twice a week and has full powers delegated by the
board to resolve on many matters, principally of a credit and commercial nature, credit,
financial, operating and market risks, the opening of branches, management powers,
etc.
It periodically revises the degree of concentration of different sectors of business
activity that the Bank is financing and sets lending limits for these.
It examines monthly the Bank’s market risk levels compared to the different limits set
by the Committee. It is also informed of and approves the financial strategy the Bank
will follow during the next month.
The Executive Committee is composed of five members, these being Luis Enrique Yarur
Rey, Jorge Cauas Lama (chairman and vice-chairman respectively), Modesto Collados
Núñez, Manuel Valdés Valdés and Sergio De Amesti Heusser. Dionisio Romero
Seminario, Pedro Corona Bozzo, Alberto López-Hermida Hermida and Daniel Yarur
Elsaca are alternate members. The advisor to the chairman and chief executive officer,
Humberto Béjares Jara, also normally takes part.
The chief executive officer, Lionel Olavarría Leyton, acts as secretary to the committee,
assisted by the risk advisor, Andrés Atala Hanna, on credit matters, and the senior legal
counsel, Andrés Atala Hanna, on other matters.
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Directors’ Committee
Constantly functioning since 2001, the members
of this Committee are Alberto López-Hermida
Hermida (chairman), Jorge Cauas Lama and
Manuel Valdés Valdés. The advisor to the chairman
and chief executive officer, Humberto Béjares Jara,
acts as the secretary.
Since October 19, 2004 and by resolution of the
board, the Committee assumed those functions
reserved for the Audit Committee, as established
by the Superintendency of Banks and Financial
Institutions.
Among its functions, it is informed of the
principal risks existing in the control systems,
processes and procedures of the Bank and its
subsidiaries, examines the annual audit plans and
is informed about the policies applied to prevent
suspicious asset-laundering and terrorist financing
transactions.
At the meeting held on December 21, 2006,
the Directors’ Committee examined the report
containing recommendations for improving
administrative-accounting controls issued by
PriceWaterhouseCoopers, usually called the
internal control report, in the presence of the
external auditors. Later the Committee revises the
follow-up of the recommendations made in the
report.
In carrying out its functions and in accordance
with the law, the Directors’ Committee met on
January 30, 2007 to examine the balance sheet and
financial statements of the Bank, unconsolidated
and consolidated, for the year 2006, in the
presence of representatives of the external auditors
PriceWaterhouseCoopers.
The Committee increased its own appreciation of
the financial statements following the explanations
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and analysis provided by the external auditors, bearing in mind that the monthly
balance sheets are known in advance by the board’s Executive Committee and widely
analyzed at the ordinary board meetings, when the chief executive officer provides
a detailed presentation based on the monthly report of the performance control
management.
The Directors’ Committee expressed its agreement with the contents of the financial
statements, plus those of all the Bci companies, whose respective auditors’ opinions
were unqualified.
This pronouncement was reported to the board on February 27, 2007, with the
proposal to suggest to the ordinary shareholders meeting that the services of
PriceWaterhouseCoopers be maintained for auditing the balance sheet for 2007, as well
as the services of the private credit-rating agencies Feller Rate and Fitch Ratings.
The other activities of the Directors’ Committee, discussed at different meetings, were
directed to examining transactions with related parties, especially those referred to in
clauses 44 and 89 of the Corporations Law, taking into account the resolution adopted
by the board concerning transactions for the supply of goods and services for the
normal functioning of the Bank contracted with related parties. Among the related-party
transactions examined by the Committee was the acquisition of shares in Credicorp
Ltd., a company controlled by Banco de Crédito del Perú (BCP), in an amount similar to
the 450,000 shares sold by Empresas Juan Yarur S.A.C. In any event, this transaction
was made under the reciprocal investment agreements between Bci and that bank, and
was authorized by the Superintendency of Banks and Financial Institutions and the
Central Bank of Chile, and carried out through the New York Stock Exchange.
The Committee examined in good time the state of compliance with the comments
made by PriceWaterhouseCoopers in its internal control reports and the
Superintendency of Banks and Financial Institutions in its inspection reports.
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Annual Report 2006
The conclusions on each of the matters examined by the Directors’ Committee were
promptly reported to or submitted for the approval of the board or the board’s Executive
Committee, as the case may be.
Corporate Governance and Corporate Social Responsibility Committee.
This board committee of the Bci Corporation was formed on December 21, 2004.
During 2006 it was informed of and pronounced on the following matters:
• Results of the self-evaluation made by the board of the Corporation.
• Granting authority to grant powers and appoint persons into certain positions.
• Training program given by the Bank to its staff throughout Chile, through physicalpresence
courses, by electronic means or through self-teaching manuals.
• Activities of the Corporación Crédito al Menor, donations.
• Launching of the Nace and Renace campaigns for providing financing to small
businesses.
• Social responsibility awareness workshop for suppliers of the Bci network.
• Environmental awareness campaign addressed to Bank staff.
• Structure of the information provided periodically to local and foreign institutional
investor analysts, regulators and credit-rating agencies, and to Bci’s own
shareholders.
• Operational risk management and control model.
• Good responsible marketing practices applicable to the products and services
offered by Bci, to its advertising and the way in which they are promoted.
The members of this Committee are Luis Enrique Yarur Rey (chairman), Jorge Cauas
Lama, Sergio De Amesti Heusser, Pedro Corona Bozzo and Daniel Yarur Elsaca, who
shall remain as such so long as they are still directors.
The chief executive officer, Lionel Olavarría Leyton, acts as secretary to the committee,
assisted by the advisor to the chairman and chief executive officer, Humberto Béjares
Jara.
Ethics Committee
The Ethics Committee administers the Code of
Ethics. It is responsible for regulating the practices
considered as suitable for complying with the
Corporation’s objectives and policies, following
ethical standards. It is in the exclusive power of
the Committee to interpret the provisions of the
Code of Ethics, examine enquiries about conduct
made by the staff, and set generally-applicable
criteria for the Bci companies, based on the cases
it examines from time to time.
The Committee reports directly to the chairman of
the board, Luis Enrique Yarur Rey, and comprises
the chief executive officer, Lionel Olavarría Leyton,
the advisor to the chairman and chief executive
officer, Humberto Béjares Jara, the manager,
commercial and branches, Mario Gómez Dubravcic
and the senior legal counsel, Pedro Balla
Friedmann, who also acts as the secretary of the
Committee. The Committee is joined temporarily,
for periods of two years, by the last two winners of
the Bank’s annual Jorge Yarur Banna prize.
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Annual Report 2006
70 years
being part of the lives
of our customers
“OUR COMERCIAL RELATIONSHIP WITH BCI IS BASED ON GOOD
UNDERSTANDING AT ALL LEVELS, GREAT MUTUAL TRUST AND WORK
WELL DONE”.
Since the foundation of the first company of the Von Appen Group, Ultramar, in 1952, its principal business being the provision of
port and shipping services, there has been a successful commercial relationship with Bci. The Bank has taken part in the evolution
and growth of each of its companies: “Bci has accompanied us from the start. It was our first bank and our relations have always
been very close” says Wolf Von Appen.
After 55 years in business, the Group has consolidated itself as one of the largest economic groups in the country and throughout
this time, it has maintained Bci as its principal bank, due to the mutual trust built up and the support that the Bank has provided for
its innovation processes.
Bci currently offers it services like the following, in order meet the group’s financial requirements: checking accounts, investments,
credit operations, electronic banking and factoring. And although Wolf Von Appen states that they are a conservative group in their
investments, he stresses that Bci has always accompanied them in the challenges faced: “We have always had a relationship of
mutual trust and our concerns have fallen on fruitful soil. We have helped each other so that both parties benefit”.
For the future, Von Appen says that the Group’s idea is to continue working with Bci: “The Bank has been providing unconditional
financial support and I expect that relations will be the same in the future”.
Wolf Von Appen, Von Appen Group.
Customer since 1952.
1952
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