06 BOARD OF DIRECTORS - Bci

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
BOARD OF DIRECTORS
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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