ANNUAL REPORT 2010

Board of Directors
The Board of Directors must act efficiently and in the interests of its shareholders, creditors,
clients, employees and the community at large. The Board has responsibility for defining
corporate strategies, determining business policies and establishing and controlling the strategic
direction of the institution. It also supervises the management of the organization’s different
business and support areas. It evaluates results by comparing them against previously approved
plans and strategies, performance in previous years and the general banking environment.
In line with best corporate governance practices, the majority of the Directors on the Board of
Directors of Mercantil Servicios Financieros are independent of Management. The presence of
directors who are independent of Management is further proof of Mercantil’s commitment to
international management standards and in line with best corporate government practices.
The Directors are highly qualified and well-versed in business and finance, ensuring optimum
performance of their functions. The Board of Directors is made up of 10 directors and 20 alternate
directors. The Board appoints the President and Executive President from its members and these
appointments may be held by the same person. The Board meets once a month and whenever
else the President deems necessary.
To ensure better transparency and control over management procedures, right from the outset
Mercantil’s Bylaws provided for the creation of a Compensation Committee and an Audit
Committee. The creation of these Committees was provided for in the Bylaws of its main
subsidiary, Banco Mercantil in 1981. An Ordinary Shareholders’ Meeting held in March 2006
approved a proposal submitted by the Board of Directors to amend a provision in them giving
legal status to the Risk Committee, which had already been created by the Board meeting on
May 31, 2001. It is important to point out that these Committees are comprised mainly of
Directors who are independent from the bank’s Management.
Consistent with the Company’s tradition of adhering to best corporate governance practices,
the Audit Committee is subject to Bylaws governing its functions. This document describes the
Committee’s purpose, functions and responsibilities, and the requirement that members conduct
an annual assessment of their compliance therewith. It also states that its members must be
independent of Management, adding that at least one of them must have considerable
accountancy or financial management experience.
Mercantil Servicios Financieros
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