The Risk Committee. a) The Board of Directors will create from among its members a Risk Committee formed by members of the Board of Directors who do not perform executive functions and that have the opportune knowledge, capability and experience to fully understand and control the risk strategy and risk propensity to risk of the Company, in the amount considered by the Board of Directors, with a minimum of three (3) and a maximum of six (6) members, the majority of whom shall be independent directors.. b) The Chairman of the Risk Committee will be designated by the Committee itself from among the independent Directors forming part of the same. c) The amount of members, the powers and the operational regulations of the Committee will be developed in the Board of Directors Regulation, and should favour the independence of its operation. d) Notwithstanding the other function attributed in Law, these By-laws, the Board of Directors regulation or other functions that could be assigned by the Board of Directors, the Risk Committee will have the following basic functions: (i) Assess the Board of Directors about the current and future global propensity to risk of the Company and its strategy in this field, reporting about the risk appetite, assisting in ensuring the application of that strategy, making sure that the Group actions are consistent with the level of tolerance of the previously decided risk and monitoring the suitability level of the assumed risks to the established profile. (ii) Proposing the Group Risks Policy to the Board, which should particularly identify: a) the different types of risk (operational, technological, financial, legal an reputational, among others) which the Company faces, including the contingent liabilities and others not in the balance. b) the information and internal control systems that will be used to control and manage the mentioned risks. c) fixing the risk level considered acceptable by the Company; and d) the foreseen measures to mitigate the impact of the identified risks in the case that these materialized. (iii) Ensure that price policy of assets and liabilities offered to the clients fully takes into account the business model and risk strategy of the Company, Otherwise, the Risk Committee will present to the Board of Directors a plan for tackling it. (iv) Determine, together with the Board of Directors, the nature, quantity, format, and frequency of the information about risks that the Board of Directors should receive and establish that to be received by the Committee. (v) Regularly revise expositions with main clients, economic activity sectors, geographical areas and types of risk. (vi) Examine the information and risk control processes as well as the information system and indicators that should allow: a) the suitability of the structure and operation of risk management in the entire Group; b) knowing the risk exposition in the Group to evaluate if it adapts to the profile decided by the institution; c) have sufficient information for precisely knowing about the risk exposition for taking decisions, and; d) adequate operation of the policies and procedures mitigating operational risks. (vii) Evaluate the regulatory compliance risk in the field of application and decision, understanding how risk management of legal or regulatory sanctions, financial, material ort reputational losses that the Company may sustain as a result of non- compliance of laws, regulations, ruling standards and codes of conduct, detecting any risk of non-compliance and, monitoring the same and examining possible deficiencies with deontology principles. (viii) Report about new products and services or of significant changes in the existing ones, in order to determine: a) the risks faced by the Company with the emission of the same and their commercialization on the markets, as well as the significant changes in already existing ones; b) information and internal control systems for managing and controlling these risks; c) corrective measures to limit impact of the identified risks, in the case that they materialize; and d) adequate means and channels for their commercialization in order to minimize reputational and defective commercialization risks. (ix) Collaborate with the Remuneration Committee to establish rational remuneration policies and practices. To this effect, the Risk Committee will examine, notwithstanding the functions of the Remuneration Committee, if the policy for incentives foreseen in the remuneration systems take into consideration the risk, capital and liquidity and the probability and opportunity of the benefits. The delegated Risk Committee may have access to the information about the risk situation of the Company so it can adequately carry out its functions and, if necessary, specialized external assessment, including that of the external auditors and regulatory bodies. e) The Risk Committee will be validly formed when the majority of its members concur in person or by representation. The majority of the concurrent members, present or represented, will adopt the agreements taken by the mentioned Committee. f) The Risk Committee will prepare a report about its activity in the year that will serve as a base among others, as the case may be, for evaluation of the Board of Directors.
Appears in 4 contracts
