• Annual Report | Responsible Banking 2021

Structure

At Santander, we coordinate our corporate governance through policies, processes, programs and initiatives that meet the highest international sustainability standards. Our goal is to create value for our stakeholders and forge transparent and trust-based relationships with each and every one of them. This is how we transform challenges into opportunities for all, offering smart solutions to our clients.


Our corporate governance is tasked with directing and controlling the management of our governance bodies and our stakeholder relationships. It is underpinned by regulatory requirements and local and international best practices for providing clear and specific information about the reports and functions of the Bank’s business.

The Board of Directors and its Committees are responsible for authorizing the Governance Model and Corporate Frameworks that comprise the Group’s Internal Governance system, in accordance with local regulations and legislation. Another of its responsibilities is ensuring that the Bank’s resources are used correctly and responsibly, and it is also tasked with monitoring and evaluating any impacts, risks and opportunities relating to Environmental, Social and Governance (ESG) issues.


Structure of Grupo Financiero Santander México, S.A. de C.V. which forms part of Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México*.







**During the Ordinary and Extraordinary General Shareholders’ Meeting, held on April 20, 2021, the cancellation of 650,000,000 treasury shares was authorized in order to issue a total of 1,805,300,000 new shares, corresponding to the aforementioned 650,000,000 treasury shares and the 155,300,000 new shares stemming from the issuance of Equity Instruments authorized at the Meeting.
As such, an increase in the Company’s capital stock was authorized, totaling MXN $6,825,447,481.00 (six billion, eight hundred and twenty-five million, four hundred and forty-seven thousand, four hundred and eighty-one Mexican Pesos), through the issuance of 1,805,300,000 shares (921,514,867 Series F shares and 883,785,133 Series B shares) of the Company’s capital stock, all of which are registered common stock with a nominal value of MXN $3.780782962.
Furthermore, and as a result of the Initial Public Offering (IPO) finalized on December 8, 2021, Banco Santander, S.A. (Spain) acquired 306,088,636 Series B shares of the 561,353,228 shares from said Series that were involved in the IPO. It now has a 21.191364% share of the Company’s capital stock.

Board of Directors

The main remit of the Board of Directors is to assess and analyze material, social, environmental, economic and ethical issues, in addition to the major opportunities, impacts and risks associated with the proper implementation of the Bank’s Responsible Banking strategy.

The Board of Directors has no direct contact with its stakeholders; however, it is tasked with coordinating stakeholder affairs. It functions and actions are regulated by the Group’s by-laws, which are underpinned by a focus on both transparency and efficacy, and by local and international best practices.

In 2021, the Board of Directors met on seven occasions, on the following dates: January 28, April 22, June 17, July 22, September 22, October 28, and November 11. During these sessions, the most relevant sustainability issues for the Bank’s operations were identified and are contained in the minutes of the sessions for follow-up purposes.

Our Board of Directors is composed of 22 members: 11 Proprietary and 11 Alternate members. The Board of Directors is responsible for assigning members to Committees.

The Board of Directors is comprised of the following Committees:

  • • Audit Committee (CA).
  • • Remuneration Committee (CR).
  • • Comprehensive Risk Management Committee (CAIR).
  • • Corporate Practices, Nomination and Remuneration Committee (CPSNC).

The Board Members appointed must be honorable people who have the knowledge and experience necessary to fully comprehend the Bank’s activities in terms of legal, banking- financial, accounting, administrative and auditing issues, in addition to understanding the risks and ESG issues that could affect the Bank. This process is ratified on a yearly basis by the General Shareholders’ Meeting.

The Board is also tasked with supervising issues relating to climate change through a strategic Responsible Banking Agenda program, which promotes an on-going commitment to acting responsibility, contributing to economic development, and improving the quality of life of its employees, their families and the community in general.

Furthermore, at a Group level, the Responsible Banking, Sustainability and Cultural Committee supports the Board of Directors in monitoring social, environmental and climate change issues. It meets quarterly and covers the aforementioned issues from a perspective of risk, business opportunity and commitments to improve its operations and performance. It helps the Board reach more informed decisions and create strategies based on risks and opportunities identified.

As such, we have reaffirmed our commitment to the environment by renewing our environmental policies and maintaining an Environmental Management System (EMS).



Board of Directors Appointment Process


The Board of Directors is organized as follows:


Responsibilities of the Committees

The main task of the Committees is to reach decisions on economic, environmental, and social issues. The identification, analysis and monitoring of Bank issues and decisions are undertaken by the Board Committees (Regulatory Committees), which are supported by Internal Committees supervising the proper functioning of the Regulatory Committees.

Committees of the Board of Directors

The Board of Directors appointed four committees specializing in economic, social, ethical, and legal issues in order to ensure Santander’s operations are conducted effectively and transparently. These Committees are also tasked with ensuring the sustainability of business operations. Every year, four ordinary sessions are held, in addition to an extended session to analyze and decide on strategies within our operations.

The composition of the four committees is outlined below: