The corporate structure of the Group, which forms an essential part of the Corporate Governance System, includes:
a) The Company, the principal function of which is to act as the holder of the equity stakes in the country subholding companies.
b) The country subholding companies, which in turn, group together the business subholding companies that conduct their activities in each country in which the Group operates.
c) The business subholding companies.
All of them have human and material resources of their own to independently carry out the duties assigned thereto by the Corporate Governance System.
This structure is intended to favour a process of agile and rapid decision-making in day-to-day management, subordinate to the business subholding companies, while achieving appropriate coordination at the Group level as a result of the duties of supervising the country subholding companies and the Company.
Based on this corporate structure, the governance of the Group is determined in accordance with the basic principles described below, which duly distinguish between day-to-day and effective management duties, on the one hand, and supervision and control duties, on the other:
a) Attribution to the Board of Directors of the Company, which exclusively exercises holding company duties, the powers relating to establishing the Group’s policies and strategies, and the basic guidelines for the management thereof, as well as general supervision of the development of such policies, strategies, and guidelines and of decisions on matters of strategic importance at the Group level.
b) Assumption by the chairman of the Board of Directors & chief executive officer, with the technical support of the Operating Committee, by the Business CEO (director general) appointed by the Board of Director, with overall responsibility for all of the businesses of the Group, and by the rest of the management team, of the duty of organisation and strategic coordination within the Group through the dissemination, implementation, and monitoring of the general strategy and basic management guidelines established by the Board of Directors.
c) The function of organisation and strategic coordination is strengthened through country subholding companies in those countries where the Board of Directors of the Company has so decided. Such entities group together equity stakes in the business subholding companies carrying out their activities within the various countries in which the Group operates and centralise the provision of services common to such companies, always in accordance with the provisions of applicable law and especially the legal provisions regarding the separation of regulated activities. Country subholding companies have boards of directors that include independent directors and their own audit committees, internal audit areas, and compliance units or divisions.
Country subholding companies are responsible for disseminating, implementing, and ensuring compliance with the policies, strategies, and general guidelines of the Group in each of the countries in which it operates, taking into account the characteristics and unique aspects of such countries.
In this regard, country subholding companies facilitate the coordination of the companies in which they hold interests and are assigned responsibility for effective compliance with the laws and regulations on separation of regulated activities.
In order to concretise the application of the Corporate Governance System based on the applicable law in each country, as well as the characteristics and unique aspects of such countries, and to meet the responsibilities that the Corporate Governance System assigns thereto, the country subholding companies approve the rules applicable to the companies in which they have a stake, and specify the application at the country level of the content of the basic policies and guidelines approved by the Company’s Board of Directors for the entire Group.
d) The business subholding companies of the Group assume decentralised executive responsibilities, enjoy the independence necessary to carry out the day-to-day and effective management of each business, and are assigned responsibility for the day-to-day control thereof.
These business subholding companies are organised through their respective boards of directors, which include independent directors where appropriate, and their own management decision-making bodies; they may also have their own audit committees, internal audit areas, and compliance units or divisions.
In order to facilitate the orderly performance of the functions inherent in its capacity as the controlling company of the Group, the Company’s Board of Directors establishes a number of guidelines that allow for the exchange of information required for the strategic coordination of the activities conducted by the various country subholding companies and business subholding companies, without detracting from the decision-making autonomy of each of such companies or from the requirements imposed on their directors by law or those stemming from the Corporate Governance System, in the interest of all the companies making up the Group.
The corporate and governance structure of the Group permits, in turn, the global integration of the businesses in accordance with the Group’s Business Model, which focuses on maximising the operational efficiency of the various business units and guarantees the dissemination, implementation, and monitoring of the overall strategy and of the basic management guidelines established for each business, primarily through the exchange of best practices among the various companies within the Group and without detracting from the decision-making autonomy of each of such companies.
Within the corporate and governance structure of the Group, the Operating Committee is an internal committee of the Company, providing technical, informational, and management support both with respect to the functions of definition, supervision, organisation, and monitoring of the general management guidelines and to the strategic planning of the business managed by the business subholding companies, in accordance with the Group’s Business Model.
The country subholding companies are related to various entities in the nature of foundations, which are not a part of the Group’s corporate structure and that implement, in their respective countries, the corporate social responsibility strategy designed by the Board of Directors of the Company, to the extent consistent with their foundational purposes and as assigned thereto by the Board of Directors of the country subholding company to which they are related.
Lastly, the Compliance Unit, which is a collective internal and permanent body linked to the Company’s Corporate Social Responsibility Committee, has duties in the area of regulatory compliance and in the Corporate Governance System, in particular, regarding crime prevention matters.