La EIB en la educación mexicana

The corporate governance model that was approved at the Annual General Meeting of Shareholders of March 13th 2006 established a model based on a two-tier government, separating the functions of executive and supervisory powers in Banco Comercial Português, in line with the best international practices.

The experience accumulated during more than one year of activity and the fact that the amendments to the Companies Code, allowing the full implementation of this model, were published after the adaptation of the Bank’s Articles of Association to the two-tier governance model, justified the proposed amendment to the Articles of Association, which aimed to improve the governance model, by increasing its efficiency and effectiveness, that the Supervisory Board (SB) intended to submit to the Annual General Meeting of Shareholders of May 28th 2007.

As it is of public knowledge, at the Annual General Meeting of May 28th 2007, the SB decided to withdraw the related item.

On June 27th 2007, a group of seven shareholders requested the Chairman of the General Meeting the call of an Extraordinary General Meeting (EGM) with the purpose to amend the Articles of Association, eliminating the two-tier governance model and adopting a one-tier governance system. The SB analysed the proposal and concluded, “ It is considered inopportune and does not serve the interests of the Bank, its Shareholders or its other Stakeholders”.

On July 10th 2007, two requests for the inclusion of additional items in the agenda were delivered to the Chairman of the General Meeting, one of them proposed by a group of shareholders aiming the dismissal and election of new members of the corporate bodies and another one aiming to maintain the Bank’s stability and the current strategy of value creation enshrined in the Millennium 2010 program presented by the Executive Board (EB) on the 1st of June at the Investor Day. About the first request, the Chairman of the Senior Board wrote a letter to all the Shareholders on July 16th 2007 stating that the request “is a proposal for radical changes to the company’s governing institutions. These would cause a break from institutional practice and culture, and create a risk of corporate governance instability endangering the company’s existing strategic objectives that have already been adopted and accepted by the market.” The Chairman of the Senior Board concluded in his letter that “the proposals some shareholders intend to submit to the General Meeting of August 6th 2007, both relative to the change of the current corporate governance model and to the dismissal and election of corporate body members, place the quality, experience, knowledge and culture of the Bank’s Team at stake, thereby decreasing the existing confidence in the Bank’s management and value creation abilities.”

The EGM was held on August 6th and 27th 2007, being represented 71.88% of share capital. No proposal was presented regarding the item 8, which comprised the dismissal of SB members, and the remaining proposals scheduled in the agenda were withdrawn

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by the subscribers. On August 31st 2007, Mr. Filipe Pinhal was designated Chairman of the Executive Board, following the resignation of the former CEO.

In 2007, an EGM was called for January 15th 2008, proposed separately by the EB and one shareholder. The General Meeting approved the election of new General Meeting Board Members and of a new EB for the three-year period 2008/2010, the election of two effective members, Mr. António Mexia and Mr. Manuel Vicente, and one substitute member, Mr. Ângelo Ludgero Marques, of the SB through the end of the three-year period 2006/2008 and the ratification of the designation of three members to the Senior Board through the end of the four-year period 2005/2008, Mr. Luís Neiva dos Santos, Mr. Manuel Vicente and Mr. Maarten Dijkshoorn.

Composition of the Supervisory Board

The SB is composed by a number of members always higher than the number of EB members and elected by the General Meeting of Shareholders, in compliance with the legal requisites of independence stated in the Bank’s Articles of Association and in the Law.

During the financial year 2007, the following members have stepped down from the SB: Mr. Mário Augusto de Paiva Neto, on July 2nd, Mr. Ricardo Manuel Simões Bayão Horta, deputy-chairman, on October 29th, and Josep Oliu Creus, voting member, on December 28th. On December 31st 2007, became effective the resignation of the Chairman of the SB, Mr. Jorge Jardim Gonçalves, already announced on December 4th 2007. Under statutory terms, the first deputy-chairman, Mr. Gijsbert Swalef was appointed as Chairman.

Following the resignation of Mr. Mário Augusto de Paiva Neto and Mr. Ricardo Manuel Simões Bayão Horta, the SB approved the proposals to call the substitute members Mr. José Eduardo Faria Neiva dos Santos and Mr. Mário Branco Trindade in the SB meetings of July 2nd and October 29th 2007 respectively, with effects from those dates onwards.

To fulfil the remaining vacancies for effective and substitute members, proposals were presented in order to designate new SB members to be submitted to the EGM convened for January 15th 2008. Thus, the EGM designated Mr. António Mexia and Mr. Manuel Vicente as SB effective members and Mr. Ângelo Ludgero Marques as SB substitute member. The SB composition as of December 31st 2007 was the following:

Chairman: Jorge Manuel Jardim Gonçalves Deputy Chairmen: Gijsbert J. Swalef

António Manuel Ferreira da Costa Gonçalves Voting Members: Francisco de la Fuente Sánchez

João Alberto Ferreira Pinto Basto José Eduardo de Faria Neiva dos Santos Keith Satchell

Luís de Melo Champalimaud Luís Francisco Valente de Oliveira Mário Branco Trindade

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Composition of the Specialised Committees of the Supervisory Board

At the SB meeting of September 24th 2007, Mr. Luís Valente de Oliveira was appointed Chairman of the Audit and Risk Committee, effective November 23rd 2007, following the resignation of the former Chairman Mr. Ricardo Bayão Horta. In the same meeting, the SB deliberated to change the configuration of the Sus tainability and Corporate Governance Committee, in order to deal exclusively with matters relating to corporate government, adopting the designation of Corporate Governance Committee, and its composition was also amended. This change did not affect the SB focus in the Bank’s sustained growth within the economic, environment and social themes.

In its meeting of December 4th 2007, and following the above-mentioned changes in the composition of the SB and EB, the SB approved the new composition of its Specialised Committees. Mr. José Neiva dos Santos and Mr. Jeff Medlock substituted Mr. Mário Branco Trindade and Mr. Maarten Dijkhoorn, respectively, at the Audit and Risk Committee. Among other changes, Mr. Francisco Sánchez and Mr. João Alberto Pinto Basto were nominated Chairman of the Corporate Governance Committee and Chairman of the Nomination Committee respectively. The composition of the Specialised Committees as of December 31st 2007 was the following:

Audit and Risk Committee

Chairman: Luís Francisco Valente de Oliveira Deputy-Chairman: João Alberto Ferreira Pinto Basto José Eduardo de Faria Neiva dos Santos

Jeff Medlock (Expert Member)

Nomination Committee

Chairman: João Alberto Ferreira Pinto Basto Deputy-Chairman: Francisco de la Fuente Sánchez Ângelo Ludgero Marques (Expert Member)

Luís Manuel de Faria Neiva dos Santos (Expert Member)

Corporate Governance Committee

Chairman: Francisco de la Fuente Sánchez Deputy-Chairman: João Alberto Pinto Basto

António Augusto Serra Campos Dias da Cunha (Expert Member) José de Sousa Cunhal Melero Sendim (Expert Member)

Miguel Galvão Teles, indicated by Morais Leitão, Galvão Teles, Soares da Silva & Associados (Expert Member)

Filipe de Jesus Pinhal (Chairman of the Executive Board of Directors)

Terms of Reference of the Supervisory Board

In its meeting of September 24th 2007, the SB adjusted its Terms of Reference which establishes its functioning, in order to incorporate the change of competence of the Corporate Governance Committee.

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Meetings of the Supervisory Board

During the financial year 2007, the SB met for twelve times, on January 10th and 29th, March 20th, April 23rd, May 28th, July 2nd, 9th and 23rd, August 31st, September 24th, October 29th and December 4th.

In 2007, the SB analysed the developments related with the tender offer for Banco BPI then underway and with the launch of a Bank in Romania, the annual, half-year and quarterly reports of the Specialised Committees, the situation of Millennium Bank (Turkey), the impact of the 2007 Portuguese Public Budget, the business evolution and the 2007 first quarter financial statements, the strategic plan presented at the Investor’s Day, the issues to be submitted to the Annual General Meeting, including the proposal for appropriation of profits and the proposal of amendment of the Articles of Association, and the Bank’s Internal Control System. The SB still analysed the SB self-assessment on the profile and composition of its members. Based on the analysis performed, in the opinion of the Audit and Risk Committee and the recommendation of the Sustainability and Corporate Governance Committee, the SB endorsed the 2006 Annual Report and 2006 Sustainability Report. The SB also focused on the independence of SB members, deliberated the call of two substitute members given the resignation of two effective members from the SB and analysed the information related with the Annual General Meeting of May 28th 2007 and the correspondence between EB members in what regarded the process of establishing a partnership agreement with an Angolan entity. As per the date of August 31st 2007, the SB analysed the designation of Mr. Filipe Pinhal, the first deputy-chairman, as Chairman of the EB, substituting the former CEO who had resigned.

Throughout the second half of the year, it is worth to highlight: the analysis of the materials contained in the agenda of the EGM, convened for August 6th 2007, whose works were resumed on the August 27th 2007, and of the related developments, which included the appreciation of the audit report on the procedures of the EGM, requested by the EB and by the SB through the Audit and Risk Committee; the analysis of the merger proposal presented by Banco BPI and of the subsequent view of merging the two Banks; the analysis of the negotiation of a partnership agreement with Sonangol; the adverse context of the financial markets, namely the monetary, which has developed from August 2007, having the SB, through the works and meetings of the Audit and Risk Committee during the second half of 2007, analysed and followed, as usual, the liquidity management of the Group as well as the level of liquidity plan for 2008.

In its meeting of December 4th 2007, the SB analysed the request for the call of a General Meeting, scheduled for January 15th 2008, proposed separately by the EB and one shareholder, and approved the 2008 activity plan of the SB and of its Specialised Committees as well as the current composition of the latter, included on the Corporate Governance Report.

In a meeting held on February 18th 2008, the SB, in accordance with the Companies Code, under proposition of the Audit and Risk Committee and bearing in mind the statement issued by the External Auditors and by the Statutory Auditor, issued a favourable opinion on the EB’s management report and accounts of the 2007 fiscal year,

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as well as on the EB’s 2007 sustainability report, recommending its approval at the Annual General Meeting.

Information from the Executive Board

During financial year 2007, the SB gathered comprehensive and up-to-date information in all matters that required its approval as foreseen in the Companies Code, namely the report on the activity and consolidated accounts.

In complying with the legal framework foreseen in the Companies Code and in the Bank’s Articles of Association, the Chairman of the SB and the Chairman of the Audit and Risk Committee were present, whenever deemed appropriate, in the EB meetings.

Meetings of the Specialised Committees of the Supervisory Board

The Audit and Risk Committee (ARC) met for eleven times during 2007, on January 26th (quarterly meeting), February 28th, March 29th, April 19th (quarterly meeting), May 31st, June 28th, July 19th (quarterly meeting) September 27th, October 18th (quarterly meeting), November 23rd and December 20th.

Among the tasks performed the ARC assisted the SB in its responsibilities to oversee the following: the consideration of the financial statements, both on an individual and consolidated basis; the monitoring of the evolution and control of the main risk and prudential indicators; the control of the liquidity position of the Bank; the monitoring of the evolution of the cost-to-income ratio; the follow-up of the activity of the external and of the internal auditors, the Risk Office, the Compliance Officer and of the Client Ombudsman; the analysis and follow-up of the implementation of the new Rules on Credit Granting, Follow-up and Recovery of Loans and the later changes to it; the review of the new versions of the Risk Manuals approved by the EB (Risk Management and Control Principles; Credit Principles and Guidelines; Operational Risk Principles and Guidelines) and of the main activity indicators estimated in the 2008 Budget; and the approval of the ARC activity plan for 2008.

As far as the external auditors are concerned, it is worth to mention: the certification of the independence of the external auditors; the favourable opinion on the proposal of KPMG Associados – Sociedade de Revisores Oficiais de Contas, S.A., regarding the audit actions to be developed during 2007 in the com panies of the Group Banco Comercial Português; the assessment of the 2006 KPMG Recommendation Letter, the Economic Provisions reports issued by KPMG, and the conclusions of the Desktop Review to the financial statements performed by KPMG; and the analysis and approval of several proposals of non-audit services to be rendered by auditors.

Regarding the internal auditors, it is worth highlighting the analysis of: the change to the Principles, Structure, Functioning and Duties of the Group Audit Department; the 2007 Activity Plan and Budget of the Audit Department; the Report on the Internal Control System sent to the Bank of Portugal in June 2007 and the Report on the External Evaluation of BCP’s Internal Audit elaborated by PriceWaterhouseCoopers. Still in the scope of the Internal Audit, the ARC analysed the information on the supervisory actions performed by the regulatory entities of the several markets where the Bank operates,

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including the progress reports related with the agreement set up between the bcpbank and the Office of the Comptroller of the Currency (OCC).

In 2008, the ARC reviewed in detail the 2007 Management Report and Year-End Financial Statements and recommended to the SB the adoption of a favourable opinion. The ARC approved the issue of this opinion in its meeting of February 12th 2008, after the EB approved the 2007 Management Report and Year-End Financial Statements in an earlier meeting on the same day.

The SB was informed on the works of the ARC on a regular basis.

The Nomination Committee met for seven times, on the January 9th and 29th, April 13th, July 26th, October 8th and 22nd and December 4th. Among the tasks performed it is worth to emphasise: the analysis of the remuneration policy of the EB and SB members, the criteria to apply in determining the 2006 variable remuneration attributable to the Group employees, the management policy of high-potential employees and the program of commercial skills development for the Bank employees. The Committee also assessed the study “Benchmark of the Corporate Governance Model 2006”, the annual reports of the remaining Specialised Committees, debated on the SB self-evaluation and approved its Activity Reports of 2006 and of the first-half of 2007 and the Activity Plan for 2008. The Committee gathered detailed information on the profile of a group of members of the Bank senior management team (“Alta Direcção”), discussed the proposal of amendment of the Articles of Association to submit to the Annual General Meeting and analysed the nomination matters that were justified during the year, having deliberated on a set of nominations for the corporate bodies of subsidiary companies, and analysed the proposals for the composition of the SB Specialised Committees and the filling of the changes with the Bank of Portugal. In its meeting of December 4th 2007, the Committee approved the proposal presented by the Chairman of the EB for the composition of the EB for the three-year period 2008/2010, to be submitted to the General Meeting, and the Committee issued a favourable opinion to the SB on the CEO proposed list for election of EB members, in order to be recommended its approval by the Shareholders. However, its subscriber withdrew this proposal in 2007.

On July 26th 2007, the Nomination Committee met at the request of the Senior Board, with the aim to verify the conditions made available to the EB to ensure its capacity to perform its duties, given the developments related with the call of an EGM, requested by a group of seven shareholders, that aimed to deliberate, namely, on the change of the corporate model of governance, with the consequent replacement of existing corporate bodies, and alternatively on the dismissal of five of the nine Bank executive board members, with the election of three new executive board members, and election of new SB members with eventual dismissal of SB members. The Nomination Committee concluded that “The EB has at its disposal the legal and statutory conditions for the regular functioning and performance of its duties, in order to ensure the good and sound management of the Bank.”

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The Corporate Governance Committee met for six times, on the January 29th, April 13th, September 24th, October 8th and 22nd and December 4th.

Still under the designation of Sustainability and Corporate Governance Committee, this Committee analysed the EB’s Annual Report, with particular focus to the chapter of the Corporate Governance Report, and the EB’s Sustainability Report and on these matters issued an opinion to the SB. Among the remaining tasks performed it is worth highlighting: the approval of its 2006 Activity Report; the analysis of the results of the study “Benchmark of the Corporate Governance Model 2006” and the document related with the self-assessment of SB; analysis of the remuneration policy of the SB members; analysis of the EB’s 2007 Sustainability Plan; the monitoring of the works of the Social Responsibility Committee and Stakeholders Committee, which were created within the scope of the EB; and the analysis of the Bank’s reputation management.

Additionally, two important issues were analysed. The first, regarding the independence and incompatibility rules concerning the members of the General Meeting. The second, regarding the proposal of amendment of the Bank Articles of Association to be submitted to the Annual General Meeting, which aimed to improve the two-tier governance model that was adopted by the Bank.

On October 8th 2007, the Corporate Governance Committee met for the first time under