Corporate
Governance
GRI: 2-9, 2-10, 2-11, 2-12, 2-15, 2-18, 2-20, 2-23, 2-24, 2-25, 2-26, 2-27, 2-30, 205-2 and 406-1
CORPORATE
STRUCTURE
GRI: 2-9, 2-10, 2-11, 2-12, 2-15, 2-18, 2-20, 2-23, 2-24, 2-25, 2-26, 2-27, 2-30, 205-2 and 406-1
The process of setting up this structure began in 2012, when we carried out Public Offerings of Acquisition (OPAS) for the exchange of shares to become the controlling Company of General de Seguros, S.A. and Reaseguradora Patria, S.A.
Likewise, in October of the same year, and with the objective of raising our different business areas to a new level in terms of competitiveness, we constituted Servicios Administrativos Peña Verde, S.A. de C.V., which is oriented to the integration of a participative and innovative organizational culture capable of promoting an optimal organizational performance.
In addition, in 2013, we opened Patria Re Marketing Services Ltd. (London), and, in September 2015, we incorporated Patria Corporate Member Limited (PCM) under the laws of the United Kingdom, an entity focused on capitalizing on reinsurance opportunities within the Lloyd’s Bank PLC market. We also celebrated the opening of Patria Re Servicios, S.A. in Santiago, Chile.
Finally, in 2016 we incorporated CCSS - Peña Verde, S.A. de C.V., in order to participate in the auxiliary services market related to insurance; and we opened Patria Risk Management Inc. in Miami.
As of December 31, 2022, the Company’s interest in its principal subsidiaries is as follows:
| COMPANY | GRUPO PEÑA VERDE'S STAKE |
|---|---|
| General de Seguros | 99.5543% |
| Reaseguradora Patria | 99.9822% |
| Servicios Administrativos Peña Verde | 99.9999%(1) |
| PCM | 89.1618% |
| CCSS - Peña Verde | 99.9999%(2) |
(2) The remaining 0.001% is owned by Servicios Administrativos Peña Verde
SHAREHOLDER
STRUCTURE
At the end of 2022, the capital stock of Peña Verde, S.A.B. included a total of 642,431,282 nominative, ordinary, common, single series shares with no par value, of which 476,678,213 were outstanding and 165,753,069 were held in treasury. Of the shares held in treasury, 9,380,700 are subscribed.
With a price of Ps.9.7, our market capitalization, as of December 31, 2022, amounted to Ps.4,624 million.
SHAREHOLDERS’ MEETING
The Company’s highest governance body is the Shareholders’ Meeting, which provides the philosophy and risk appetite under which business must be conducted. It is also responsible for making decisions and providing the strategy to the Board of Directors so that it can supervise its correct execution throughout the value chain.
The Escobedo Conover family owns 66.26% of the Company’s shares, which gives them commanding power in the Group. Another 30.95% belongs to the Luttman Fox family, who have significant influence in corporate decisions. Finally, 0.84% is distributed among the investing public and 1.95% is in Treasury.
*Through the repurchase of the shares.
Individually, the main stockholders of Grupo Peña Verde and their respective participation, as of the end of 2022, are presented below:
(1) Controlling shareholders
(2) Shareholders exercising significant influence
(3) CEO of Grupo Peña Verde
BOARD OF DIRECTORS
This material references disclosures 2-11, 2-12, 2-18, 2-23: General Disclosures 2021
The Board of Directors has the objective of ensuring the correct management and proper control of Grupo Peña Verde’s corporate governance. For this reason, the Board is comprised of visionary, efficient, strategic, and proactive directors who are responsible for overseeing the management, conduct and execution of all of the Company’s businesses lines.
In order to guarantee the strength and effectiveness of corporate governance, the directors are trained each year in economic and governance matters related to the insurance and reinsurance sector, in addition to being provided with the necessary information about each subsidiary.
Furthermore, at the end of each session, the Board conducts a self-survey of its performance by means of a performance form. In this way, the necessary actions for improvement are determined based on the results obtained.
In addition, in order to ensure its optimal functioning, the Board of Directors is supported by various Committees under its direction. In this way, the members of the Board of Directors and the Committees are nominated and selected in accordance with guidelines that take into consideration various criteria such as:
| Member | Position | Alternate |
|---|---|---|
| Enrique Zorrilla Fullaondo | Chairman | Luis Carlos Ferezin |
| Álvaro Mancera Corcuera | Director | Luz María Gabriela Hernández Cardoso |
| Antonio Souza Saldívar | Director | Xavier Marc Meric de Bellefon |
| José Antonio Martí Cotarelo | Director | Pablo de la Peza Berríos |
| Lorenzo Lazo Margain | Director | Juan Manuel Gironella García |
| Alejandro Alfonso Díaz | Director |
COMMITTEES
This material references Disclosures 2-9, 2-20 y 2-27: General Disclosures 2021
Grupo Peña Verde has a corporate governance system that guarantees inclusive, participatory, and representative decision-making through 5 organic committees, 2 of which are regulatory, in charge of supporting the Board of Directors.
EVALUATION AND COMPENSATION COMMITTEE
Purpose
The Evaluation and Compensation Committee verifies that the Group has the necessary talent and organizational culture, mainly in key positions such as senior management, in order to encourage the Company’s competitiveness, with a focus on sustainable growth.
TECHNOLOGY AND TRANSFORMATION COMMITTEE
Purpose
Through the incorporation of new technologies and market trends in the Company’s operating processes (comprehensive digitalization of the Group), it seeks to generate greater value for customers and the various stakeholders.
PLANNING AND STRATEGY COMMITTEE
Purpose
It is responsible for providing support to the Chairman’s Office in the execution and development of the business strategy, as well as in the implementation of adequate corporate governance and internal control.
As a result of the Planning and Strategy Committee’s adherence to Article 69 of Mexico’s Insurance and Bonding Institutions Law (LISF, for its Spanish acronym), in order to implement corporate governance and internal control, policies and procedures have been established related to:
AUDIT AND CORPORATE PRACTICES COMMITTEE
Purpose
To oversee Grupo Peña Verde’s compliance with the internal regulations established by the Board of Directors, as well as with the applicable legal and administrative provisions. Likewise, it will verify that financial and operating information is issued and disclosed in a responsible and transparent manner.
The Audit and Corporate Practices Committee supports the Board of Directors with the Internal Audit.
INVESTMENT AND FINANCING COMMITTEE
Purpose
Establishes the Company’s investment policy and strategy based on current regulations and adhering to the thresholds proposed by the Risk Committee, which have been approved by the Board of Directors.
In addition to these five committees, Grupo Peña Verde has created two other committees for specific operational purposes, considering that their importance merits it:
FISCAL COMMITTEE
Purpose
To oversee that all subsidiaries fully comply with current tax regulations; and analyze initiatives and their effects on the operation. For this reason, this committee assesses the latent risks in this area, as well as defining and approving all of Peña Verde S.A.B.’s tax guidelines and standardizes them among subsidiaries.
In this regard, the Tax Committee analyzes the tax risks identified individually for each subsidiary and formulates a group-wide criterion, establishing the oversight and follow-up framework for each subsidiary.
At the end of 2022, Grupo Peña Verde does not have a tax strategy generally established for the Group.
-
The Fiscal Committee is
assisted by two specialized
external advisors
who
belong to renowned firms in tax matters. -
SUSTAINABILITY TASK GROUP
Pursuant to Peña Verde’s strong Environmental, Social and Governance commitment, the Company has a Sustainability Working Group whose main purpose is to ensure that the strategy and its execution maintain a sustainable focus. This group reports directly to the Planning and Strategy Committee.
ETHICS
The Company’s Code of Ethics and Business Conduct (the “Code”) includes all the principles that Grupo Peña Verde deems essential for the success of its business, since, by offering mostly intangible products, generating, conveying, and maintaining trust among customers.
This allows all those who make up the Group to base their daily operations on ethical principles that are aligned with the mission, vision, and values of each of its subsidiaries.
In addition, all contractual documentation is structured to fully comply with and safeguard the human and fundamental rights of policyholders, clients, employees and all those related to the Group and its companies, thus aligning ourselves with the 2011 reform on human rights.
In order to ensure that those who are part of the
Group adhere to the guidelines established by
the Code, all new employees are provided with
a physical copy that they are required to read.
In addition to the previously mentioned, each
year the Company organizes training workshops
to promote the familiarization of employees with
the Code, which are evaluated at the end of the
activities to detect areas of opportunity and solve
them in order to achieve full understanding of the
Code.
In this regard, the Compliance Area oversees the proper adherence of employees to the principles established by the Code of Ethics and the training activities related to the Code, since failure to comply with them could result in disciplinary action, termination of the contract and even civil and/or criminal prosecution.
Therefore, all employees have the facility to ask the Human Resource and Legal Departments for all the necessary advice on how to proceed in the event of a possible fault or violation of the Code.
KEY PRINCIPLES OF THE CODE
Respect for others
We base our hiring, remuneration, promotion, and employment decisions on factors such as talent, skills, qualifications and performance, excluding factors related to race, sex, skin color, religion, age, nationality, sexual orientation, gender identity, disability and any other reason unrelated to the aforementioned factors.
With all this, the Company seeks to ensure a workplace free of discrimination, retaliation of any kind or harassment, which is distinguished by:
During the period, 1 case of discrimination was recorded, which proceeded to a diagnosis where more information was requested from the complainant, which was followed up, no further information was provided by the complainant, closing the case as unsubstantiated.
Conduct in the workplace
We do not tolerate physical or verbal violence, or any kind of threat in the workplace committed by or against employees or their property.
Labor relations and
working conditions
Grupo Peña Verde recognizes and respects the right of its employees to associate in order to encourage collective bargaining, as long as the terms established in the collective bargaining agreements are respected.
Idea assets
Due to the nature of Grupo Peña Verde’s business, the Company considers it extremely important to have rules and controls that regulate, among other things, the access, handling, and authorization of use of its tangible and intangible assets. These regulations include:
Third-party Services Policy
Only those third parties with integrity and good reputation, and who are aware of and adhere to Grupo Peña Verde’s Code of Conduct and Ethics for suppliers, may be considered as potential service providers for the Group.
In this regard, and since all contracts with third parties state that such has no labor dependance on Grupo Peña Verde, suppliers undertake to comply with all labor and employer obligations in accordance with the provisions of current legislation.
POLICIES RELATED TO REGULATORY COMPLIANCE
Anti-corruption policy
Grupo Peña Verde does not allow, either directly or through third parties, the realization, concealment and/or promotion of any act of bribery, corruption, collusion, blackmail, and any activity that involves offering or granting to any person a payment in cash or in kind, advantages, privileges, provision of services, assumption of debts or obligations, or excessive courtesies.
By virtue of the foregoing, the necessary measures are taken to prevent and avoid acts of corruption, both at the Group level and in each subsidiary, considering the following principles:
Gifts and hospitality
It is not allowed to receive bribes, kickbacks, gratuities or other exceptional payments from any organization or individual that competes with, intends to do business with, or is doing business with Grupo Peña Verde.
Donations
Donations will not be made when: i) they are at the request of a government official, or ii) a government official is involved in the administration of such organizations. For this reason, all donations are reviewed and approved by the Head of the Corporate Legal Department.
Political Contributions
Under no circumstances shall direct or indirect contributions be made to political parties, movements, committees, political and labor organizations, or their representatives and candidates, except as required by applicable laws, if any.
Anti-money Laundering
Grupo Peña Verde ensures that it works exclusively with reputable customers and suppliers, whose business and resources are within the applicable legal framework. In this regard, the Company does its part to not enable or assist transactions with resources of illicit origin, the financing of terrorism or any other financial crime.
OTHER RELEVANT POLICIES
Human Rights Policy
The Group’s Human Rights Policy provides a precise and clear framework to ensure the dignified treatment of all people related to the Company.
Diversity and Inclusion Policy
The Company’s Diversity and Inclusion Policy establishes the necessary guidelines to continue promoting equal opportunities and better decisionmaking.
MAIN MEASURES TO PREVENT CONFLICTS OF INTEREST
RELATED-PARTY TRANSACTIONS
All transactions between related parties must be
carried out at market value and strictly adhere to
the Policies for Transactions with Related Parties
and Entities, in force and approved by our Board
of Directors.
We consider related parties to be:
