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Report BFA - Bankia 2014 / Responsible managementCorporate governance

  • The board of directors has 11 members
  • 22 meetings of the board of directors in 2014
  • Board member term of office: 4 years
  • Annual evaluation of the board of directors

Changes to the corporate governance model

Bankia complies with the best national and international corporate governance practices. At the 2014 General Meeting, shareholders approved a raft of amendments to the by-laws and regulations, including a number of developments laid down in subsequent legal reforms approved at the end of the year and some of the recommendations set out in the new Code of Good Governance for listed companies published by the CNMV in February 2015.

Bankia’s governing bodies are the General Meeting of Shareholders and the Board of Directors, as well as the standing committees: the Audit and Compliance Committee, the Appointments Committee, the Remuneration Committee, the Risk Advisory Committee and the Board Risk Committee. On 22 October 2014, the Board resolved to disband the Appointments and Remuneration Committee and created a separate Appointments Committee and a Remuneration Committee.

On 25 June and following the former Appointments and Remuneration Committee’s recommendation, Bankia’s Board of Directors voted to appoint José Sevilla as the new CEO, and Antonio Ortega – General Director of People, Organisation and Technology – as a new executive director.

These changes represent another step in bolstering Bankia’s corporate governance, paving the way to achieve the objectives for transforming the institution and further engaging the bank’s general directors in the decision-making process.


Bankia’s board of directors comprises:
3 executive directors and 8 independent directors.


Milestones reached in developing best corporate governance practices are as follows:

  • In June 2013, shareholders at the General Meeting voted to create the figure of lead director, boosting the power of the independent directors on the Board of Directors and acting as a counterweight to the Chairman’s executive profile. The lead director will be appointed for a term of three years and cannot be re-elected for a successive term.
  • The lead director is responsible for channelling any questions or concerns received from external directors and he/she may request the Board convene and include items on the agendas of board meetings.

Management committee

The Management Committee has been expanded to seven members with the addition of the heads of Retail Banking, Fernando Sobrini, and of Business Banking, Gonzalo Alcubilla.

7. Gonzalo Alcubilla, Deputy General Director of Business Banking 4. Miguel Crespo, Secretary to the Board of Directors 2. José Sevilla, CEO 1. José Ignacio Goirigolzarri, Bankia’s Chairman 5. Amalia Blanco, Deputy General Director of Communication and External Relations 3. Antonio Ortega, Executive director and General Director of People, Organisation and Technology 6. Fernando Sobrini, Deputy General Director of Retail Banking

Its members are: 1 José Ignacio Goirigolzarri, Bankia’s Chairman; 2 José Sevilla, CEO; 3 Antonio Ortega, executive director and General Director of People, Organisation and Technology; 4 Miguel Crespo, Secretary to the Board of Directors; 5 Amalia Blanco, Deputy General Director of Communication and External Relations, 6 Fernando Sobrini, Deputy General Director of Retail Banking, and 7 Gonzalo Alcubilla, Deputy General Director of Business Banking.

Measures to strengthen corporate governance

  1. Shortening of board members’ terms of office to four years.
  2. Directors serving for 12 years will no longer be considered independent.
  3. Non-executive directors may only grant proxies to another director in accordance with the law.
  4. The lead director will head up the chairman’s performance appraisal.
  5. Board members have been bound by the duties of diligence and loyalty, and a review has been performed of any conflicts of interest.
  6. The specific powers that cannot be delegated of the general meeting of shareholders and the Board of Directors have been defined, pursuant to the recommendations of the Expert Corporate Governance Committee.
  7. Members of the Audit and Compliance Committee, Appointments Committee, Remuneration Committee and Risk Advisory Committee must be non-executive directors.

Board of Directors22 meetings in 2014

  • José Ignacio Goirigolzarri Tellaeche
    Executive Chairman
  • José Sevilla Álvarez
    Chief Executive Officer
  • Antonio Ortega Parra
    Executive Director
  • Joaquín Ayuso García
    Independent Director
  • Francisco Javier Campo García
    Independent Director
  • Eva Castillo Sanz
    Independent Director
  • Jorge Cosmen Menéndez-Castañedo
    Independent Director
  • José Luis Feito Higueruela
    Independent Director
  • Fernando Fernández Méndez de Andés
    Independent Director
  • Alfredo Lafita Pardo
    Independent Director
  • Álvaro Rengifo Abbad
    Independent Director
  • Miguel Crespo Rodríguez
    Non-executive secretary

Audit and Compliance Committee16 meetings in 2014

(4 independent external directors)

Alfredo Lafita Pardo
Chairperson
Joaquín Ayuso García
Jorge Cosmen Menéndez-Castañedo
José Luis Feito Higueruela

Supervising the effectiveness of internal control, internal auditing and systems for managing risks.
Overseeing the process of preparing and submitting regulated financial information.
Proposing the appointment of the external auditors and engage appropriately with them.
Assessing compliance with the regulations of the governing bodies and the by-laws, among other responsibilities.

Appointments and Remuneration Committee6 meetings in 2014

(Until 22 october)
(4 independent external directors)

Joaquín Ayuso García
Chairperson
Francisco Javier Campo García
Alfredo Lafita Pardo
Álvaro Rengifo Abbad

General authority to propose and report on remuneration.
Appointing and dismissing directors and senior officers.
Reviewing the remuneration programmes, considering their appropriateness and utility.
Ensuring transparency on remuneration and remuneration policy.

Appointments Committee1 meeting in 2014

(As from 22 october)
(4 independent external directors)

Joaquín Ayuso García
Chairperson
Francisco Javier Campo García
Alfredo Lafita Pardo
Álvaro Rengifo Abbad

General authority to propose and report on appointments matters and removal of directors and senior managers.
Evaluating the necessary competencies, ability, diversity and experience in the Board of Directors.
Deciding on the functions and skills needed by candidates to fill vacancies.
Evaluating the time and dedication needed to effectively perform duties.
Examining and organising succession plans in the governing bodies.


Remuneration Committee0 meetings in 2014

(As from 22 october) 
(4 independent external directors)

Eva Castillo Sanz
Chairperson
Joaquín Ayuso García
Jorge Cosmen Menéndez-Castañedo
Alfredo Lafita Pardo

General proposal-making and reporting powers on matters relating to the remuneration and other contractual terms and conditions of directors and senior officers.
Reviewing the remuneration programmes, considering their appropriateness and outcomes.
Ensuring transparency on remuneration and the remuneration policy.

Risk Advisory Committee6 meetings in 2014

(3 independent external directors)

Francisco Javier Campo García
Chairperson
Fernando Fernández Méndez de Andés
Eva Castillo Sanz

Advising the Board of Directors on the institution’s general risk appetite and strategy.
Overseeing the pricing policy.
Presenting risk policies.
Proposing the risk control and management policy of the bank and the group, by way of the Individual Capital Adequacy Assessment Report (ICAAR).

Board Risk Committee37 meetings in 2014

(4 directors)

José Sevilla Álvarez
Chairperson
Fernando Fernández Méndez de Andés
Francisco Javier Campo García
Eva Castillo Sanz

Establishing and supervising compliance with the institution’s risk control mechanisms.
Approving material transactions and establishing global limits.

Evaluation and performance

The Chairman of the Board of Directors organises and coordinates alongside the chairperson of the Audit and Compliance Committee and the chairperson of the Appointments Committee, regular appraisals of Board members, which are carried out by an independent expert selected from among leading firms in the market.


Bankia has a manual of procedures for evaluating the suitability of board members, general directors and similar officers and key personnel at Bankia, S.A.


Once a year and under the guidance of the lead director, the Board of Directors also assesses the Chairman’s performance based on a report by the Appointments Committee.

Bankia carries out an annual evaluation of the suitability of the members of the Board of Directors, considering that members must be individuals with a track record of commercial and professional repute, and suitable knowledge and experience to perform their duties, and be in a position to properly govern the bank, without overlooking the suitability of the Board of Directors taken as a whole. Failure to satisfy these requirements will be grounds for removal of a director.

Training

2014 saw the start of a process to increase Board members’ knowledge of economic and social matters, with a schedule of regular training sessions being drawn up, the content of which will be modified according to:

  • The needs of Board members;
  • Possible regulatory requirements; and
  • Recommendations related to best practices in this area.

Content of training provided

  • Corporate governance and board member responsibilities
  • Risk tolerance
  • Marketing systematics
  • Business intelligence
  • Talent management
  • Employment framework and remuneration policy
  • Information security

Remuneration of the board of directors

With regard to remuneration, while the institution continues to receive public aid, the caps on remuneration stipulated in Royal Decree-Law 2/2012 of 3 February, Ministerial Order ECC/1762/2012 of 3 August and Law 10/2014 of 26 June will remain in force.

All remuneration of Board members not performing executive duties is therefore capped at 100,000 euros per annum for all components of their pay. Moreover, no consideration is paid by way of fees for attending meetings of the Board or the standing committees.

Executive director remuneration is capped at 500,000 euros for all considerations, including compensation from within the group, while their variable remuneration cannot exceed 60% of this amount.

As proposed by the Remuneration Committee, Bankia’s Board of Directors has identified targets that must be met for entitlement to variable remuneration, giving priority to fulfilment of the Restructuring Plan and defining the parameters for adjusting the types of risks affecting the institution’s risk profile, taking into account the cost of capital and liquidity required.

Express approval is required from the Bank of Spain before variable remuneration can be paid, which if approved, will be settled three years after it is accrued, pursuant to prevailing rules.

Each year, the Board of Directors approves the remuneration policy, which sets out the criteria and basis on which board remuneration is calculated. This policy is put before the General Meeting of Shareholders and submitting to an advisory vote and as a separate point on the agenda.

The report includes complete, clear and comprehensible information on the board remuneration policy approved by the Board during the corresponding year, as well as any policy planned for future years.

Board of directors’ remuneration
Name Salary Fixed remuneration Per diems Short-term variable remuneration Long-term variable remuneration Fee for sitting on board committees Indemnity payments Other items Total 2014 Total 2013
JOSÉ IGNACIO GOIRIGOLZARRI TELLAECHE 498 0 0 0 0 0 0 2 500 500
JOSÉ SEVILLA ÁLVAREZ 495 0 0 0 0 0 0 5 500 500
ANTONIO ORTEGA PARRA 500 0 0 0 0 0 0 0 500 500
JOAQUÍN AYUSO GARCÍA 0 100 0 0 0 0 0 0 100 100
FRANCISCO JAVIER CAMPO GARCÍA 0 100 0 0 0 0 0 0 100 100
EVA CASTILLO SANZ 0 100 0 0 0 0 0 0 100 100
JORGE COSMEN MENÉNDEZ-CASTAÑEDO 0 100 0 0 0 0 0 0 100 100
JOSÉ LUIS FEITO HIGUERUELA 0 100 0 0 0 0 0 0 100 100
FERNANDO FERNÁNDEZ MÉNDEZ DE ANDÉS 0 100 0 0 0 0 0 0 100 100
ALFREDO LAFITA PARDO 0 100 0 0 0 0 0 0 100 100
ÁLVARO RENFIGO ABBAD 0 100 0 0 0 0 0 0 100 100

*(€ Thousand)

Conflicts of interest

The mechanisms in place at the institution to detect and deal with possible conflicts of interest include the following:

  • Directors must disclose to the Board of Directors any conflict they may have with Bankia’s interests, and refrain from attending meetings and participating in deliberations affecting matters in which the director or person related thereto, is personally interested.
  • Directors must also declare any direct or indirect ownership interest which either they or persons related to them hold in the share capital of companies engaging in an activity that is identical, similar or complementary to the activity constituting the corporate purpose of the bank, and shall give notification of the positions held or duties discharged thereat.
  • Directors must make a first declaration of any conflicts of interest upon taking office. This declaration must be updated immediately whenever any of the declared situations are changed or terminated or new situations appear.

Corporate integrity

Code of Ethics and Confidential Whistle-blowing Channel

The Bankia Group avails of a Code of Ethics and Conduct, approved by the board of directors on 28 august 2013. The code sets out the rules and criteria on professional conduct that must be adhered to and applied by all the institution’s staff and officers and across all the Bankia Group’s activities and businesses.


884 employees received training on
Code of Ethics and Conduct.


The objectives of the Code of Ethics and Conduct are as follows:

  • Regulate permitted and prohibited conduct by the institution.
  • Establish the general ethical principles and rules that should guide how the group and affected staff should behave towards each other and in their dealings with customers, partners, suppliers and, generally, any person or public or private entity with which the group has a direct or indirect relationship.
  • Impose standards of ethical conduct and corporate integrity as an essential requirement for gaining and maintaining the trust and respect of institutions, which anyone with any type of professional connection to the bankia group must fulfil

The most relevant aspects covered by Bankia’s Code of Ethics are as follows:

  • Bankia Group ethical values and principles: Commitment, integrity, professionalism, proximity and a performance-focused approach.
  • Corporate ethics. The Code establishes the values that must guide relations between the Bankia Group and its staff, customers, suppliers and society as a whole. In particular, the Bankia Group prevents institutional conflicts of interest using Chinese walls to ensure non-public information on its investment decisions and other activities obtained through its relations with customers, suppliers or privileged institutional relations cannot be used in an abusive or illegal manner.
  • Ethics and integrity in market dealings. In order to ensure this ethical commitment is adhered to, a raft of policies, procedures and controls has been put in place to guarantee compliance with relevant international standards. In particular, policies are in place to avoid market manipulation and the use of insider information, and to encourage free competition and transparency in the information provided to the market.
  • Ethical staff. It is absolutely prohibited to: (a) accept any kind of gift, gratuity, income or commission in relation to transactions performed by the Bankia Group; and (b) influence matters that could give rise to actual or potential conflicts of interest.

Persons subject to the Code of Ethics and Conduct are required to be familiar with it, follow it, and help others to comply with it, which includes reporting through the channels established for this purpose, any indications or proof that the Code has been breached.

In this area, the Audit and Compliance Committee approved the launch of a Confidential Whistle-blowing Channel through which any breaches of the Code of Ethics and Conduct can be reported by email or on line.

This channel has its own regulation signed off by the Audit and Compliance Committee, establishing mechanisms for receiving, filtering, classifying and resolving reports of misconduct submitted, in accordance with the criteria of the Spanish Data Protection Agency.

The aim of the Confidential Whistle-blowing Channel is to provide a single point of contact for the institution’s directors, staff and suppliers to report any breaches of the Code of Ethics and Conduct.

This channel is managed by a third party (a specialist firm outside the Bankia Group, currently PwC) and is overseen by the Ethics and Conduct Committee; ensuring all reports of misconduct received are analysed by an independent party and that only those people who are strictly necessary to the investigation and resolution are notified.

The Code of Ethics and Conduct and the Confidential Whistle-blowing Channel are key elements of the crime detection and prevention model.

The Code of Ethics and Conduct is disseminated to Bankia’s entire workforce, and the Confidential Whistle-blowing Channel can be accessed via Bankia’s corporate website and the staff intranet.

Type of reports of misconduct received
2013* 2014
Description Open Closed Open Closed
Market abuse - - - -
Workplace bullying - - - 1
Irregular conduct with suppliers - - 1 -
Misappropriation or syphoning off of resources - 1 - 1
Accounting and auditing aspects - - - 1
Confidentiality or use of insider information - - - -
Conflicts of interest - - 1 -
Question/Suggestion - - 1 2
Falsification of contracts, reports or records - - - -
Infringements regarding securities or equities trading - - - -
Environmental protection - - - -
Information security - - - -
Physical security - - - -
Bribery or corruption - - - -
Infringement of employee rights - 1 - -
Other - 2 - 4
Total reports of misconduct submitted 0 4 3 9

12 submissions received in 2014. Three concerned questions and nine reports of misconduct

Nature of action taken
Closed 2013* 2014
Operational matter - 4
Rejected/No grounds 3 -
Corrective measures/sanctions/redesign of controls or processes - 4
Total closed 3 8

* The Channel was opened at the end of September 2013.

Prevention of money laundering and the financing of terrorism

The Bankia Group actively collaborates with the authorities responsible for overseeing and controlling compliance with Spanish laws designed to prevent the laundering of money from illicit activities and the financing of terrorism, which faithfully transposes the European Union directive on this matter.

On 16 June 2011, the Board of Directors approved the Anti-money Laundering and Financing of Terrorism Policy Manual for the Bankia Group. The manual is constantly updated to bring it into line with legislative developments concerning the prevention of money laundering and the financing of terrorism.

883 employees received training on anti-money laundering and the financing of terrorism.

Each affiliate and group responsible for any transactions that could be considered high risk due to its activity and/or type of customer, has a manager and specific manual of anti-money laundering policies and procedures.

The Bankia Group also avails of controls and expert systems contributing to the segmentation of customers, products, transactions and work centres based on their risk level, and helping to detect at an early stage any transactions that may be intended to cover up money laundering, and to comply with regulations on identifying, accepting and knowing customers as part of the due diligence process.

According to legislation, anti-money laundering procedures are examined annually by an independent expert to detect any possible incidents and, if necessary, propose improvements. The results of these examinations and any action plans for improvements must be put before the Board of Directors on completion of the examination.

The Group is aware that the best form of prevention is to inform and raise the awareness of its staff, and therefore places special importance on training in this area, which is provided through annual training plans.

Crime risk prevention

The Reform of the Fundamental Act 10/1995 on the Penal Code, which came into force in December 2010, regulates the criminal liability of bodies corporate, establishing that these entities can extenuate themselves or stand exempt of any liability by establishing “effective measures to detect and prevent crimes that may be committed in the future using the resources or under the auspices of the body corporate” (Art. 31 bis).

The current climate makes it is even more necessary for management and employees to act with diligence to strictly and carefully comply with and ensure compliance with internal rules, which are clearly designed to prevent acts that could result in the institution being exposed to crime risk.

As a starting point, the Bankia Group has numerous internal controls in place, set up to mitigate specific risks related to the business and/or to comply with various financial and internal control regulations (anti-money laundering, market abuse, MiFID, personal data protection, Basel, etc.) in order to prevent criminal acts.

2.809 employees received training on crime risk prevention.

It also has a battery of general controls contributing to the prevention of criminal acts, while also encouraging staff and management to adhere to high ethical standards. These controls are also used to detect and deal with breaches of professional conduct rules and criteria, such as the Code of Ethics and Conduct and the Confidential Whistle-blowing Channel.

As delegated by the Board of Directors, the Audit and Compliance Committee approved the Crime Detection and Prevention Manual, based on prior analysis of a risk map (linking the group’s various business areas with types of acts that could result in criminal liability), and the effectiveness of pre-existing controls and the need, if required, to strengthen them or put new control mechanisms in place.

The purpose of this manual is to define and implement a crime detection and prevention model. Guidelines have been drawn up to establish the model as a structured and organic control and prevention system that is effective in mitigating the risk of crimes being committed in relation to Bankia’s operations. It also provides evidence that Bankia exercises proper control over its business activity, thereby complying with the requirements set forth in the prevailing Penal Code.

This model is regularly reviewed and updated to bring it into line with legislative developments/amendments and changes in the institution, and to detect and redress any anomalies arising over time.

On 25 May 2014, the Audit and Compliance Committee approved the Bankia Group’s Crime Risk Prevention Rulebook, setting out the general principles for preventing and detecting crime in the group.

The Crime Risk Prevention Officer (who is the Director of Regulatory Compliance, on agreement with the Audit and Compliance Committee) reports to the Ethics and Conduct Committee and the Audit and Compliance Committee on any weaknesses in or areas for improvement of the model to establish corrective measures to guarantee that the model remains up-to-date and an effective tool for preventing use of the institution to commit criminal acts.

Bankia has a Corporate Internal Audit Division, the activity of which is overseen by the Audit and Compliance Committee. The internal audit function is an independent, objective assurance and consulting activity designed to add value and improve the group’s operations. It helps the organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, internal control and governance processes and information systems. The team also collaborates with the external auditors when they provide audit services and with supervisory bodies to ensure regulatory compliance.

Data protection

Bankia has a raft of measures in place – defined in a personal data protection policy – to guarantee appropriate application of the principles and rights of customers regarding data protection: information that must be provided during data collection; duty of confidentiality and safekeeping of data; consent to process data; and exercising of the right to access, rectify or delete data or oppose the handling of personal data.

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