Tanner provides an opportunity for long-term collaboration among its stakeholders, who directly and indirectly influence its ability to achieve its objectives. An appropriate corporate governance system acts to prevent and resolve conflicts of interest, working to ensure that these objectives are met in a transparent way.
Corporate governance is the set of relations, standards, processes and institutional practices in exercising authority and control that contribute to the sustainable creation of value, providing a framework of transparency, ethics and corporate responsibility, aligning interests and promoting the rights of all shareholders and stakeholders that participate directly or indirectly in the Company.
The Company’s diverse stakeholders and the focus of its actions with them are detailed as follows:
Shareholders’ meetings are the highest level of corporate governance. Their main functions are to elect the board of directors; appoint external auditors and risk rating agencies; approve the annual report, annual financial statements, profit distributions and capital increases and set compensation for the Board and Committees.
BOARD OF DIRECTORSThe Board of Tanner Servicios Financieros S.A. is responsible for approving policies and defining the structure for properly managing the diverse risks faced by the organization. To accomplish this, it is continually briefed on developments in the diverse risk areas through several committees: Credit, Audit, Assets and Liabilities (ALCO), Compliance and Commercial.
Risk management policies are established with the objective of identifying and analyzing the risks faced by Tanner Servicios Financieros S.A., setting adequate risk limits and controls and monitoring risks and compliance with the predetermined limits. Risk management policies and systems are revised regularly so that they reflect changes in market conditions and the Company’s activities. The Board, through its management standards and procedures, aims to develop a disciplined and constructive control environment in which all associates understand their roles and obligations.
AUDIT COMMITTEEThe members of the Audit Committee include three directors, the CEO, the General Counsel and the Controller. They report directly to the Board on the effectiveness and reliability of internal control systems and procedures, both at parent and subsidiary level.
The committee’s duties include analyzing the results of audits and interim reviews by external auditors and analyzing the quarterly and annual financial statements, including those that are audited by external auditors. It is also briefed on compliance with institutional policies on the observance of laws, regulations and internal standards that must be met and approves and verifies compliance with the annual program prepared by the Company’s internal auditing department.
CREDIT COMMITTEETanner Servicios Financieros S.A. has a governance structure for credit decisions to ensure that all customer loan applications are approved at a certain level with the proper authority. Each level is differentiated by segment and based on exposure, risk ratings, statements of uncollectability and loan charge-offs, etc. The highest level is the Directors’ Credit Committee, which reviews and approves the main exposures of each business line, by customer, on a monthly basis.
The Company manages comprehensive risk matrix for each business line and has a Comprehensive Risk Management Policy to properly identify, analyze, evaluate, treat and monitor risks, based on set guidelines and the individual needs of each business in accordance with its particular objectives and regulatory requirements.
ASSET-LIABILITY COMMITTEE (ALCO)All directors, the CEO and Treasury Manager serve on this committee. The committee can request the attendance of other managers responsible for establishing and supervising compliance of financial risk policies, mainly for liquidity and market risk, in line with Board guidelines and regulatory requirements issued by the Financial Market Comission.
This Committee meets monthly to review developments and the current status of financial positions and liquidity, market, prices, interest rates, currency and indexation risks, and enables Tanner Servicios Financieros S.A. to forecast, with an appropriate level of confidence, potential future situations that may benefit or affect the Company and take the corresponding actions.
The members of the Compliance Committee are two Directors, the CEO, the General Counsel, the Controller and the Compliance Officer. They define and coordinate policies and procedures on the topics of asset laundering, terrorism financing prevention, bribery and the acceptance of stolen goods. In addition, they are briefed on and analyze and adopt the appropriate actions in response to cases reported by the Compliance Officer.
The policies and procedures established for preventing asset laundering and terrorism financing are defined in a handbook prepared by the Company that meets two objectives:
- Complying with laws and regulations governing such matters;
- Providing the organization’s members, at all levels, with policies, procedures and information to manage commercial activities and operations while mitigating risks arising from funds originated from illegal activity that are intended to make licit through Tanner Servicios Financieros S.A. or any of its subsidiaries.
PRODUCT COMMITTEEThe Product Committee is formed by the CEO, General Counsel, Finance Manager, Risk Manager, IT Manager and Division Managers. It is their responsibility to determine the feasibility of introducing a new product and/or amending existing products (as long as there are significant changes involved), which are proposed by Divisional Management. This committee considers new products, evaluating not only the commercial and economic feasibility, but also the legal and regulatory aspects (including accounting and tax). If approved, the committee must make sure that the products comply with the relevant internal and corporate policies and procedures in order to mitigate the key operational risks.
COMMERCIAL COMMITTEEThe Commercial Committee is comprised of two Directors, the CEO, Risk Managers, managers from the Enterprises Division, in addition to executives of the teams that are presenting the opportunity. It is their responsibility to track the sales pipeline, support the commercial area in developing more sophisticated sales proposals, approve operations and review credit proposals that will be presented to the Board of Directors for final consideration. This Committee meets three times per week.