General Framework

Motivation

CAVALI has made the choice to keep their good corporate governance practices updated because, as issuer and as a Central Securities Depository, it has the double responsibility of leading the company with the highest transparency and reliability standards before its shareholders and different economic agents of the market with which it relates.

Within this objective, CAVALI hired in 2009, through an agreement with the  CAF, the Colombian consultancy company Governance Consultants, with the purpose of carrying out a study on CAVALI's corporate governance practices.  

As a result of such study, a series of recommendations were implemented; the following are the main recommendations: 

• Three Board of Director's committees were created: (i) Corporate Governance and Development Committee, (ii) Audit Committee and (iii) Settlement Fund Investment and Management Committee.
• A Regulation of the General Board of Shareholders, Regulation of the Board of Directors and Regulation of the Board of Director's Committees were created, where the clear rules for the management of such government organisms are established.
• An independent member was included in the Board of Directors and the Independent Director was established in the statute and Regulation of the Board of Directors. A procedure for the evaluation of the Board of Directors was approved.
• In 2010, CAVALI participated in the Fourth Competition of Good Corporate Governance that Procapitales and the Peruvian University of Applied Sciences - UPC (in Spanish) currently organize, in order to make a self-assessment of the level we were in, which did not allowed to have specific recommendations.
• In 2011, the Mercado de Capitales, Inversiones y Finanzas – MC&F Consultores company was hired with the purpose of carrying out a Corporate Governance quality assessment of CAVALI S.A. I.C.L.V. and the preparation of an improvement plan and implementation strategy. 

The consultancy diagnostic concluded with 25 recommendations, which are detailed in the Yearly Corporate Governance Report of 2011, which is part of 2011 Annual Report. Such recommendations are: 

• Two (02) of the seven (07) directors of the Board will be independent directors.
• The Bylaws establishes the profiles of the members of the Board of Directors.
• The rules of the General Meetings of Shareholders now include a procedure for shareholders to add issues in the agenda.
• These policies were approved: Policy of Information, Policy of Administration of Conflicts of Interest, Policy of Transactions of Related Parties, Policy of Induction of the Board of Directors. 
• CAVALI has participated in the Good Corporate Governance Index - IBGC 2012 and IBGCS 2013, accomplishing the recognition of its good corporate practices.