Board of Directors duties and functions

    Approving:
  • The annual report required to be filed with the Mexican Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) ("CNBV").
  • The annual report regarding to the management and activities of the Compliance Department.
  • The methodologies and models, and also the policies and procedures, for the study, analysis, opinion, evaluation, and reporting of the credit or operational quality (the "Rating methodologies and procedures").
  • The documents that, in general, form part of the HR Ratings Company Rules, meaning the Code of Conduct, Internal Control Manual, General Operations Plan, the Human Resources and Material Resources Manual, and the Administrative and Technological Infrastructure protocols, and any modifications thereof
  • The criteria to determine the severity of the defaults or violations of the Company Rules.
  • The procedures for conducting compliance audits for the methodologies and rating process that, where such is the case, the independent board members may conduct or the person so delegated.
  • The procedures for conducting the look-back review of former employees.
  • The guidelines and policies that establish:
    • Their functions and responsibilities.
    • The salary and promotion policies for the board members, directors, technical personnel involved in the ratings, and employees in general of HR Ratings.
    • The policies and procedures to detect, handle, and disclose conflicts of interest, established in the Code of Conduct.
    • The rotation policies for the Credit Analysis Committees and/or principal technical personnel responsible for the analysis process.
    • The structure and voting process of the Credit Analysis Committees.
  • The terms and conditions according to which HR Ratings management and employees may conduct Securities Transactions regarding which they have or may have access to confidential information related to the registering processes of the Mexican National Securities Register (Registro Nacional de Valores, "RNV") for public offerings, acquisitions, or share sale of issuer.
  • Appointing the following Agency officers:
    • Chief Compliance Officer.
    • Chief Risk Officer.
    • The person responsible for communications with market participants, to receive questions, suggestions, or complaints that may give the Board of Director elements to improve the design and aptness of the Agency's policies. The Board of Directors appointed the Chief Compliance Officer as the responsible for this duty.
  • Knows, discuss and approve the results of the compliance audits conducted by the Compliance Department regarding adherence to the Agency’s Company Rules.
  • Knows, discuss and approve the results of compliance audits with Methodologies and rating process performed by the independent board members or the person so authorized by same.
  • Knows, discuss and approve the results of the statistical analyses for the Mexican market prepared by the independent board members or the person so authorized by same, to evaluate the effectiveness of the Rating methodologies and procedures over time.
  • Knows, discuss and approve the report on the review and monitoring of the rating Methodologies and rating process, prepared by the independent board members or the person authorized to that effect.
  • Knows, discuss and approve the annual report from the Chief Risk Officer on their performance and activities.
  • The board members will also give their opinion to the Chief Risk and Chief Compliance Officers regarding the imposition of sanctions, in cases of serious violations to the Company Rules, or to the Chief Executive Officer when the sanctions are to be applied on the Compliance and/or Risk Departments.
  • Approves the technical notes.
  • The additional powers conferred by the Agency’s bylaws and by applicable legislation to commercial entities and securities rating agencies.

Independent Board of Directors functions and duties

  • Perform statistical analyses for the market so as to evaluate the effectiveness over time of the rating Methodologies and processes, and also to assess whether the work of the technical personnel that applied these needs to be reviewed.
  • Review and monitor the development of the Agency’s rating Methodologies and procedures, as well as the rating models, as a result of the statistical analyses prepared by the independent board members or any other as established in the Code of Conduct.
  • Perform compliance audits on the rating Methodologies and procedures.
  • Conduct periodical audits of the Compliance and Risk Departments to verify the fulfillment of their respective duties.
  • Audit that the periodical delivery of regulatory information and other information to any regulating body has been completed in time and manner as required, in accordance with the Internal Control Manual.
  • The independent board members will review the effectiveness of the internal control system to ensure compliance with:
    • The policies, procedures, and methodologies for the determination of ratings.
    • The policies and procedures for detecting, handling, and disclosing conflicts of interes.
    • The policies and procedures for the remuneration and promotion for the member of the board of directors, directors, technical personnel involved in rating processes, and employees in general
    • The Company Rules in general.
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Contact for Rating Methodologies