UNITED STATES SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February, 2022

Commission file number: 1-10110

 

 

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

(Exact name of Registrant as specified in its charter)

BANK BILBAO VIZCAYA ARGENTARIA, S.A.

(Translation of Registrant’s name into English)

 

 

Calle Azul 4,

28050 Madrid

Spain

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F                 X                         Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes                          No                 X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes                          No                 X

 

 

 

ISSUER IDENTIFICATION

YEAR-END DATE: 31/12/2021

CIF (Código de identificación fiscal — Tax Identification No.) A-48265169

Company Name: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

Registered Office: 4 Plaza de San Nicolás, 48005 Bilbao (Biscay)

 

1

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

 

A.	OWNERSHIP STRUCTURE

 

A.1

Fill in the following table on the company’s share capital and the associated voting rights, including, if applicable, any such rights corresponding to shares with loyalty votes, as of financial year-end:

Indicate whether the company’s bylaws provide for double voting rights for loyalty:

 

 

 

Indicate whether there are different classes of shares with different associated rights:

No

 

A.2

Detail the direct and indirect owners of significant shareholdings as of financial year-end, including directors with significant shareholdings:

 

Details of indirect shareholdings:

 

Indicate the most significant changes in the shareholder structure during the financial year:

Most significant changes:

As of 31 December 2021, State Street Bank and Trust Co., The Bank of New York Mellon S.A.N.V. and Chase Nominees Ltd., as international custodian/depositary banks, had custody of 14.26%, 2.45% and 7.69% of BBVA’s share capital, respectively. Of said positions held by the custodian banks, BBVA is not aware of any individual shareholders with direct or indirect holdings greater than or equal to 3% of the BBVA share capital.

 

2

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

On 18 April 2019, Blackrock, Inc. informed the CNMV (Comisión Nacional del Mercado de Valores — Spanish National Securities Market Commission) that it had an indirect holding of 5.917% of BBVA’s share capital, with 5.480% corresponding to voting rights attached to shares and 0.437% corresponding to voting rights through financial instruments.

On 11 February 2021, GQG Partners LLC informed the CNMV that it had a direct holding in BBVA’s share capital of 3.090%, through voting rights attached to shares.

 

A.3

Detail, regardless of the percentage, the shareholdings as of financial year-end of the members of the board of directors that hold voting rights associated with company shares or through financial instruments, excluding those directors identified in Section A.2 above:

 

 

3

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Details of indirect shareholdings:

 

Detail the total percentage of voting rights held by the board:

 

 

A.4

Where applicable, indicate any family, commercial, contractual or corporate relationships between owners of significant shareholdings, insofar as they are known to the company, unless they are of little relevance or attributable to ordinary trading or exchange activities, except those described in Section A.6:

 

 

A.5

Where applicable, indicate any commercial, contractual or corporate relationships between owners of significant shareholdings and the company and/or its group, unless they are of little relevance or attributable to ordinary trading or exchange activities:

 

 

A.6

Describe the relationships, unless they are of little relevance for the two parties, that exist between significant shareholders or shareholders represented on the board and directors, or their representatives in the case of directors that are legal entities.

Explain, where applicable, how significant shareholders are represented. Specifically, indicate those directors appointed to represent significant shareholders, those whose appointment was proposed by significant shareholders or those who are related to significant shareholders and/or their group companies, and specify the nature of the relationships. In particular, state, where applicable, the existence, identity and position of board members—or their representatives—of the listed company who are also members—or representatives of members—of the management body of companies that hold significant shareholdings in the listed company or in entities that are part of said significant shareholders’ group.

 

 

4

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

A.7

Indicate whether the company has been informed of any shareholder agreements that may affect it, as established in Articles 530 and 531 of the Corporate Enterprises Act. Where applicable, briefly describe them and list the shareholders bound by each such agreement:

No

Indicate whether the company is aware of the existence of concerted actions by its shareholders. If so, describe them briefly:

No

If any changes to or breaking of any such pacts, agreements or concerted actions have occurred during the financial year, indicate this expressly:

 

A.8

Indicate whether any legal entities or natural persons exercise or may exercise control over the company pursuant to Article 5 of the Securities Exchange Act. If so, identify them:

No

 

A.9

Fill in the following tables regarding the company’s treasury shares:

As of financial year-end:

 

(*) Through:

 

Explain any significant changes that have occurred during the financial year:

 

 

A.10

Describe the conditions and term of the current mandate from the general meeting to the board of directors to issue, buy back or transfer treasury shares.

 

●

The BBVA General Meeting held on 17 March 2017, under item three of the Agenda, passed a resolution to delegate to the Board the power to increase share capital for a period of five years up to a maximum amount corresponding to 50% of BBVA’s share capital on the date of the authorisation. This can be done on one or several occasions by issuing new shares of any kind allowed by law, with or without an issue premium, the counter-value of said shares comprising cash considerations. The authorisation includes the setting out of the terms and conditions of the increase in any respect not provided for in the resolution, and to authorise the Board to wholly or

 

5

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

partly exclude pre-emptive subscription rights in relation to any share capital increase carried out by virtue of the resolution, in compliance with the applicable legal requirements. This power was limited insofar as the nominal amount of capital increases agreed or carried out with an exclusion of the pre-emptive subscription rights do not exceed the maximum nominal amount, overall, of 20% of BBVA’s share capital at the time of authorisation, although this limit is expected to be reduced to 10% in accordance with the proposals submitted to the BBVA General Meeting in 2022. To date, BBVA has not adopted any resolution using this delegated power.

 

●

The BBVA General Meeting held on 16 March 2018, under item three of the Agenda, passed a resolution to grant BBVA the authority, whether directly or through any of its subsidiaries, and for a period of no more than five years, to derivatively acquire BBVA shares as well as their subsequent disposal, by any means permitted by law, noting, in particular, that (i) the nominal value of the shares acquired by means of this authorisation, in when added to those already owned by BBVA and its subsidiaries, may exceed 10% of BBVA’s subscribed share capital, or, where appropriate, any lower limit established by applicable legislation; (ii) the acquisition price per share may not be lower than the nominal value of the share, and must be under 10% higher than the share price or any other price associated with the shares at the time that they are acquired. It also authorised that the shares acquired through this authorisation be partially or totally set aside for workers or directors of BBVA or its subsidiaries, either directly or as a result of them exercising any option rights.

At its meeting on 28 October 2021, having received the mandatory authorisation of the European Central Bank, the BBVA Board resolved to carry out a treasury share buyback framework programme through the aforementioned delegation, in accordance with Regulation (EU) 596/2014 of the European Parliament and of the Council of 16 April 2014 and Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016, to be implemented in several tranches, for a maximum amount of EUR 3.5 billion, with the aim of reducing BBVA’s share capital. Within the framework programme, it resolved to carry out an initial buyback programme for a maximum amount of EUR 1.5 billion and a maximum number of shares to be acquired of 637,770,016 treasury shares. This first programme began on 22 November 2021 and will end between 16 February and 5 April 2022 and, in any case, when the maximum monetary amount or maximum number of shares is reached within that period.

 

●

The BBVA General Meeting held on 20 April 2021, under item five of the Agenda, passed a resolution to delegate to the Board the power to issue securities that will eventually be convertible into newly issued BBVA shares, for a period of five years, to meet regulatory requirements for their eligibility as capital instruments, in accordance with the solvency regulations and the applicable provisions and after obtaining the necessary authorisations, for a maximum overall amount of EUR 8,000,000,000, or its equivalent in another currency, with the ability to determine: (i) the terms, characteristics and conditions of issuances; (ii) the form, timing, assumptions, bases and methods of conversion; and (iii) the conversion rate. It also delegated to the Board the power to (i) request admission to trading of securities and shares that have been issued; (ii) increase BBVA’s capital by the amount necessary to meet the conversion commitments; and (iii) totally or partially exclude pre-emptive subscription rights of shareholders within the framework of a specific issuance, in compliance with applicable legal requirements and limitations. To date, BBVA has not adopted any resolution using this delegated power.

 

●

The BBVA General Meeting held on 20 April 2021, under item six of the Agenda, passed a resolution to delegate to the Board (until the next General Meeting), the power to reduce, once or several times, the share capital of BBVA up to a maximum of 10% of its capital at the time of delegation, after obtaining the corresponding regulatory authorisations, through the redemption of BBVA shares acquired under the authorisation of the General Meeting of 16 March 2018, through any mechanism with the aim of redeeming such shares and in accordance with the provisions of the applicable legislation and regulations, also resolving to empower it to set out the terms and conditions of the increase in anything not foreseen herein. To date, BBVA has not implemented the aforementioned share capital reduction.

 

6

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

A.11

Estimated floating capital:

 

 

 

A.12

Indicate whether there are any restrictions (statutory, legislative or of any other kind) on the transferability of securities and/or any restrictions on voting rights. In particular, report the existence of any restrictions that might hinder the takeover of the company through the purchase of its shares on the market, as well as any authorisation or prior communication regimes that are applicable to the purchase or transfer of the company’s financial instruments as provided by law in the sector.

Yes

 

 

A.13

Indicate whether the general meeting has resolved to adopt measures to neutralise a public takeover bid pursuant to the provisions of Act 6/2007.

No

If so, explain the measures approved and the terms on which the restrictions would be rendered ineffective:

 

A.14

Indicate whether the company has issued securities that are not traded on a regulated market in the European Union.

Yes

Where applicable, indicate the different classes of shares and the rights and obligations conferred by each such class.

 

 

7

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

B.	GENERAL SHAREHOLDERS’ MEETING

 

B.1

Indicate, providing details where applicable, whether there are any differences to the minimum standards established under the Corporate Enterprises Act (CEA) with respect to the quorum for holding the general meeting.

Yes

 

 

 

B.2

Indicate, providing details where applicable, whether there are any differences to the minimum standards established under the Corporate Enterprises Act (CEA) for the adoption of corporate resolutions:

No

 

B.3

Indicate the rules applicable to amending the company’s bylaws. In particular, report the majorities needed to amend the bylaws as well as any rules established to safeguard shareholders’ rights when amending the bylaws.

Article 30 of the BBVA Company Bylaws establishes that the General Shareholders’ Meeting is empowered to amend the Company Bylaws and to confirm or rectify the manner in which they are interpreted by the Board of Directors.

To such end, the rules established under Articles 285 et seq. of the Corporate Enterprises Act shall apply.

The above paragraph notwithstanding, Article 25 of the BBVA Bylaws establishes that in order to validly adopt resolutions regarding any change to the corporate purpose, transformation, total spin-off or winding up of the Company and amendment of the second paragraph of said Article 25, two thirds of the subscribed capital with voting rights must attend the General Meeting on first calling, and 60% of said capital on second calling.

As regards the procedure for amending the Bylaws, Article 4.2 c) of the LOSS establishes that the Bank of Spain shall be responsible for authorising the amendments to the bylaws of credit institutions as set out by regulations.

Further to the above, Article 10 of Royal Decree 84/2015 stipulates that the Bank of Spain shall make a decision within two months following receipt of the request for amendment of the Bylaws and that said request must be accompanied by certified minutes recording the agreement, a report substantiating the proposal drawn up by the board of directors and draft new bylaws, identifying the cited amendments.

 

8

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Notwithstanding the foregoing, the aforementioned Article 10 establishes that no prior authorisation from the Bank of Spain is required, though the latter must be notified for the purposes of entry in the Registro de Entidades de Crédito (Spanish register of credit institutions), for amendments with the following purposes:

 

•

Change of the registered office within the national territory.

 

•

Share capital increase.

 

•

Verbatim incorporation into the bylaws of legal or regulatory precepts of a mandatory or prohibitive nature, or for the purpose of complying with legal or administrative decisions.

 

•

Those amendments for which the Bank of Spain, in response to a prior enquiry made by the affected bank, deems that authorisation is not required due to their little relevance.

This communication must be made within 15 working days following the adoption of the statute amendment resolution.

Finally, as a significant entity, BBVA is under the direct supervision of the European Central Bank (ECB) in cooperation with the Bank of Spain under the Single Supervisory Mechanism, so the authorisation of the Bank of Spain mentioned above will be submitted to the ECB, prior to its resolution by the Bank of Spain.

 

B.4

Provide data on attendance at general meetings held during the financial year covered in this report and the previous financial year:

 

 

B.5

Indicate whether there were any items on the agenda for the general meetings that took place during the financial year that were not approved by the shareholders for any reason.

No

 

B.6

Indicate whether there are any restrictions in the bylaws that establish a minimum number of shares required to attend general meetings or vote remotely:

Yes

 

 

9

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Remarks

Article 23 of the BBVA Bylaws establishes that holders of 500 or more shares may attend both annual and extraordinary General Shareholders’ Meetings, provided that their shares are registered in the corresponding accounting ledger at least five days before the day on which the Meeting is scheduled, pursuant to the Securities Exchange Act and other applicable provisions, and who conserve at least that number of shares until the Meeting is held.   Holders of fewer shares may group together until they have at least that number, and name a representative.   However, there is no minimum number of shares required to vote remotely. Pursuant to the provisions of Article 8 of BBVA’s Regulations of the General Shareholders’ Meeting, shareholders may vote by proxy, by post, electronically or by any other means of remote communication, provided that the shareholder confirms the identity of the person exercising their right to vote. In terms of constituting the General Shareholders’ Meeting, shareholders who vote remotely will be counted as present.

 

B.7

Indicate whether it has been established that certain decisions, other than those provided for by law, involving an acquisition, a disposal, the contribution of essential assets to another company or a similar corporate transaction, must be submitted to the general shareholders’ meeting for approval.

No

 

B.8	Indicate the address and means of access, on the company’s website, to information on corporate governance and other information on general meetings that must be made available to shareholders on the company’s website.

Information relating to corporate governance and the Company’s general meetings can be accessed via the Banco Bilbao Vizcaya Argentaria, S.A. company website, www.bbva.com, in the Shareholders and Investors — Corporate Governance and Remuneration Policy section (https://shareholdersandinvestors.bbva.com/corporate-governance-and-remuneration-policy/).

C.    COMPANY MANAGEMENT STRUCTURE

 

C.1

Board of directors

 

C.1.1

Maximum and minimum number of directors established in the bylaws and number set by the general meeting:

 

Maximum number of directors		15
Minimum number of directors		5
Number of directors set by the general meeting		15

 

Remarks

In accordance with the provisions of Article 34, Paragraph 2 of the Bylaws, the General Shareholders’ Meeting, held on 20 April 2021, resolved to set the total number of directors on the Board of Directors of Banco Bilbao Vizcaya Argentaria, S.A. at 15.

 

C.1.2

Fill in the following table on the board members:

 

Name or corporate name of the director

Representative

Type of director

Position on the board

Date of first appointment

Date of most recent appointment

Election procedure

Carlos Torres Vila

-

Executive

Group Executive Chairman

04/05/2015

15/03/2019

Resolution of the General Shareholders’ Meeting

 

10

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Onur Genç

-

Executive

Chief Executive Officer

20/12/2018

15/03/2019

Resolution of the General Shareholders’ Meeting

José Miguel Andrés Torrecillas

-

Independent

Deputy Chair

13/03/2015

20/04/2021

Resolution of the General Shareholders’ Meeting

Jaime Caruana Lacorte

-

Independent

Director

16/03/2018

20/04/2021

Resolution of the General Shareholders’ Meeting

Raúl Galamba de Oliveira

-

Independent

Director

13/03/2020

13/03/2020

Resolution of the General Shareholders’ Meeting

Belén Garijo López

-

Independent

Director

16/03/2012

20/04/2021

Resolution of the General Shareholders’ Meeting

Sunir Kumar Kapoor

-

Independent

Director

11/03/2016

15/03/2019

Resolution of the General Shareholders’ Meeting

Lourdes Máiz Carro

-

Independent

Director

14/03/2014

13/03/2020

Resolution of the General Shareholders’ Meeting

José Maldonado   Ramos

-

Other external

Director

28/01/2000

20/04/2021

Resolution of the General Shareholders’ Meeting

Ana Peralta Moreno

-

Independent

Director

16/03/2018

20/04/2021

Resolution of the General Shareholders’ Meeting

Juan Pi Llorens

-

Independent

Director

27/07/2011

20/04/2021

Resolution of the General Shareholders’ Meeting

Ana Revenga Shanklin

-

Independent

Director

13/03/2020

13/03/2020

Resolution of the General Shareholders’ Meeting

Susana Rodríguez Vidarte

-

Other external

Director

28/05/2002

13/03/2020

Resolution of the General Shareholders’ Meeting

Carlos Salazar Lomelín

-

Other external

Director

13/03/2020

13/03/2020

Resolution of the General Shareholders’ Meeting

Jan Verplancke

-

Independent

Director

16/03/2018

20/04/2021

Resolution of the General Shareholders’ Meeting

 

Total number of directors		15

Indicate any departures, whether resulting from resignation or resolution of the general meeting, that occurred on the board of directors during the reporting period:

 

11

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Name or corporate name of the director		Type of director at the time of departure		Date of most recent appointment		Departure date		Specialised committees of which the director was a member		Indicate whether the departure occurred prior to the end of the term

 

C.1.3

Fill in the following tables on the board members and their directorship type:

EXECUTIVE DIRECTORS

 

 

EXTERNAL PROPRIETARY DIRECTORS

 

 

12

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

EXTERNAL INDEPENDENT DIRECTORS

 

 

13

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

 

14

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Total number of independent directors		10
% of all directors		66.67%

Indicate whether any director considered to be an independent director is receiving, from the company or its group, any amount or benefit that does not constitute remuneration for serving as a director, or maintains or has maintained, over the last financial year, a business relationship with the company or any company in its group, whether in their own name or as a significant shareholder, director or senior manager of an entity that maintains or has maintained such a relationship.

Where applicable, include a reasoned statement from the board with the reasons why it deems that this director can perform their duties as an independent director.

 

Name or corporate name of the director		Description of the relationship		Reasoned statement

OTHER EXTERNAL DIRECTORS

Identify all other external directors and explain why they cannot be considered proprietary or independent directors, detailing their relationships with the company or its executives or shareholders:

 

Name or corporate name of the director		Reasons		Company, executive or shareholder with whom the relationship is maintained		Profile
José Maldonado Ramos		He has been a director for a continuous period of more than 12 years.		Banco Bilbao Vizcaya Argentaria, S.A.		Over the course of his professional career, he has held the positions of Secretary of the Board of Directors at a number of companies, most notably as Corporate General Secretary of Argentaria, before taking up the position of Corporate Secretary of BBVA. He took early retirement as a Bank executive in December 2009.   He holds a Law degree from Complutense University of Madrid. In 1978, he passed State exams and became an Attorney for the State.
Susana Rodríguez Vidarte		She has been a director for a continuous period of more than 12 years.		Banco Bilbao Vizcaya Argentaria, S.A.		She has been Professor of Strategy at the Faculty of Economics and Business Administration at the University of Deusto and a non-practising member of the Institute of Accounting and Accounts Auditing.   She was Dean of the Faculty of Economics and Business Administration at the University of Deusto, Director of the Postgraduate Area and Director of the Instituto Internacional de Dirección de Empresas (INSIDE).   She holds a PhD in Economic and Business Administration from the University of Deusto.

 

15

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Carlos Salazar Lomelín		Applying a criterion of prudence in the interpretation of the rule, Mr Salazar Lomelín has been assigned the status of external director to Banco Bilbao Vizcaya Argentaria, S.A., in view of his membership of the management bodies of companies related to BBVA Mexico for more than 15 years.		Grupo Financiero BBVA Bancomer, S.A. de C.V.		Chairman of Mexico’s Business Coordinating Council (since 2019).   His career has been linked mainly to Grupo Fomento Económico Mexicano S.A.B. de C.V. (Femsa), where he was General Manager of Cervecería Cuauhtémoc-Moctezuma and Chief Executive Officer of Femsa (this last role was from 2014–2017).   He holds a degree in Economics and has completed postgraduate studies in Business Administration at Instituto Tecnológico y de Estudios Superiores de Monterrey (Monterrey Institute of Technology and Higher Education).   For information on his roles in other entities, see sections C.1.10 and C.1.11 of this Report.

 

Total number of other external directors		3
% of all directors		20%

Indicate any changes that occurred during the period in the type of each director:

 

Name or corporate name of the director		Date of change		Previous type		Current type

 

C.1.4

Fill in the following table with information regarding the number of female directors as of the end of the last four financial years and the types of such directors:

 

		Number of female directors								% of all directors of each type
		Year 2021		Year 2020		Financial year 2019		Financial  year 2018		Financial  year 2021		Year 2020		Financial  year 2019		Financial  year 2018
Executive		0		0		0		0		0.00%		0.00%		0.00%		0.00%
Proprietary		0		0		0		0		0.00%		0.00%		0.00%		0.00%
Independent		4		4		3		3		40%		40%		37.5%		37.5%
Other external		1		1		1		1		33.33%		33.33%		25%		25%
Total:		5		5		4		4		33.33%		33.33%		26.67%		26.67%

 

C.1.5

Indicate whether the company has diversity policies in relation to the company’s board of directors with regard to matters such as age, gender, disability or professional training and experience. In accordance with the definition contained in the Spanish Account Auditing Act, small and medium-sized companies are required to report, at a minimum, the policy that they have established with regard to gender diversity.

 

16

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Yes

In the event the company has them, please outline these diversity policies, their objectives, their measures, the way in which they have been applied and the results thereof in this financial year. Please also indicate any specific measures adopted by the board of directors and the appointments and remunerations committee to achieve a balanced and diverse representation of directors.

If the company does not have a diversity policy, explain the reasons for this.

Description of the policies, their objectives, their measures, the way in which they have been applied and the results thereof

The Bank has a Policy on the selection, suitability and diversity of the BBVA Board of Directors, (the Selection Policy) approved by the Board of Directors at the end of the 2020 financial year that sets out the principles and criteria governing the process for the selection, appointment and renewal of BBVA Board members, as well as the legal requirements that directors must meet, including those relating to suitability. The Policy also provides for elements and objectives concerning the composition of the corporate bodies, including diversity, the purpose of which is to ensure that the corporate bodies properly and effectively exercise their functions. All of this is done in the Bank’s best corporate interest.

In this sense, with regard to diversity, the Selection Policy states that the BBVA Board of Directors will promote diversity in the composition of the Bank’s corporate bodies by encouraging the inclusion of people with different profiles, qualities, knowledge, training and experience.

In addition, to ensure that the corporate bodies have an adequate and balanced composition, the rotation and selection processes will encourage diversity of their members, based on the needs of the Bank at all times.

In particular, efforts will be made to ensure that the Board of Directors has a balanced representation of men and women. To this end, the Appointments and Corporate Governance Committee has set a target for representation of the lesser-represented gender, namely that female directors should represent at least 40% of the Board of Directors by the end of the 2022 financial year and beyond, with the figure not dropping below 30% prior to this.

Additionally, the aim is for the composition of the Board of Directors to feature an appropriate balance between the different types of director, for non-executive directors to represent an ample majority over executive directors and for the number of independent directors to account for at least 50% of the total seats.

The corporate bodies will also be assessed to ensure that they have a mix of individuals who have experience and knowledge of the Group, its businesses and the financial sector in general, as well as others who have training, skills, knowledge and experience in other areas and sectors relevant to the Bank.

In addition, BBVA’s corporate bodies may take any other diversity factor into consideration that is relevant at any given moment to adapt the composition of the corporate bodies to the needs of the Bank. They may take into account criteria such as gender diversity, academic profile, professional experience, knowledge, disability, origin or age, thus being able to achieve an adequate balance aimed at ensuring that the corporate bodies can properly and effectively exercise their functions.

Continued in section H.

 

C.1.6

Explain any measures that have been agreed by the appointments committee to ensure that selection procedures are free from implicit biases that could hinder the selection of female directors and to ensure that the company makes a conscious effort to search for, and includes among its potential candidates, women who match the desired professional profile in order to achieve a balanced representation of men and women. Further, indicate whether these measures include facilitating a significant number of female senior managers at the company:

 

17

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Explanation of the measures

As stated in Section C.1.5, the Board has a Selection Policy that establishes that, with respect to the selection processes for new Bank directors, as part of the process of progressive and systematic rotation of the corporate bodies, the Appointments and Corporate Governance Committee will ensure that they promote diversity and that, in general, they are free from implicit biases that may lead to discrimination.

Furthermore, the Committee will ensure that these selection processes facilitate the selection of a sufficient number of female directors so as to guarantee a balanced representation of women and men, endeavouring to ensure that women who match the relevant professional profile are included amongst potential candidates.

To this end, as indicated previously, the Appointments and Corporate Governance Committee has set a target for representation of the lesser-represented gender, namely that female directors should represent at least 40% of the Board by the end of the 2022 financial year and beyond, with the figure not dropping below 30% prior to this.

In view of the above, and considering the constant analysis of the structure, size and composition of the Board of Directors, in the 2021 financial year, the Appointments and Corporate Governance Committee developed a selection process for directors, inspired by the principles of the Regulations of the Board and the Selection Policy, which has taken into account the aim of female directors representing at least 40% of the Board before the end of the 2022 financial year. In addition, it is based on a current situation in which women make up one third of the Board, which fulfils the objective set out in the Selection Policy that applies at this time.

This process has taken into account the criteria outlined in the Selection Policy, favouring the diversity of experiences, knowledge, skills and gender. It has also been free from implicit bias that could lead to any kind of discrimination, and has included women who may meet the desired professional profile.

As a result of this process, and having followed the company’s required process, a proposal has been made to the General Meeting, which will be held in the 2022 financial year, to appoint a new female director as an independent director.

This new appointment, if approved, will contribute directly to the fulfilment of the Policy’s representation objective, therefore meaning that six female directors will form part of the Board of Directors, which would represent 40% of its members.

In addition, it should be noted that the majority of the members of the Audit Committee and the Remunerations Committee are women, including the Chair of the Remunerations Committee.

Continued in section H.

When, despite the measures taken, there are few or no female directors or senior managers, explain the reasons therefor:

 

Explanation of the reasons

 

C.1.7

Explain the conclusions of the appointments committee regarding the verification of compliance with the policy aimed at promoting an appropriate composition of the board of directors.

As part of the annual evaluation of the Board carried out for the 2021, the Appointments and Corporate Governance Committee, in accordance with its Regulations, has analysed the structure, size and composition of the corporate bodies, taking into account that these must remain balanced and adapted to their needs at all times, and that the Board, as a whole, has the right knowledge, skills and experience to understand the business, activities and main risks of BBVA and the Group, and ensures that it has the effective capacity to carry out its functions in the Bank’s best corporate interest.

 

18

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

This analysis takes place within the framework of the progressive and orderly rotation of the corporate bodies developed by the Board, under which individuals with different profiles and experience are admitted as often as it sees fit, in order to increase diversity, as well as to ensure an appropriate rotation of the members of the Board. This guarantees a balanced representation of directors with diverse experience on the Board.

The analysis also takes into account the forecasts and objectives regarding the structure, size and composition of the Board as set out in applicable legislation, the Regulations of the corporate bodies and the Selection Policy, as outlined above, as well as the finalisation of the directors’ statutory terms, as appropriate for each financial year.

The Committee also takes into account the functioning and performance of the corporate bodies in recent years, and in particular how they have operated during the COVID-19 crisis, during which the directors have shown a great deal of dedication to the Bank as well as demonstrating flexibility and an ability to adapt to the current circumstances, and during which their knowledge of the landscape and the Group itself has not only enabled the corporate bodies to adequately carry out their functions, it has also contributed to the Group being able to tackle the crisis from a position of strength.

Furthermore, the Committee also takes into account the areas and matters that are of particular relevance when it comes to carrying out the functions that correspond to the corporate bodies, in particular, the Group’s activities, business and strategies, both at present and going forwards.

Among the various sources of information the Committee uses to carry out its work, particularly noteworthy is the matrix of skills and diversity on the Board, developed with a view to facilitating the identification of the skills, characteristics and experience that the Board has, and those which could be strengthened in the future. This matrix covers skill categories, sectors and areas related to banking and finance, as well as others that are of particular relevance to the Group’s strategy and activities.

This matrix covers the areas of banking and financial services; accounting and auditing; risk management; innovation and information technologies; strategy and macroeconomic environment; human resources and remuneration; institutional, legal and regulatory; and corporate governance and sustainability.

Similarly, the matrix brings together the prior professional experience and career of directors in various areas such as the company, boards of directors, public administration and academia, among others, at both national and international level; it also indicates the percentage of women and men on the Board.

In relation to the foregoing, the Committee has been able to confirm that the Board includes individuals with extensive knowledge and experience in the financial and banking field along with individuals who have experience and knowledge in each of the other areas analysed; it also notes that there is a diversity in the type of training undertaken and professional experience—both national and international—gained by the directors.

This diversity of the Board’s skills, knowledge and experience has been strengthened following the in-depth process to renew the corporate bodies, which are being developed, with the appointment of several directors over the last few years. As a result, individuals have been appointed who have enabled the Board to strengthen its skills, knowledge and experience in areas of particular relevance to the Bank’s strategy, business and activities.

The Board, therefore, consists of directors with a range of experience in terms of the Board itself, combining newly incorporated members with others who have experience in the corporate bodies themselves and who have extensive knowledge of the Group and of the functional dynamics and working culture of the corporate bodies themselves. They also ensure that the process of progressive rotation of the corporate bodies, which involves the inclusion of new profiles, with lesser knowledge of the Bank, without affecting its proper functioning

 

19

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

The Committee also observed that independent directors contribute to the suitable composition of both the Board of Directors and its committees and, in particular, those that assist the Board in its supervision and control functions. These Committees must have a significant number of independent directors, from among which the chairs of these committees must also be appointed.

Continued in section H.

 

C.1.8

Where applicable, explain why proprietary directors have been appointed at the behest of shareholders whose holding is less than 3% of the capital:

 

Name or corporate name of the shareholder		Justification

Indicate whether any formal requests for a seat on the board were denied where such requests came from shareholders whose interests in the company’s share capital were equal to or greater than those of others at whose behest proprietary directors were appointed. Where applicable, explain why these requests were not granted:

No

 

C.1.9

Where applicable, indicate the powers and authority delegated by the board of directors, including as it relates to potential share issuances or buybacks, to directors or board committees:

 

Name or corporate name of the director or committee		Brief description
Carlos Torres Vila		He holds the widest-ranging representative and management powers in line with his duties as Group Executive Chairman of the Company.
Onur Genç		He holds the widest-ranging representative and management powers in line with his duties as Chief Executive Officer of the Company.
Executive Committee		Pursuant to Article 30 of BBVA’s Regulations of the Board of Directors and Article 1.2 of the Regulations of the Executive Committee, the Executive Committee will be made aware of matters delegated to it by the Board of Directors, in accordance with the law, the Bylaws, the Regulations of the Board or the Regulations of the Executive Committee.   In addition, in relation to those powers concerning potential share issuances and buybacks, at its meeting on 28 October, 2021, the BBVA Board of Directors resolved to carry out a framework programme for the buyback of treasury shares and, within the scope of this framework programme, an initial share buyback programme, agreeing to delegate to the Executive Committee, with express substitution powers, the determination of its start and termination date, its early termination or temporary suspension, as well as its definitive terms, characteristics and conditions.

 

C.1.10

Where applicable, identify any members of the Board who hold positions as directors, representatives of directors or executives in other companies that belong to the same group as the listed Company:

 

Name or corporate name of the director		Corporate name of the group entity		Position		Does the director have executive duties?
Carlos Torres Vila		BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México		Director		No
Carlos Torres Vila		Grupo Financiero BBVA México, S.A. de C.V.		Director		No

 

20

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Onur Genç		BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México		Director		No
Onur Genç		Grupo Financiero BBVA México, S.A. de C.V.		Director		No
Carlos Salazar Lomelín		BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México		Director		No
Carlos Salazar Lomelín		Grupo Financiero BBVA México, S.A. de C.V.		Director		No
Carlos Salazar Lomelín		BBVA Seguros México, S.A. de C.V. Grupo Financiero BBVA México		Director		No
Carlos Salazar Lomelín		BBVA Pensiones México, S.A. de C.V. Grupo Financiero BBVA México		Director		No
Carlos Salazar Lomelín		BBVA Seguros Salud México, S.A. de C.V. Grupo Financiero BBVA México		Director		No

 

C.1.11

Detail the director or director representative roles held by directors or representatives of members of the board of directors of the company in other companies, whether listed or not:

 

Name of the director or representative		Corporate name of the entity, whether listed or not		Position
José Miguel Andrés Torrecillas		Zardoya Otis, S.A.		Director
Raúl Galamba de Oliveira		CTT – Correios de Portugal, S.A.		Group Executive Chairman
Raúl Galamba de Oliveira		José de Mello Capital		Director
Raúl Galamba de Oliveira		José de Mello Saúde		Director
Belén Garijo López		L’Oréal Société Anonyme		Director
Belén Garijo López		Merck Group		CEO
Sunir Kumar Kapoor		Stratio Big Data, Inc.		Director
Sunir Kumar Kapoor		Deep Image Analytics, Inc.		Director
Sunir Kumar Kapoor		McLaren Technology Adquisition Corp.		Director
Ana Peralta Moreno		Grenergy Renovables, S.A.		Director
Ana Peralta Moreno		Inmobiliaria Colonial SOCIMI, S.A.		Director
Juan Pi Llorens		Ecolumber, S.A.		Group Executive Chairman
Juan Pi Llorens		Oesía Networks, S.L.		Director
Juan Pi Llorens		Tecnobit, S.L.U. (Grupo Oesía)		Director
Juan Pi Llorens		UAV Navigation, S.L. (Grupo Oesía)		Director
Carlos Salazar Lomelín		Alsea, S.A.B. de C.V.		Director
Carlos Salazar Lomelín		Sukarne, S.A. de C.V.		Director

 

21

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Indicate, where applicable, all paid activities of any nature engaged in by directors or their representatives aside from those indicated in the table above:

 

Name of the director or representative		Other paid activities
Susana Rodríguez Vidarte		Professor Emeritus at the University of Deusto
Sunir Kumar Kapoor		Operating Partner at Atlantic Bridge Capital and advisor to the CEO at mCloud Technologies Corp.
Lourdes Máiz Carro		Teaching of training activities
Jaime Caruana Lacorte		Teaching of training activities

 

C.1.12

Indicate and, where applicable, explain whether the company has established any rules regarding the maximum number of company boards on which its directors may sit, identifying, where applicable, where such rules are governed:

Yes

Explanation of the rules and identification of the document governing the same

Article 11 of the Regulations of the Board of Directors establishes that, in the performance of their duties, directors will be subject to the rules on limitations and incompatibilities established under the current applicable regulations, and in particular, to the provisions of Act 10/2014 on the regulation, supervision and solvency of credit institutions (the LOSS).

In this regard, Article 26 of the LOSS stipulates that the directors of credit institutions may not simultaneously hold more positions than those provided for in the following combinations: (i) one executive position and two non-executive positions; or (ii) four non-executive positions. Executive positions are understood to be those that undertake management duties irrespective of the legal bond attributed by those duties. In this respect, the following will count as a single position: 1) executive or non-executive positions held within the same group; 2) executive or non-executive positions held within (i) entities that form part of the same institutional protection scheme or (ii) trading companies in which the entity holds a significant shareholding. Positions held in non-profit organisations or entities or companies pursuing non-commercial purposes will not count when determining the maximum number of positions. Nevertheless, the Bank of Spain may authorise members of the Board of Directors to hold an additional non-executive position if it deems that this would not interfere with the proper performance of the director’s activities in the credit institution.

In addition, pursuant to the provisions of Article 11 of BBVA’s Regulations of the Board of Directors, directors may not:

 

•

Provide professional services to companies that compete with the Bank or any of the companies within its Group, or agree to be an employee, manager or director of such companies, unless they have received express prior authorisation from the Board of Directors or from the General Shareholders’ Meeting, as appropriate, or unless these activities were conducted before the director joined the Bank, they posed no effective competition and the Bank had been informed of such at that time.

 

22

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

•

Have direct or indirect shareholdings in businesses or enterprises in which the Bank or companies within its Group hold an interest, unless that shareholding was held prior to joining the Board of Directors or prior to the Group’s acquisition of its holding in such businesses or enterprises, or unless such companies are listed on national or international securities markets, or unless authorised to do so by the Board of Directors.

 

•

Hold political positions or perform any other activities that might receive public attention or affect the Company’s image in any way, unless authorised to do so by the Bank’s Board of Directors.

 

C.1.13

Indicate the amounts of the following items relating to the total remuneration of the board of directors:

 

Remuneration accrued in favour of the board of directors during the financial year (thousands of euro)		16,118
Amount of funds accumulated by current directors through long-term savings systems with vested economic rights (thousands of euro)		0
Amount of funds accumulated by current directors through long-term savings systems with non-vested economic rights (thousands of euro)		24,546
Amount of funds accumulated by former directors through long-term savings systems (thousands of euro)		69,289

 

Remarks

The remuneration included in the first heading of this paragraph includes: (i) the fixed remuneration received by all directors in 2021; and (ii) in the case of executive directors, the amount corresponding to the Upfront Portion of the Annual Variable Remuneration for the 2021 financial year, in cash and shares, and to the payment of the Deferred Portion of the Annual Variable Remuneration for the 2018 financial year, in cash and shares, to be delivered in 2022, together with the corresponding update of the cash portion. In the case of the Chairman, the amount corresponding to the payment of the Deferred Portion of the Annual Variable Remuneration for the 2017 financial year, in cash and shares, to be delivered in 2022, together with the corresponding update of the cash portion.   The amounts of the Upfront Portion of the Annual Variable Remuneration for the 2021 financial year have been determined in 2022, once the result of the Annual Performance Indicators established for their calculation is known. They will be paid in the first quarter of 2022, providing that the conditions to that effect have been met.   The amounts of the Deferred Portion of the Annual Variable Remuneration for the 2018 financial year have been determined in 2022, upon learning the result of the Multi-Year Performance Indicators to which said remuneration was subject, and will be paid in the first quarter of 2022, providing that the conditions to that effect have been met.   The amount of the second payment of the Deferred Portion of the Chairman’s Annual Variable Remuneration for the 2017 financial year, to be delivered in 2022 was determined in 2021, upon learning the result of the Multi-Year Performance Indicators to which said remuneration was subject, and will be paid in the first quarter of 2022, providing that the conditions to that effect have been met.

 

C.1.14

Identify the members of senior management who are not also executive directors, and indicate the total remuneration accrued in their favour throughout the financial year:

 

Name or corporate name		Position(s)
María Luisa Gómez Bravo		Global Head of Corporate & Investment Banking
Jorge Sáenz-Azcúnaga Carranza		Country Monitoring
Peio Belausteguigoitia Mateache		Country Manager Spain
Eduardo Osuna Osuna		Country Manager Mexico
David Puente Vicente		Global Head of Client Solutions
Javier Rodríguez Soler		Global Head of Sustainability

 

23

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Rafael Salinas Martínez de Lecea		Global Head of Finance
Jaime Sáenz de Tejada Pulido		Head of Global Risk Management
José Luis Elechiguerra Joven		Global Head of Engineering
Carlos Casas Moreno		Global Head of Talent & Culture
Ricardo Martín Manjón		Global Head of Data
Victoria del Castillo Marchese		Global Head of Strategy & M&A
María Jesús Arribas de Paz		Global Head of Legal
Domingo Armengol Calvo		General Secretary
Ana Fernández Manrique		Global Head of Regulation & Internal Control
Joaquín Gortari Díez		Global Head of Internal Audit

 

Number of women in senior management		4
Percentage of all members of senior management		25%

 

Total remuneration of senior management (thousands of euro)		25,425

 

C.1.15

Indicate whether there have been any amendments to the regulations of the board during the financial year:

Yes

Description of the modifications

On 29 July, 2021, coinciding with the creation of the new global area of Sustainability, the Board of Directors resolved to make specific amendments to Articles 18 and 20 of the Regulations of the Board of Directors of the Bank, in order to include the report of this new area to the Chief Executive Officer, as well as to the Chairman of the Board of Directors (in this case, in the areas of strategy and transformation).

To this end, and on the basis of the analysis and agreement previously expressed by the Appointments and Corporate Governance Committee, the Board approved the proposal for a new Regulation, thus drawing up a new consolidated text of the Regulation. This was later published on the Bank’s website and registered in the Commercial Registry, in compliance with the applicable regulations.

 

C.1.16

Indicate the procedures for the selection, appointment, re-election and removal of directors. Provide details regarding the competent bodies, the procedures to be followed and the criteria to be used in each procedure.

Selection, appointment and re-election procedure:

The General Meeting is responsible for appointing and re-appointing members of the Board of Directors, though the Board has the authority to co-opt members if a seat falls vacant, in accordance with the terms established in the regulations, the Bylaws, the Regulations of the Board and the Selection Policy described in Sections C.1.5 and C.1.6.

The persons proposed to be appointed or re-appointed as members of the Board of Directors must meet the requirements set out in current legislation, in the specific regulations applicable to credit institutions, in the Bylaws, in the Regulations of the Board and in the Selection Policy.

Proposals for appointment or re-appointment of directors submitted by the Board of Directors to the General Meeting, as well as appointments made directly to fill vacancies under its co-opting authority, will be approved at the proposal of the Appointments and Corporate Governance Committee for independent directors and subject to a report from this Committee for all other directors.

 

24

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Furthermore, proposals for appointment and re-appointment submitted to the General Meeting must be accompanied by a supporting report from the Board of Directors assessing the skills, experience and merits of the proposed candidate. Proposals for the appointment or re-appointment of non-independent directors must also be accompanied by a report from the Appointments and Corporate Governance Committee.

To this end, said Committee will evaluate the balance of knowledge, skills and experience on the Board of Directors, as well as the conditions that the candidates must meet to cover vacancies (applicable legal and suitability requirements, inter alia), evaluating the time commitment considered necessary so that they can carry out their duties, according to the needs of the corporate bodies.

Thus, the Appointments and Corporate Governance Committee will develop rotation and selection processes for directors as part of the process of progressive and systematic rotation of the corporate bodies with a view to ensuring that the structure and composition of the Board remains balanced and in line with the needs of the Bank at all times, having directors with different profiles, knowledge, training, experience and qualities.

Within these processes, the Committee will ensure that diversity is promoted and that, in general, there are no implicit biases that may lead to any form of discrimination.

It shall also ensure that these processes facilitate the selection of a sufficient number of female directors to guarantee a balanced representation of men and women, with the aim that female directors represent at least 40% of the Board by the end of the 2022 financial year and beyond, with the figure not dropping below 30% prior to this, while endeavouring to ensure that women who match the professional profile sought are included amongst potential candidates.

Additionally, the aim is for the composition of the Board of Directors to feature an appropriate balance between the different types of director, for non-executive directors to represent an ample majority over executive directors and for the number of independent directors to account for at least 50% of the total seats.

The corporate bodies will also be assessed to ensure that they have a mix of individuals who have experience and knowledge of the Bank, the Group, its businesses and the financial sector in general, as well as others who have training, skills, knowledge and experience in other areas and sectors relevant to the Bank.

In any case, BBVA’s corporate bodies may take any other relevant diversity factor into consideration to adapt the composition of the corporate bodies to the needs of the Bank. They may take into account criteria such as gender diversity, academic profile, professional experience, knowledge, disability, origin or age, thus being able to achieve an adequate balance.

In the performance of its functions, the Appointments and Corporate Governance Committee may employ external services to select potential candidates, when it deems this necessary or appropriate.

Duration of term and termination:

The directors will hold their position for the term set out in the company Bylaws (that is, three years, after which they may be reappointed one or more times for an additional three-year term) or, if they have been co-opted, until the first General Shareholders’ Meeting has been held. They will resign from their post when the term for which they were appointed expires, unless they are re-appointed.

Directors must also inform the Board of Directors of any circumstances affecting them that could harm the company’s standing and reputation, and any circumstances that may have an impact on their suitability for their role. Directors must offer their resignation to the Board and accept the Board’s decision regarding their continuity in office. Should the Board decide against their continuity, they are required to tender their resignation, in the circumstances listed in section C.1.19 below.

 

25

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

In any event, directors will resign from their posts upon reaching 75 years of age and must submit their resignation at the first meeting of the Bank’s Board of Directors held after the General Shareholders’ Meeting approving the accounts for the financial year in which they reach said age.

 

C.1.17

Explain the extent to which the annual evaluation of the board has led to significant changes in its internal organisation and in the procedures applicable to its activities:

Description of changes

Article 17 of the Regulations of the Board of Directors establishes that the Board shall evaluate the quality and efficiency of its functioning, on the basis of the report submitted to it by the Appointments and Corporate Governance Committee.

The BBVA Board of Directors carried out its self-assessment according to the process described in the following section, in the context of the evolution and constant improvement of BBVA’s Corporate Governance System, in such a way that it remains aligned at all times to the needs of the corporate bodies, to the environment in which the Group operates, and to the regulatory requirements and best practices.

This has enabled the corporate bodies to continue to deepen the implementation of the various improvement measures resolved by the Board over the course of the last few financial years.

Thus, the following conclusions from the 2021 evaluation process were of particular note:

 

·

The maintenance of an adequate structure and composition of the corporate bodies, following the re-election processes of seven directors (six of them independent) which culminated in the 2021 general meeting. This composition allows the Bank to have directors with outstanding professional backgrounds with diverse profiles and a high level of dedication when it comes to carrying out their duties. All of which guarantees an adequate knowledge of the environment, activities, strategies and risks of the Bank and its Group by the corporate bodies and contributes to the enhanced performance of their functions.

 

·

The existence of a large majority of independent directors (two thirds of the total) and a female representation of at least 30% of the total (a target applicable to the 2021 financial year).

 

·

The significant improvements implemented in the decision-making process of the corporate bodies, as well as in the exercise of their supervisory and control functions, where progress has been made in both the role of the committees and the information model, as well as in the Board’s own dynamics in dealing with matters.

 

·

The constant adaptation of the dynamics of the corporate bodies’ meetings when it comes to the evolution of the pandemic.

 

·

The measures aimed at ensuring that there is constant interaction between the Board, its committees and the executive team for the analysis of all relevant information, including on the evolution of the pandemic and its management by the Bank, as well as the supervision and control of the executive team, either directly by the Board, through the committees, within the framework of their respective functions.

 

·

The mechanisms that have enabled corporate bodies to increase the time spent on issues of greatest relevance to the Group, in particular with regard to their different strategic approaches and progress in the area of sustainability.

In all of this, the Bank’s corporate bodies sought to keep BBVA’s Corporate Governance System adapted to the reality, circumstances and needs of the Bank and, consequently, to emphasise the importance attributed to ensuring its solidity and resilience under all circumstances.

In this regard, indicate that on the evaluation process for 2021 likewise, the following issues have been detected for continuous improvement: increase the participation of the Appointments and Corporate Governance Committee in planning the succession of the holders of key functions, as well as continue developing the supervision of the Corporate Governance Policy of the Group, simplify the information provided to the corporate bodies to improve the efficiency of their sessions; and strengthen the integration of the second line of defense within the area of Regulation and Internal Control.

 

26

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Describe the evaluation process and the evaluated areas conducted by the board of directors, assisted, where applicable, by an external consultant, regarding the functioning and composition of the board, its committees and any other area or aspect that was evaluated.

Description of the evaluation process and the areas evaluated

In accordance with Article 17 of the Regulations of the Board of Directors, the Board assesses the quality and efficiency of its operation, as well as the performance of the duties of the Chairman of the Board, starting, in each case, with the report submitted to it by the Appointments and Corporate Governance Committee. The Board of Directors also evaluates the performance of the Chief Executive Officer, based on the report by the Appointments and Corporate Governance Committee, which includes the evaluation performed by the Executive Committee. Finally, the Board of Directors also assesses the operation of its committees, on the basis of the reports submitted to it by the latter.

The evaluation process carried out in relation to the 2021 financial year consisted of a thorough analysis and evaluation of the quality and efficiency of the functioning of the corporate bodies and the performance of the Chairman and the Chief Executive Officer. This evaluation was carried out by the Appointments and Corporate Governance Committee, taking into account several aspects, such the Board’s self-assessment for the 2020 financial year, the directors’ view of the Bank, and the various reports issued, described below.

On this basis, the Board of Directors evaluated: the quality and efficiency of the operation of the Board of Directors; the performance of the duties of the Chairman and the Chief Executive Officer; and the functioning of the Board Committees; as detailed below.

 

·

The Board of Directors has analysed the quality and efficiency of its functioning in the 2021 financial year, for which it has used the work carried out by the Appointments and Corporate Governance Committee, as contained in its report on the quality and efficiency of the operation of the Board, in which the following issues have been analysed in detail, among others: the structure, size and composition of the Board of Directors and its committees, in line with the points in sections C.1.5, C.1.6 and C.1.7; the independence and suitability of the directors, as well as the degree of dedication of the members of the Board, (in particular, the chair of each of the committees), which the Bank requires for the proper execution of the duties of director and the proper operation of the corporate bodies; and the functioning of the Board and the committees, including the decision-making process, the performance of supervision and control functions, and the development of the corporate bodies’ meetings during the financial year.

The Board has also analysed the outcome of the opinions obtained from the directors on the above issues through personal interviews with Board members, these interviews having been led by the Lead Director for non-executive directors and by the Chair of the Committee for executive directors.

Furthermore, and within the framework of its competence to determine the Board’s assessment procedure, in 2021, the Committee determined the desirability of incorporating the expert advice of an independent external firm, Following the provisions of the Good Governance Code of Listed Companies published by the CNMV as to the desirability of having the support of an external consultant in carrying out the assessment every three years (where 2018 was the financial year in which the last analysis by an external party took place).

This advice has been carried out by the company Promontory Financial Group (Promontory), after the verification of its independence by the Appointments and Corporate Governance Committee, and it has allowed that company – which also carried out the external analysis in 2018 – to carry out an independent and in-depth review of the evolution of BBVA’s Corporate Governance System in the last three financial years, including, in particular, the various improvement measures implemented. Promontory submitted its report of conclusions to the Appointments and Corporate Governance Committee and the Board of Directors at the beginning of the 2022 financial year.

 

27

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

The process described has the objective of ensuring that the Board’s assessment is carried out on the basis of a combination of elements that will provide Board members with an overall view of the development of their functions, in addition to the good governance recommendations established in this area.

 

·

The evaluation of the performance of the duties of the Chairman of the Board of Directors, which was led by the Lead Director in accordance with Article 21 of the Regulations of the Board, was carried out by the Board on the basis of the report by the Appointments and Corporate Governance Committee (in accordance with Article 5 of the Regulations of the Appointments and Corporate Governance Committee) which details the key elements of the Chairman’s performance for the 2021 financial year.

 

·

The evaluation of the performance of the duties of the Chief Executive Officer was carried out by the Board on the basis of the report by the Appointments and Corporate Governance Committee, including the assessment carried out in this respect by the Executive Committee (in accordance with Article 17 of the Regulations of the Board) which details the key elements of the Chief Executive Officer’s performance for the 2021 financial year.

In addition, the Board assessed the quality and efficiency of the functioning of each Committee on the basis of the reports submitted by their respective Chairs, as described in Section H of this Report.

 

C.1.18

For those financial years in which an external consultant assisted with the evaluation, provide details of any business relationships that the consultant or any entity in their group maintains with this company or any company in its group.

The independent external expert who has aided in the Board of Directors assessment process has intervened throughout the financial year in the provision of other consulting services for the Company, and there are no known significant business relationships between the Company and the external consultant or any other company in its group.

Furthermore, it is indicated that the external expert who has assisted in the Board of Directors assessment process has not advised the company on appointment of directors or senior managers or on remuneration systems.

 

C.1.19

Indicate the circumstances under which directors are obliged to resign.

In addition to the circumstances established in applicable law, directors will resign from their post when the term for which they were appointed expires, unless they are re-appointed.

Accordingly, as set forth in Article 12 of the Regulations of the Board of Directors, directors must offer their resignation to the Board of Directors and accept the Board’s decision regarding their continuity in office. Should the Board decide against their continuity, they are required to tender their resignation, in the following circumstances:

 

·

If they find themselves in circumstances deemed incompatible or prohibited under current legislation, in the Bylaws or in the Regulations of the Board of Directors.

 

·

When significant changes occur in their personal or professional situation that may affect the status under which they were appointed to the Board.

 

·

When they are in serious dereliction of their duties as director;

 

·

When, for reasons attributable to them, acting in their capacity as director, serious damage has been done to the Company’s net worth, standing or reputation; or

 

·

When they are no longer fit to hold the position of director at the Bank.

 

28

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

C.1.20

Are supermajorities, other than those provided for by law, required for any type of decision?

No

Where applicable, describe the differences.

 

C.1.21

Explain whether there are specific requirements, other than those relating to directors, to be appointed chairman of the board of directors.

No

 

C.1.22

Indicate whether the bylaws or regulations of the board establish an age limit for directors:

Yes

 

		Age limit
Group Executive Chairman		-
Chief Executive Officer		-
Director		75

 

Remarks

As stipulated in Article 4 of the BBVA Regulations of the Board of Directors, directors will resign from their posts, in all circumstances, upon reaching 75 years of age, and must submit their resignation at the first meeting of the Bank’s Board of Directors held after the General Shareholders’ Meeting approving the accounts for the financial year in which they reach said age.

 

C.1.23

Indicate whether the bylaws or regulations of the board establish a limited term or other stricter requirements for independent directors in addition to those provided for by law:

No

 

C.1.24

Indicate whether the bylaws or regulations of the board of directors establish specific rules for proxy voting within the board of directors in favour of other directors, how this is carried out and, in particular, the maximum number of proxies that a director may have and whether there are any restrictions as to what types of directors may be appointed as a proxy, beyond the limitations provided for by law. Where applicable, provide a brief description of these rules.

Article 5 of the BBVA Regulations of the Board of Directors establishes that directors are required to attend meetings of the corporate bodies of which they form part, unless they have a justifiable reason for not doing so. Directors will participate in the deliberations, discussions and debates on matters submitted for their consideration and must personally attend the meetings held.

However, as set forth in Article 26 of the Regulations of the Board of Directors, if it is not be possible for a director to attend a meeting of the Board of Directors, this director may authorise another director to act as their proxy and cast votes on their behalf, by sending a letter or email to the Company with the information needed by the proxy director to follow the absent director’s instructions. Applicable legislation states, however, that non-executive directors may only grant proxy to another non-executive director. In addition, this same system applies to attendance at meetings of Board of Directors committees.

 

C.1.25

Indicate the number of meetings that the Board of Directors has held during the financial year. In addition, where applicable, indicate how many times the board met without the chairman in attendance. For calculation purposes, the chairman will be deemed to have been in attendance if represented by a proxy provided with specific instructions.

 

Number of board meetings		15
Number of board meetings without the chairman in attendance		0

Indicate how many meetings were held by the lead director with the other board members, without any executive director in attendance or represented:

 

29

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Number of meetings		66

 

Remarks

BBVA’s Board of Directors has a Lead Director who performs the duties set forth in the applicable legislation, as well as those stipulated by Article 21 of the Regulations of the Board of Directors.   With regard to the duties assigned to this position, during the financial year, the Lead Director maintained ongoing contact, held recurring meetings and had conversations with other directors of the Bank in order to seek their opinions on the corporate governance and operation of the Bank’s corporate bodies.   In addition, in accordance with Article 37 of the Regulations of the Board, the Lead Director held and coordinated monthly meetings of non-executive directors, which took place following the meetings of the Board of Directors.   Furthermore, as of the date of this report, the Lead Director serves as Chair of the Risk and Compliance Committee and as a member of the Appointments and Corporate Governance Committee, which are composed of non-executive directors with a majority of independent directors. In addition, the Lead Director has held individual meetings with non-executive directors within the framework of the Board’s annual self-assessment process, in addition to those meetings described above, in order to fully fulfil his duties.   In addition to the above, it should be noted that the number of meetings indicated does not include those informal meetings that the Lead Director frequently holds with the other directors of the Bank since, due to their very nature, there is no record of them nor are they documented.

Indicate how many meetings were held by the board committees during the financial year:

 

Number of meetings of the executive committee		22
Number of meetings of the audit committee		15
Number of meetings of the appointments and corporate governance committee		5
Number of meetings of the remunerations committee		7
Number of meetings of the risk and compliance committee		22
Number of meetings of the technology and cybersecurity committee		8

 

C.1.26

Indicate how many meetings were held by the board of directors during the financial year and provide details on the attendance of its members:

 

Number of meetings attended in person by at least 80% of the directors		15
% of in-person attendance of the total number of votes cast during the financial year		98.67%
Number of meetings where all directors, or proxies granted with specific instructions, attended in person		15
% of votes cast by directors attending in person and through proxies granted with specific instructions of the total number of votes cast during the financial year		100%

 

Remarks

The Board of Directors holds monthly ordinary meetings in accordance with the annual schedule of ordinary meetings drawn up before the beginning of the financial year, and extraordinary meetings as often as deemed necessary.   In addition, the Board of Directors meetings were held remotely, connecting all its members through remote means of communication that allowed attendees to be recognised, as well as to interact and contribute in real time, guaranteeing the unity of the event. Meetings were also held in person, always taking into account the evolution of the pandemic caused by the coronavirus and the measures taken in this regard by the authorities.

 

30

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

C.1.27

Indicate whether the individual or consolidated annual financial statements that are being presented to the board for approval have been certified beforehand:

No

Where appropriate, identify the person(s) who has/have certified the company’s individual and consolidated annual financial statements prior to board approval:

 

C.1.28

Explain the mechanisms, if any, established by the board of directors to ensure that the annual financial statements presented by the board of directors to the general shareholders’ meeting are prepared in accordance with accounting regulations.

Article 32 of the BBVA Regulations of the Board of Directors specifies that the main task of the Audit Committee, which is composed exclusively of independent directors, is to assist the Board of Directors in supervising the preparation of the financial statements and public information, as well the relationship with the external auditor and the Internal Audit area.

In this regard, in accordance with Article 5 of the Regulations of the Audit Committee, it is the responsibility of the Audit Committee to oversee the process of preparing and reporting financial information and submit recommendations or proposals on safeguarding the integrity thereof to the Board of Directors.

It is also the responsibility of the Audit Committee to analyse all financial information and in the rest of the required financial information and any related non-financial information contained in the annual, half-yearly and quarterly financial statements of both the Bank and its consolidated Group, prior to their submission to the Board of Directors and with sufficient depth so as to verify their accuracy, reliability, adequacy and clarity.

It is also the Committee’s responsibility to review the correct application of accounting criteria, as well as all relevant changes relating to the accounting principles used and the presentation of the financial statements, including the accurate demarcation of the consolidation perimeter.

Similarly, in accordance with Article 5 of the Regulations of the Audit Committee, said Committee is responsible for monitoring the effectiveness of the Company’s internal control and risk management systems in the preparation and presentation of financial information (including tax-related risks).

In the performance of these functions, the Audit Committee maintains direct and ongoing contact with the heads of the area in the Group responsible for Accounting functions through monthly meetings, monitoring the evolution of the main figures on the Balance Sheet and the Income Statement of the Bank and its Group each month; overseeing the accounting policies, practices and principles as well as the valuation criteria followed by the Bank and the Group during the process of preparing and submitting the corresponding financial information; and analysing changes made in relation to the main applicable accounting regulations, as well as the main impacts that their incorporation has had on the financial information of the Bank and its Group. To this end, the Committee had all of the information that it required, with the level of aggregation deemed appropriate.

In addition, given that the external audit is one of the core elements in the chain of control mechanisms established to ensure the quality and integrity of the financial information, in accordance with the Regulations of the Audit Committee, it is the Committee’s responsibility to check, at appropriate intervals, that the external audit schedule of work is being conducted under the agreed conditions, and that this satisfies the requirements of the competent authorities and the corporate bodies.

Moreover, it will require the auditor to periodically—at least once a year—provide an evaluation of the quality of the internal control procedures regarding the preparation and presentation of the Group’s financial information, discussing with the auditor any weaknesses in the internal control system identified during the audit, without undermining its independence, to then be able to submit recommendations or proposals to the Board of Directors, along with the deadline for their follow-up.

The Committee will also be apprised of any infringements, situations requiring adjustments or anomalies that may be detected during the external audit and are material in nature, i.e. those that, in isolation or as a whole, could cause significant and substantive harm to the Group’s net worth, earnings or reputation.

 

31

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Discernment of such matters will be at the discretion of the external auditor who, if in doubt, must opt to report on them.

These matters are carefully considered by the Audit Committee, which maintains direct and ongoing contact with the external auditors through monthly meetings not attended by the Bank’s executives. At these meetings, the auditors provide detailed information on their work and the results thereof, which enables the Committee to continuously monitor said work and the conclusions thereof, ensuring that it is performed under optimal conditions and without interference from management.

 

C.1.29

Is the secretary of the board a director?

No

If the secretary is not a director, complete the following table:

 

		Name or corporate name of the secretary		Representative
		Domingo Armengol Calvo		-

 

C.1.30

Indicate the specific mechanisms established by the company to preserve the independence of the external auditors, and, if any, the mechanisms to preserve the independence of financial analysts, investment banks and rating agencies, including how legal measures have been implemented in practice.

As set forth in the Regulations of the Audit Committee, one of the Committee’s functions, described in the following Section C.2.1, is to guarantee the independence of the statutory auditor through a dual approach:

 

●

Avoiding any possibility that the auditor’s warnings, opinions or recommendations may be adversely influenced. To this end, the Committee must ensure that compensation for the auditor’s work does not compromise either its quality or independence, in compliance with the account auditing legislation in force at any given moment.

 

●

Establishing incompatibility between the provision of audit and consulting services, unless they are tasks required by supervisors or the provision of which by the auditor is permitted by applicable legislation, and there are no alternatives on the market that are equal in terms of content, quality or efficiency to those provided by the auditor, in which case, agreement by the Committee will be required, and this decision may be delegated in advance to its Chair. The auditor will be prohibited from providing unauthorised services outside the scope of the audit, in compliance with the auditing legislation in force at any given moment.

This matter is carefully considered by the Audit Committee, which holds meetings with the auditor’s representatives at each of the monthly meetings it has, without Bank executives in attendance, to gain a detailed understanding of any issues that may hinder the audit process, the progress and quality of the work carried out, and to confirm independence in the performance of its work.

The Committee also continually oversees the engagement of additional services to guarantee compliance with the Regulations of the Audit Committee and with applicable legislation and thus the independence of the auditor, in accordance with the Bank’s internal procedure established for these purposes.

Moreover, in accordance with the provisions of Point f), Section 4 of Article 529 quaterdecies of the Spanish Corporate Enterprises Act and Article 5 of the Regulations of the Audit Committee, each year before the audit report is issued, the Committee must issue a report expressing its opinion on whether or not the independence of the auditor has been compromised. This report must, in all cases, contain a reasoned assessment of the provision of each and every kind of additional service provided to the Group companies, considered individually and collectively, except the legal audit and those relating to independence or the regulations on audit activity. Each year, the auditor must issue a report confirming its independence via-à-vis BBVA or entities linked to BBVA, either directly or indirectly, with detailed and itemised information on any kind of additional services provided to these entities by the external auditor, or by the individuals or entities linked to it, as set out in the consolidated text of the Spanish Account Auditing Act.

 

32

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

The relevant auditor and Audit Committee reports confirming the statutory auditor’s independence with respect to the 2021 financial year have been issued, in compliance with the legislation in force.

In addition, as BBVA’s shares are listed on the New York Stock Exchange, it is subject to compliance with the Sarbanes Oxley Act and its implementing regulations.

The Board of Directors also has a policy in place for communication and interaction with shareholders and investors. The policy is governed by the principle of equal treatment for all shareholders and investors, who are in the same position in terms of information, involvement and the exercise of their rights as shareholders and investors, inter alia.

Moreover, this policy contains the principles and channels established in relation to shareholders and investors, which govern, where applicable, BBVA relations with other stakeholders, such as financial analysts, Bank share management companies and custodians, and proxy advisors, among others.

 

C.1.31

Indicate whether the company has changed its external auditor during the financial year. If so, identify the incoming and outgoing auditors:

No

If there were any disagreements with the outgoing auditor, explain these disagreements:

No

 

C.1.32

Indicate whether the auditing firm does any other work for the company and/or its group other than audit work. If so, state the amount of fees received for such work and the percentage that the aforementioned amount represents of the total fees billed to the company and/or its group for audit work:

Yes

 

				Company		Group   companies		Total
		Amount of non-audit work (thousands of euro)		20		185		205
		Amount of non-audit work/total amount billed by the auditing firm (%)		0.15%		1.46%		0.78%

 

C.1.33

Indicate whether the audit report on the annual financial statements for the previous financial year contained qualifications. If so, indicate the reasons given by the chair of the audit committee to the shareholders at the General Meeting to explain the content and scope of such qualifications.

No

 

C.1.34

Indicate the number of consecutive financial years during which the current auditing firm has been auditing the individual and/or consolidated annual financial statements of the company. Likewise, indicate the total number of financial years audited by the current auditing firm as a percentage of the total number of years in which the annual financial statements have been audited:

 

				Individual		Consolidated
		Number of consecutive financial years		5		5
		Number of financial years audited by the current auditing firm/ number of financial years the company or its group have been audited (%)		23.81%		23.81%

 

33

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

C.1.35

Indicate whether there is a procedure in place (and provide details, where applicable) whereby directors are provided with the information they need with sufficient time to be able to prepare for meetings of the management bodies:

Yes

Details of the procedure

As set forth in Article 5 of the Regulations of the Board of Directors, prior to the meetings, directors will be provided with the information needed to form an opinion with respect to the matters within the remit of the Bank’s corporate bodies, and may ask for any additional information and advice required to perform their duties. They may also ask the Board of Directors for external expert help for any matters put to their consideration whose special complexity or importance so requires.

These rights will be exercised through the Chairman or Secretary of the Board of Directors, who will attend to requests by providing the information directly or by establishing suitable arrangements within the organisation for this purpose, unless a specific procedure has been established in the regulations governing the Board of Directors’ committees.

Furthermore, as set forth in Article 28 of the Regulations of the Board of Directors, the directors will be provided with such information or clarifications as deemed necessary or appropriate with regards to the matters to be discussed at the meeting, either before or after the meetings are held.

In addition, BBVA’s information model ensures that decisions are made on the basis of complete, comprehensive, appropriate and consistent information, prepared in accordance with common principles so that analyses carried out by the corporate bodies are based on the correct data, thus allowing directors to perform their duties to the best of their ability.

Thus, the Bank’s corporate bodies have a procedure in place for checking the information submitted for consideration, coordinated by the Board’s Secretariat with the departments responsible for the information, in order to provide directors with complete, comprehensive, appropriate and consistent information in sufficient time for the meetings of the Bank’s various corporate bodies. Prior to such meetings, information is made available to the Bank’s corporate bodies via an online system, to which all members of the Board have access.

 

C.1.36

Indicate and, where applicable, provide details regarding whether the company has established rules that require directors to report and, if applicable, resign in the event they are affected by circumstances that, whether or not related to their actions at the company itself, could harm the company’s standing and reputation:

Yes

Explanation of the rules

As set forth in Article 12 of the Regulations of the Board of Directors, directors must also inform the Board of Directors of any circumstances that may affect them and harm the Company’s standing and reputation, and any circumstances that may have an impact on their suitability to perform their role.

Directors must offer their resignation to the Board of Directors and accept its decision regarding their continuity in office. Should the Board decide against their continuing, they are required to tender their resignation when, for reasons attributable to the directors in their status as such, serious damage has been done to the Company’s net worth, standing or reputation or when they are no longer suitable to hold the status of director at the Bank, among other circumstances referred to in Section C.1.19 of this report.

 

C.1.37

Indicate, unless there have been special circumstances recorded in the minutes, whether the board was informed or otherwise came to know of any situation concerning a director, whether or not related to their actions at the company itself, that could harm the company’s standing and reputation:

No

 

34

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

C.1.38

Detail any significant agreements entered into by the company that are coming into force, or were amended or concluded, as a result of a change in the control of the company stemming from a public takeover bid, and the effects thereof.

The Company has not reached any significant agreements that are coming into force, or were amended or concluded as a result of a change in the control of the Company stemming from a public takeover bid.

 

C.1.39

Identify, on an individual basis when referring to directors and in the aggregate for all other cases, and indicate in detail, any agreements between the company and its directors, managers or employees that provide for severance pay (guarantee or golden parachute clauses) in the event such persons resign or are wrongfully dismissed or if the contractual relationship comes to an end owing to a public takeover bid or other type of transaction.

 

		Number of beneficiaries		61

		Beneficiary type		Description of the agreement
		61 managers and employees		The Bank has no payment or severance commitments to directors.   As at 31 December 2021, in accordance with the provisions of their contracts, 61 managers and employees are entitled to a severance pay in the event of leaving on grounds other than their own will, retirement, disability or serious dereliction of duties. Its amount will be calculated by factoring in the fixed elements of the Bank employee’s salary and length of service and will not, under any circumstances, be paid in the event of dismissal for misconduct at the employer’s decision on grounds of the employee’s serious dereliction of duties.

Indicate whether, in addition to the circumstances provided for by law, these contracts are required to be communicated to and/or approved by bodies of the company or its group. If so, specify the procedures, the circumstances provided for and the nature of the bodies responsible for such approval or communication:

 

		Board of directors		General meeting
Body that authorises the clauses		Yes		No
		YES		NO
Is the general meeting informed of these clauses?		X

 

Remarks

The Board of Directors approves resolutions relating to the basic contractual conditions of members of Senior Management, pursuant to the provisions of Article 17 of the Regulations of the Board and at the proposal of the Remunerations Committee, which are hereby notified to the General Meeting through this Report and through the information contained in the Annual Financial Statements, but does not approve the conditions applicable to other employees.

 

C.2	Committees of the board of directors

 

C.2.1

Detail all of the committees of the board of directors, their members and the proportion of executive, proprietary, independent and other external directors sitting thereon:

EXECUTIVE COMMITTEE

 

Name		Position		Type
Carlos Torres Vila		Chair		Executive

 

35

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Onur Genç		Member		Executive
José Miguel Andrés Torrecillas		Member		Independent
Jaime Caruana Lacorte		Member		Independent
José Maldonado Ramos		Member		Other external
Susana Rodríguez Vidarte		Member		Other external

 

% of executive directors		33.33%
% of proprietary directors		0%
% of independent directors		33.33%
% of other external directors		33.33%

Explain the functions that have been delegated or assigned to this committee, other than those that have already been described in Section C.1.9, and describe the procedures and organisational and operational rules of the committee. For each of these functions, indicate its most significant actions during the financial year and how it has, in practice, exercised each of the functions attributed to it, whether by law, in the bylaws or in other corporate resolutions.

Pursuant to Article 30 of BBVA’s Regulations of the Board of Directors and Article 1.2 of its own Regulations, the Executive Committee will be made aware of matters that the Board, as required by law, the Bylaws, the Regulations of the Board or its own Regulations, resolves to delegate to it.

In particular, in accordance with the powers conferred on it by Article 5 of the Regulations of the Executive Committee, the Committee performs the following functions:

 

●	Supporting the Board in its decision-making:

 

I.

In relation to strategy: establishment of the bases on which proposals are prepared and prior analysis of proposals submitted to the Board regarding the Strategic Plan or other strategic decisions such as the Risk Appetite Framework (RAF); prior analysis of the strategic and financial aspects of proposals submitted to the Board regarding corporate operations that fall within its decision-making remit; and decision-making or implementation of the mandates which are expressly delegated to it by the Board in these areas, once the decisions within its remit have been adopted.

 

II.

In relation to budgets: prior analysis of budget proposals submitted to the Board; decision-making within its remit with regard to the implementation of the budget approved by the Board; and analysis of deviations from the approved budget.

 

III.

In relation to finance: establishment of the bases on which proposals are prepared and prior analysis of proposals submitted to the Board regarding the funding plan, the capital and liquidity structure and the Bank’s dividend policy; and decision-making on the implementation of mandates conferred upon it by the Board in these areas.

 

IV.

In relation to business risk: analysis of matters relating to business risk in the proposals and plans submitted to the Board; and, in relation to reputational risk, analysis, evaluation and management of matters relating to reputational risk.

 

●

Prior reporting of policies submitted to the Board and approval of Company and Group general policies: analysis, prior to their consideration by the Board, of the general Group and Company policies that, in accordance with the law or internal regulations, must be approved by the Board, except for policies relating to issues handled by other Board committees, which will be approved or reported to the Board beforehand by the appropriate committee.

 

●	Oversight and control of the following matters: (i) Group activity and results; (ii) budgetary monitoring; (iii) progress of the Strategic Plan, by analysing key performance indicators established for this

 

36

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

purpose; (iv) monitoring of the Group’s funding and liquidity plan and capital situation, as well as the activities of the Assets and Liabilities Committee; (v) monitoring of changes in the risk profile and core metrics defined by the Board; (vi) share-price performance and changes in shareholder composition; (vii) analysis of the markets in which the Group operates; and (viii) progress of projects and investments agreed within its remit, as well as those agreed by the Board within the strategic sphere.

 

●

Decision-making powers on the following matters: (i) investments and divestments between EUR 50 million and EUR 400 million, unless they are of a strategic nature, in which case they will be the Board’s responsibility; (ii) plans and projects that are considered to be of importance to the Group and that arise from its activities, and that are not within the remit of the Board; (iii) decisions regarding the assumption of risks that exceed the limits set by the Board, which must be reported to the Board at its first meeting thereafter for ratification; (iv) granting and revoking of the Bank’s powers; (v) proposals for the appointment and replacement of directors in the Bank’s subsidiaries or affiliates with more than EUR 50 million in equity; and (vi) compliance so that executive directors may hold management positions in subsidiaries, in which the Bank holds a direct or indirect controlling interest, or in the Group’s affiliate companies.

The Regulations of the Executive Committee set out the operational principles of the Committee and lay down the basic rules of its organisation and operation.

The Regulations of the Executive Committee specifically provide that the Committee will meet whenever it is called to do so by its Chair, who is empowered to call the Committee and to set the agenda, and also set out the procedure for calling ordinary and extraordinary meetings.

For the proper performance of its functions, the Committee will have available, where necessary, the reports of the relevant Board committees on matters within their remits, and may request as a matter of relevance the attendance of the chairs of those committees at its own meetings where such reports are to be dealt with.

Other aspects of the organisation and operation of the Committee shall be dealt with in the Regulations of the Committee itself. All other matters not provided for in the aforementioned Regulations will be subject to the Regulations of the Board, insofar as they are applicable.

The most significant actions carried out by the Executive Committee in the 2021 financial year are detailed in Section H of this Report.

AUDIT COMMITTEE

 

Name		Position		Type
Jaime Caruana Lacorte		Chair		Independent
José Miguel Andrés Torrecillas		Member		Independent
Belén Garijo López		Member		Independent
Lourdes Máiz Carro		Member		Independent
Ana Peralta Moreno		Member		Independent

 

% of proprietary directors		0%
% of independent directors		100%
% of other external directors		0%

Explain the functions that have been assigned to this committee, including, where applicable, any that are in addition to those provided for by law, and describe the procedures and organisational and operational rules of the committee. For each of these functions, indicate its most significant actions during the financial year and how it has, in practice, exercised each of the functions attributed to it, whether by law, in the bylaws or in other corporate resolutions.

 

37

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

The main task of the Audit Committee is to assist the Board of Directors in overseeing the preparation of the financial statements and public information, and the relationship with the external auditor and the Internal Audit area.

More specifically, in accordance with the powers assigned to it by Article 5 of the Regulations of the Audit Committee, and notwithstanding any other functions assigned to it by law, by the Bank’s internal regulations or by resolution of the Board the Audit Committee is entrusted with the following functions, inter alia:

In relation to overseeing the financial statements and public information:

 

●

To oversee the process of preparing and reporting financial information and to submit recommendations or proposals to the Board for safeguarding data integrity.

 

●

Analyse, prior to their submission to the Board and in enough detail to guarantee their accuracy, reliability, sufficiency and clarity, the financial statements of the Bank and of its consolidated Group contained in the annual, six-monthly and quarterly reports, as well as all other required financial and related non-financial information.

 

●

Review the necessary consolidation perimeter, the correct application of accounting criteria, and all the relevant changes relating to the accounting principles used and the presentation of the financial statements.

 

●

Monitor the effectiveness of the Company’s internal control as well as its risk management systems, in terms of the process of preparing and reporting financial information, including tax-related risks, and discuss with the auditor any significant weaknesses detected in the internal control system during the audit, without undermining its independence.

In relation to the Internal Audit function:

 

●

Propose the selection, appointment, re-election and removal of the Head of the Internal Audit function to the Board of Directors; monitor the independence, effectiveness and functioning of the Internal Audit function; analyse and set objectives for the Head of the Internal Audit function and conduct a performance evaluation; ensure that the Internal Audit function has the necessary material and human resources; and analyse and, where appropriate, approve the annual work plan for the Internal Audit function.

 

●

Receive monthly information from the Head of the Internal Audit function regarding the activities carried out by it, and regarding any incidents and obstacles that may arise, and verify that Senior Management takes into account the conclusions and recommendations of the reports; and also follow up on these plans.

 

●

To be aware of the audited units’ degree of compliance with corrective measures previously recommended by the Internal Audit area and inform the Board of those cases that may involve a significant risk for the Group.

In relation to the external audit process:

 

●

Submit to the Board any proposals for the selection, appointment, re-election and replacement of the external auditor, taking responsibility for the selection process in accordance with applicable regulations, as well as for the engagement terms, and periodically obtain information from the external auditor on the external audit plan and its execution, in addition to preserving its independence in the performance of its functions.

 

●

Ensure the independence of the auditor: (i) by avoiding any possibility that the auditor’s warnings, opinions or recommendations may be adversely influenced, ensuring that compensation for the auditor’s work does not compromise either its quality or independence; and (ii) by establishing incompatibility between the provision of audit and consulting services, unless they are tasks required by supervisors or the provision of which by the auditor is permitted by applicable legislation, and there are no alternatives on the market that are equal in terms of content, quality or efficiency to those provided by the auditor, in which case, agreement by the Committee will be required.

 

38

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

●

Establish appropriate relationships with the statutory auditor in order to receive information regarding any issues that may pose a threat to their independence and any other issues related to the account audit process.

 

●

Where appropriate, authorise the provision of additional services by the auditor or associated persons or entities, excluding prohibited services, as required by applicable regulations in each case, under the terms provided for in auditing legislation.

 

●

Issue, on an annual basis and before the audit report is issued, a report expressing an opinion on whether the statutory auditor’s independence has been compromised. This report must contain a reasoned assessment of each of the additional services mentioned in the previous section, considered individually and collectively, over and above the legal audit and in relation to the independence requirements or to the rules governing the account auditing process.

 

●

Ensure that the auditor holds an annual meeting with the full Board of Directors to inform it of the work undertaken and developments in the Company’s risk and accounting situations.

The most significant actions and work carried out by the Audit Committee in the 2021 financial year, as well as its organisational and operational rules, are detailed in Section H of this Report.

Identify the directors who are members of the audit committee and have been appointed on the basis of their knowledge and experience of accounting, auditing or both, and specify the date on which the chair of this committee was appointed to the position.

 

Names of the directors with experience		Jaime Félix Caruana Lacorte José Miguel Andrés Torrecillas Belén Garijo López Lourdes Máiz Carro Ana Cristina Peralta Moreno
Date of appointment of the chair to the position		29 April 2019

APPOINTMENTS AND CORPORATE GOVERNANCE COMMITTEE

 

Name		Position		Type
José Miguel Andrés Torrecillas		Chair		Independent
Belén Garijo López		Member		Independent
José Maldonado Ramos		Member		Other external
Juan Pi Llorens		Member		Independent
Susana Rodríguez Vidarte		Member		Other external

 

% of proprietary directors		0%
% of independent directors		60%
% of other external directors		40%

Explain the functions that have been assigned to this committee, including, where applicable, any that are in addition to those provided for by law, and describe the procedures and organisational and operational rules of the committee. For each of these functions, indicate its most significant actions during the financial year and how it has, in practice, exercised each of the functions attributed to it, whether by law, in the bylaws or in other corporate resolutions.

 

39

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

The main task of the Appointments and Corporate Governance Committee is to assist the Board of Directors in matters relating to the selection and appointment of members of the Board of Directors; the assessment of their performance; the drafting of succession plans; the Bank’s Corporate Governance System; and the oversight of the conduct of directors and any conflicts of interest that may affect them.

Notwithstanding any others assigned to it by the law, the internal regulations of the Bank or by decision of the Board of Directors, the Appointments and Corporate Governance Committee has, among others, the following functions:

 

1.

Submit proposals to the Board of Directors for the appointment, re-appointment or removal of independent directors and report on proposals for the appointment, re-appointment or removal of the remaining directors.

 

2.

Propose to the Board of Directors the selection and diversity policies for members of the Board.

 

3.

Establish a target for representation of the underrepresented gender on the Board of Directors and draw up guidelines on how to reach that target.

 

4.

Analyse the structure, size and composition of the Board of Directors, at least once per year, when assessing its operation.

 

5.

Analyse the suitability of the members of the Board of Directors.

 

6.

Review the status of each director each year, so that this may be reflected in the Annual Corporate Governance Report.

 

7.

Report on proposals for the appointment of Chairman and Secretary and, where appropriate, Deputy Chair and Deputy Secretary, as well as the Chief Executive Officer (Consejero Delegado).

 

8.

Submit to the Board of Directors proposals for the appointment, dismissal or re-appointment of the Lead Director

 

9.

Determine the procedure for assessing the performance of the Chairman of the Board of Directors, the Chief Executive Officer (Consejero Delegado), the Board of Directors as a whole and the Board’s committees, and oversee its implementation.

 

10.

Report on the quality and efficiency of the performance of the Board of Directors.

 

11.

Report on the performance of the Chairman of the Board of Directors and of the Chief Executive Officer, incorporating for the latter the assessment made in this regard by the Executive Committee, for the purpose of periodic evaluation of both by the Board.

 

12.

Study and arrange the succession of the Chairman of the Board of Directors, the Chief Executive Officer and, where applicable, the Deputy Chair, in conjunction with the Lead Director in the case of the Chair, and, where appropriate, draft proposals to the Board of Directors to ensure that the succession takes place in a planned and orderly manner.

 

13.

Review the Board of Directors’ policy on the selection and appointment of members of the Group’s Senior Management, and file recommendations with the Board when applicable.

 

14.

Report on proposals for the appointment and removal of senior managers.

 

15.

Regularly review and assess the Company’s Corporate Governance System and, where applicable, propose to the Board of Directors for its approval or submission at the General Shareholders’ Meeting any amendments and updates that would facilitate its implementation and continuous improvement.

The organisational and operational rules and the most significant actions carried out by the Appointments and Corporate Governance Committee in the 2021 financial year are detailed in Section H of this Report.

 

40

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

REMUNERATIONS COMMITTEE

 

Name		Position		Type
Belén Garijo López		Chair		Independent
Lourdes Máiz Carro		Member		Independent
Ana Peralta Moreno		Member		Independent
Carlos Salazar Lomelín		Member		Other external
Jan Verplancke		Member		Independent

 

% of proprietary directors		0%
% of independent directors		80%
% of other external directors		20%

Explain the functions that have been assigned to this committee, including, where applicable, any that are in addition to those provided for by law, and describe the procedures and organisational and operational rules of the committee. For each of these functions, indicate its most significant actions during the financial year and how it has, in practice, exercised each of the functions attributed to it, whether by law, in the bylaws or in other corporate resolutions.

The main task of the Remunerations Committee is to assist the Board of Directors in remuneration matters within its remit and, in particular, those relating to the remuneration of directors, senior managers and those employees whose professional activities have a significant impact on the risk profile of the Group (hereinafter, the Identified Staff), ensuring that the established remuneration policies are observed.

More specifically, in accordance with the powers that are assigned to it by Article 5 of the Regulations of the Remunerations Committee, and notwithstanding any other functions assigned to it by law, by the Bank’s internal regulations or by resolution of the Board, the Remunerations Committee broadly performs the following functions:

 

1.

Propose to the Board of Directors, for submission to the General Meeting, the Remuneration Policy for BBVA Directors, and also submit to the Board its corresponding report, all in accordance with the terms established by applicable regulations at any given moment.

 

2.

Determine the remuneration of non-executive directors, as provided for in the Remuneration Policy for BBVA Directors, and submit the corresponding proposals to the Board of Directors.

 

3.

Determine the extent and amount of individual remunerations, rights and other economic rewards, as well as other contractual conditions for executive directors, so that these can be contractually agreed in line with the Remuneration Policy for BBVA Directors, by submitting the relevant proposals to the Board.

 

4.

Determine and propose to the Board the objectives and criteria for measuring the variable remuneration of the executive directors, and evaluate their degree of achievement.

 

5.

Analyse, where appropriate, the need to make ex-ante or ex-post adjustments to variable remuneration, including the application of reduction or recovery arrangements for variable remuneration, submitting the corresponding proposals to the Board, based on the report from the relevant committees in each case.

 

6.

Present an annual report on the remuneration of the Bank’s directors to the Board of Directors, which will be submitted to the Annual General Shareholders’ Meeting, in accordance with the provisions of the applicable law.

 

7.

Propose to the Board of Directors, and oversee the implementation of, the remuneration policy for senior managers and other employees of the Identified Staff, including the process of determining the Identified Staff.

 

41

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

8.	Propose to the Board of Directors, and oversee the implementation of, the remuneration policy for the Group, which may include the policy for senior managers and other employees of the Identified Staff, stated in the previous paragraph.

 

9.	Submit to the Board of Directors the proposals for basic contractual conditions for senior managers, including their remuneration and compensation in the event they leave their role.

 

10.

Directly oversee the remuneration of senior managers and, within the framework of the remuneration model applicable to Senior Management at any given time, the objectives and criteria for measuring variable remuneration of the heads of the Regulation & Internal Control area and the Internal Audit area, submitting the corresponding proposals to the Board of Directors, based on those submitted to it in turn by the Risk and Compliance Committee and the Audit Committee, respectively.

 

11.

Ensure compliance with the remuneration policies established by the Company and review them periodically, proposing, where appropriate, any modifications that it deems necessary to ensure, amongst other things, that they are adequate for the purposes of attracting and retaining the best professionals, and that they contribute to the creation of long-term value and adequate control and management of risks, and address the principle of equal pay. In particular, the Committee shall ensure that the remuneration policies established by the Company are subject to internal, central and independent review at least once a year.

 

12.	Verify the information on the remuneration of directors and senior managers contained in the various corporate documents, including the Annual Report on the Remuneration of Directors.

 

13.	Supervise the selection of external advisers, whose advice or support is required for the performance of their duties in remuneration matters, ensuring that any conflicts of interest do not impair the independence of the advice provided.

The organisational and operational rules and the most significant actions carried out by the Remunerations Committee in the 2021 financial year are detailed in Section H of this Report.

RISK AND COMPLIANCE COMMITTEE

 

Name		Position		Type
Juan Pi Llorens		Chair		Independent
Jaime Caruana Lacorte		Member		Independent
Raúl Galamba de Oliveira		Member		Independent
Ana Revenga Shanklin		Member		Independent
Susana Rodríguez Vidarte		Member		Other external

 

% of proprietary directors		0%
% of independent directors		80%
% of other external directors		20%

Explain the functions that have been assigned to this committee and describe the procedures and organisational and operational rules of the committee. For each of these functions, indicate its most significant actions during the financial year and how it has, in practice, exercised each of the functions attributed to it, whether by law, in the bylaws or in other corporate resolutions.

The main task of the Risk and Compliance Committee (RCC) is to assist the Board in the determination and monitoring of the Group’s risk control and management policy, including internal risk control and non-financial risks, with the exception of those related to internal financial control, which are the responsibility

 

42

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

of the Audit Committee; those related to technological risk, which are the responsibility of the Technology and Cybersecurity Committee; and those related to business and reputational risk, which are the responsibility of the Executive Committee. It also assists the Board in monitoring the Compliance function and implementing a risk and compliance culture in the Group.

More specifically, in accordance with Article 5 of its Regulations and notwithstanding any other functions assigned to it by law, by the Bank’s internal regulations or by resolution of the Board, the Risk and Compliance Committee is entrusted with the following functions:

 

1.

Analyse, in accordance with the strategic basis set by the Board or the Executive Committee, and submit to the Board proposals on the Group’s risk strategy, control and management, including the Group’s risk appetite and the establishment of a risk level considered acceptable according to the Group’s risk profile and risk capital, broken down by its businesses and areas of activity; on the basis of the strategic financial approaches determined by the Board and the Executive Committee.

 

2.

Propose the policies of control and management of the different risks of the Group, within its scope of competence, in a manner that is consistent with the Risk Appetite Framework established by the Board.

 

3.

Monitor the effectiveness of the Regulation & Internal Control function (which includes the Regulatory, Supervisory, Compliance, Internal Risk Control and Non-Financial Risk Units) and, in particular: (a) propose to the Board the appointment and separation of the individual responsible for the function; (b) analyse and establish the objectives of the individual responsible for the function and assess their performance; (c) ensure that the function has the resources necessary for the effective performance of their function; and d) analyse and/or approve the annual work plan of the function and monitor its compliance.

 

4.

Receive monthly information from the Head of Regulation & Internal Control regarding their activities, as well as regarding any incidents that may arise, and verify that the Group’s Senior Management takes into account the conclusions and recommendations of their reports.

 

5.

Monitor the evolution of the risks faced by the Group and their compatibility with established strategies and policies, and with the Group’s Risk Appetite Framework and monitor risk-measurement procedures, tools and indicators established at the Group level to obtain a global view of the risks faced by the Bank and the Group; monitor compliance with prudential regulations and supervisory risk requirements; and analyse measures to mitigate the impact of identified risks, should they materialise.

 

6.

Analyse the risks associated with strategic projects or corporate operations to be presented to the Board or the EC, within its scope of competence and, where appropriate, submit a report.

 

7.

Analyse risk operations that will be submitted to the Board or the Executive Committee for consideration.

 

8.

Examine whether the prices of the assets and liabilities offered to customers take into account the Bank’s business model and risk strategy and, if not, submit a plan to the Board aimed at rectifying the situation.

 

9.

Participate in the process of establishing the remunerations policy, checking that it is compatible with an adequate and effective risk management strategy and that it does not offer incentives to assume risks that exceed the level tolerated.

 

10.

Check that the Group has the means, systems, structures and resources that are consistent with best practices to implement their risk management strategy, ensuring that the risk management mechanisms are adequate in relation thereto.

 

11.

Provide information on the matters within its competence provided for in law or company regulations, prior to the adoption of the corresponding resolutions by the Board, where relevant.

 

43

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

12.

Ensure compliance with applicable regulations on matters related to money laundering, conduct on the securities markets, data protection and the scope of Group activities with respect to competition, and ensure that any requests for action or information made by official authorities on these matters are dealt with in due time and in an appropriate manner.

 

13.

Receive information about any breaches of applicable regulations and relevant events that the areas reporting to it have detected during its monitoring and control operations, and to be informed of relevant issues related to legal risks that may arise in the course of the Group’s activity.

 

14.

Examine draft codes of ethics and conduct and their modifications, prepared by the corresponding area of the Group, and give its opinion in advance of the proposals to be drafted to the Corporate Bodies.

 

15.

Have knowledge of the reports, submissions or communications from external supervisory bodies, and confirm that the instructions, requirements and recommendations received from the supervisory bodies are implemented in an appropriate manner in order to correct any irregularities, deficiencies or inadequacies that have been identified.

 

16.

To ensure the promotion of risk culture across the Group.

 

17.

To supervise the Group’s criminal risk prevention model.

 

18.

Review and monitor the systems for reporting by employees of possible irregularities in financial information or other matters.

The organisational and operational rules and the most significant actions carried out by the RCC in the 2021 financial year are detailed in Section H of this Report.

TECHNOLOGY AND CYBERSECURITY COMMITTEE

 

Name		Position		Type
Carlos Torres Vila		Chair		Executive
Raúl Galamba de Oliveira		Member		Independent
Sunir Kumar Kapoor		Member		Independent
Juan Pi Llorens		Member		Independent
Jan Verplancke		Member		Independent

 

% of executive directors		20%
% of proprietary directors		0%
% of independent directors		80%
% of other external directors		0%

Explain the functions that have been assigned to this committee and describe the procedures and organisational and operational rules of the committee. For each of these functions, indicate its most significant actions during the financial year and how it has, in practice, exercised each of the functions attributed to it, whether by law, in the bylaws or in other corporate resolutions.

The main task of the Technology and Cybersecurity Committee is to assist the Board of Directors in monitoring technological risk, in managing cybersecurity and in monitoring the Group’s technological strategy.

Specifically, in accordance with the powers assigned to it by Article 5 of the Technology and Cybersecurity Committee Regulations, and notwithstanding any other functions assigned to it by law, by the Bank’s internal regulations or by resolution of the Board, the Technology and Cybersecurity Committee shall perform the following functions, which fall into two categories:

 

44

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

(a) Functions relating to monitoring technological risk and managing cybersecurity, such as:

(i) Reviewing the Bank’s main technological risks, including risks related to information security and cybersecurity, as well as the procedures adopted by the executive area for monitoring and controlling these exposures.

(ii) Reviewing the policies and systems for assessment, control and management of the Group’s technological infrastructures and risks, including the response and recovery plans in the event of cyberattacks.

(iii) Being informed of business continuity plans regarding technology and technological infrastructure matters.

(iv) Being informed, as appropriate, about: (i) compliance risks associated with information technology; (ii) the procedures established for identifying, assessing, overseeing, managing and mitigating these risks.

(v) Being informed about any relevant events that may have occurred with regard to cybersecurity, i.e. events that, either individually or as a whole, may cause significant impact or harm to the Group’s net equity, results or reputation.

(vi) Being informed, as required, by the Head of the Technological Security area regarding the activities it carries out, as well as any incidents that may arise.

(b) Functions related to the Technology Strategy:

(i) Being informed, as appropriate, of the technology strategy and trends that may affect the Bank’s strategic plans, including through monitoring general trends in the sector.

(ii) Being informed, as appropriate, of the metrics established by the Group for management and control in the technological area, including the Group’s developments and investments in this area.

(iii) Being informed, as appropriate, of issues related to new technologies, applications, information systems and best practices that may affect the Group’s technological plans or strategy.

(iv) Being informed, as appropriate, of the main policies, strategic projects and plans defined by the Engineering Area.

(v) Reporting to the Board of Directors and, where appropriate, to the Executive Committee, on matters related to information technologies falling within its remit.

The organisational and operational rules and the most significant actions carried out by the Technology and Cybersecurity Committee during the 2021 financial year are detailed in Section H of this Report.

 

45

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

C.2.2

Fill in the following table with information on the number of female directors sitting on the committees of the board of directors as of the end of the last four financial years:

 

 

C.2.3

Indicate, where applicable, if there are regulations governing the board committees, where they may be consulted and any amendments made thereto during the financial year. Indicate whether an annual report on the activities of each committee has been prepared voluntarily.

All the Committees of the Board of Directors have their own regulations, approved by the Board and available on the Bank’s corporate website (www.bbva.com), under Shareholders and Investors, Corporate Governance and Remuneration Policy, in the Board Committees section. The regulations were not amended during the 2021 financial year.

In addition, within the framework of the annual process of evaluating their operation, all the Board Committees have prepared and submitted a report to the Board of Directors detailing the activity carried out by each of them in the exercise of their functions during the 2021 financial year, and which are described in section H of this Report, further to section C.2.1.

D. RELATED-PARTY TRANSACTIONS AND INTRA-GROUP TRANSACTIONS

 

D.1

Explain the procedure and competent bodies, if any, for the approval of related-party and intra-group transactions, indicating the general criteria and internal rules of the entity that regulate the obligation of the affected directors or shareholders to abstain and detailing the internal procedures relating to reporting and periodic control established by the company in relation to related-party transactions whose approval has been delegated by the board of directors.

The Regulations of the Board of Directors establish that the Board of Directors will be responsible for approving, where appropriate, transactions between the Company or companies within its Group and directors or shareholders who have, individually or together with others, significant shareholdings, as well as with related persons to them.

In addition, in its capacity as a credit institution, BBVA is subject to specific sectorial regulations which, with regard to transactions with related persons, are governed by Royal Decree 84/2015 of 13 February, implementing Act 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, and Bank of Spain Circular 2/2016 of 2 February, on the supervision and solvency of credit institutions, which completes the adaptation to Spanish law of Directive 2013/36/EU and Regulation (EU) No 575/2013, on the extension of credit and guarantees to members of the Board of Directors and Senior Management. The foregoing transactions are subject to approval by the Board of Directors and, in the event that the requirements established by the aforementioned applicable regulations are fulfilled, are submitted to the Bank of Spain for authorisation.

In accordance with applicable sectorial legislation, the Bank has specific internal regulations in this regard, which specifically govern the process of granting and approving credit risk transactions as described above for members of BBVA’s Board of Directors and Senior Management, the approval of which, as indicated, lies with the Bank’s Board of Directors, and for related parties.

 

46

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.

Furthermore, following the amendments to the Corporate Enterprises Act regarding the regime for related-party transactions in listed companies, introduced by Act 5/2021 of 12 April, the General Meeting will be responsible for the approval of related-party transactions with an amount or value equal to or greater than 10% of the company’s total assets according to its last approved annual balance sheet; while the Board of Directors will be responsible for the approval of all other related-party transactions, and may not delegate transactions except those that fulfil certain requirements stipulated in the Corporate Enterprises Act.

On the basis of the regulations established by the Spanish Corporate Enterprises Act, the Board of Directors resolved to delegate, to those responsible for certain executive areas of the Bank, the approval of related-party transactions that: (i) are carried out pursuant to contracts with standard terms that are widely applicable to a large number of customers, at prices that are set on a general basis by the party acting as a supplier of the goods or services in question, where the amount thereof does not exceed 0.5% of the net turnover contained in the most recent consolidated annual financial statements; and (ii) are carried out between companies that are part of the same group and in the ordinary course of business and on market terms, with transactions with credit risk that, as indicated, have a specific approval procedure that corresponds to the Board of Directors, being excluded from such delegation.

Similarly, with regard to the approval of delegated related-party transactions, the Board of Directors approved an internal procedure for periodic reporting and control regarding such transactions to enable the Bank’s corporate bodies to monitor their fairness and transparency, as well as compliance with applicable legal requirements, in particular those established in this respect by the Corporate Enterprises Act, the supervision of which will be the responsibility of the Audit Committee which, on a half-yearly basis, will analyse the transactions, if any, approved on the basis of the delegation conferred.

The regulations established with regard to the handling of possible conflicts of interest and the rules regarding abstention are described in section D.6.

 

D.2

Individually detail transactions that are significant due to their amount or content entered into between the company or its subsidiaries and shareholders holding 10% or more of the voting rights or represented on the board of directors of the company, and indicate the competent body for the approval thereof and whether any affected shareholder or director abstained from voting thereon. If the board is the competent body, indicate whether the proposed resolution was approved by the board without a majority of the independent directors having voted against such proposal:

 

Name or corporate name of the shareholder or any of its subsidiaries

% shareholding

Name or corporate name of the company or subsidiary

Nature of the transaction

Type of transaction and other information required to evaluate the same

Amount (thousands of euro)

Approving body

Name of any abstaining significant shareholders or directors

The proposal to the general meeting, where applicable, has been approved by the board without a majority of the independent directors having voted against the same.

 

D.3

Individually detail transactions that are significant due to their amount or content entered into between the company or its subsidiaries and directors or executives of the company, including transactions entered into with entities controlled or jointly controlled by the director or executive, and indicate the competent body for the approval thereof and whether any affected shareholder or director abstained from voting thereon. If the board is the competent body, indicate whether the proposed resolution was approved by the board without a majority of the independent directors having voted against such proposal:

 

47

This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.