BOARD OF DIRECTORS AND BOARD COMMITTEES
Audit and control committee
Without prejudice to any other tasks that the Board of Directors may assign thereto, the primary duty of the Audit and Control Committee shall be to support the Board of Directors in its supervisory duties. Specifically, it shall have at least the following powers and duties:
To report to the shareholders at the General Shareholders’ Meeting on matters raised at the Committee and within the purview thereof, and particularly regarding the results of the audit, explaining how it has contributed to the integrity of the financial information and the function performed by the Committee in such process.
To submit to the Board of Directors proposals for the selection, appointment, re-election or replacement of the external auditor, taking responsibility for the selection process in accordance with the provisions of law, as well as the terms for the hiring thereof, and regularly obtain information from the auditor regarding the audit plan and the implementation thereof, in addition to preserving the independence thereof in the performance of its duties.
To supervise internal audit and, in particular:
a) To ensure the independence and efficiency of the internal audit function;
b) To propose the selection, appointment and removal of the person responsible for internal audit;
c) To propose the budget for such service;
d) To review the internal audit annual work plan and its annual activities report;
e) To receive periodic information on its activities; and
f) To verify that the senior executive officers take into account the conclusions and recommendations of its reports.
To supervise the process of preparing and submitting mandatory financial information and submit recommendations or proposals to the board of directors intended to safeguard the integrity thereof. With respect thereto, it shall be responsible for supervising the process of preparation and the integrity of the financial information relating to the Company and the Group, reviewing compliance with regulatory requirements, the proper determination of the scope of consolidation, and the correct application of accounting standards, informing the Board of Directors thereof.
To supervise the effectiveness of the Company’s internal control system, internal audit, and systems for the management of risk, including tax risks, and to discuss with the Auditor significant weaknesses in the internal control system detected during the audit, all without infringing the independence thereof. In such cases, and if applicable, it may submit recommendations or proposals to the Board of Directors and the corresponding period for follow-up thereon. With respect thereto, it shall be responsible for proposing to the Board of Directors a risk control and management policy, which shall identify at least the following:
a) the types of risk (operational, technological, financial, legal and reputational) facing the company;
b) the setting of the risk level that the Company deems acceptable; the measures to mitigate the impact of the identified risks, should they materialize; and
c) the control and information systems to be used to control and manage the above-mentioned risks.
To establish and supervise a mechanism to allow employees to confidentially and anonymously report potentially significant irregularities, particularly any financial or accounting irregularities detected within the Company.
To establish and maintain appropriate relations with the Auditor in order to receive, for review by the Committee, information on all matters that could entail a threat to the independence thereof, as well as any other matters relating to the audit procedure, and when applicable, authorization of services other than those that are prohibited, upon the terms contemplated by applicable law, and such other communications as may be provided for in auditing legislation and auditing rules. In any event, the Audit and Control Committee must receive, on an annual basis, a declaration from the Auditor of its independence vis-à-vis the entity or entities directly or indirectly related thereto, as well as detailed and itemized information regarding additional services of any kind provided and the corresponding fees received by such entities from the Auditor or by the persons or entities related thereto pursuant to the provisions of applicable law.
To issue on an annual basis, prior to the issuance of the audit report, a report stating an opinion on whether the independence of the Auditor has been compromised. This report must in all cases include a reasoned assessment of the provisions of each and every one of the additional services referred to in point 7) above, both individually and as a whole, other than the legal audit and regarding the rules on independence or regulations on the activity of auditing.
To analyze and report on the financial terms, accounting impact and, if applicable, the exchange ratio proposed for structural modifications and corporate transactions that the Company expects to carry out, prior to submission to the Board of Directors.
To report in advance to the Board of Directors on all matters provided by law and the By-Laws, and particularly regarding:
1. Financial information that the Company must periodically make public;
2. The creation or acquisition of interests in special-purpose entities or entities domiciled in countries or territories considered to be tax havens; and
3. Related-party transactions.
As regards those companies of the Group that are deemed to be Public-Interest Entities (Entidades de Interés Público) (as defined by applicable law), to perform all those duties of the Audit Committee at any time contemplated by applicable law, such that they are so approved by the Board of Directors, provided that they are directly or indirectly wholly-owned by the Company pursuant to the provisions of applicable law and that the administration thereof is not vested in a Board of Directors.
The Telefónica Group of companies with consideration of Public Interest Entities, for which the Audit and Control Committee of Telefónica, S.A. has assumed its own powers of its respective Audit Committees, are as follows: Telefónica de España, S.A.U. , Telefónica Móviles España, S.A.U. , Telefónica Emisiones, S.A.U. , Telefónica Participaciones, S.A.U. , Seguros de Vida y Pensiones Antares, S.A. , and Telefónica Europe, B.V.
The provisions of sections 2, 7 and 8 are deemed to be without prejudice to the regulations governing auditing.
|Name||Post||Type||Date of Appointment|
|Mr. José Javier Echenique Landiribar||Chairman||Independent||April 8, 2016|
|Ms. Carmen García de Andrés||Member||Independent||May 4, 2017|
|Mr. Ignacio Moreno Martínez||Member||Proprietary||May 31, 2013|
|D. Francisco Javier de Paz Mancho||Member||Independent||April 27,2016|
OTHER ADVISORY OR MONITORING COMMITTEES