Description of the management structure

There were no changes in the composition of the Management Board of Santander Bank Polska S.A. in 2022. The composition of the Management Board was as follows:

*For the purpose of GRI 2-11 disclosure, we explain that the bank operates under a dualistic model, in accordance with the Commercial Companies Code, which provides for the division of management and supervisory powers between the Management Board and the Supervisory Board. The Chair of the Supervisory Board is not a member of the bank’s Management Board.
*On 13 December, 2022 the bank’s Supervisory Board passed a resolution to appoint María Elena Lanciego Pérez as a member of the bank’s Management Board. She took up this position on 1 January, 2023. The appointment followed the resignation of Carlos Polaino Izquierdo effective 1 January, 2023.

The role of the Management Board is to manage the bank’s affairs, represent the bank, prepare the assumptions of business and financial plans and approve and monitor their execution. The Management Board regularly reports to the Supervisory Board on the bank’s situation. The members of the Management Board jointly manage the bank’s affairs. Their tasks also include defining the bank’s mission, setting long-term strategic plans and goals, establishing standing and ad hoc committees and appointing persons responsible for directing their work. According to the bank’s statutes, the Management Board is responsible for implementing corporate governance at the bank and ensuring compliance with it. At least twice a year, the Management Board evaluates the degree of compliance with the bank’s ethical principles.

In addition, the Management Board is responsible for developing a climate strategy and setting its main objectives in line with the Net Zero strategy of Banco Santander Group. Decision-making takes into account the assessments and information and analyses of the body responsible for risk management which is the Risk Committee. This committee is involved in the process of identifying various climate risks and opportunities, and based on its guidelines, the Risk Appetite Statement is adopted. The Management Board is responsible for overseeing and approving the Responsible Banking Strategy and the integration of ESG criteria into the overall business strategy (in the short, medium and/or long term) and as part of the risk management process. ESG risks are the responsibility of all Board Members. The Risk Division acts as the second line of defence in ESG risk management. In the near future, there are plans to analyse environmental risk activities and develop a full accountability model, including the definition of the role of internal control.

The Supervisory Board approves the acceptable level of risk. It is also the responsibility of the Supervisory Board to review the bank’s management strategy and the risk management strategy taking into account the long-term perspective. In making its decisions, the Supervisory Board also considers the assessments, information and analyses of the unit responsible for risk management.

Members of the bank’s Management Board are appointed and dismissed in accordance with the provisions of, among others, the Commercial Companies Code, the Banking Law and the provisions of our Statutes and the Appointment and Succession Policy for Members of the Management Board of Santander Bank Polska S.A. They are appointed by the Supervisory Board, but the appointment of two Board Members, including the President, must be approved by the Polish Financial Supervision Authority (KNF). The criteria used to select members of the Management Board and the Supervisory Board are also derived from the Methodology for Assessing the Suitability of Members of the Authorities of Supervised Entities, published by the Financial Supervision Authority. Members of the Management Board may be dismissed by the Supervisory Board or the General Meeting of Shareholders at any time. The Management Board’s term of office is three years.

In accordance with the bank’s Policy for the Selection and Assessment of the Suitability of Management Board Members and Key Executives at Santander Bank Polska S.A., when appointing the Management Board and Supervisory Board, we take into account criteria to ensure the comprehensiveness and diversity of these bodies. Each member of the Management Board is subject to an individual and independent suitability assessment, and the Management Board as a whole is subject to a collective, independent suitability assessment. The assessment is also carried out in accordance with the Methodology for Assessing the Suitability of Members of Bodies of Entities Supervised by the Financial Supervision Authority. Individual and collective suitability assessment is carried out at least once a year and in situations specified in the aforementioned policy, such as when candidates for Board Members are proposed (as a rule, before a person is appointed to the Board), when the composition of the Board changes or when there is a significant change in the bank’s business model. If a person is deemed unsuitable to serve as a Management Board Member, he or she shall immediately step down.

The performance of the Management Board and its members is monitored by the Supervisory Board. The process of assessing the qualifications of Management Board members and other key executives of the bank is conducted by the Nominations Committee and the Remuneration Committee of the Supervisory Board. The members of the Management Board are also subject to performance appraisal in the implementation of the Responsible Banking agenda. This is one of the strategic directions, written into the charter of goals as mandatory: Safety&Trust (ESG). The KPIs by which its implementation is measured include green finance, position in the Top 10 employers, number of women in senior positions and closing the equal pay gap (EPG). The evaluation is carried out twice a year (mid-year review and annual evaluation).

All members of the Management Board have the knowledgę, experience and qualifications necessary for the proper performance of their functions. Serving on the Management Board is the main activity of its members, although some additionally serve on the Supervisory Boards of the bank’s subsidiaries, which improves supervision and the functioning of the Santander Bank Polska Group.

Management Board members on an ongoing basis participate in ESG conferences and trainings. In March 2022, Management Board and Supervisory Board members participated in a dedicated ESG in Financial Sector training on the topic of sustainable finance and related regulations. This year, we also launched a mandatory ESG Training – Introduction to Sustainability for Management Board Members, prepared by the Santander Group.

The bank’s standing committees, which are responsible for managing the bank’s environmental, social and economic impacts, include:

^{* The key committee with responsibility for managing sustainability and ESG issues is the Responsible Banking and Corporate Culture Committee which supports the Management Board in overseeing the Responsible Banking and Sustainable Development Strategy – both at the company level and at the level of the entire Santander Bank Polska Group. The President of the Management Board is also the chair of this committee, and its responsibilities include defining the strategy and annual goals of Responsible Banking and Corporate Culture and ensuring the implementation of the provisions of Santander Bank Polska S.A.’s social and environmental policies.}

^{The Committee is supported by the ESG Forum. The Forum’s task is to analyse challenges, opportunities and risks related to the EU Sustainable Finance agenda, plan ESG activities, coordinate their implementation, and report periodically (twice a year) to the Responsible Banking and Corporate Culture Committee and the bank’s Management Board. Members of the ESG Forum include senior managers from all divisions and areas.}

Permanent supervision of the bank’s activities is exercised by the Supervisory Board. In 2022, its composition remained unchanged and as at 31 December, 2022 the members of the Supervisory Board were:

The Supervisory Board consists of at least 5 members appointed for a joint term of three years. Members of the Board, including its Chairperson, are elected and dismissed by the General Meeting of Shareholders. The Management Board informs the Polish Financial Supervision Authority (KNF) about the composition of the Board.

The term of office of a member of the Supervisory Board expires no later than on the date of the General Meeting of Shareholders approving the financial statements for the last full financial year of his or her function as a member of the Supervisory Board. The term of office shall also expire upon death, resignation or dismissal. The term of office of a Supervisory Board Member appointed before the expiration of a given term of the entire Supervisory Board shall expire simultaneously with the expiration of the terms of office of the remaining Members of the Board. The Supervisory Board may appoint committees and persons responsible for directing the work of these committees. The Supervisory Board appoints from among its members the Audit and Compliance Committee, the Risk Committee and the Remuneration Committee, and may appoint other committees to support and improve the activities of the Supervisory Board. Detailed terms of the committee operations, including the roles and competencies of the committee chair and members, are set by regulations adopted by the Board.

By 2025, the bank committed to ensure that the share of women on the Supervisory Board would be between 40% and 60%* – the goal has already been achieved (women make up 40% of the Board).

*The need for these changes was due to the necessity to adapt to the requirements of Recommendation Z of the Polish Financial Supervision Authority (KNF) concerning the principles of internal governance in banks and the guidelines of the European Banking Authority no. EBA/GL/2021/06 of July 2, 2021 on the assessment of the suitability of members of the management authorities and key executives.