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Corporate governance

  • Overview
  • Board of Directors
  • Management
  • Committees
  • General Assembly

Overview

To guarantee to all our stakeholders the strength of our Corporate Governance, we adhered to the Code of Principles and Best Practices of Corporate Governance of the Business Coordinating Council (Consejo Coordinador Empresarial).

Likewise, since 2013, we have been listed on the Mexican Stock Exchange (BMV) and the New York Stock Exchange (NYSE) American Depositary Receipt Level III Program; therefore, we must also guide our structure and behavior to the provisions of these organizations and the applicable legislation.

Our corporate governance comprises the Shareholders’ Meeting, the Board of Directors, the Committees, and the Senior Management.

Volaris’ Board of Directors is comprised of 14 proprietary directors and 3 alternate directors, 71% of whom —10 proprietary and 2 alternate directors— are independent.

Diversity

14% of the members of our Board of Directors are women. Our Board of Directors is comprised of qualified members with multidisciplinary backgrounds.

Shareholders’ Meeting

It is the highest governance body, the Meetings will be chaired by the Chairman of the Board of Directors. In their absence, the Meetings will be chaired by the person designated by the shareholders in attendance by the majority of votes.

Meetings may be called at the request of the Board of Directors, the chairman or secretary of the Board of Directors; by the Audit Committee or the Corporate Governance Committee; by shareholders representing at least 10% of our outstanding capital stock, who may request the chairman of the Board of Directors, the chairman of the Audit Committee or the chairman of the Corporate Governance Committee to summon a Shareholders’ Meeting; by any shareholder, on the understanding that no Annual Shareholders’ Meeting has been held in two consecutive years or the matters about the annual Shareholders’ Meetings are not addressed, and by a competent Mexican judge, if the Board of Directors does not comply with a valid request of the shareholders by what is mentioned in the two previous points.

Generally, for an Ordinary General Meeting to be legally installed, at least 51% of our shares with voting rights must be represented, and its resolutions will be valid when taken by a majority of the votes in attendance. If such quorum is not met, a second call will be made for which it will be required in the same way that 51% of our shares are represented and the resolutions may be taken by the majority of the capital represented in the said meeting. Generally, for an Extraordinary General Meeting to be considered legally constituted, at least 75% of the shares must be represented. If a quorum is not present at the first call, a second call will be made and the Meeting will be considered legally constituted when at least 51% of the shares are represented. In any case, resolutions will be valid when adopted by the vote of shares representing at least 50% plus one of the shares of capital stock, except for resolutions referring to the cancellation of the registration of shares in the National Securities Registry, since these require the favorable vote of at least 95% of the outstanding capital stock with voting rights. The rights of minority shareholders, as well as information on notice of meetings, accreditation of ownership, minutes of meetings, Chairman and Secretary, types of meetings, and minority rights can be found in our By-Law.

Shareholders’ rights

Under Mexican law, all Volaris A and B shares are entitled to one vote per share(1).

Volaris is a Mexican Company and is subject to foreign investment control regulations.

The Company adopted a neutral investment structure, under the applicable law, which allows foreign investors interested in receiving economic rights, but never voting rights, to participate in securities with underlying shares of Volaris.

This structure allows majority Mexican investors to determine the voting direction of the shares underlying the neutral investment. This information has been made public and is available at all times to investors in the prospectuses and annual reports of the markets in which we are listed.

In addition, under the applicable Mexican law, Volaris is not required to adopt the Say on Pay Policy.

The Mexican Securities Market Law and our By-laws contain provisions that, among other things, require the approval of the Board of Directors before any person or group of persons directly or indirectly acquires: (i) 5% or more of our shares (directly or through the acquisition of ADSs or CPOs), or (ii) 20% or more of our shares (directly or through the acquisition of ADSs or CPOs) and in this case, if such approval is obtained, the acquirer must make an offer to purchase 100% of our
shares and CPOs (or securities representing them) at a substantial premium over the market price of our shares to be determined by the Board of Directors, based on the opinion from a financial advisor.

 

(1). Holders of ADSs and CPOs will not be entitled to vote the underlying A Shares at any time. Mexican holders of Series A shares will be entitled to vote their shares on all matters. Holders of Series B shares will be entitled to vote their shares on all matters and will have the specific voting rights described in “Shareholders’ Meetings”. The A shares underlying the CPOs and the CPOs underlying the ADSs will be voted by the trustee issuing the CPOs in the same manner as a majority of the votes of the A shares cast at the relevant Shareholders’ Meeting in all circumstances.

Board of Directors

Volaris’ Board of Directors comprises of 14 proprietary members; of these, 10 proprietary and 2 alternate directors are independent, 71%. In addition, 14% of the members are women. The average tenure of Board members is 7.92 years.

  • Brian H. Franke Chairman of the Board
  • Andrew Broderick Director
  • Marco Baldocchi Kriete Director
  • Enrique Javier Beltranena Mejicano Director
  • Harry F. Krensky Independent Director
  • Alfonso González Migoya Independent Director
  • José Luis Fernández Fernández Independent Director
  • Ricardo Maldonado Yáñez Independent Director
  • Joaquín Alberto Palomo Déneke Independent Director
  • John A. Slowik Independent Director
  • Stanley L. Pace Independent Director
  • William Dean Donovan Independent Director
  • Guadalupe Phillips Margain Independent Director
  • Mónica Aspe Bernal Independent Director
  • William A. Franke Honorary Director
    (without being a member)

Board of Directors’ duties

Our Company is managed by the Board of Directors and the Chief Executive Officer. The Board of Directors establishes the guidelines and general strategy for conducting our business and supervises compliance with these standards.

The members of the Board of Directors must carry out their duties to create value for the Company’s benefit, without favoring a particular shareholder or group of
shareholders. They must comply with various obligations, including:

  • The Company’s overall strategy
  • Overseeing our operations and those of our subsidiaries
  • Approve, with the prior opinion of the Audit Committee, each one individually: (i)Related party transactions, subject to certain limited exceptions,  (ii) our guidelines on internal control and internal audit, including those guidelines of our subsidiaries, (iii) our policies of accounting, (iv) our financial statements and those of our subsidiaries, (v) the operations considered as unusual or non-recurring as well as any operations that are executed, either simultaneously or successively, in the period of a fiscal year that involve: (a) The acquisition or disposal of goods with a value equal to or greater than 5% of our consolidated assets or (b) the granting of guarantees or the assumption of liabilities for a total amount equal to or greater than 5% of our consolidated assets, and (vi) the election of external auditors
  • Approve, with the prior opinion of the Corporate Governance Committee, each one individually: (i) supervise and report on the performance of our chief executive officer and render opinions to our board of directors regarding his nomination, election, removal, compensation, and related policies, (ii) supervise and report on the performance of our officers to our board of directors and render opinions to our board of directors regarding their nomination, election, removal, compensation, and related policies, (iii) submit proposals to the board of directors relating to the nomination or removal of officers within the first two corporate levels, (iv) propose the remuneration schemes of the first four corporate levels of the Company or those determined by it, for approval of the board of directors, (v) assist our board of directors in the preparation of reports for the annual shareholders’ meeting, (vi) consult with third-party experts in connection with any issues related to compensation, organizational development, and other related matters, (vii) propose to the board of directors the adoption, modification or termination of any incentive plan for employees of the Company, (viii) propose to our board of directors the entering into, amendment or termination of any collective bargaining agreements, (ix) inform our board of directors of relevant labor contingencies; (x) provide an annual report to the board in respect of corporate governance and nomination and compensations matters;
  • Summon a Shareholders’ Meeting and execute its resolutions
  • Submit annually to the Shareholders’ Meeting (i) the report of the CEO and, (ii) the opinion of the Board of Directors about the report of the CEO
  • Approve the creation of special Committees and ensure or guarantee the authority of such Committees, provided that such Committees will not have those powers expressly vested to our shareholders or the Board of Directors in accordance with our By-laws
  • Determine the voting power of the shares we hold in our subsidiaries and our disclosure policies

The meetings of our Board of Directors, according to the By-laws, shall be validly convened and held if the majority of the members or their respective alternates are present. The agreements adopted in said meetings will be valid if they are approved by a majority of the members without any conflict of interest regarding the matters discussed. In the event of a tie, the Chairman of the Board of Directors will not have a tie-breaking vote.

Meetings of our Board of Directors may be summoned by (i) 25.0% of the members of our Board of Directors, (ii) the chairman of our Board of Directors, (iii) the chairman of the Audit Committee, (iv) the chairman of the Corporate Governance Committee, and (v) the Secretary of our Board of Directors.

Moreover, members may remain in office for one year and may be re-elected or removed at any time.

In 2022, the Board of Directors met 5 times in ordinary meetings with an attendance of 98.57%. On one occasion it adopted unanimous resolutions taken out of meetings.

Management

Our President and Chief Executive Officer, as well as other members of our senior management are required to direct their activities towards creating value for the Company, making decisions that significantly transcend the administrative, financial, operating and legal situation of Volaris.

  • Enrique Javier Beltranena Mejicano View Bio
    Enrique Javier Beltranena Mejicano President and Chief Executive Officer
  • Holger Blankenstein View Bio
    Holger Blankenstein Executive Vice-President Airline Commercial and Operations
  • Jaime Esteban Pous Fernández View Bio
    Jaime Esteban Pous Fernández Chief Financial Officer
  • José Luis Suárez Durán View Bio
    José Luis Suárez Durán Chief Operating Officer
  • José Alejandro de Iturbide Gutiérrez View Bio
    José Alejandro de Iturbide Gutiérrez Chief Legal Officer
  • Jimmy Zadigue View Bio
    Jimmy Zadigue Senior Corporate Audit Services and Risk Assessment Director

Management duties

The Senior Management are obliged, mainly, to: (i) Comply with the agreements of the shareholders meetings and of our Board of Directors; (ii) submit business strategies for approval by the Board of Directors; (iii) submit for approval of the Audit Committee the guidelines of the internal control system; (iv) disseminate relevant information to the public; (v) comply with applicable laws in connection with the repurchase and subsequent acquisitions of shares; (vi) take action with respect to liabilities caused by us; (vii) comply with the applicable legislation regarding the payment of dividends; (viii) adequately maintain the internal accounting and registration control systems and mechanisms, and (ix) establish internal mechanisms and controls that allow verifying that the acts and operations of the Company and legal entities that it controls have adhered to the applicable regulations, as well as follow-up on the results of these mechanisms and internal controls and take the necessary measures where appropriate.

The Senior Management will be responsible for the breach or lack of timely and diligent attention within the scope of their powers, in the terms established in the
applicable legislation and the Company’s By-laws.

Committees

Our Board of Directors is supported by regulated Committees, which analyze specific matters concerning the Company and issue recommendations to the Board.

Audit Committee

This Committee is comprised exclusively of independent directors, with a minimum of three members appointed or removed by the Board of Directors, with exception of the Chairman. In addition, the Chairman of this Committee may not preside over the Board of Directors and is selected based on his experience, ability and professional prestige. The chairman of our Audit Committee was ratified at the Annual Ordinary General Shareholders’
Meeting held on April 21, 2023.

Is responsible for, among other:

  • Call shareholders meetings and request the inclusion of matters in the agenda
  • Supervise and evaluate our external auditors and analyze their reports (including their opinion of our annual report)
  • Analyze and supervise the preparation of our financial statements and make recommendations to the board of directors on their approval
  • Inform the board of directors of the status of our internal controls, our internal audit and their adequacy
  • Supervise the execution of related party transactions and transactions representing 20% or more of our consolidated assets being undertaken pursuant to applicable law
  • Render its opinion to the board of directors regarding transactions with related parties
  • Request reports from our executive officers or independent experts whenever it deems appropriate
  • Investigate and inform the board of directors of any irregularities that it may encounter
  • Receive and analyze recommendations and observations made by the shareholders, members of the board of directors, executive officers or any third party and take the necessary actions
  • Supervise compliance by our chief executive officer of instructions provided by our board of directors or shareholders
  • Provide an annual report to the board in respect of accounting policies and their sufficiency, adequacy and consistency
  • Request opinions from independent third party experts
  • Assist our board of directors in the preparation of reports for the annual shareholders’ meeting
  • Hire or recommend auditors to shareholders and approve them.
Audit Committee Members
José Luis Fernández Fernández
Chairman
Joaquín Alberto Palomo Déneke
Member
John A. Slowik
Member
Mr. José Carlos Silva Sanchez-Gavito is the alternate member of the audit committee.

 

Corporate Governance Committee

This Committee is comprised exclusively of independent directors, with a minimum of three members appointed or removed by the Board of Directors, with exception of the Chairman. In addition, the Chairman of this Committee may not preside over the Board of Directors and is selected based on his experience, ability and professional prestige. The chairman of our Corporate Governance Committee was appointed at the Annual Ordinary General Shareholders’ Meeting held on April 21, 2023.

Is responsible for, among other:

  • Call shareholders’ meetings and request the inclusion of matters in the agenda
  • Supervise and report on the performance of our chief executive officer and render opinions to our board of directors regarding his nomination, election, removal, compensation, and related policies
  • Supervise and report on the performance of our officers to our board of directors and render opinions to our board of directors regarding their nomination, election, removal, compensation, and related policies
  • Submit proposals to the board of directors relating to the nomination or removal of officers within the first two corporate levels
  • Propose the remuneration schemes of the first four corporate levels of the Company or those determined by it, for approval of the board of directors
  • Assist our board of directors in the preparation of reports for the annual shareholders’ meeting
  • Consult with third-party experts in connection with any issues related to compensation, organizational development, and other related matters
  • Propose to the board of directors the adoption, modification or termination of any incentive plan for employees of the Company
  • Propose to our board of directors the entering into, amendment or termination of any collective bargaining agreements
  • Inform our board of directors of relevant labor contingencies
  • Provide an annual report to the board in respect of corporate governance and nomination and compensations matters
  • Assist our board of directors in the preparation of reports for the annual shareholders’ meeting.
Corporate Governance Committee Members
Ricardo Maldonado Yañez
Chairman
Mónica Aspe Bernal
Member
Harry F. Krensky
Member

 

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