Annual Report
2017

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Composition, powers and procedures of the Management Board and the Supervisory Board

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Composition of the Management Board

The Management Board is composed of at least three members appointed for a joint term of 5 years. At least half of the Management Board Members, including the President, must be Polish citizens, have permanent residence in Poland, speak Polish and have experience in the Polish market necessary to manage mBank. The Members of the Management Board manage selected areas of the bank’s operation within the scope determined by the President of the Management Board. The division of powers of the Members of the Management Board has been described in detail in the Management Board’s resolutions.

In 2017, four changes in the composition of the Management Board of the bank took place. Two Members of the Management Board, Hans Dieter Kemler – Vice-President of the Management Board, Head of Financial Markets, and Jarosław Mastalerz – Vice-President of the Management Board, Head of Operations and Information Technology, resigned from their functions as of March 31, 2017. Hans-Dieter Kemler decided to resign as he took up the position of a Member of the Management Board in German Landesbank Hessen Thueringen (Helaba) responsible for financial markets, treasury and asset management. The reason behind the resignation of Jarosław Mastalerz was his intention to engage in the development and commercialisation of new technologies in the financial sector within the scope of mAccelerator, a project implemented in cooperation with mBank.

  • On March 30, 2017, Vice-President of the Management Board, Chief Financial Officer, Christoph Heins, resigned from his functions at the bank with effect from June 30, 2017.
  • On March 30, 2017, the Supervisory Board appointed three new Members of the Management Board of the bank until the end of the current term of office of the Management Board.
  • On April 1, 2017, Krzysztof Dąbrowski was appointed Vice-President of the Management Board, Head of Operations and Information Technology. Prior to taking up this position, since 2014 Krzysztof Dąbrowski was a Managing Director responsible for IT and technology at mBank.
  • Frank Bock was appointed the Vice-President of the Management Board, Head of Financial Markets, as of May 1, 2017. Starting from the beginning of 2009, Frank Bock was the Managing Director for Treasury at Commerzbank AG. His duties included asset and liability management, market risk management and liquidity management at Commerzbank in Central and Eastern Europe.
  • Andreas Böger was appointed the Vice-President of the Management Board, Chief Financial Officer as of July 1, 2017. He joined Commerzbank in 2013 as the head of the Corporate Finance division within Commerzbank’s Group Development and Strategy.
  • Furthermore, on September 12, 2017, Vice-President of the Management Board, Head of Corporate and Investment Banking , Przemysław Gdański, resigned from his functions at the bank. The resignation took effect as of October 25, 2017. On that date, the Supervisory Board of mBank appointed Adam Pers, Managing Director for Financial Markets, on the position of the Vice-President of the Management Board, Head of Corporate and Investment Banking .

Please find below the composition of the Management Board of mBank as at December 31, 2017

Cezary Stypułkowski – President of the Management Board, Chief Executive Officer

Cezary Stypułkowski holds a PhD in law from the University of Warsaw. In second half of 1980s, he studied at Columbia University Business School in New York as a participant of the Fulbright Program. Starting in 1991, he chaired the Management Board of Bank Handlowy S.A. (currently Citibank Group) for nearly thirteen years. In 2003, he was appointed the President of the Management Board of PZU Group and held this function for three years. From 2006 to 2010, he worked for J.P Morgan in London, from 2007 as the Managing Director of J.P. Morgan Investment Bank in Central and Eastern Europe. Cezary Stypułkowski was also a member of the International Advisory Board for Deutsche Bank Management Board, INSEAD International Advisory Board and the Geneva Association. Since 2012, co-chair of the Emerging Markets Advisory Council of the Institute of International Finance in Washington (IFF).

Mr Stypułkowski was appointed the President of the Management Board of mBank on August 2, 2010. He has been acting as the President of the Management Board of the Bank as of October 1, 2010. The Polish Financial Supervision Authority approved his appointment on October 27, 2010.

Frank Bock – Vice-President of the Management Board, Head of Financial Markets

Mr Bock graduated from the Technical University in Karlsruhe (Germany) with specialisation in financial engineering and IT.

During his professional career, Frank Bock gained considerable experience in the scope of risk and treasury management in numerous institutions in Germany, the USA (New York) and Great Britain (London). Starting from the beginning of 2009, Frank Bock was the Managing Director for Treasury at Commerzbank AG. His duties included asset and liability management, market risk management and liquidity management at Commerzbank in Central and Eastern Europe, as well as functional support in strategic subsidiaries of Commerzbank: Comdirect, Commerz Real and mBank. Previously, as the Asset and Liability Management Director in Group Capital and Treasury Management of Dresdner Bank AG in Frankfurt am Main, he was responsible for the management of market risk and liquidity portfolio. Prior to joining Dresdner Bank AG, Mr Bock worked for WestLB AG in Düsseldorf as Credit Treasury Head in Group Treasury and was a senior manager for risk management.

Vice-President of mBank’s Management Board, Head of Financial Markets since May 1, 2017.

Andreas Böger – Vice-President of the Management Board, Chief Financial Officer

He studied in Frankfurt and San Diego, graduated from the Frankfurt School of Finance & Management and holds the CFA certificate.

He started his professional career in HypoVereinsbank in Munich in 1994, where he headed the team responsible for assets and liability management and capital advisory. Since 2003, Andreas Böger worked in Deutsche Bank in Frankfurt. In 2007-2013, he was a managing director of Global Capital Markets and Capital Solutions Europe & CEEMEA at Deutsche Bank in London. Mr Andreas Böger joined Commerzbank in 2013. Prior to taking up the position at mBank, he managed the corporate finance division within Commerzbank’s Group Development and Strategy. His duties included preparation of the strategic balance sheet and management of Commerzbank Group’s capital, as well as other tasks related to finance and regulatory activities.

He has been the Vice-President of the Management Board of mBank, Chief Financial Officer since July 1, 2017.

Krzysztof Dąbrowski – Vice-President of the Management Board, Head of Operations and Information Technology

Mr Dąbrowski graduated from Warsaw University of Technology, Faculty of Electronics and Information Technology. In 2011, he completed the Executive MBA programme at the University of Warsaw and the University of Illinois.

In 1995-2003, he worked in the Internet and telecommunications industry for Polska Online and TDC Internet, where he was responsible for the development of hosting systems and services. In 2004-2011, as the head of the Software Development Department, he co-created the Polish service centre of F. Hoffman-La Roche. In the following years, as the CTO of Allegro Group, Krzysztof Dąbrowski supervised one of the biggest agile transformations in the region. Since 2014, he performed the function of the managing director for IT and technology at mBank.

Vice-President of mBank’s Management Board, Head of Operations and IT since April 1, 2017.

Adam Pers – Vice-President of the Management Board, Head of Corporate and Investment Banking

Adam Pers graduated from the Faculty of Economics of the Academy of Economics in Poznań. In 2008, he completed an MBA programme organised by SGH Warsaw School of Economics. He gained expertise in the field of banking both at university and in three institutions operating on the Polish market. He commenced his professional career as an intern in Wielkopolski Bank Kredytowy S.A., then he worked in Raiffeisen Bank Polska S.A. Group for many years, at first in back office, then in corporate banking and finally in the financial markets area. He was responsible for strategic projects concerning the reshaping of the dealing room and for one of the pillars of the bank’s strategy and during the financial crisis, as the operational committee member, he was responsible for the bank’s liquidity. In RBI Group, he was awarded the TOP Performer and Leader of the Year title. He joined BRE Bank/mBank Group in 2012, where at first he was responsible for restructuring in the area of the financial markets sales. Then, as a managing director he also supervised the integration of the area of cooperation with financial institutions and finally, the integration with the trading area.

Vice-President of mBank S.A. Management Board, Head of Corporate and Investment Banking since October 26, 2017.

Lidia Jabłonowska-Luba – Vice-President of the Management Board, Chief Risk Officer

Lidia Jabłonowska-Luba graduated from the Mathematics Institute of the University of Gdańsk. From 1994 to 2001, Ms Jabłonowska-Luba was Vice-President of Schroder Salomon Smith Barney Poland, where she advised financial institutions on M&A and public equity transactions. In 2002, Lidia Jabłonowska-Luba joined Citigroup in Poland, first as the Head of Financial Institutions & Public Sector Division and since November 2003 as the Member of the Management Board in charge of finance and operational risk management, capital management and implementation of the New Capital Accord. From 2008 to 2010, she served as the Vice-President of the Management Board of Kredyt Bank acting as Chief Finance and Risk Officer. She was also the Advisor to the CEO of Warta S.A. and TUnŻ Warta S.A. From 2010 to 2012, Lidia Jabłonowska-Luba was the Senior General Manager at KBC Group in Brussels, where she was responsible for managing all risk types in the group, including model development and valuation, risk policies and procedures, risk support for business decisions, supervision and reporting, ICAAP and ORSA processes, capital adequacy policy and technological support for risk management. Additionally, Lidia Jabłonowska-Luba held the position of the Vice-Chairwoman of the Group Risk Management Committee and also served as a member of the Group Risk and Capital Oversight Committee and ALCO at KBC Group.

Vice-President of mBank’s Management Board since April 12, 2013.

Cezary Kocik – Vice-President of the Management Board, Head of Retail Banking

He graduated from the University of Łódź with a degree in Banking and Finance. In 2015, he completed the Advanced Management Program (AMP 189) at Harvard Business School. Holder of a securities broker license. From 1994 to 1996, Cezary Kocik was employed with the Brokerage House of Bank PBG as a securities broker. Starting in 1996, he worked for Bank PBG in the investment banking , debt collection and restructuring divisions. In 1999, Mr Kocik was employed with the debt collection and loan restructuring department of Bank Pekao S.A., he was, among others, director of a Pekao Branch in Łódź.

He has been shaping mBank’s retail banking since 2004: first in the retail credit risk area, then in the sales and business processes area, contributing to successful implementation of CRM system and substantially improving the effectiveness of key sales processes in direct channels.

Vice-President of mBank’s Management Board since April 1, 2012.

Powers and procedures of the Management Board

The Members of the Management Board are jointly liable for the overall operations of the Bank. They work collegially and inform each other about the most important matters concerning the Bank for which particular Members of the Management Board are responsible. The Management Board may appoint standing committees or teams to perform specific functions or to co-ordinate the work of organisational units of the bank or to perform specific tasks.

The following committees led by Members of the Management Board operate at mBank:

  • Resource Management Committee (chairperson: Cezary Stypułkowski)
  • Capital Management Committee (chairperson: Andreas Böger)
  • Assets and Liabilities Management Committee of mBank Group (chairperson: Frank Bock)
  • Foreign Branch Supervision Committee of mBank S.A. (chairperson: Cezary Kocik)
  • Credit Committee of mBank Group (chairperson: Lidia Jabłonowska-Luba)
  • Retail Banking Risk Committee (chairperson: Lidia Jabłonowska-Luba)
  • Corporate and Investment Banking Risk Committee (chairperson: Lidia Jabłonowska-Luba)
  • Financial Markets Risk Committee (chairperson: Lidia Jabłonowska-Luba)
  • Model Risk Committee (chairperson: Lidia Jabłonowska-Luba)
  • IT Architecture Committee of mBank S.A. (chairperson: Krzysztof Dąbrowski)
  • Data Quality and Information System Development Committee (chairperson: Andreas Böger).

The Management Board manages the bank’s business, represents the bank and defines the guidelines for the bank’s operations, especially for the areas subject to risks, including the credit policy, the investment policy, the bank’s assets and liabilities management policy, and the guarantee policy. The Management Board presents to the Supervisory Board on a regular basis comprehensive information on all significant aspects of the bank’s operations and related risks as well as risk management methods.

The Management Board operates pursuant to its Rules approved by the Supervisory Board. The Rules determine among others the issues which require consideration of the Management Board as a collegial body and adoption of a resolution of the Management Board.

All resolutions are adopted by a majority of votes of the Management Board Members present at the meeting, and in the case of an equal number of opposing votes, the President of the Management Board has the casting vote.

Rules and levels of remuneration of Members of the Management Board are determined by the Remuneration Committee of the Supervisory Board. The rules of the incentive programme for the Management Board as well as the principles of allocating bonuses to Management Board Members are defined in Resolutions of the Supervisory Board.

Total remuneration of the Members of the Management Board includes a fixed and a variable part.

A detailed description of the rules of the incentive programme for the Management Board based on shares is presented in Note 46 of the Consolidated Financial Statements of mBank S.A. Group for 2017 and in Note 44 of the Financial Statements of mBank S.A. for 2017.

The section below presents a brief description of the 2014 incentive programme for the Members of the Management Board which replaced the Incentive Programme Rules of December 7, 2012.

Under the programme, the Members of the bank’s Management Board have the right to receive a bonus, including a non-cash bonus paid in the bank’s shares, including phantom shares.

The net ROE of mBank Group and the monthly remuneration as at the end of the financial year for which the bonus is to be awarded constitute the basis for the acquisition of the right to a bonus and for the calculation of the bonus amount for a given financial year. One part of the base bonus is the equivalent of 50% of the base amount calculated depending on the ROE. The other part of the bonus may be granted by the Remuneration Committee of the Supervisory Board on the basis of its appraisal of the Management Board Member and achievement of the MbO objectives taking into account the situation on financial markets in previous financial periods. The two parts of the bonus constitute the base bonus. 40% of the base bonus is paid in the year when it is determined: 50% in cash and 50% in bank’s shares, or bonds with a pre-emptive right to take up shares, or phantom shares. The remaining 60% of the base bonus is deferred and paid in three equal tranches in three subsequent years: 50% in cash and 50% in bank’s shares, or bonds with a pre-emptive right to take up shares, or phantom shares.

Remuneration paid in 2017 (in PLN)
Basic
remuneration		 Other
benefits		 Bonus
for 2016		 Deferred
bonus*
1. Cezary Stypułkowski 2,661,046 237,960 460,831 575,000
2. Lidia Jabłonowska-Luba 1,500,000 173,320 250,000 320,000
3. Frank Bock 1,061,379 229,370 – –
4. Andreas Böger 797,633 68,338 – –
5. Krzysztof Dąbrowski 1,125,000 87,939 – –
6. Cezary Kocik 1,500,000 189,036 250,000 350,000
7. Adam Pers 272,727 19,266 – –
In total 8,917,785 1,005,229 960,831 1,245,000

* In 2017, the second deferred installment was paid as part of the settlement of the cash portion of the bonus for 2014 and the first deferred tranche as part of the settlement of the bonus part of cash for 2015.

 

Remuneration paid in 2017 (in PLN)
Basic
remuneration		 Other
benefits		 Bonus
for 2016		 Deferred
bonus*		 Severance
payment
Remuneration of former Members of the Management Board who ceased to perform their functions in 2017
1. Christoph Heins 776,684 269,061 125,000 – –
2. Hans-Dieter Kemler 500,000 127,984 200,000 320,000 –
3. Jarosław Mastalerz 665,926 101,811 250,000 350,000 –
4. Przemysław Gdański 1,442,587 168,052 250,000 320,000 1,500,000
Remuneration of former Members of the Management Board who ceased to perform their functions in 2016
1. Jörg Hessenmüller 125,000 340,000 –

* In 2017, Members of the Management Board who ceased to perform their functions in 2017 and Joerg Hessenmueller received the second deferred tranche as part of the settlement of the cash portion of the bonus for 2014 and the first deferred tranche as part of the cash bonus settlement for 2015.

 

Remuneration paid in 2016 (in PLN)
Basic
remuneration		 Other
benefits		 Bonus
for 2015		 Deferred
bonus*
1. Cezary Stypułkowski 2,725,108 252,868 500,000 325,000
2. Lidia Jabłonowska-Luba 1,500,000 170,504 280,000 180,000
3. Przemysław Gdański 1,500,000 194,440 280,000 180,000
4. Christoph Heins 841,392 368,824 – –
5. Hans-Dieter Kemler 1,509,926 348,238 280,000 180,000
6. Cezary Kocik 1,500,000 185,316 300,000 200,000
7. Jarosław Mastalerz 1,500,000 203,396 340,000 180,000
In total 11,076,426 1,723,586 1,980,000 1,245,000

*In 2016, the 1st deferred tranche was paid out as part of the settlement of cash bonus for 2014.

 

Remuneration paid in 2016 (in PLN)
Basic
remuneration		 Other
benefits		 Bonus
for 2015		 Deferred
bonus*		 Cash settlement of the incentive programme
based on Commerzbank shares **
Remuneration of former Members of the Management Board who resigned from the Management Board in 2016
1. Jörg Hessenmüller 781,500 93,768 300,000 190,000 –
Remuneration of former Members of the Management Board who ceased to perform their functions in 2012
1. Christian Rhino – – – – 134,206

*In 2016, Jörg Hessenmüller was paid the first deferred tranche as part of the settlement of cash bonus for 2014.

** The settlement concerns the incentive program for the Management Board Members of 2008 in part based on Commerzbank shares. In 2016, Christian Rhino received a cash equivalent for Commerzbank shares as part of the settlement of the third tranche of the incentive program for 2012.

Composition of the Supervisory Board

The Supervisory Board acts on the basis of adopted Rules and performs the functions provided for in the By-laws of the bank, the Code of Commercial Partnerships and Companies, and the Banking Law. The By-laws of mBank provide that the Supervisory Board consists of no less than five Members elected by the General Meeting for a joint term of three years. Members of the Supervisory Board should possess knowledge, skills and experience adequate for fulfilling their function and duties entrusted to them and should guarantee proper fulfilment of these duties. At least half of all Supervisory Board Members, including the Chairman, shall hold Polish citizenship, permanently reside in Poland, speak Polish and have experience on the Polish market which can be used while supervising the bank’s operations. Pursuant to the statutory requirement, at least two Supervisory Board Members are independent, unless the General Meeting decides otherwise. The independence criteria of the Supervisory Board Members are stipulated in the Rules of the Supervisory Board.

The 30th Annual General Meeting of mBank S.A. held on March 30, 2017 elected the following 12 Members of the Supervisory Board of mBank for a joint term of three years:

  • Maciej Leśny – Chairman of the Supervisory Board
  • Stephan Engels – Deputy Chairman of the Supervisory Board
  • Tomasz Bieske – Member of the Supervisory Board
  • Andre Carls – Member of the Supervisory Board
  • Marcus Chromik – Member of the Supervisory Board
  • Janusz Fiszer – Member of the Supervisory Board
  • Mirosław Godlewski – Member of the Supervisory Board
  • Jörg Hessenmüller – Member of the Supervisory Board
  • Thorsten Kanzler – Member of the Supervisory Board
  • Michael Mandel – Member of the Supervisory Board
  • Teresa Mokrysz – Member of the Supervisory Board
  • Agnieszka Słomka-Gołębiowska – Member of the Supervisory Board

Detailed information on mBank Supervisory Board Members, who performed their functions as at December 31, 2017, is presented in the table below.

 

Maciej Leśny graduated from the Faculty of Economic Sciences at Warsaw University in 1969. During his professional career, Mr Leśny worked for 6 years in the shipbuilding industry in Gdańsk and 8 years for Zakłady Elektronicznej Techniki Obliczeniowej. For more than 22 years, he worked in the central state administration, including 8 years in the position of Undersecretary of State: in the Ministry of Foreign Economic Co-operation; the Ministry of Economy; the Ministry of Economy, Labour and Social Policy; and finally in the Ministry of Infrastructure.

He completed a post-graduate course and training courses at universities in the USA: Michigan University (Business School of Administration) and De Paul University (Chicago). In 1992-1993, as a holder of scholarship granted by the US government, Mr Leśny studied at the American University in Washington, DC. During his scholarship time, he took part in a four-month internship at the World Bank and completed a privatization training course in the International Monetary Fund.

From March 1994 to 1998, Mr Leśny was the Chairman of the Supervisory Board of mBank (former BRE Bank). Then, until December 2001, he was a Member of the Supervisory Board. In 2004, Mr Leśny was re-elected as the Chairman of the Supervisory Board.

Mr Engels is a graduate of the University of St. Gallen in Switzerland. In the period of 1988-1993, he worked at Daimler-Benz AG’s Internal Audit Department. Afterwards he headed the Regional Controlling (Europe) at debis AG for three years. From 1996 to 2000, he served as the Chief Financial Officer at debis AirFinance B.V. In 2000, Mr Engels joined DaimlerChrysler Bank AG as the Member of the Board for Credit, and then CFO and IT. In 2003, he took the position of the Member of the Board for Finance, Controlling, Risk Management & Strategy at DaimlerChrysler Services AG. From 2007 to 2012, he was a Member of the Executive Committee of Mercedes-Benz Car Group for Finance & Controlling and the Head of Management Group Controlling at Daimler AG.

Since April 1, 2012, Member of the Board, Chief Financial Officer at Commerzbank AG.

Mr Bieske studied economy at the University of Cologne. He worked in Dresdner Bank’s head office in Frankfurt for six years. In 1990, Tomasz Bieske co-founded Arthur Andersen in Poland and became the Head of Financial Markets Group responsible for cooperation with financial sector clients. He participated in most key projects in the financial services sector including preparation of public offerings of PKO BP S.A and Kredyt Bank S.A. as well as audits of financial statements of the National Bank of Poland, PKO BP S.A., Pekao S.A., Getin Holding and a number of other banks. He managed many advisory projects in the banking sector.

Since 2011, he has been participating in the work of the committee for legal and business regulatory changes of the cooperative banking sector and closely cooperating with the Polish Bank Association (Związek Banków Polskich) and the National Association of Cooperative Banks (Krajowy Związek Banków Spółdzielczych). Tomasz Bieske has professional qualifications of a Polish statutory auditor. Until June 30, 2013, he worked for Ernst & Young.

Having studied business economics and completed a doctorate at the University of Cologne, Dr Carls joined Commerzbank through an international trainee programme in 1990.

He held positions in corporate finance and capital markets areas in Frankfurt. Later he became the Executive Director of the investment banking line of Commerzbank in London.

From 2000 to 2008, Dr Carls was a Member of the Board of Managing Directors of comdirect bank AG, from September 2002 to November 2004 he served as the company’s CFO and from November 2004 to March 2008 as its President of the Management Board (CEO). From March to September 2008, he was the Vice-President of the Management Board and CFO of BRE Bank.

From March 2008 to December 2013, Dr. Carls was the CEO of Commerzbank Auslandsbanken Holding AG and managed the Central & Eastern Europe Holding segment of Commerzbank AG.

In the years 2014-2015, Dr. Carls took over the position of Managing Director of the segment of medium-sized corporate clients for the northern regions and western Germany, while from 2015 he is responsible for the Western Germany region.

Marcus Chromik studied physics in Göttingen, Kiel and Munich. He also spent some time in the US, where he engaged in scientific research at Michigan State University. Mr Chromik holds a PhD in nuclear physics.

He started his professional career with McKinsey in 2001. In 2004, he joined Postbank Group, where he held various executive positions, being responsible for, among other things, new issues and syndication, liquidity management and Credit Treasury. Later he served as the Chief Market Risk Officer in Commerzbank’s markets and corporates segment for more than three years, where he was responsible for the Bank’s market and liquidity risk management. As of 2012, Dr Chromik became a Divisional Board Member, Chief Credit Risk Officer at Commerzbank.

On January 1, 2016, he was appointed Member of the Board of Managing Directors at Commerzbank AG, Chief Risk Officer.

Dr. Janusz Fiszer is a legal advisor and a certified tax advisor. He is a graduate the Faculty of Law and Administration of the University of Warsaw, a specialist in the field of tax and financial law. Since 1980, Janusz Fiszer has been an employee of the University of Warsaw, the Faculty of Management. In addition, since 1991, he has been a senior advisor at the White & Case international law firm and also, from 1998 to 2012, he served as partner in this company. From 2012 to 2013, Dr Fiszer was a partner in the tax & legal department of the PricewaterhouseCoopers (PwC) international advisory company and in January 2014, he joined the GESSEL law firm as a partner.

Moreover, he is a lecturer in international tax law at the Postgraduate Programme of International Tax Strategies at Warsaw School of Economics (SGH). Janusz Fiszer was a scholarship holder of the University of Kansas School of Business in Lawrence, Kansas, USA (1982-1983) and of Deutscher Akademischer Austauschdienst (DAAD) as well as of the Fritz Thyssen Foundation (Fritz Thyssen Stiftung) at the University of Munich in Germany (1988-1989 and 1990). Since 1993, he has been a member of the editorial board of the Monitor Podatkowy monthly journal. Since the 1990s, he has worked as a correspondent for the Tax Notes International professional periodical in the USA. Since 2004, he has been writing regular tax commentaries for the Dziennik Gazeta Prawna daily. Janusz Fiszer is a co-founder and a member of the Supervisory Board of the Polish branch of the International Fiscal Association (IFA).

Mirosław Godlewski completed the MBA programme at Warsaw University of Technology, the MBA programme at Ashridge Management College and Harvard Business School Advanced Management Program.

He is the Executive Chairman of Apteka Gemini, Senior Advisor at BCG, a Member of the Supervisory Board of Celon Pharma S.A., a Member of the Supervisory Board of Netia S.A. and the so-called “Angel Investor” at Hedgehog Fund.

Mr Godlewski was a member of the Supervisory Board at ABC Data SA and a member of the Nomination and Remuneration Committee. In 2007-2014, he was the President and CEO of Netia S.A. He also held executive positions with Opoczno S.A., Pepsi Cola General Bottlers-Polska Sp. z o.o., DEC Sp. z. o.o. and MEMRB Polska.

Jörg Hessenmüller graduated from Hochschule für Bankwirtschaft in Frankfurt am Main in 1997 and was awarded the title of Master in Management (Diplom–Betriebswirt (FH)). From 1989 to 2009, he worked for Dresdner Bank, holding the position of, among others, Head of Financial Control responsible for London, New York, Moscow, Sao Paulo and Asia. In 2009, Mr Hessenmüller was appointed the Managing Director in Commerzbank Group and worked as Head of Investment Banking Finance, Group Finance. From April 2012 to June 2016, he was the Member of the Management Board of mBank S.A., Chief Financial Officer.

Since July 2016, Mr Hessenmüller has been the Managing Director in Commerzbank Group responsible for Group Management Development & Strategy.

Thorsten Kanzler studied mechanical engineering and economics at the University of Technology in Darmstadt (Germany), where he obtained the Diplom-Wirtschaftsingenieur (M.Sc. Eng.).

From 1991 to 2004, he was employed with Deutsche Bank AG, holding various positions in the treasury and risk management area in Frankfurt, New York, Sydney and London.

Between 2004 and 2007, Mr Kanzler was the Group Treasurer and the Divisional Board Member of Corporate & Investment Banking in WestLB AG in Düsseldorf.

From May 2007, he held the position of the Head of Group Treasury & Capital Management at Dresdner Bank AG in Frankfurt am Main. Since 2009, he has been the Divisional Board Member for Group Treasury at Commerzbank AG. Mr Kanzler is responsible for assets and liabilities management, risk management, capital management and capital market funding.

He is a graduate of Business Administration at the University of Münster. Between 1986 and 2000, he worked for Dresdner Bank AG, where he was responsible for private banking . In the years 2000-2002, he was a consultant in McKinsey & Company consulting company.

Since 2002, he has worked for Commerzbank AG, first as the Head of Business Development for the Private Customer Segment, and then the Group Manager for Private and Business Customers. In 2008, he was appointed CEO of Comdirect Bank AG. Since 2010, he has served as the Divisional Board Member for Private Customers at Commerzbank AG. In May 2016, Michael Mandel was appointed the Member of the Board of Managing Directors at Commerzbank AG responsible for the segment of “Private and Business Customers”.

Ms Mokrysz graduated from the Academy of Economics (now the University of Economics) in Katowice (1978). In 1990, she created the Mokate brand, one of the most recognisable Polish brands in the world. She transformed a small family-run company into an international business. As one of the owners, Ms Mokrysz runs eight Mokate enterprises headquartered in Poland and in other countries of Central Europe. She built production plants in the Polish towns of Żory and Ustroń from scratch and expanded a production plant near Prague (producing coffee, tea and intermediate products for the food industry). She has successfully launched her products in several dozen countries on all the continents.

In 2000, the International Association of Women Entrepreneurs from Los Angeles awarded her the title of the “Most Entrepreneurial Woman in the World”. Moreover, Ms Mokrysz received a number of prestigious awards in Poland and abroad, including the “Leader of the Decade” title granted by Gazeta Wyborcza, and the “Success of the Decade” title granted by the Businessman Magazine. She funds scholarships for talented and underprivileged young people and provides financial support to health care institutions, nursing care homes, orphanages and schools.

Ms Słomka-Gołębiowska holds PhD in economics. She is a graduate of Warsaw School of Economics specializing in finance and banking and completed the MBA programme of the French Institute of Management (IFG). She obtained her PhD degree at Warsaw School of Economics (SGH). Ms Słomka-Gołębiowska works as a lecturer at Warsaw School of Economics and she conducts research into corporate governance. She attended several Executive Education courses, e.g. the IESE-Harvard Business School programme.

From 2006 to 2009, she was the Director in the Industrial Development Agency responsible for corporate governance, and before that, a consultant for private and public companies at Arthur Andersen. Since 2006, she has been a member of supervisory boards. Agnieszka Słomka-Gołębiowska was a holder of the Alexander von Humboldt Fellowship at the University of Münster and the Polish-American Fulbright Fellowship at the University of California, Berkeley. She was also a visiting scholar at universities in Cambridge (MIT), Tucson (UOA), Münster, Copenhagen (CBS), Birmingham (BBS), Berlin (HSoG), Genoa (UoG – Law School), Vienna (WU) and Florence (UniFi). She is the author of many publications on corporate governance.

The four independent members of the Supervisory Board are: Tomasz Bieske, Janusz Fiszer, Mirosław Godlewski and Agnieszka Słomka-Gołębiowska. Maciej Leśny and Teresa Mokrysz do not meet the independence criterion due to the fact that they have been sitting on the Supervisory Board for over twelve years.

Andre Carls, Marcus Chromik, Stephan Engels, Jörg Hessenmüller, Thorsten Kanzler and Michael Mandel are not independent members due to their relationship with the main shareholder of mBank.

Powers and procedures of the Supervisory Board

The responsibilities of the Supervisory Board include, in particular, the following matters:

  • Advising and supervising the Management Board in defining internal guidelines for the activity of the bank, especially for the areas subject to risks, including the bank’s credit policy, investment policy, guarantee policy, compliance policy, and approving the Management Board’s proposals concerning the general organisational structure of the bank.
  • Supervising compliance of the bank’s risk-taking regulations with the strategy and financial plan of the bank.
  • Approving the disclosure policy rules concerning risk management and capital adequacy adopted by the Management Board.
  • Approving strategies and procedures for the internal control system, the risk management system, the internal capital assessment process, capital management and capital planning, as proposed by the Management Board.
  • Assessing the adequacy and effectiveness of the risk management system.
  • Reviewing regular and exhaustive reports presented by the Management Board on all relevant issues related to the activity of the bank, the risks of its activity, and the means and effectiveness of risk management.
  • Preparing a concise assessment of the position of the bank to be presented to the Annual General Meeting and attached to the annual report of the bank for the previous financial year.
  • Approving the Bank’s annual financial plans, multi-year growth plans, as well as the strategy of the bank and the rules of prudent and stable management of the bank.
  • Reviewing any motions and matters to be decided in a resolution of the General Meeting, including draft resolutions of the General Meeting; the Supervisory Board prepares the justification for draft resolutions to be presented to the General Meeting for approval.
  • Issuing and approving rules provided for in the By-laws of the bank.
  • Appointing and dismissing the President of the Management Board, the Vice-Presidents of the Management Board and other Members of the Management Board subject to the procedures laid down in the Banking Law Act and taking into account relevant qualifications for the functions assigned to them.
  • Defining the terms of contracts and remuneration of the Management Board.
  • Authorizing the Chairperson of the Supervisory Board to represent the bank in agreements with the Management Board Members, including the conclusion of management contracts with Management Board Members.
  • Approving conclusion or amendment of any significant contract or agreement with the Members of the Management Board or the Supervisory Board.
  • Approving conclusion, amendment or termination of any significant affiliation or co-operation agreements.
  • Analyzing reports of the Internal Audit Department Director received at least once per year.

Meetings of the Supervisory Board are convened by the Chairperson of the Supervisory Board on his or her own initiative, or on request of the Management Board, or on request of a Supervisory Board Member, no less frequently than three times a year. All Management Board Members participate in the meetings of the Supervisory Board except for those agenda items which directly concern the Management Board or its Members.

Resolutions of the Supervisory Board are adopted by a simple majority of votes. In the case of an equal number of votes, the Chairman of the Supervisory Board has the casting vote.

No resolution should be passed without the consent of the majority of the Independent Members of the Supervisory Board on the following matters:

  • any benefits provided by the bank or any entities associated with the bank to the Members of the Management Board.
  • consent for the bank to enter into a significant agreement with an entity associated with the bank, a Member of the Supervisory Board or the Management Board, and entities associated with them.

The Supervisory Board has four committees: the Executive and Nomination Committee, the Risk Committee, the Audit Committee, and the Remuneration Committee.

Executive and Nomination Committee Risk Committee Audit Committee Remuneration Committee
Maciej Leśny Marcus Chromik Tomasz Bieske Andre Carls
Andre Carls Mirosław Godlewski Andre Carls Tomasz Bieske
Stephan Engels Thorsten Kanzler Janusz Fiszer Stephan Engels
Teresa Mokrysz Agnieszka Słomka-Gołębiowska Jörg Hessenmüller Maciej Leśny
Agnieszka Słomka-Gołębiowska

The tasks of the Executive and Nomination Committee involve, in particular, exercising regular supervision over the bank’s activity in the periods between meetings of the Supervisory Board. The Executive Committee authorises the Management Board to acquire, encumber or dispose of real estate, perpetual usufruct rights or interests in real estate, shares in companies and partnerships, and other fixed assets if the value of a transaction exceeds 1% of the bank’s own funds. Such authorisation is not required if the aforesaid acquisition took place as part of enforcement or bankruptcy proceedings, including bankruptcy proceeding with the possibility to make an arrangement or other settlement with the bank’s debtor or in the case of disposal of assets so acquired. The Committee is also responsible for recruitment for the positions of Management Board and Supervisory Board Members of the bank.

The Audit Committee issues opinions about the selection of the bank’s statutory auditor by the General Meeting, recommends whether the Supervisory Board should approve or reject financial statements, exercises regular supervision over the internal control system at the bank, and approves changes proposed by the Management Board of the bank as regards the head of the Internal Audit Department. The Audit Committee must have at least one independent Supervisory Board Member with qualifications and experience in accounting and finance.

The Risk Committee has among others the following tasks: exercising permanent supervision over credit risk, market risk, operational risk, and liquidity risk. Moreover, the Risk Committee issues recommendations for approval or rejection of exposures posing single entity risk, in accordance with the parameters defined by the Supervisory Board at the time. Moreover, the Risk Committee provides the Supervisory Board with recommendations for approval or rejection of transactions, provided for in the Banking Law, concluded between the bank and Members of the bank’s authorities, and recommendations for approval or rejection of the bank’s disclosure policy regarding risk management.

The tasks of the Remuneration Committee include among others: reviewing issues related to the remuneration principles and amounts of remuneration paid to the Members of the Management Board, setting the remuneration levels, presenting opinions concerning approval for Members of the Management Board of mBank to engage in competing activity, issuing recommendations to the Supervisory Board regarding the general guidelines for the Management Board on the level and structure of remuneration for the bank’s senior management and the policy on variable components of remuneration paid to persons holding managerial positions at the bank. Moreover, the Committee monitors the level and structure of remuneration paid to senior managers.

All standing committees of the Supervisory Board make reports on their activity in the past reporting year available to the shareholders. The aforesaid reports are appended to the set of materials for the Annual General Meeting.

The amount of monthly remuneration of the Members of the Supervisory Board was set in Resolution No. 50 regarding the remuneration rules for the Members of the Supervisory Board of mBank S.A. adopted by the 30th Annual General Meeting of mBank S.A. held on March 30, 2017. The Chairperson of the Supervisory Board earns PLN 17,000 monthly, the Deputy Chairperson – PLN 14,500 monthly, while Members of the Supervisory Board earn PLN 12,000 monthly each.

Additional monthly remuneration is granted for the participation in standing committees of the Supervisory Board: 50% of monthly remuneration of a Supervisory Board Member for the first committee and 25% for participating in another committee. No additional remuneration is paid to a Member of the Supervisory Board who sits on three or more Standing Committees of the Supervisory Board. However, a Supervisory Board Member performing the function of the Chairperson of the Audit Committee of the Supervisory Board of the bank is entitled to additional remuneration equal to 80% of the sum of remuneration he or she is paid.

 

Remuneration paid in 2017
(in PLN)		 Remuneration paid in 2016
(in PLN)
1. Maciej Leśny 367,235 367,235
2. Stephan Engels – –
3. Tomasz Bieske 319,656 –
4. Andre Carls 279,000 252,000
5. Marcus Chromik – –
6. Janusz Fiszer 162,000 –
7. Mirosław Godlewski 162,000 –
8. Jörg Hessenmüller 210,000 –
9. Thorsten Kanzler 216,000 216,000
10. Michael Mandel – –
11. Teresa Mokrysz 220,225 220 225
12. Agnieszka Słomka-Gołębiowska 248,435 221,435
Wiesław Thor* 37,812 149,435
Waldemar Stawski* 55,812 221,435
Marek Wierzbowski* 54,000 216,000
Martin Zielke** – –
Martin Blessing*** – –
In total 2,332,175 1,863,765

* The term of office expired on 30 March 2017.

** Martin Zielke resigned from his position as of December 15, 2016.

*** Martin Blessing resigned from his position as of April 30, 2016.

Activity of the Supervisory Board and its Committees in 2017

In 2017, the Supervisory Board held six meetings and adopted 81 resolutions. The resolutions covered all areas of the bank’s operation and were consistent with the scope of supervisory functions specified in generally applicable laws, the Banking Law, KNF recommendations, corporate governance principles, and the bank’s By-laws and the Rules of the Supervisory Board.

In 2017, at the meetings of the Supervisory Board, the current results of the mBank Group and particular business segments were systematically discussed and assessed in relation to the financial plan.

Attendance*
Tomasz Bieske (since March 30, 2017) 4/4
Andre Carls 5/6
Marcus Chromik 6/6
Jörg Hessenmüller 5/6
Stephan Engels 6/6
Mirosław Godlewski (since March 30, 2017) 3/4
Janusz Fiszer (since March 30, 2017) 4/4
Thorsten Kanzler 6/6
Maciej Leśny 6/6
Michael Mandel 5/6
Teresa Mokrysz 5/6
Agnieszka Słomka-Gołębiowska 6/6
Waldemar Stawski (until March 30, 2017) 2/2
Wiesław Thor (until March 30, 2017) 2/2
Marek Wierzbowski (until March 30, 2017) 2/2

* Attendance at meetings/number of meetings during the term of office.

The Executive Committee worked until March 30, 2017. During that period the Committee conducted the initial selection of candidates for the Supervisory Board and three new candidates for the position of Management Board Members in accordance with the Adequacy Policy. Following the Supervisory Board’s resolution of March 30, 2017, the new Executive and Nomination Committee was created and took over the functions and responsibilities of the Executive Committee. The Executive and Nomination Committee exercised ongoing supervision over the activity of the bank in the periods between the Supervisory Board’s meetings in 2017. In October 2017, the Executive and Nomination Committee conducted the initial recruitment for the position of a Management Board Member.

The Audit Committee was regularly informed about the results and the financial position of the bank and the Group. It received and analysed information on actions taken in the key risk areas.

The Audit Committee held four meetings in 2017 and discussed, among others, the following:

  • Compliance of the process of preparing financial statements with the applicable law.
  • Cooperation with the external auditor.
  • Conclusions from the audit of the annual financial statements of mBank Group for 2016.
  • Scope of the audit of the annual financial statements for 2017.
  • Assessment of the internal control system at mBank in 2017.
  • Ongoing supervision of proposed changes to mBank’s internal control system in 2017.
  • Ongoing supervision over the activity of the Internal Audit Department.
  • Approval of reports of the Compliance Department.
  • Approval of the policy on mBank’s selection of the external auditor.
  • Approval of the policy on mBank’s cooperation with the external auditor.

 

The Audit Committee provided the Supervisory Board with, among others, recommendations on the approval of: Reports of the Management Board on the activity of mBank and mBank Group for 2016, and the financial statements for 2016, the annual report on compliance risk management at mBank in 2016, the report of the Outsourcing Coordinator on the implementation of the Outsourcing Policy at mBank in 2016 and the Audit Plan of the Internal Audit Department for 2017.

In 2017, the Risk Committee held four meetings, during which it regularly discussed the following matters: changes in the economic situation in Poland and their impact on the bank’s situation, quarterly risk reports (capital adequacy, liquidity risk, credit risk, market risk, interest rate risk, non-financial risks including operational risk, key events in the risk area), as well as a range of issues related to mBank’s portfolios, including dedicated presentations on corporate, investment, financial markets and retail portfolio risks. The Committee held an additional meeting in May during which it discussed the limits on mBank Group’s exposure to the State Treasury and the central bank.

Other major issues considered by the Committee included the largest exposures, development of risk parameters, and loan loss provisions at the bank and in the Group. Furthermore, in accordance with its work plan, the Risk Committee discussed in detail the effectiveness of particular portfolios of the bank, analysing risk parameters, change directions and forecasts. It also reviewed the management strategies covering individual risks of mBank Group and the strategic risk limits. In addition, the Risk Committee issued a positive recommendation regarding the approval of the new Concentration Risk Management Strategy of mBank Group.

In 2017, the Risk Committee issued:

  • 13 recommendations concerning exposures subject to single entity risk in accordance with the parameters defined by the Supervisory Board;
  • 23 decisions concerning approval of a range of strategies and policies and other risk management documents requiring the Supervisory Board’s approval.

 

The Remuneration Committee held four meetings in 2017 and issued 14 decisions. During its meetings the Remuneration Committee discussed and issued recommendations for the Supervisory Board regarding among others:

  • Adoption of periods in 2017 during which Risk Takers could acquire bonds and/or shares issued by mBank S.A. under the Incentive Programme.
  • Assessment and definition of the MbO objectives for the Members of the Management Board of mBank.
  • The Risk Takers Identification Policy of mBank.
  • The Remuneration Policy for mBank employees.
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