Responsible Corporate Governance

The reliability and transparency of our corporate governance policies at FEMSA is essential to our long-term success.

We have a long-standing commitment to reporting our results with objectivity and integrity, fulfilling the requirements of Mexican GAAP, and exercising our oversight responsibilities throughout the company in accordance with the highest principles of business ethics. Our corporate governance principles provide a framework for the operation of our company as we strive to work towards our shareholders' best interests.

FEMSA is subject to Mexican legislation, which is the basis for our corporate governance practices. Reflecting FEMSA's international focus, our shares are listed on the Mexican Bolsa (BMV) and the New York Stock Exchange (NYSE). For this reason, we comply with the corporate governance standards set forth in the Mexican Securities Market Law (Ley del Mercado de Valores) and with the applicable provisions for foreign issuers contained in the Sarbanes-Oxley Act of the United States.

In addition, our corporate governance standards adhere to the principles of the Code of Best Corporate Governance Practices (Código de Mejores Prácitcas Corporativas), sponsored by the Mexican Consejo Coordinador Empresarial.

The Board of Directors is at the head of our corporate governance system and is responsible for determining our corporate strategy; defining and overseeing the implementation of our key values and vision; and the approval of related-party transactions and transactions not in the ordinary course of business.

In addition to management, the Board of Directors is supported by its committees: the Audit Committee, the Operations and Strategy Committee, and the Corporate Practices and Nominations Committee. The Board of Directors appoints and supervises the committees, which assist and make recommendations to the Board in their respective areas of responsibility.

Pursuant to Rule 303A.11 of the Listed Company Manual of the NYSE, we are required to provide a summary of the significant ways in which our corporate governance practices differ from those required for U.S. companies under the NYSE listing standards. We are a Mexican corporation with shares listed on the Mexican Stock Exchange. Our corporate governance practices are governed by our bylaws, the Mexican Securities Law and the regulations issued by the CNBV. We also disclose the extent of compliance with the Mexican Code of Principles and Best Corporate Governance (Código de Principios y Mejores Prácticas de Gobierno Corporativo), which was created by a group of Mexican business leaders and was endorsed by the Mexican Stock Exchange.

The table below discloses the significant differences between our corporate governance practices and the NYSE standards.


NYSE Standards


Our Corporate Governance Practices



Directors independence: A majority of the board of directors must be independent.

Directors independence: Pursuant to the Mexican Securities Law, we are required to have a board of directors with a maximum of 21 members, 25% of whom must be independent.


The Mexican Securities Law sets forth, in article 26, the definition of “independence,” which differs from the one set forth in Section 303A.02 of the Listed Company Manual of the NYSE. Generally, under the Mexican Securities Law, a director is not independent if such director: (i) is an employee or a relevant officer of the company or its subsidiaries; (ii) is an individual with significant influence over the company or its subsidiaries; (iii) is a shareholder or participant of the controlling group of the company; (iv) is a client, supplier, debtor, creditor, partner or employee of an important client, supplier, debtor or creditor of the company; or (v) is a family member of any of the aforementioned persons.


In accordance with the Mexican Securities Law, our shareholders are required to make a determination as to the independence of our directors at an ordinary meeting of our shareholders, though the CNBV may challenge that determination. Our board of directors is not required to make a determination as to the independence of our directors.


Executive sessions: Non-management directors must meet at regularly scheduled executive sessions without management.

Executive sessions: Under our bylaws and applicable Mexican law, our non-management and independent directors are not required to meet in executive sessions.


Our bylaws state that the board of directors will meet at least four times a year, following the end of each quarter, to discuss our operating results and progress in achieving strategic objectives. Our board of directors can also hold extraordinary meetings.


Nominating/Corporate Governance Committee: A nominating/corporate governance committee composed entirely of independent directors is required.

Nominating/Corporate Governance Committee: We are not required to have a nominating committee, and the Mexican Code of Best Corporate Practices does not provide for a nominating committee.





However, Mexican law requires us to have a Corporate Practices Committee. Our Corporate Practices Committee is composed of four members, and as required by the Mexican Securities Law and our bylaws, the four members are independent, and its chairman is elected at the shareholders’ meeting.


Compensation Committee: A compensation committee composed entirely independent directors is required.

Compensation Committee: We do not have a committee that exclusively oversees compensation issues. Our Corporate Practices Committee, composed entirely of independent directors, reviews and recommends management compensation programs in order to ensure that they are aligned with shareholders’ interests and corporate performance.


Audit Committee: Listed companies must have an audit committee satisfying the independence and other requirements of Rule 10A-3 under the Exchange Act and the NYSE independence standards.

Audit Committee: We have an Audit Committee of three members, as required by the Mexican Securities Law. Each member of the Audit Committee is an independent director, and its chairman is elected at the shareholders’ meeting.



Equity compensation plan: Equity compensation plans require shareholder approval, subject to limited exemptions.

Equity compensation plan: Shareholder approval is not required under Mexican law or our bylaws for the adoption and amendment of an equity compensation plan. Such plans should provide for general application to all executives. Our current equity compensation plans have been approved by our board of directors.



Code of business conduct and ethics: Corporate governance guidelines and a code of conduct and ethics are required, with disclosure of any waiver for directors or executive officers.

Code of business conduct and ethics: We have adopted a code of ethics, within the meaning of Item 16B of SEC Form 20-F. Our code of ethics applies to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions as well as to our directors and other officers and employees. Our code of ethics is available on our website at If we amend the provisions of our code of ethics that apply to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website at the same address.