Board of Director's Committee

Pursuant to Chilean Corporation Law, as amended by Law No. 19705, Lan Airlines must have a board of directors' committee composed of no less than three board members. Lan Airlines has established a three-person committee of its board of directors, which, among other duties, is responsible for:

  • Examining the reports of Lan Airlines' external auditors, the balance sheets and other financial statements submitted by Lan Airlines' administrators to the shareholders, and issuing an opinion with respect thereto prior to their presentation to the shareholders for their approval.
  • Proposing external auditors and rating agencies to the board of directors.
  • Evaluating and proposing external auditors and rating agencies.
  • Reviewing internal control reports pertaining to related party transactions.
  • Examining and reporting on all related-party transactions.
  • Reviewing the pay scale of Lan Airlines' senior management.

Under Chilean law LAN is required, to the extent possible, to appoint a majority of independent directors to the board of directors committee. The corresponding independence requirements are set forth in Chilean Corporation Law, as amended by Law No. 19705, and relate to the relationship between the directors and the shareholders that control a corporation. A director is considered independent when he or she can be elected regardless of the voting of the controlling shareholders.

Pursuant to U.S. regulations, we are required to have an audit committee of at least three board members, which complies with the independence requirements set forth in Rule 10A-3 under the Securities Exchange Act of 1934. Given the similarity in the functions that must be performed by our Board of Directors' Committee and the audit committee, our Board of Directors' Committee serves as our Audit Committee for purposes of Rule 10A-3 under the Securities Exchange Act of 1934.

As of November 30, 2007, all of the members of our Board of Directors´ Committee, which also serves as our Audit Committee, were independent under Rule 10A-3 under the Securities Exchange Act of 1934.

On May 25, 2010, the Board of Directors of LAN unanimously appointed directors Messrs. Jorge Awad Mehech, Juan Gerardo Jofré Miranda and Ramón Eblen Kadis as members of its Committee of Directors. All three Directors qualify as independent in accordance with the provisions of article 50 bis of Law N°18.046 on Corporations.

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