INTEGRATED REPORT 2015 BRADESCO

Governance structure

Formal decision making processes at Bradesco are established based on transparency and respect for relations with shareholders, employees, third-party workers and other stakeholders. The well-structured organizational culture incorporates mechanisms aligned with best corporate governance practices, ensuring effective and independent risk management, internal control and internal audit processes. The Board of Directors comprises eight members, most of whom came up through the Organization, ensuring strategic planning aligned with the bank’s mission. In line with good governance practice, the positions of chairman of the Board of Directors and CEO are separated.

Bradesco’s administrative structure comprises the Board of Directors and the Executive Board. The Board of Directors consists of eight members, seven of whom are external, including the chairman (Lázaro de Mello Brandão), and one who is internal (the CEO Luiz Carlos Trabuco Cappi), with re-election permitted. The Statutory Board currently consists of 83 members, most of whom have developed their careers in the Organization. These career executives, a number of whom came from acquisitions, mirror the Bradesco culture. All strategic decisions are based on consensus.

Six committees provide support for the Board of Directors. Two of these are statutory (Audit and Remuneration) and four are non-statutory (Ethical Conduct; Internal Controls and Compliance; Integrated Risk Management and Capital Allocation; and Sustainability). Diverse other executive committees report to the Executive Board.

In addition to the Audit Committee, the Organization has a permanent Fiscal Council, elected by the shareholders, and an Internal Audit area, subordinated to the Board of Directors, the main bodies responsible for overseeing the administrative/operational structure.

The Corporate Governance Committee provides support for the Executive Board, its attributions being related to compliance with the instructions established by the Board of Directors in the Bradesco Corporate Governance Policy. One of the document’s fundamental directives is respect for the rights of shareholders, investors, clients, employees and other stakeholders, ensuring fair and equal treatment and, under no circumstances, tolerating discrimination.

There is further information on corporate governance as well as on the composition of all the internal entities and the curriculum vitae of their members on the Bradesco website(www.bradesco.com.br), via the link Relacionamento com Investidores

1. Company controlled by the members of the Board of Directors, Statutory Directors and some Banco Bradesco executive superintendents.
2. The Bradesco Administration (Executive Board and Board of Directors) make up the Board of Trustees of the Fundação Bradesco, the foundation’s highest decision making body.
Note: Base date: December 2015. Includes 3,669,932 ordinary shares (ON) and 15,583,262 preferential (PN) shares in the treasury.

Prevention of Illegal Acts

Bradesco conducts its businesses and relations based on ethics and transparency, concepts that permeate its organizational culture, whose values and principles are set forth in the Code of Ethical Conduct and in the Sector Codes of Ethical Conduct: Accounting and Financial Administration; Procurement; Financial and Capital Markets; Internal Auditors and Inspectors; and the Grupo Bradesco Seguros and BSP Empreendimentos Imobiliários S.A.

Preventing and Combating Money Laundering and Finance for Terrorism

The program is based on specific policies, standards, procedures and systems which establish guidance for detecting and preventing the use of the Organization’s structure and/or products and services for purposes of laundering money and financing terrorism.

The initiative is supported by the Executive Anti-Money Laundering and Financing of Terrorism Committee, which is responsible for assessing the effectiveness of the work done and the need for aligning procedures with established regulations and best Brazilian and international practices.

Atypical or suspicious cases identified are evaluated by the Assessment of Suspicious Transactions Commission, comprising various areas of the Organization, which decides whether they should be reported to the regulatory authorities.

Anti-Corruption DMA Anti-Corruption

Preventing and combating corruption and bribery are ongoing activities, endorsing the Organization’s commitment to ethical conduct in business and relationships.

The Anti-Corruption Program is supported by the Code of Ethical Conduct, by the Corporate Anti-Corruption Policy and by the Ethical Conduct Committee, all approved by the Board of Directors.

Training G4-SO4

In 2015, training courses focused on the policies, standards and procedures for preventing illegal acts were held. These consisted of talks and in-house programs for the Board of Directors, the Executive Board, and departments with greater exposure to risk. Other departments were encouraged to conduct the training.

Employee training consists of programs in diverse formats, such as handbooks, videos, classroom and distance courses, as well as talks for the areas that require them.

For 2016, training and refresher courses are scheduled for managers and employees.

channels for reporting breaches

The channels for reporting breaches, available on the Investors Relations website (www.bradesco.com.br/ir > Corporate Governance), are also used for receiving reports about illegal acts from the diverse stakeholder groups.

Governance of Sustainability G4-34

For further information, access

http://goo.gl/Acpl3n
http://goo.gl/ZePnEA
(only in Portuguese)

The sustainability strategy and its ramifications are monitored directly by the Board of Directors through the Sustainability Committee. Coordinated by the executive managing director and the Investor Relations director, this committee is composed of three vice presidents and two Board members and meets at least once a quarter. Sustainability-related subjects are linked with other bodies, such as the Ethical Conduct Committee, the Executive Credit Committee and the Executive Efficiency Committee. Sustainability-related matters are also included in the strategic planning of all the Organization’s areas.

In 2015, the governance structure for sustainability was reinforced with the creation of a Sustainability Commission, comprising 11 departments and subordinated to the Sustainability Committee, the purpose being to aid the Committee and to add value for the Organization.

Internal Controls DMA Audit/Former FS9

The effectiveness of the Organization’s internal controls is sustained by qualified professionals, well defined and effective processes and technology compatible with the requirements of the businesses.

The controls help to ensure that the Organization achieves its goals with reasonable assurance as to the appropriate management of the businesses in line with the targets established and in compliance with laws and external regulations, internal policies, standards and procedures, and the applicable codes of conduct and self-regulatory codes. They operate as a secondary line of defense, conducting adherence tests on the controls aimed at detecting the level at which they are applied. Given the complexity of its products, services, activities and processes, the Organization needs an internal control structure which, in addition to being efficient, is flexible enough to adapt rapidly to changes in the operational and business environments.

In accordance with Equator Principles methodology, the Bank commissions independent audits by specialized consultants. In the event non-conformance is detected, according to the Internal Controls Standard, an action plan should be established to mitigate the risk. With respect to social and environmental risks, a number of recommendations were made and actions plans were established. These are monitored periodically by specific forums. Regarding audit systems for social and environmental risk assessment policies, in 2015 two inventories for credit operations were implemented aimed at assisting in the evaluation of related risks.

The internal controls methodology in place at Bradesco is also aligned with the guidelines of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), version 2013, which proposes a model for internal controls and for managing corporate risks and fraud as a means of improving organizational performance and oversight. The existence, execution and effectiveness of the controls that ensure acceptable levels of risk in the Organization’s processes are certified by the area responsible and the results are reported to the Audit, Internal Controls and Compliance Committees, as well as to the Board of Directors. In 2015, a Disclosure of Information to the Market Standard was established, aimed at controlling and cataloging the information disclosed to external stakeholders, such as periodic reports, financial and accounting statements, including the annual and quarterly reports, offerings and material facts.

Independent validation of management models and measurement of risks and capital

Bradesco uses internal models to manage risks and capital. These are developed based on statistical, economic, financial and mathematical theories, as well as on the knowledge of specialists who support and facilitate the establishment of critical topics and promote standardization and speed in decision making.

To identify, mitigate and control risks inherent to the internal models, represented by potential adverse consequences arising from decisions based on incorrect or obsolete parameters, there is an independent validation process, the main objective of which is to verify whether the models work in accordance with the established targets and whether their results are appropriate. This validation involves the application of a rigorous testing program, which addresses matters such as the appropriateness of processes, governance and construction of the models and their premises, the results being reported to the managers, Internal Audit and to the Internal Controls and Compliance, Integrated Risk Management and Capital Allocation Committees.

Information Security DMA Privacy

Information security in the Organization comprises a set of controls represented by procedures, processes, organizational structures, policies, standards and information technology solutions. The goal is compliance with the principles of protecting the confidentiality, availability and integrity of information. The Executive Board and the other hierarchical levels are involved in decisions regarding information security by means of the Information Security Commission and the Executive Corporate Security Committee.

Bradesco Seguros – Compliance

Goals and Targets for 2016

On October 19, 2015, the Grupo Bradesco Seguros formalized the revision of the Sector Code of Ethical Conduct, the first version having been released in 2009. This version makes a clearer presentation of aspects related to compliance with law No. 12,846/13. For 2016, the Group will invest in informing employees about the principles and guidelines in the new version, in particular aspects related to preventing and combating money laundering, fraud and corruption.