CORPORATE GOVERNANCE

Administration of the company is the responsibility of a Board of Directors, which is currently made up of six (6) regular directors and no designated alternates. Telesites’s bylaws stipulate that the Board of Directors have between five and twenty-one directors and an equal number of alternate directors. Directors need not be shareholders, but a majority of the directors of the alternate directors must be Mexican citizens and elected by Mexican shareholders.

Directors and alternate directors are elected or reelected at each annual general meeting of shareholders. In accordance with the Mexican Securities Market Law (LMV), the determination as to the independence of Telesites’s directors is made by Telesites’s shareholders, though the Mexican Banking and Securities Commission may challenge this determination. Pursuant to our bylaws and the Mexican Securities Market Law, at least 25% of Telesites’s directors must be independent. Currently close to 70% of our directors are independent, significantly higher than the proportion required by law. Meetings of the Board of Directors may be legally called to order if the majority of its members are present.

Our bylaws also state that the members of the Board of Directors are elected for a term of one year. Pursuant to the General Law on Commercial Corporations (LGSM), however, members of the Board continue in their positions after the expiration of their terms for up to an additional thirty-day (30) period if new members are not elected and substitutes have either not been designated for the departing member of the Board or have not assumed their roles. Furthermore, in certain circumstances provided under the LMV, the Board of Directors may elect temporary directors who then may be elected or replaced at the shareholders’ meetings.