• The shareholders' meeting will approve the remuneration policy on a binding basis, at least every three years
  • The capital necessary to exercise minority rights is reduced from 5% to 3%
  • The position of administrator must be exercised for a maximum period of four years, compared to the current six
  • A representation objective will be established in the boards of directors for sex with less presence

The Council of Ministers has approved the referral to the Cortes Generales of the Draft Law (PL) amending the Capital Companies Law, the purpose of which is to improve corporate governance of companies. The rule was submitted to the hearing process after its approval by the Government in the first round last December. It covers aspects such as the remuneration of directors, the duration of their mandate, appointments, conflict of interest situations and the duties of loyalty and diligence of administrators, among other aspects.

The PL incorporates proposals for regulatory changes raised by the Committee of Experts on Corporate Governance. This commission was created by Agreement of the Council of Ministers of May 10, 2013 with the aim of preparing a study on best practices in corporate governance and promoting initiatives in this regard.

The Commission published its conclusions on October 14 and incorporated as an annex a series of specific regulatory proposals to reform the current Capital Companies Law. Modifications to this rule affect mainly listed companies, although new developments are also introduced in all companies. These modifications are the following:


All societies

  • Intervention in matters of management and essential operations: The board is allowed to issue management instructions unless otherwise provided in the statutes. Likewise, the Board is attributed the decision on essential operations (those in which the volume exceeds 25% of the total assets on the balance sheet).
  • Voting: The proposed resolutions must be voted on separately for those matters that are substantially independent.
  • Conflicts of interest between shareholders: It is proposed to extend to all companies the prohibition on voting by the partner who benefits in very clear cases of conflict of interest.
  • Challenge of social agreements:

    • The distinction between null agreements (infringement of a legal provision) and voidable (other infringements) disappears.
    • The challenge period is extended from 40 days to 1 year.
    • As for the legitimation, at least 1% of the capital is required to be able to exercise the challenge action (currently it varies depending on whether they are null or voidable agreements). In listed companies this percentage will be 1 per thousand.

b) Listed companies

  • Shareholder rights: The social capital necessary to exercise minority rights is reduced from 5% to 3%.
  • Attendance at the general meeting: The maximum number of shares that could be required to attend the meeting is reduced from 1 per thousand to 1,000 shares.
  • Fractionation and divergent vote: Entities acting on behalf of various people may split and delegate the vote. This would be the case of foreign investors who make their investments through a chain of financial intermediaries who act as fiduciary holders on behalf of the last investor.
  • Right to information: It is proposed to lower the maximum period in which shareholders can request information from 7 to 5 days before the meeting is held.
  • Associations and shareholders forums: The inscription in a special register of the CNMV and the fulfillment of a series of accounting and information obligations are established.


a) All companies

  • Duties and liability regime of administrators:

    • The duties of diligence and loyalty and the procedures that should be followed in the event of a conflict of interest are more precisely typified.
    • The scope of liability is extended, beyond compensation for the damage caused, including the return of unjust enrichment. The filing of the social responsibility action is facilitated by reducing the necessary participation (from 5 to 3% in listed companies) and allowing its direct filing (without waiting for the meeting) in case of breach of the duty of loyalty.
  • Powers of the board of directors: A new article is included with the non-delegable powers of the board, in order to reserve the decisions corresponding to the essential core of the management and supervision of the company.

Listed companies

  • Composition: The selection procedures for directors will facilitate the appointment of directors.
  • President and CEO: When both positions fall on the same person, the appointment of the president of the council will require the favorable vote of two thirds of the members of the council. In addition, a coordinating director must be appointed from among the independentlead independent director) who is empowered to request the call of the board, expand the agenda, coordinate non-executive directors and direct the evaluation of the president.
  • Evaluation of the council and its committees: The board of directors must carry out an annual evaluation of its operation and that of its committees.
  • Appointments and remuneration committee: The boards of directors must imperatively constitute an appointments and remuneration committee. The appointments and remuneration committee will establish a representation objective for the least represented sex on the board of directors and will prepare guidelines on how to achieve this objective.
  • Competences: The tax risks are included as an inalienable competence of the council, within the risk control and management policy; that is, the approval of investments or operations that have special tax risk and the determination of the company's tax strategy.
  • Duration of the administrator position: It is proposed that the maximum period of each appointment does not exceed 4 years, compared to the current 6.


All societies

  • Programmatic references: The remuneration of the administrators must be reasonable, in accordance with the economic situation of the company and with the functions and responsibilities assigned to them. The remuneration system should be oriented to promote the profitability and sustainability of society in the long term.
  • CEOs: The remuneration regime for the exercise of executive powers of the directors is clarified. In these cases, a contract must be signed with the director that will include the different remuneration items. It will be approved by a qualified majority of the council and the abstention of the interested parties.

Listed companies

  • Remuneration policy: It must be approved by the board (binding vote), after a report from the appointments and remuneration committee, at least every three years. This policy will contain, at least:

    • Total remuneration to directors for their status as such
    • The remuneration system for executive directors (description of the components, global amount of the annual fixed remuneration and its variation in the reference period, the parameters for fixing the other components and all the terms and conditions of their contracts as premiums, compensation, etc.)
    • The board will decide the individual distribution always within the remuneration policy.
    • Any modification will require approval of the board and no payment can be made until it has been approved by the board.
  • Annual remuneration report: It will continue to be subject to an advisory vote by the board, but in the event of a negative vote, a new proposal for the remuneration policy must be made.


  • It is obliged to publish in the memory of the annual accounts the average period of payment to suppliers. Companies that are not listed and do not present abbreviated annual accounts will also publish this information on their website, if they have it.
  • Likewise, corporations listed companies must publish on their website the average payment period to their suppliers.

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