• The shareholders meeting will approve the remuneration policy on a binding basis, at least every three years
  • The capital needed to exercise the rights of minorities 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 on the boards of directors for sex with less presence

The Council of Ministers has approved the referral to the General Courts of the Bill (PL), which modifies the Capital Companies Law whose purpose is to improve the 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 addresses aspects such as the remuneration of directors, the duration of their mandate, appointments, situations of conflicts of interest 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 objective 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 a annex a series of concrete regulatory proposals for the reform of the current Capital Companies Law. The modifications of this norm affect mainly in the listed companies, although innovations of draft are also introduced in all the societies. These modifications are as follows:


All societies

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

    • The distinction between null agreements (violation of a legal precept) and voidable (other infractions) disappears.
    • The challenge period is extended from 40 days to 1 year.
    • As for legitimization, at least 1% of the capital is required to be able to exercise the challenge action (currently it varies depending on whether it is 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%.
  • General meeting attendance: The maximum number of actions that could be required to attend the meeting from 1 per thousand to 1,000 shares is reduced.
  • Fractionation and divergent vote: The entities that act on behalf of various people may split and delegate the vote. It would be the case of foreign investors who make their investments through a chain of financial intermediaries that act as fiduciary holders on behalf of the last investor.
  • Right to information: It is proposed to reduce the maximum period in which shareholders can request information from 7 to 5 days before the meeting is held.
  • Associations and shareholder forums: Registration is established in a special register of the CNMV and compliance with a series of accounting and information obligations.


a) All societies

  • Duties and liability regime of administrators:

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

Listed Companies

  • Composition: The procedures for selecting directors will facilitate the appointment of directors.
  • President and CEO: When both charges fall on the same person, the appointment of the chairman of the board will require the favorable vote of two thirds of the board members. In addition, a coordinating advisor must be appointed among the independents (lead independent director) who is empowered to request the convening of the board, expand the agenda, coordinate non-executive directors and direct the chairman's assessment.
  • Evaluation of the board and its commissions: The board of directors must carry out an annual evaluation of its operation and that of its commissions.
  • Appointments and Remuneration Committee: The boards of directors must imperatively constitute a commission for appointments and remuneration. The appointments and remuneration committee will establish a representation objective for the sex less represented on the board of directors and will elaborate guidelines on how to achieve said objective.
  • Competitions: Tax risks are included as a non-delegable competence of the board, within the control and risk management policy; that is, the approval of investments or operations that have a special fiscal risk and the determination of the company's fiscal strategy.
  • Administrator term: 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 attributed to them. The remuneration system should be aimed at promoting the profitability and sustainability of society in the long term.
  • CEOs: The remuneration regime is clarified for the exercise of executive powers of the directors. In those 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 by the appointments and remuneration committee, at least every three years. This policy will contain at least:

    • Total compensation to directors for their status as such
    • The remuneration system for executive directors (description of the components, overall amount of the annual fixed remuneration and its variation in the reference period, the setting parameters of the remaining components and all the terms and conditions of their contracts as premiums, compensation, etc.)
    • The council will decide the individual distribution always within the remuneration policy.
    • Any modification will require board approval and no payment can be made as long as it has not been approved by the board.
  • Annual report on remuneration: It will continue to be submitted to the board's advisory vote but, in the case of a negative vote, a new remuneration policy proposal must be made.


  • It is obliged to publish in the annual accounts report the average payment period to suppliers. Companies that are not listed and do not submit abbreviated annual accounts will also publish this information on their website, if they have one.
  • Equally, corporations listed must publish on their website the average payment period to their suppliers.

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