• The Government introduces objective criteria for the appointment of the four independent directors and limits the mandate
  • The independent vote will be double when it comes to making decisions on matters related to the financial business.

The Council of Ministers has approved the Royal Decree (RD) which modifies certain precepts of the Statutes of the Official Credit Institute (ICO) with the aim of introducing improvements in corporate governance in its operation. This norm develops the provisions of the Law on the Legal Regime of the Public Sector of last October, in which four independent directors were admitted for the first time to the State financial agency. Now the objective selection criteria such as prestige and training, incompatibilities and a term of office for three years, extendable to another three once, are made explicit in a regulatory standard. Independent directors will have a double vote when it comes to matters pertaining to the financier's business and, therefore, will be a majority on the board.

The Public Sector Legal Regime Law (October 2015) modified the RD-law that regulates the ICO, and established that the General Council is made up of the president and 10 members (until then 9). Of these, four members must be independent (not personnel serving the Public Sector) and with a three-year term, extendable once. It was also established that the appointment and removal of all the members corresponds to the Council of Ministers, at the proposal of the Minister of Economy and Competitiveness. These members will have a double vote in those decisions related to financial operations of assets and liabilities of the ICO business.

The RD approved today by the Council of Ministers develops these modifications. Regarding the requirements to be appointed independent director include: recognized commercial and professional honor, having adequate knowledge and experience, not incurring potential permanent conflicts of interest and refraining from carrying out activities on their own account or on behalf of third parties that entail effective competition with the ICO. It is also required not to be linked to credit institutions; financial credit establishments; investment services companies; collective investment institutions, venture capital entities, etc. as well as its subsidiaries, group to which they belong or associations.

It is also pointed out that the members of the General Council must exercise their functions always attending to the interest of the ICO, as well as keeping secret on the information, data, reports or confidential background information to which they have had access in the performance of their duties, even when they have ceased in it. The dismissal may be produced by resignation accepted by the Minister of Economy and Competitiveness, by the expiration of the mandate in the case of the independent members or by the termination in the public office of the members from this sector. The unsuccessful absence of suitability in the case of the independent will also be cause for withdrawal, as well as for serious breach of the duties of confidentiality or having incurred a conflict of interest.

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