• The Government introduces objective criteria for the appointment of the four independent directors and limits the mandate
  • The vote of the independent 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 last October in which four independent directors were first admitted to the State financial agency. Now, the objective selection criteria such as prestige and training, incompatibilities and the mandate for three years can be extended to another three for one time only. The independent directors will have a double vote when it comes to matters related to the business of the financier and will therefore be a majority on the board.

The Public Sector Law Regime Law (October 2015) modified the RD-law that regulates the ICO, and established that the General Council is formed by the president and 10 members (until then 9). Of these, four members must be independent (not personal at the service of the Public Sector) and with a term of three years renewable once. It was also established that the appointment and removal of all 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, there are: recognized commercial and professional honorability, having adequate knowledge and experience, not incurring potential permanent conflicts of interest and refraining from developing activities on their own or other people's account that entail effective competition with the ICO It is also required not to be linked to credit institutions; financial credit establishments; investment service companies; collective investment institutions, venture capital entities and so on; 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 paying attention to the interest of the ICO, as well as keeping secret information, data, reports or confidential records to which they have had access in the performance of their duties, even when there is ceased in him. The termination may occur by resignation accepted by the Minister of Economy and Competitiveness, by expiration of the mandate in the case of independent members or by termination in the case in their public office of the members from this sector. The unexpected absence of suitability in the case of independents will also be cause for withdrawal, as well as for serious breach of confidentiality duties or having incurred a conflict of interest.

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