Spanish reg' approves stewardship code reform
Spanish market authority has approved the reform of its good governance code for local listed companies. These amendments focus primarily on four areas: increasing women's presence on company boards; improving relevance of companies' non-financial and sustainability information; addressing reputational risks; clarifying rules around board members' remunerations.
New recommendations of the code state that Spanish listed firms must tally at least 40% women board members by the end of 2022 and that until this deadline, the proportion of women shall not be less than 30%. Moreover, companies must increase gender diversity among senior managers. A pair of recommendations adresses circumstances around the dismissal of a company's chief executive if he/she damaged the reputation of the concerned firm. The board can take action if necessary without awaiting court decisions. More transparency is also brought into issues of chief executive officers of Spanish listed firms resigning or stepping down following an agreement with the board. Another recommendation advises Spanish listed companies to have a minimum of two non-executive directors within their executive committees, with at least one being independent.
Regarding board members' remunerations, the CNMV recommends that the payment for the termination or the extinction of a contract shall not exceed more than two years of salary. In addition, it must include amounts deriving from long-term pension schemes and post-contractual non-competition covenants.