Actualidad Spain

Corporate governance and remuneration annual reports

Spanish National Securities Commission Circular 7/2015

The Spanish National Securities Commission Circular 7/2015, modifying Circular 5/2013, on the annual corporate governance report models for listed companies, and for others that issue securities that are admitted for trading on official securities markets, and Circular 4/2013, 12th June, establishing the annual report models for disclosing the remunerations of directors of listed companies and of the members of the board and of the control committees of savings banks that issue securities admitted for trading on official securities markets.

The numerous legislative initiatives published last year in Spain to support good corporate governance and transparency have made it necessary to modify the models for the annual corporate governance report to be produced by listed limited companies, savings banks and other listed bodies; and also the models for the remuneration report on board directors of listed limited companies and listed savings banks.

Thus, as a consequence of the passing of the law modifying Corporate Enterprises Act 31/2014 and the Good Governance Code for listed companies, Spain’s National Securities Commission has published this Circular to adapt said models to the provisions in these regulations.

The Circular modifies the 2013 Circulars 4 and 5. In the case of Circular 5/2013, the changes, mainly found in Appendix 1, are as follows:

  1. The inclusion of the new recommendations contained in the Code of Good Governance for Listed Companies;
  2. The suppression of certain sections referring to the recommendations in the unified Code, which have become mandatory since the passing of Act 31/2014; and
  3. The inclusion of information about the committees that have been set up in the company.

With regard to Circular 4/2013, the section “Remunerations policy expected in forthcoming years” is excised, in order to adapt the model to article 541 of the Corporate Enterprises Act 31/2014, which has eliminated the minimum content  reporting the remuneration policy expected in the future. Nevertheless, said information should still figure in savings banks’ reports, pursuant to article 31.1 of Act 26/2013 for savings banks and bank foundations.