The CNMV publishes its analysis of listed companies’ corporate governance reports for 2019

The Spanish Securities and Exchange Commission (CNMV) presents its findings about the annual corporate governance reports for financial year 2019 approved by listed companies during 2020.

The CNMV publishes its analysis of listed companies’ corporate governance reports for 2019
January 28, 2021

The Spanish Securities and Exchange Commission (CNMV) presents its findings about the annual corporate governance reports for financial year 2019 approved by listed companies during 2020.

The CNMV published its assessment on the annual corporate governance reports of issuing entities for financial year 2019.

According to the assessment, the degree of compliance with the Code of Good Governance guidelines by listed companies remained unchanged from last year, at 85.7%. Along with the 7.1% of partial compliance, there was therefore overall compliance, i.e., full and partial compliance with the guidelines, of 92.8% (0.1 percentage points more than in 2018).

The guidelines with the highest degree of compliance (i.e., those reportedly complied with by all listed companies) include: (i) that the audit committee ask the board to file the accounts with no exceptions; (ii) that the board do not propose the dismissal of independent board members before the end of their term unless there is just cause; and (iii) that all board members express their opposition if they consider any of the proposals contrary to corporate interest.

The guidelines with the lowest degree of compliance remain (i) that high capitalization companies (i.e., Ibex-35 companies) have separate appointment and remuneration committees; and (ii) live broadcasting of shareholders’ meetings on the companies’ websites. Guidelines (i) and (ii) have a 37.8% and 44.9% degree of compliance respectively.

Regarding the ownership structure, floating capital slightly fell from 44.3% in 2018 to 43.9%. In 63% of listed companies, the addition of significant shares and blocks of shares held by the board exceeded 50% of the company’s share capital.

As for shareholder engagement, average attendance at general meetings fell slightly in 2019: from 72% to 71.2%. The share of companies using remote voting systems increased by six percentage points to 47.2%.

Regarding the composition of the board of directors, the average size remains at 10 members, as in 2018. Boards with over 15 members are still almost exclusively the preserve of Ibex-35 companies (3.1% overall). The degree of independence reached at least 50% in 67.6% of Ibex-35 companies (63.6% in 2018). Also, 74.2% of companies from the Spanish Continuous Market had at least one third of independent board members (70% in 2018).

As for the types of chairpersons of the boards, 52.9% of Ibex-35 companies have executive chairpersons, whereas 20.5% have proprietary chairpersons. For the remaining companies in the Continuous Market, the percentages are 50% and 40.2% respectively. The share of independent chairpersons overall remains low, but in 2019 it increased from 12.8% to 13.4%.

In 2019, the average age of board members was 60.1 years old. Of all listed companies, only 18 executive board members were younger than 45. Regarding board member rotation, 29.5% of board members had been in their position for over eight years. Executive board members had the longest terms, whereas independent ones remained board members for the shortest time periods.

Finally, the percentage of women on the boards increased from 19.7% in 2018 to 23.4%, and from 23.1% to 27.5% for Ibex-35 companies. However, almost 10% of listed companies had no female representation. Therefore, companies generally did not meet the 30% share of women recommended for 2020. After being reviewed in July 2020, this minimum share was raised to 40% for 2022. Regarding senior management, the percentage of both female senior executives and companies with female representation in senior management decreased in 2019. Note that this Code of Good Governance requires boards to implement diversity promotion policies, including measures allowing for a significant share of female senior executives.


January 28, 2021