F. Degree to which the good governance recommendations have been followed
Indicate the degree of conformance of the company to the recommendations of the Unified Code on Good Governance.
In the event of non-compliance with any of them, explain the recommendations, rules, practices or criteria applied by the Company.
1.
The By-Laws of listed companies do not limit the maximum number of votes that can be cast by a single shareholder, or impose other obstacles to the takeover of the Company by means of the acquisition of its shares on the market.
See sections: A.9, B.1.22, B.1.23, B.1.24 and E.1, E.2
| x | Complies |
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Explain |
|---|
2.
When both the parent company and a Company controlled by it are listed companies, they both provide detailed public disclosure on:
a) Their respective areas of activity, and any business dealings between them, as well as between the controlled listed Company and other companies belonging to the group;
b) The mechanisms in place to resolve any conflicts of interest that may arise.
See sections: C.4, C.5, C.6 and C.7
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|
Complies |
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Complies in part |
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Explain | x | Not applicable |
|---|
3.
Even if not expressly required under applicable commercial Laws, transactions involving a structural change of the Company and, in particular, the following, are submitted to the shareholders at the General Meeting of Shareholders for approval:
a) The transformation of listed companies into holding companies through “subsidiarization” or reallocating core activities to controlled entities that were previously carried out by the Company itself, even if the latter retains full ownership of the former;
b) The acquisition or disposal of key operating assets, when it involves an actual change in the corporate purpose;
c) Transactions whose effect is tantamount to the liquidation of the Company.
| x | Complies |
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Complies in part |
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Explain |
|---|
Although the case described under letter a) of this Recommendation is not expressly covered in the Regulations of the General Meeting of Shareholders, Chapter III of Act 3/2009 of 3 April on the structural amendments of private companies, expressly governs the segregation (full transfer on account of universal succession of one or several parts of the assets of one company, each of which sets an economic unit, to one or several companies, and the segregated company receives shares of the beneficiary companies) and the “subsidiarization” (full transfer of the assets of a company to a newly incorporated company, in exchange for the full stock of the beneficiary company) of private companies, by submitting the above referred transactions (segregation and subsidiarization) to the regulation of split-off, where appropriate. Therefore, such transactions which basically encompass the case referred to under letter a) of this Recommendation should be subject to the prior approval of the Annual General Meeting of Shareholders, pursuant to the provisions of the above referred Act.
Likewise, the cases described under letters b) and c) are expressly provided in Section 6.j) of the Regulations of the General Meeting of Shareholders as issues which need to be approved by the AGM.
4.
Detailed proposals of the resolutions to be adopted at the Annual General Meeting, including the information to which recommendation 28 refers, are made public at the time of publication of the notice of the General Meeting of Shareholders.
| x | Complies |
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Explain |
|---|
5.
Matters that are substantially independent are voted on separately at the General Meeting of Shareholders, in order to allow the shareholders to express their voting preferences separately. This rule applies, in particular:
a) To the appointment or ratification of directors, issues which shall be voted on individually;
b) In the event of amendments of the Articles of Association, to each article or group of articles that is substantially independent of one another.
See section: E.8
| x | Complies |
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Complies in part |
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Explain |
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6.
Companies allow split votes so financial intermediaries who are recorded as having shareholder status but act for different clients can divide their votes in accordance with the instructions given by such clients.
See section: E.4
| x | Complies |
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Explain |
|---|
7.
The Board performs its duties with a unity of purpose and independent judgment, affording equal treatment to all shareholders in furtherance of the corporate interests, which shall be understood to mean the optimization, in a sustained fashion, of the financial value of the Company.
It likewise ensures that in its dealings with stakeholders, the Company abides by the laws and regulations, fulfils its obligations and contracts in good faith, respects the customs and good practices of the industries and territories in which it operates and upholds any other social responsibility standards to which it has voluntarily adhered.
| x | Complies |
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Complies in part |
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Explain |
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8.
The Board assumes responsibility, as its core mission, for approving the company’s strategy and the organization required to put it into practice, and to ensure that Management meets the goals set while pursuing the company’s interest and corporate purpose. As such, the Board in plenary session reserves for itself the right to approve:
a) The Company’s policies and general lines of strategy, and in particular:
i) The Strategic or business Plan as well as the management goals and annual budgets;
ii) The investment and financing policy;
iii) The design of the structure of the corporate group;
iv) The corporate governance policy;
v)The corporate social responsibility policy;
vi) The policy for compensation and assessment of the performance of senior managers;
vii) The risk control and management policy, as well as the periodic monitoring of internal information and control systems.
viii)The dividend policy and the policy regarding treasury stock and, especially, the limits thereto.
See sections: B.1.10, B.1.13, B.1.14 and D.3
b) The following decisions:
i)At the proposal of the chief executive of the Company, the appointment and, if applicable, removal of senior managers, as well as their severance packages.
See section: B.1.14
ii) The compensation of directors and, in the case of executive directors, the additional compensation to be paid for their executive duties and other terms of their contracts.
Ver epígrafe: B.1.14.
iii) The financial information that the Company must periodically disclose publicly due to its status as listed company.
iv) Investments or transactions of all kinds which are strategic in nature due to the large amount or special characteristics thereof, unless approval thereof falls upon the shareholders at the General Meeting of Shareholders.
v) The creation or acquisition of interests in special-purpose entities or entities registered in countries or territories regarded as tax havens, as well as any other transactions or operations of a similar nature whose complexity might impair the transparency of the group.
c) Transactions made by the Company with directors, with significant shareholders or shareholders with Board representation, or with other persons related thereto (“related-party transactions”).
However, Board authorization need not be required in connection with related-party transactions that simultaneously meet the following three conditions:
1st They are governed by standard-form agreements applied on an across-the-board basis to a large number of clients;
2nd They are conducted at prices or rates generally set by the party acting as supplier of the goods or services in question;
3rd The amount thereof is not higher than 1% of the annual revenues of the Company.
It is recommended that related-party transactions be approved by the Board after favourable report of the Audit and Control Committee or, where appropriate, such other committee handling the same function; and that the directors affected thereby should neither exercise nor delegate their votes, and should be absent from the meeting room while the Board deliberates and votes on the transaction.
It is recommended that the powers granted herein to the Board are conferred without the power of delegation, except for those mentioned under b) and c) above, which may, for urgent reasons, be adopted by the Executive Committee subject to subsequent ratification by the Board in plenary session.
See Sections C.1 and C.6
| x | Complies |
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Complies in part |
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Explain |
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9.
In order to operate effectively and in a participatory manner, the Board ideally is comprised of no less than five and no more than fifteen members.
See section: B.1.1
| x | Complies |
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Explain |
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10.
Non-executive proprietary and independent directors are a vast majority on the Board and the number of executive directors is the minimum necessary number, bearing in mind the complexity of the corporate Group and the percentage interest held by the executive directors in the Company’s share capital.
See sections: A.2, A.3, B.1.3 and B.1.14.
| x | Complies |
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Complies in part |
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Explain |
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11.
If there is an external director who cannot be deemed either proprietary or independent, the Company explains such circumstance and the links such director maintains with the company or its managers or with its shareholders.
See section B.1.3
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Complies | x | Not applicable |
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12.
Among non-executive directors, the relation between the number of proprietary directors and independent directors reflects the proportion existing between the share capital of the Company represented by proprietary directors and the rest of its capital.
This strict proportionality standard can be relaxed so that the weight of proprietary directors is greater than would correspond to the total percentage of the share capital that they represent:
1st In large cap companies, where few or no equity stakes attain the legal threshold as significant, but there are shareholders holding interests with a high absolute value.
2nd In case of companies with a plurality of shareholders represented on the Board but not otherwise related.
See sections: B.1.3, A.2 and A.3
| x | Complies |
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Explain |
|---|
13.
The number of independent directors represents at least one-third of the total number of directors.
See section: B.1.3
| x | Complies |
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Explain |
|---|
14.
The status of each director is explained by the Board at the General Meeting of Shareholders at which the shareholders are to make or ratify their appointment and that such status is confirmed or reviewed, as the case may be, annually in the Annual Corporate Governance Report, after verification by the Nomination and Remuneration Committee. Said report also discloses the reasons for the appointment of proprietary directors at the proposal of shareholders controlling less than 5% of the share capital, as well as the reasons for not having accommodated formal petitions, if any, for presence on the Board from shareholders whose equity stake is equal to or greater than that of others at whose proposal proprietary directors have been appointed.
See sections: B.1.3 and B.1.4
| x | Complies |
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Complies in part |
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Explain |
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15.
Where female directors are few or non-existent, the Board explains the reasons for this situation and the measures taken to correct it; and in particular, the Nominating Committee takes steps to ensure that, when new vacancies are filled:
a)Recruitment processes do not have an implied bias that hinders the recruitment of female directors;
b)The Company deliberately seeks women with the target professional profile and includes them among the potential candidates.
See section: B.1.2., B.1.27 and B.2.3
| x | Complies |
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Complies in part |
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Explain |
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Not applicable |
|---|
16.
The Chairman, being responsible for the effective running of the Board, ensures that directors receive adequate information in advance of Board meetings; promotes debate and the active involvement of directors during Board meetings; safeguards their rights to freely take a position and express their opinion; and, working with the chairmen of the appropriate committees, organizes and coordinates regular assessments of the Board and, where appropriate of the Chief Executive Officer.
See section: B.1.42
| x | Complies |
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Complies in part |
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Explain |
|---|
17.
Where the Chairman of the Board is also the chief executive officer, one of the independent directors is authorized to request the calling of a Board meeting or the inclusion of new items on the agenda; to coordinate and echo the concerns of non-executive directors; and to lead the Board’s assessment of the Chairman.
See section: B.1.21
| x | Complies |
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Complies in part |
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Explain |
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Not applicable |
|---|
18.
he Secretary of the Board takes particular care to ensure that the Board’s actions:
a) Adhere to the letter and the spirit of laws and their implementing regulations, including those approved by the regulatory authorities;
b) Comply with the Articles of Association and the Regulations of the General Meeting of Shareholders, the Board of Directors´ Regulations and other regulations of the Company;
c) Are informed by those good governance recommendations included in this Unified Code as the Company has subscribed to.
And, in order to safeguard the independence, impartiality and professionalism of the Secretary, his/her appointment and removal are reported by the Nominating Committee and approved by the Board in plenary session; and that such appointment and removal procedures are set forth in the Board’s Regulations.
See section: B.1.34
| x | Complies |
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Complies in part |
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Explain |
|---|
19.
The Board meets with the frequency required to perform its duties efficiently, in accordance with the calendar and agendas set at the beginning of the fiscal year, and that each Director is entitled to propose items of the agenda that were not originally included therein.
See sections: B.1.29
| x | Complies |
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Complies in part |
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Explain |
|---|
20.
Directors’ absences are limited to unavoidable cases and quantified in the Annual Corporate Governance Report. And when there is no choice but to grant a proxy, it is granted with instructions.
See sections: B.1.28 and B.1.30
| x | Complies |
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Complies in part |
|
Explain |
|---|
21.
Where directors or the Secretary express concerns about a proposal or, in the case of the directors, regarding the running of the Company, and such concerns have not been resolved at a Board meeting, such concerns are recorded in the minutes at the request of the person expressing them.
| x | Complies |
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Complies in part |
|
Explain |
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Not applicable |
|---|
22.
The Board in plenary session assesses the following on a yearly basis:
a) The quality and efficiency of the running of the Board;
b) On the basis of the report submitted by the Nomination and Remuneration Committee, the performance of their duties by the Chairman of the Board and by the chief executive officer;
c) The running of its Committees, on the basis of the report they submit;
See section: B.1.19
| x | Complies |
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Complies in part |
|
Explain |
|---|
23.
All directors are able to exercise the right to request any additional information they require on matters within the Board’s competence. Unless the Articles of Association or the Board provide otherwise, such requests are addressed to the Chairman or the Secretary of the Board.
See section: B.1.42
| x | Complies |
|
Explain |
|---|
24.
All directors are entitled to call on the Company for the advice they need to carry out their duties. The Company provides suitable channels for the exercise of this right, which, in special circumstances, may include external advice at the Company’s expense.
See section: B.1.41
| x | Complies |
|
Explain |
|---|
25.
Companies organize induction programs for new Directors to rapidly and adequately acquaint them with the Company and its corporate governance rules. Directors are also offered refresher training programs when circumstances so advise.
| x | Complies |
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Complies in part |
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Explain |
|---|
26.
Companies require that directors devote sufficient time and effort to perform their duties efficiently, and, as such:
a) Directors inform the Nomination and Remuneration Committee of their other professional duties, in case they might detract from the necessary dedication;
b) Companies lay down rules about the number of boards on which their directors may sit.
See sections: B.1.8, B.1.9 and B.1.17
| x | Complies |
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Complies in part |
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Explain |
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27.
The proposal for the appointment or re-election of directors that the Board submits to the shareholders at the General Meeting of Shareholders, as well as their interim appointment through the co-option system, are approved by the Board:
a) On the proposal of the Nomination and Remuneration Committee, as regards independent directors;
b) After report of the Nomination and Remuneration Committee, as regards the remaining directors.
See sections: B.1.2 and B.2.4
| x | Complies |
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Complies in part |
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Explain |
|---|
28.
28.Companies post the following information regarding directors on their websites, and keep such information updated:
a) Professional and biographical profile;
b) Other Boards of Directors of listed or unlisted companies on which they sit;
c) Indication of the director’s category, stating, as regards proprietary directors, the shareholder they represent or to whom they are related.
d) Date of their first and subsequent appointments as a Company director; and
e) Shares held in the Company and options thereon held by them.
| x | Complies |
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Complies in part |
|
Explain |
|---|
Ver epígrafes: E.12
29.
Independent directors do not hold office as such for a straight period of more than 12 years.
See sections: B.1.2
| x | Complies |
|
Explain |
|---|
Having reviewed the personal and professional circumstances of the three independent directors concerned by the above referred time limit, the Board of Directors considered that the higher experience and knowledge of the company acquired by such three independent directors has contributed largely to their better discharge of their duties, without their independence being questioned for the mere lapse of time in their tenure.
30.
Proprietary directors tender their resignation when the shareholder they represent sells its entire shareholding interest. The appropriate number of them does likewise when such shareholder reduces its interest to a level that requires the reduction of the number of its proprietary directors.
See sections: A.2, A.3 and B.1.2
| x | Complies |
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Complies in part |
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Explain |
|---|
31.
The Board of Directors does not propose the removal of any independent director prior to the expiration of the term, set in the Articles of Association, for which he/she was appointed, except where good cause is found by the Board upon a prior report of the Nomination and Remuneration Committee. In particular, good cause shall be deemed to exist whenever the director has failed to perform the duties inherent in his /her position or comes under any of the circumstances described in section III.5 (Definitions) of this Code.
The removal of independent directors may also be proposed as a result of Tender Offers, mergers or other similar corporate transactions that entail a change in the share capital structure of the Company, when such changes in the structure of the Board follow from the proportionality standard mentioned in Recommendation 12.
See section: B.1.2, B.1.5 and B.1.26
| x | Complies |
|
Explain |
|---|
Section 24 of the Board of Directors´ Regulations requires a prior report of the Nomination and Remuneration Committee for the proposed early dismissal by any independent director before his/her tenure expires, but it has not been deemed necessary to include into these regulations the provision pursuant to which this proposal need not be submitted unless there is good cause. Anyway, no proposal for the early dismissal of any independent director has been submitted so far.
32.
Companies establish rules obliging directors to report and, if appropriate, to resign in those instances as a result of which the credit and reputation of the Company might be damaged and, in particular, they require that such directors report to the Board any criminal charges brought against them, and the progress of any subsequent proceedings.
If a director is indicted or tried for any of the crimes described in Section 124 of the Spanish Corporation Act, the Board examines the matter as soon as practicable and, in view of the particular circumstances thereof, decides whether or not it is appropriate for the director to continue to hold office. And the Board provides a substantiated account thereof in the Annual Corporate Governance Report.
See sections: B.1.43 and B.1.44
| x | Complies |
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Complies in part |
|
Explain |
|---|
33.
All directors clearly express their opposition when they feel that any proposed resolution submitted to the Board might be contrary to the best interests of the Company. And in particular, independent directors and the other directors not affected by the potential conflict of interest do likewise in the case of decisions that could be detrimental to the shareholders lacking Board representation.
Where the Board adopts material or reiterated resolutions about which a director has expressed serious reservations, such director draws the pertinent conclusion and if he/she chooses to resign, sets out the reasons in the letter referred to in the next Recommendation.
This Recommendation also applies to the Secretary of the Board, even if he/she is not a director.
| x | Complies |
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Complies in part |
|
Explain |
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Not applicable |
|---|
34.
Directors who give up their place before their tenure expires, through resignation or otherwise, explain the reasons in a letter sent to all members of the Board. Without prejudice to such withdrawal being communicated as a relevant fact, the reason for the withdrawal is explained in the Annual Corporate Governance Report.
See section: B.1.5
| x | Complies |
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Complies in part |
|
Explain |
|
Not applicable |
|---|
35.
The compensation policy approved by the Board specifies at least the following points:
a) The amount of the fixed components, with a breakdown showing the fees, if any, for attending the meetings of the Board and its Committees and an estimate of the fixed annual fixed compensation they give rise to;
b) The items of the variable remuneration, including, in particular:
i) The types of directors to which they apply, as well as an explanation of the relative weight of variable to fixed compensation items.
ii) Performance evaluation criteria used to calculate entitlement to compensation in shares, share options or any other variable component;
iii) Main parameters and grounds for any system of annual bonuses or other non-cash benefits; and
iv) An estimate of the absolute amount of variable compensation arising from the proposed compensation plan, as a function of the degree of compliance with benchmark assumptions or targets.
c) The main characteristics of pension systems (for example, supplementary pensions, life insurance and similar systems), with an estimate of the amount thereof or the equivalent annual cost.
d) Terms and conditions that must be included in the contracts of executive directors performing senior management duties, which will include:
i) Term;
ii) Notice periods; and
iii) Any other provisions relating to hiring bonuses, as well as indemnity or golden parachute provisions in the event of early or other termination of the contractual relationship between the company and the executive director.
See section: B.1.15
| x | Complies |
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Complies in part |
|
Explain |
|---|
36.
Remuneration paid by means of delivery of shares in the Company or companies that are members of the Group, share options or instruments indexed to the price of the shares, and variable compensation linked to the Company’s performance or pension schemes is confined to executive directors.
This recommendation shall not apply to the delivery of shares when such delivery is subject to the condition that the directors hold the shares until they cease to hold office as directors.
See sections: A.3 and B.1.3
| x | Complies |
|
Explain |
|---|
37.
The remuneration of non-executive directors is such as is necessary to compensate them for the dedication, qualifications and responsibility required by their position, but is not so high as to jeopardize their independence.
| x | Complies |
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Explain |
|---|
38.
The compensation linked to Company results takes into account any qualifications included in the external auditor’s report that reduce such earnings.
| x | Complies |
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Explain |
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Not applicable |
|---|
39.
In the case of variable compensation, compensation policies include technical safeguards to ensure that such compensation reflects the professional performance of the beneficiaries thereof and not simply the general performance of the markets or of the industry in which the Company does business or circumstances of this kind.
| x | Complies |
|
Explain |
|
Not applicable |
|---|
40.
The Board submits a report on director compensation policy to the advisory say on pay vote of the shareholders at a General Shareholders’ Meeting, as a separate item on the agenda This report is made available to the shareholders separately or in any other manner that the Company deems appropriate.
Such report shall focus especially on the compensation policy the Board has approved for the current year, as well as on the policy, if any, established for future years. It will address all the points referred to in Recommendation 35, except those potentially entailing the disclosure of commercially sensitive information. It will emphasize the most significant changes in such policies with respect to the policy applied during the fiscal year prior to that to which the General Shareholders’ Meeting refers. It shall also include an outline of the manner in which the compensation policy was applied in such prior fiscal year.
Likewise, the Board shall report on the role played by the Nomination and Remuneration Committee in the preparation of the remuneration policy and, where external advice would have been provided, the Board shall report on the identity of the external consultants who provided it.
See section: B.1.16, B.2.4 and E
| x | Complies |
|
Explain |
|
Not applicable |
|---|
41.
The Annual Report lists the individual compensation of directors during the fiscal year, including:
a) A breakdown of the compensation of each director, to include where appropriate:
i) Attendance per diem or other fixed compensation received as a director;
ii)The additional compensation received as chairman or member of a Board committee;
iii) Any compensation received under profit-sharing or bonus schemes, and the reason for the accrual thereof;
iv) Contributions on the director’s behalf to defined-contribution pension plans; or any increase in the director’s vested rights, in the case of contributions to defined-benefit plans;
v) Any severance package agreed or paid;
vi) Any compensation received as a director of other companies in the group;
vii) Compensation for the performance of senior management duties by executive directors;
viii)Any item of compensation other than those listed above, of whatever nature and provenance within the group, especially when it is deemed to be a related-party transaction or when the omission thereof detracts from a true and fair view of the total compensation receive.
b) A breakdown of any delivery to directors of shares, share options or any other instrument indexed to the price of the shares, specifying:
i) Number of shares or options awarded during the year, and the terms and conditions for the exercise thereof;
ii) Number of options exercised during the year, specifying the number of shares involved and the exercise price;
iii) Number of options outstanding at the end of the year, specifying their price, date and other requirements for exercise;
iv) Any change during the year in the terms for the exercise of previously-awarded options.
c) Information on the relationship, in such past fiscal year, between the compensation received by executive directors and the profits or other measures of performance of the Company.
| x | Complies |
|
Complies in part |
|
Explain |
|---|
42.
Where there is an Executive Committee (hereinafter, the “Executive Committee”), the breakdown of its members by director category is similar to that of the Board, and its secretary is the Secretary of the Board.
See sections: B.2.1 and B.2.6
| x | Complies |
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Complies in part |
|
Explain |
|
Not applicable |
|---|
43.
The Board is always kept informed of the matters dealt with and the resolutions adopted by the Executive Committee, and all members of the Board receive a copy of the minutes of the meetings of the Executive Committee.
| x | Complies |
|
Explain |
|
Not applicable |
|---|
44.
In addition to the Audit Committee mandatory under the Stock Exchange Act, the Board of Directors forms a single Nomination and Remuneration Committee as a separate committee of the Board, or a Nomination Committee and a Remuneration Committee.
The rules governing the make-up and operation of the Audit and Control Committee and the Nomination and Remuneration Committee or committees are set forth in the Board´s Regulations, and include the following:
a) The Board appoints the members of such Committees, taking into account the background, knowledge, qualifications and experience of the Directors and the responsibilities of each Committee, discusses its proposals and reports, and receives a report, at the first meeting of the full Board following the meetings of such committees, on their activities and the work.
b) These Committees are formed exclusively of non-executive directors and have a minimum of three members. The foregoing is without prejudice to the attendance of executive directors or senior managers, when expressly resolved by the members of the Committee.
c) The Chairmen of the Committee are independent directors.
d) They may receive external advice, whenever they feel this is necessary for the discharge of their duties.
e) Minutes are prepared of their meetings, and a copy sent to all Board members.
See Sections: B.2.1 and B.2 3
| x | Complies |
|
Complies in part |
|
Explain |
|---|
45.
Supervising compliance with internal codes of conduct and corporate governance rules is entrusted to the Audit and Control Committee, the Nomination and Remuneration Committee or, if they exist separately, to the Compliance or Corporate Governance Committee.
| x | Complies |
|
Explain |
|---|
46.
The members of the Audit and Control Committee and, particularly, the Chairman thereof, are appointed taking into account their background, knowledge and experience in accounting, auditing and risk management matters.
| x | Complies |
|
Explain |
|---|
47.
Listed companies have an internal audit function which, under the supervision of the Audit and Control Committee, ensures the smooth operation of the information and internal control systems.
| x | Complies |
|
Explain |
|---|
48.
The head of internal audit submits to the Audit and Control Committee his/her annual work plan; reports to it directly on any issues arising in the execution of such plan; and submits an activities report to it at the end of each fiscal year.
| x | Complies |
|
Complies in part |
|
Explain |
|---|
49.
Risk control and management policy specifies at least:
a) The different types of risk (operational, technological, financial, legal, reputational, etc.) the Company is exposed to, including contingent liabilities and other off-balance sheet risks among financial or economic risks.
b) The determination of the risk level the Company sees as acceptable;
c) Measures in place designed to mitigate the impact of the risks identified, should they materialize;
d) The internal reporting and control systems to be used to monitor and manage the above risks, including contingent liabilities and off-balance sheet risks.
See section: D
| x | Complies |
|
Complies in part |
|
Explain |
|---|
50.
It is incumbent on the Audit and Control Committee:
1st With respect to the internal control and reporting systems:
a) To monitor the preparation and the integrity of the financial information relating to the company and, if appropriate, to the group, checking compliance with legal requirements, the appropriate demarcation of the scope of consolidation, and the correct application of accounting standards.
b) To periodically review internal control and risk management systems so main risks are properly identified, managed and disclosed.
c) To ensure the independence and efficacy of the internal audit function; propose the selection, appointment, reappointment and removal of the head of the internal audit service; propose the department’s budget; receive regular reports on its activities; and verify that senior management takes into account the findings and recommendations of its reports.
d) To establish and supervise a mechanism whereby staff can report, confidentially and, if appropriate, anonymously, potentially significant irregularities within the company that they detect, in particular financial or accounting irregularities.
2nd With respect to the external auditor:
a) To make recommendations to the Board for the selection, appointment, reappointment and replacement of the external auditor, and the terms of its engagement.
b) To receive regular information from the external auditor on the audit plan and the results of the implementation thereof, and check that senior management takes its recommendations into account.
c) To monitor the independence of the external auditor, to which end:
i) The company reports a change of auditor to the CNMV as a relevant fact, accompanied by a statement of any disagreements with the outgoing auditor and the reasons for the same.
ii) The Committee ensures that the company and the auditor adhere to current regulations on the provision of non-audit services, the limits on the concentration of the auditor’s business and, in general, all other regulations established to safeguard the independence of the auditors;
iii) In the event of resignation of the external auditor, the Committee investigates the circumstances that may have given rise thereto.
d) In the case of groups, the Committee favours the auditor of the Group assuming responsibility for the audits of the companies that form part thereof.
See sections: B.1.35, B.2.2, B.2.3 and D.3
| x | Complies |
|
Complies in part |
|
Explain |
|---|
51.
The Audit and Control Committee may cause any employee or officer of the company to appear before it, and even order their appearance without the presence of any other manager.
| x | Complies |
|
Explain |
|---|
52.
The Audit and Control Committee reports to the Board, prior to the passing thereby of the relevant resolutions, on the following matters specified in Recommendation 8:
a) The financial information that the Company must periodically make public due to its status as a listed company. The Committee should ensure that interim financial statements are prepared under the same accounting standards as the annual financial statements and, to this end, consider whether a limited review by the external auditor is appropriate.
b) The creation or acquisition of interests in special-purpose entities or entities registered in countries or territories considered tax havens, and any other transactions or operations of a comparable nature whose complexity might impair the transparency of the Group.
c) Related-party transactions, unless such prior reporting duty has been assigned to another supervision and control committee.
See sections: B.2.2and B.2.3
| x | Complies |
|
Complies in part |
|
Explain |
|---|
53.
The Board of Directors endeavours to present the annual accounts to the shareholders at the Annual General S Meeting without reservations or qualifications in the auditor’s report and, in the exceptional instances where they do exist, both the Chairman of the Audit and Control Committee and the auditors give a clear account to the shareholders of the content and scope of such reservations or qualifications.
See section: B.1.38
| x | Complies |
|
Complies in part |
|
Explain |
|---|
54.
The majority of the members of the Nomination Committee –or of the Nomination and Remuneration Committee, if one and the same– are independent directors.
See sections: B.2.1
| x | Complies |
|
Explain |
|
Not applicable |
|---|
55.
The Nomination and Remuneration Committee has the following duties, in addition to those stated in the earlier Recommendations:
a)To assess the qualifications, background knowledge and duties and qualifications required of the candidates to fill each vacancy, and decide the time and dedication necessary for them to properly perform their duties.
b) To examine or organize, in the manner it deems appropriate, the succession of the Chairman and the chief executive and, if appropriate, make proposals to the Board for such succession to take place in an orderly and well-planned manner.
c) To report on senior manager appointments and removals that the chief executive proposes to the Board.
d) To report to the Board on the gender diversity issues discussed in Recommendation 14 of this Code.
See sections: B.2.3
| x | Complies |
|
Complies in part |
|
Explain |
|
Not applicable |
|---|
56.
The Nomination and Remuneration Committee consults with the Company’s Chairman and chief executive, especially on matters relating to executive directors.
And that any board member may request that the Nomination and Remuneration Committee consider possible candidates to fill vacancies for the position of director, if it finds them suitably qualified.
| x | Complies |
|
Complies in part |
|
Explain |
|
Not applicable |
|---|
57.
The Nomination and Remuneration Committee is responsible for the following duties, in addition to those set forth in the earlier recommendations:
a) To propose to the Board of Directors:
i) The compensation policy for directors and senior managers;
ii) The individual compensation of executive directors and other terms of their contracts.
iii) The basic terms and conditions of the contracts with senior managers.
b) To ensure compliance with the compensation policy set by the Company.
See sections: B.1.14 and B.2.3
| x | Complies |
|
Complies in part |
|
Explain |
|
Not applicable |
|---|
58.
The Nomination and Remuneration Committee consults with the Chairman and chief executive of the Company, especially on matters relating to executive directors and senior managers.
| x | Complies |
|
Explain |
|
Not applicable |
|---|
