Recommendations of the new good governance code for listed companies (I): shareholders’ meetings

As recently mentioned in another blog entry, the new good governance code, published by the Spanish National Securities Market Commission (CNMV) on February 24, 2015, contains 64 voluntary recommendations grouped into three main blocks: general aspects, shareholders’ meetings and board of directors. The new version of the Code has eliminated some of the recommendations of the previous code, modified others and introduced new recommendations.

The new Code is aimed at listed companies, that is, companies whose shares are listed on an official secondary securities market, regardless of their size or market capitalization. These companies will have to give an account of their follow-up of the different recommendations in their annual corporate governance report to be submitted to the CNMV in 2016.

Today we will look at the main new features of the recommendations relating to the shareholders’ meeting:

• Publication on the website of the reports on the independence of the auditor, the functioning of the audit, appointments and remuneration committees, related-party transactions and the corporate social responsibility policy (R6), on the call of the annual shareholders’ meeting.

• Live broadcast of shareholders’ meetings via the company website (R7).

• Permanent publication of requirements and procedures that will be accepted in order to evidence ownership of shares, the right to attend, the right to vote and the right to grant proxies for shareholders’ meetings; such requirements must also facilitate the exercise of these rights, in a non-discriminatory manner (R9).

• Where a shareholder exercises their right to supplement the agenda or present new proposals:
  • Immediate dissemination by the company.
  • Publication of the specimen attendance card or proxy form with the necessary modifications.
  • Voting on items or proposals with the same voting rules as the board of directors.
  • And, following the shareholders’ meeting, communication of the breakdown of the votes obtained in each case (R10).

• Establishment of a stable, general policy on fees for attending shareholders’ meetings, if the company intends to pay attendance fees (R11).

The document prepared by our Corporate Governance and Corporate Social Responsibility experts on the three main blocks of recommendations contained in the new Code for listed companies can be found on our website.

Garrigues Corporate/Commercial Law Department