On 22 March 2013 the Spanish Ministry of the Economy and Competition approved a ministerial order that contains rules on the content and structure of the annual report on corporate governance, the annual report on director remuneration and other informative documentation that must be issued by listed public limited companies (sociedades anónimas, or SAs), savings banks and other entities that issue securities that are negotiable on the official markets (Ministerial Order ECC/461/2013 – the "Ministerial Order").  

The Ministerial Order adapts corporate governance rules to the obligations provided in the Spanish Sustainable Economy Act 2/2011, of 4 March (the "Sustainable Economy Act"), and Royal Decree Law 11/2010, of 9 July, on the governing bodies and other aspects of the legal regime applicable to savings banks. It was published in the Spanish Official State Journal (Boletín Oficial del Estado) on 23 March 2013 and entered into force on the following day.

We include below a summary of the main new elements introduced by the Ministerial Order, the ultimate primary objective of which, especially as far as listed SAs are concerned, is to expand the information that must be included in the annual report on corporate governance and to include an obligation to submit an annual report on director remuneration:

  1. Annual report on corporate governance

The company's ownership structure – restrictions on takeovers and non-EU markets

The annual report on corporate governance will include, among other things, information on any restrictions to the transfer of securities, voting rights and, in particular, any restrictions that could hinder control being obtained over the company by acquiring its shares on the market.

As provided in the Sustainable Economy Act, the Ministerial Order establishes that information must be provided on any securities that are not negotiated on a regulated EU market and, if so, on the different classes of shares and the rights and obligations attaching to each class.

Functioning of the General Meeting – restrictions in the articles of association and reinforced quorums

Information must now be provided, among other things, on the existence of restrictions in the articles of association that establish minimum shareholdings to attend the general meeting; the address and method of accessing the company's webpage, corporate governance information and shareholder rights.

Likewise, information must now be provided on any reinforced quorums for voting on specific resolutions – quorums over and above those established by law – and on any rules related to the modification of the company's articles of association. In particular, the report will indicate the majorities required to modify the articles of association and, if any, the rules established to protect the rights of shareholders if the articles of association are ultimately modified.

Finally, the report must point out whether or not certain decisions resulting in a structural modification of the company will be subject to the approval of the general shareholders meeting, even when this is not required by law.

Structure of the company's management – gender diversity and self-appraisal

The annual report on corporate governance will now have to include information on gender diversity on the company's board of directors. Information must be provided on the number of women directors, on the evolution of the relative proportion of men and women on the board over the previous four years and the steps that have been taken to ensure gender balance among the board's members. If the number of women directors on the board is low or zero despite the steps taken, the board must explain why.

The report will indicate whether the board of directors has made an appraisal of its performance for the year in question and, if so, the extent to which the appraisal has triggered significant changes in its internal organisation, processes or procedures.

Finally, the Ministerial Order includes an obligation – already established in the Sustainable Economy Act – regarding significant or material contracts. As a result, the annual report on corporate governance must provide information on any significant or material contracts entering into force, modified or terminating in the event of a change of control pursuant to a takeover, as well as the impact that this would have, except where disclosing this information would have a serious detrimental impact on the company. However, those companies under a legal obligation to publish that information cannot hide behind that exception.

Director classes – definition of independent directors

The Ministerial Order also establishes a new definition in relation to certain classes of director, in particular independent director.

In the case of executive or proprietary directors, they remain as defined in the Unified Code of Good Governance. However, a time restriction has been established in the case of independent directors. As a result, any director who has held that position for a continuous term exceeding 12 years can no longer be considered as an independent director.

Despite the above limitation, a transitional period has been established for independent directors who, at 30 June 2013, have held that position for a period exceeding 12 years. If so, they will continue to be considered independent directors until the end of their current term of office.

  1. Annual report on director remuneration

Content of the report

The Ministerial Order establishes the minimum information that must be contained in the annual report on director remuneration, the structure of which was already established in the Sustainable Economy Act.

The report must, at least, contain information on the director remuneration policy for the current year, with special reference – among other things – to variable remuneration items, the most significant changes made to the remuneration policy and information on the preparatory work that has been performed to devise the policy. The report should also provide a general forecast of the remuneration policy for the coming years, an overall summary of the remuneration policy for the previous year and an itemised list of the remuneration received during the past year. Information must also be included on the results of the advisory voting process at the annual general meeting to which the report was submitted for approval, as provided in the Sustainable Economy Act.


As in the case of the annual reports on corporate governance, the annual report on director remuneration must be published as a reportable event (hecho relevante) and notified to the Spanish securities market regulator, the Comisión Nacional del Mercado de Valores, which will publish it on its webpage.

  1. Other matters of interest
  • The Ministerial Order primarily affects listed SAs and savings banks, although it also contains provisions applicable to other entities that issue securities negotiable in the official securities markets.
  • The Ministerial Order contains provisions on the information resources and relevant information related to listed companies and savings banks, establishing the minimum content that must be included on their webpages.
  • The legal regime established for savings banks and other entities that issue securities that are negotiable in the official securities markets is similar to the regime established for listed companies, although differences do exist depending on the peculiarities of each specific type of company.