Sebastián Albella, president of the National Commission of the Market of Values (CNMV), has submitted a series of changes in the Code of Good Governance of listed companies. The relevant changes affecting the gender diversity of boards of directors, and controls to combat potential cases of corruption in companies.

the latest modification of The Code, which dates 2015 and is currently in force, recommends that the companies in the exchange are required to have policies for the selection of directors to promote that in 2020 the number of female directors, representing at least 30% of the total. With the modification introduced now the SEC says that the "less-represented sex" assume at least 40% of the total number of administrators. That is to say, hardens the suggestion of the supervisor of stock in a double sense: it increases by 10 percentage points in the recommended weight that should be women and, in addition, to comply with the recommendation it is not enough to say that you have a policy aimed at encouraging diversity.

At the end of fiscal 2019, and according to a study prepared by The COUNTRY, the Ibex 35 companies fail to meet the goal of 30% since the middle of counselors was only 27.6%. Of the members of the selective index, 16 organizations already meet the quota recommended, compared to 12 in 2018. "It is true that there has been an acceleration in the incorporation of female directors in recent years and it is feasible that throughout this year will reach 30%. However, as we have already reached 2020 and taking into account the social reality that surrounds us, we felt it appropriate to raise the goal of management to 40%," argues Albella.

the amendment of The Code will be submitted to consultation of the companies and the consultative body for the next 30 days. Once you receive the suggestions will change the circular of the Code to set the new format for the brochure to be completed by the listed. This process can last between two and three months before entering into force. That is to say, to comply with the Code, the report on corporate governance which companies can present between April and may of 2021 (corresponding to the year 2020) must attest that the 40% of women are counselors. In case you do not comply with this recommendation, companies should explain why they did not comply.

Likewise, the CNMV, after having ascertained that the number of female directors, executives is especially low (4.9% overall), "which relates to the limited presence of women in senior management, the agency proposes that the selection policy of the companies, encourage that a sufficient number of women in management positions of greater responsibility."It is evident that the senior management of companies is the nursery and then, to promote women in the executive positions of the council", according to Albella.

Tackling corruption

Another of the main modifications of the Code has to do with the numerous cases of corruption that affect in the last months to listed companies. In this regard, the CNMV seeks to amend a number of recommendations as the number 22 with the objective of promoting the council to examine as soon as possible the situations that affect a counselor, or not related to their activity in the society, which may impair the credit and reputation of the company itself. "Currently the recommendation is too formalistic because it delayed the action of the board at the time in which to initiate a processing or opening of the oral proceedings. With the changes that we intend is that the board can open an investigation or even ask for the dismissal of the director affected without waiting for them to arrive to these judicial phases", explains the president of the supervisor.

In the area of corruption, the securities and exchange commission also wants to strengthen the powers of the audit committee, atribuyéndola also the systems of control and risk management non-financial information, with express mention of the corruption-related. This commission should also address the policies and systems of internal control are effectively implemented in practice." It also requires that when a director ceases in his position before the end of its mandate, explain sufficiently the reasons of his resignation.

Severance pay

The securities and exchange commission also wants to tackle the ambiguity on the recommendation of the severance pay of the executive directors. As written now the recommendation 64 says that payments for termination of the contract does not exceed a set amount equivalent to two years of the total compensation annual from the steering. However, the supervisor has detected that some companies, in order to bypass this limit, they are increasing the compensation for non-competition or the contribution to the pension plans. Po this reason, from the entry into force of the proposed changes should be included in the limit of the two annuities pay the amounts paid for not going to work for a competitor, or the money injected to the retirement systems of executive.

finally, the CNMV wants to propose, in order to prevent the dissemination of privileged information to managers of large funds or consultants of recommendation of vote, that companies have a general policy of communication of information for economic-financial and corporate via media dissemination (mass media, social networks or other means).