The Road to Corporate Governance: Spanish Listed Companies’ Study
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October 21, 2020
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Corporate Governance And Spanish Listed Companies - Insights and Key Findings 
Between February 2019 and August 2020, 232 new directors were appointed to Spain’s public companies, 44 percent of whom have experience in P&L management.

In October 2020, Russell Reynolds Associates published a new study of corporate governance at all Spanish- listed companies (Ibex 35 and IGBM). In this study, we analyse different aspects of best practices for board effectiveness to provide a snapshot of public companies’ progress in incorporating the Good Governance Code recommended by CNMV, Spain’s national securities regulator. 

Takeaways

1. New Profiles

Between February 2019 and August 2020, 232 new directors were appointed to Spain’s public companies, 44 percent of whom have experience in P&L management and 14 percent of whom have been CFOs for listed or unlisted companies. In addition, 20 percent have worked for public institutions and 15 percent have experience in education. 

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2. Directors’ Age

Both IBEX 35 & IGBM female directors are younger, on average, than male directors. Female directors also tend to be younger when looking at the average age of first board appointment.

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3. Directors’ Background

Regarding all board members’ executive experience, a large majority comes from the financial sector, followed by public and industrial sectors. In addition, more than 40 percent of directors have experience in P&L management of listed or unlisted companies. 

4. Cross-linkages

74 percent of Spain’s listed companies have board members in common.

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5. Independence

We find a higher presence of independent directors in the IBEX 35 (55%) than the IGBM (43%). Regarding lead independent directors, there is a trend to appoint one even if it is not required by regulation. Regardless of having power split between the CEO and the chairman, 29 percent of companies have a lead independent director on their boards. However, 16 percent of companies without a power split still do not comply with the recommendation.

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6. Diversity

The CNMV’s recommendation for 2022 is for female directors to comprise 40 percent of each board, Currently, only 9 percent of companies comply with this. As of August 2020, women only accounted for 30 percent of directors in Ibex 35 companies and 23 percent in IGBM companies.

7. Digital expertise

The recommendation for digital experience implies a great challenge for Spanish boards. Currently, only 7 percent of public company directors’ have digital expertise, if analysed against MIT qualification standards. Likewise, only six companies have created a committee dedicated to digital, technology or cybersecurity, given the slim share of members with technology backgrounds.

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8. Geographies

International directors currently represent 20 percent of board members. However, the presence of international directors is highly correlated with foreign companies that are publicly-traded in Spanish markets.

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For more details of this year’s analysis, click on “Download PDF” at the top of the page.