Governance moves slowly on the Board of Directors of the Spanish Stock Exchange
The Expansión article, “Governance moves slowly on the Board of Directors of the Spanish Stock Exchange," quoted Russell Reynolds Associates Consultant Ramón Gómez de Olea and features our report The Road to Corporate Governance: Spanish Listed Companies’ Study. The article is excerpted below.
An analysis by the firm Russell Reynolds shows that Spain lags behind other European countries in the creation of sustainability committees.
Governance and sustainability are slowly advancing on the advice of the Spanish Stock Exchange. The report The Road to Corporate Governance: Spanish Listed Companies' Study, by the executive search firm Russell Reynolds, analyzes the data available until August from the members of the Ibex board of directors and the General Index of the Madrid Stock Exchange (IGBM), comparing them with the CNMV Good Governance Code of Listed Companies.
The goal is to provide a complete view of their trajectory to incorporate best practices with respect to their counterparts of similar size.
The analysis shows that only 13% of listed organizations have a sustainability or CSR committee, although the Good Governance Code recommends that there be a committee under the administrative body that expressly promotes environmental, social and governance policies. 8% of Ibex companies have these committees, compared to 5% of IGBM. The data contrasts, for example with France, where 33% of the companies that make up the CAC 40 and 25% of the SBF 120 index have a body dedicated exclusively to CSR, according to data from Russell Reynolds.
The analysis also shows the existence of cross-links in the Spanish boards. Of the 128 companies on the Stock Exchange, 95 have links between board members (74%). Two out of ten groups have five or more cross-links, while in 5% (six companies) the links are ten or more.
"There's a reasonable level that I think is positive because you have to know what governance is and being on several councils isn't bad," says Gómez de Olea. The problem, he says, "is when they're always the same and it starts to decrease that confidence. One of the issues to be reviewed at the moment is the ability of board directors; they can't be in four companies when they have to spend more and more time on the board. There will come a time when the limit cannot be four, but less," he says.
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