The proposals to appoint directors that the Board of Directors puts to the General Shareholders’ Meeting for its consideration, and the appointments
decided by said Board by virtue of its legal empowerment to co-opt members, must follow the provisions of the Regulations of the Board of Directors and
be proposed by the Appointments and Remuneration Committee in the case of independent directors, and based on a prior report from said Committee
in the case of all other types of directors.
1.
Appointment of external directors
The Regulations of the Board of Directors make special mention of the selection and appointment of external directors, due to their unique
characteristics compared to executive directors.
El Consejo de Administración y la Comisión de Nombramientos y Retribuciones tienen el deber de procurar, dentro del ámbito de sus respectivas
competencias, que la elección de candidatos recaiga sobre personas de reconocida solvencia, competencia y experiencia, que se encuentren
dispuestas a dedicar una parte suficiente de su tiempo a la Compañía, debiendo extremar el rigor en relación con la elección de aquellas personas
llamadas a cubrir puestos de consejeros independientes. A continuación, se procede a exponer brevemente las características básicas de la
designación de los citados Consejeros Externos:
The basic characteristics of the appointment of the aforementioned external directors are briefly explained below:
1.1
Proprietary Directors
Proprietary Directors are directors that represent or that have a shareholding in the Company that is greater than or equal to what is legally considered
significant, or that may have been appointed due to their status as shareholders even though their shareholding does not reach the legally established
amount.
For the purposes of this definition, it shall be assumed that a director represents a shareholder when:
a) The director has been appointed by means of the shareholder’s right to representation.
b) The person is a director, senior manager, employee or regular service provider of this shareholder, or to companies belonging to the same
group.
c) The company documentation states that the shareholder accepts that the director has been appointed by it or represents it.
d) The director is a spouse, a person connected to the shareholder by a similar level of affinity, or a relative of up to the second degree of kinship
of a significant shareholder.
1.2
Independent Directors
Independent directors are considered to be those directors appointed because of their personal and professional attributes, who can perform their
duties without being influenced by relations with the company, its significant shareholders or its managers.
The following people may not qualify as independent directors under any circumstances:
a) Those that have been employees or executive directors of companies in the group, unless 3 or 5 years have passed, respectively, since the
relationship was terminated.
b) Those that receive any amount or benefit for a concept other than the remuneration for being a director, from the company or its group,
unless the amount or benefit is insignificant.
For the purposes of this section, neither the dividends nor supplementary pension that the director receives in relation to his/her former
professional or employment relationship shall be taken into account, provided that such additional payments are not contingent and as a
result, the Company that pays them cannot suspend, modify or revoke their payment without being in breach of its obligations.
c) Those that are, or have been, during the last three years, a partner in the external auditor’s firm or responsible for the audit report, whether
in relation to the audit of the listed company during this period, or of any other company in its group.
d) Those that are executive directors or senior managers of another company in which an executive director or senior manager of the Company
is an external director.
e) Those that maintain, or have maintained during the last year, a significant business relationship with the Company or with any Company in its
group, whether on their own behalf or as a significant shareholder, director or senior manager of a company that has or has had this relationship.
Business relations are defined as the supply of goods or services, including financial or advisory services, or consultancy.
f) Those that are significant shareholders, executive directors or senior managers of a company that receives, or has received during the last three
years, significant donations from the Company or its group.
People or entities that have solely been patrons of a foundation that receives donations shall not be included in this section.
g) Those that are spouses, persons connected by a similar type of affinity, or relative of up to of the second degree of kinship of an executive
director or senior manager of the Company.
h) Those that have not been proposed, whether for appointment or renewal, by the Appointments Committee.
i) Those that are in any of the situations indicated in points a), e), f) or g) of this article in relation to another significant shareholder or
representative on the Board. In the case of being a relation as indicated in letter g), the limitation shall not only apply in connection with the
shareholder, but also with its proprietary directors in the investee company.
Proprietary directors that cease to be entitled to their position as a result of the sale of the shareholder’s stake they represent may only be
re-elected as independent directors when the shareholder they represented until this time has sold all of its shares in the Company.
In order to establish a reasonable balance between both types of external directors, the Board shall use the ownership structure of the
Company as a basis to ensure that the relation between each type of director reflects the relationship between stable and floating capital.
ANNUAL CORPORATE
GOVERNANCE REPORT
27
