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.
The Board of Directors and the Appointments and Remuneration Committee have a duty to ensure, within the scope of their respective competencies, that the
election of candidates falls on people with a solid reputation, proven skills and experience, and who are prepared to dedicate a sufficient part of their time to the
Company, taking the utmost care in choosing people who may be selected to be independent directors.
The basic characteristics of the appointment of the aforementioned external directors are briefly explained below:
1.1
Proprietary Directors
ProprietaryDirectorsaredirectorsthatrepresentorthathaveashareholdingintheCompanythatisgreaterthanorequaltowhatislegallyconsideredsignificant,
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) They are appointed in the course of exercising the 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.
2.2
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 who have been employees or Executive Directors of companies in the group, unless 3 or 5 years, respectively, have passed since that relationship ceased.
b) They receive any amount or benefit from the company, or from its group, as payment other than for their role as Director, unless this amount 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) Executive Directors or Senior Managers in another different company in which an Executive Director or Senior Manager of the company is an external
director.
e) Those who maintain or have maintained an important business relationship with the company or any company in the group in the last year, whether in their
own name or as a significant shareholder, director or senior manager of an entity maintaining or which has maintained such a 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 an entity 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) Spouses, persons connected by a similar level of affinity, or a relative of up to the second degree of kinship of an Executive Director or Senior Manager of the
company.
h) They were not proposed, whether as an appointment or renewal, by the Appointments Committee.
i) They fall under any of the cases set out in paragraphs a), e), f) or g) of this Article in relation to a significant shareholder or represented body on the Board.
In the case of being a relation as indicated in paragraph g), the limitation shall not only apply in connection with the shareholder, but also with its proprietary
directors in the investee company.
C.1 .20 Indicate whether the Board of Directors has assessed its own activity in the last year:
YES
If so, explain how far this self-assessment has led to important changes in its internal organisation, and what procedures are applicable to its activities:
Description of changes
At least once a year, the Board of Directors will assess the quality of its own work, how efficiently it functions, and based on the report sent to it by the
Appointments and Remuneration Committee, how its members perform their duties. It will also evaluate the work of its Commissions or Committee
annually, based on the reports they submit to it. .
C.1 .21 State cases in which directors are obliged to resign.
Directors will resign from their posts at the end of the period for which they were appointed, or when decided by the General Meeting in the exercise of its legal
powers.
ANNUAL CORPORATE GOVERNANCE REPORT
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