Glass Lewis has submitted a response to the Spanish consultation on the proposed changes to the Spanish Corporate Governance Code. The current proposal for the revision of the Code focuses on adapting the recommendations to the legislative changes made since 2015, and on strengthening some of the recommendations related to policies and controls to prevent corruption and other irregular practices. In addition, some amendments are made to clarify the language of recommendations.

Glass Lewis finds the proposed amendments to the Code largely positive. We find the new target of having at least 40% of the board occupied by the less represented gender reasonable (currently 30%), while we believe a more specific recommendation regarding the disclosure on promotion of women in executive pipeline would be beneficial.

Further, we find positive the recommendations to include the evaluation of integrity of non-financial information within the remit of the audit committee, and that the audit committee should include members with knowledge and experience in management of also non-financial risks.

Regarding the amendments related to executive remuneration, we note the change where the three-year vesting period for share-based incentive plans could potentially be waived in case of executive’s sufficient shareholding (2x fixed remuneration). In our experience, many companies operate shareholding requirements and equity awards with long-term vesting in parallel, and we find no reason that such long-term safeguards should be mutually exclusive. On the other hand, we welcome the inclusion of non-competition payment within the recommended maximum severance payouts.

You can download our submission to the consultation below. For more information, contact