Home > Board Performance, Spain, Trends in Corporate Governance > Report on Boards` performance in Spanish public companies, 2011 (III)

Report on Boards` performance in Spanish public companies, 2011 (III)


On june 2012, PWC has released a report on the subject, whose items concern:

  1. Performance of Board, Chairman, Secretary and Committees.
  2. Independent Directors` Compensation
  3. Trends and Conclusions.

The report is based on a survey made among directors covering 77% of all Spanish public firms, (90% of the bigger are covered).

In previous posts we dealt with the first and second topic, so in this one we will update on the third one.

These are the big trends that can be recognized:

  1. Chairman and CEO separation: once elected by 95%, Executive Chairmen are now receiving not more than 75%-80% in average. Directors apparently agree with a trend for separation as they expect it to increase in next years. The reasons they enumerate are the need for a tighter control and risk supervision, the need for better interest conflict management, the proxy advisors’ pressure, and the USA guidance.
  2. Lead Director: 67% of firms that have not separated functions, have named a lead director, and in general directors think its role will increase.
  3. Women presence in Boards: it is reduced, (12%), directors think it will increase, but measures to be adopted are not clear, and particularly quotas.
  4. Who has an influence on Board`s decisions? The order is the following: Regulatory bodies, Analysts and Institutional Investors, Media and Credit Rating Agencies, and Proxy Advisors.
  5. 95% of directors surveyed think the current Corporate Governance Code, based on the “Comply or Explain” principle, has strongly improved corporate governance, so they do not think it would be wise to introduce additional imperative regulation.

These are the main conclusions:

  1. Although the Board is considered to perform well, and correctly develop its meetings, Board evaluation is said by directors to be deficient.
  2. Chairman, Secretary, and committees are well evaluated by directors; both Secretary and Nomination and Compensation Committees should engage in additional duties in the future.
  3. Although transparency on Compensation for directors has improved, (for the first time a report has been published in 2011 by all public companies), the same disclosure for executives is a pending task.
  4. There is a certain inconsistency between Corporate Governance reports and opinions showed in the survey. Perhaps a good way to improve Corporate Governance is through the analysis of these inconsistencies, among which, the following:
    1. Only 34% of firms have Ceo and Chairman roles separated, but 76% of respondents see Separation as a trend.
    2. Evaluation is also mostly said to be complied with, but it is a major deficiency in the view of most directors.
    3. Women presence is minor and its growth very slow, but it is also said to be a trend for the future
    4. Education for Boards is said to exist in most of firms, but is a concern for most of directors
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