CNMV chairman acknowledges damage to corporate governance caused by Indra, NH and Unicaja cases


F.R. “There have been specific cases in the last year that have had a very negative impact on the perception of the quality of governance of some large Spanish listed companies. And I don’t want to beat around the bush: I am referring, among others, to Indra, Unicaja and NH. With different nuances and peculiarities, these are cases where independent directors have been the adjustment variable for shareholder changes, changes in management or discrepancies within the board,” said Rodrigo Buenaventura, chairman of the CNMV (Spain’s National Securities Market Commission), in his opening speech at the 11th IESE, KPMG and El Mundo Directors’ Forum.

Despite this, Buenaventura added: “I don’t think there is any doubt about the CNMV’s determination to seek a safe environment for the exercise” of the independent director’s role in Spain, “but this safe environment does not always exist and this worries me and I think it should worry us all”.

The chairman of the CNMV explained that the independent director’s role must be taken care of in at least two complementary dimensions. The first is “from the moment of selection. This must be done with guarantees, avoiding the independent director being associated with any label or “belonging to someone”, and selecting people with the professional and personal qualities that allow them to carry out their functions of defending the company’s interests without being compromised by relations with shareholders, executives or the company itself”.

And the second of the dimensions for their care has to do with stability in office. “And here the picture is not so positive,” he said. “On the one hand, recent research we have published suggests that in Spain one of the most important statistical factors for the longevity (in office) of an independent director is whether he or she was appointed when the current or the previous CEO was in place. If it was before, their “life expectancy” in office is shorter than if they were appointed when the current CEO (or executive chairman) was already in office. This is not very encouraging about the real-world translation of the concept of independence,” he concluded.

At another point in his speech, Buenaventura expressed his support for the “stability” of the Spanish code of good governance, although “we must evaluate, calmly and without any haste, whether the CBG requires some kind of update, of “aggiornamento”, to guide Spanish listed companies” in the area of sustainability.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.