Published and draft legislation - Spain

Annual corporate governance report for bank foundations

Draft Ministerial order

Banking foundations are a new figure in the Spanish legal system, created by Law 26/2013, 27th December, on savings banks and bank foundations. This provision required certain savings banks to assign their financial business to a Bank and manage their community service activities through bank foundations.

The initiative gives a comprehensive description of the content to be included in the annual corporate governance report of the bank foundations. It also establishes that the governing body of the savings banks, the Board of Trustees, will hold maximum responsibility for the preparation of the annual report and for its correct dissemination.

Structure of the annual corporate governance report

The corporate governance report must contain:

  • Information on the structure, composition and functioning of the governing bodies
  • Information about appointments policy, with special attention to remuneration policy, providing a comprehensive breakdown of the remuneration of senior staff: fixed and variable remuneration; per diem payments; compensation in kind; bonuses or premiums, and the criteria for their allocation; accrued benefits of services or activities other than those inherent to the position, etc.
  • Information on the Foundation’s policy regarding investment in the savings bank, thus guaranteeing independence of powers between the two entities.
  • Information about related-party transactions and policy for managing conflicts of interest, with special attention to internal procedures to detect and resolve potential conflicts of interest that might affect the Foundation.
  • Information regarding the core activities of the Banking Foundation.

The bill includes an annex with the format of the report and instructions and definitions to facilitate and standardize its production.

The order has been drafted taking into account the latest recommendations from the code of corporate governance prepared by the CNMV and the requirements introduced by Law 31/2014, 3rd December, amending the Corporate Enterprises Act for the improvement of corporate governance.

The involvement of the CNMV means that the rules and obligations regarding content and dissemination of the annual corporate governance report for banking foundations are equivalent to those of listed companies and savings banks.