Published and draft legislation - Spain

Corporate governance for Spanish financial institutions

Royal Decree 84/2015, 13th February, with implementation measures for Law 10/2014, 26th June

This Royal Decree provides the implementing regulations for Law 10/2014, 26th June, on the organisation, supervision and solvency of credit institutions, whose key specifications were discussed in the first issue of Progreso.

On this occasion, we wish to highlight what is new in the implementing regulations of this law and their significance for corporate governance. The obligations relating to corporate governance and remuneration policy are in Chapter IV (Title I). The Royal Decree develops regulation on the following aspects:

Firstly, obligations regarding disclosure. Financial institutions are obliged to post comprehensive, clear and understandable information on their corporate governance and the remuneration policies for their board members to their website.  They must reflect the total remuneration vesting, with itemisation of each director’s remuneration, so that it is clear what is being paid for, and must include remuneration for sitting on the boards of other companies, etc.

The board of directors will be obliged to keep such information up to date. The aim here is to foster transparency and help shareholders exercise greater control over the activities of the directors and senior managers.


The decree also gives more details on the duties of the board committees of financial institutions, introduced under Law 10/2014 (Appointments Committee, Remunerations Committee and the Risks Committee):

  • The Appointments Committee is tasked with the periodic inspection and assessment of the Board’s structure, composition and conduct and the suitability of its members. One of the most significant items included in this mission is the committee’s obligation to oversee the policies to boost the number of persons of the gender under-represented on the board of directors, in order to promote equality among male and female directors and senior managers. This obligation is in line with Recommendation 14 of the Spanish security exchange commission’s Code of good governance, in which the Spanish securities exchange commission (Comisión Nacional del Mercado de Vlores, CNMV) describes the necessary structure and composition of the board of directors.
  • The decree pays special attention to risk management. It requires the chair of the risks management committee to be an independent director with no executive or management duties in the institution’s business areas. The chairmanship cannot be revoked without a prior resolution from the board of directors, in order to preserve its freedom of action and independence. The Law 10/2014 establishes that the Bank of Spain will determine which institutions must set up a board committee to oversee risks, depending on their size, internal organisation and the nature and complexity of their activities. However the powers established for the committee in this Royal Decree highlight the importance of boards being able to count on its services to advise them on the ins