The Portuguese Securities Market Commission (CMVM) has amended the existing corporate governance regime for listed companies as a result of the severe impact of some practices of corporate governance brought to light by the current financial crisis.
CMVM Regulation 1/2010 enacted last February, introduced several amendments to the existing corporate governance rules, the most significant of which was the mandatory disclosure of information on remuneration policies for members of the board of directors and auditing committees. Listed companies are now compelled to disclose detailed information on their Annual Corporate Governance Reports concerning (i) remuneration policies for members of the board of directors and auditing committees; (ii) annual amounts paid to them (as a whole and individually); (iii) fixed and variable remuneration, including details on the variable remuneration, such as the relevant components,payments already made and deferred payments; (iv) remunerations received from other companies in the group (as a whole and individually), and (v) pension rights acquired during the respective financial year.
Additionally, CMVM has further recommended the implementation of the corporate governance published by CMVM. Listed companies may adopt a different corporate governance code, provided, however, that such code is prepared by independent certified experts and ensures the same level of shareholder protection as the code recommended by CMVM.
Corporate governance standards have often been developed and improved upon following corporate governance failures. The current financial crisis has highlighted the importance of more effective board oversight and is leading financial regulators all over the world to issue more strict regulations on corporate governance issues; however, markets, economical activities and corporate needs in particular will definitely continue to play a key role in defining corporate governance frameworks.
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