Spain

Spanish Stock Exchanges have long been concerned with issues relating to the transparency and responsibility of listed companies' board of directors and the protection of shareholders. In February 1997, at the request of the National Securities Market Commission (CNMV), the Spanish government issued a Ministerial Order which instructed a special commission, chaired by Professor Olivencia, to draft a corporate governance code. The Olivencia commission published the Good Corporate Governance Code (the Code) in February 1998. Since then, many listed companies have amended either their articles of association or their internal regulations to comply with the provisions of the Code. Moreover, the CNMV has suggested, in its Circular letter number 11/1998, of December 17, that listed corporations provide their shareholders and the market in general with enough information to show whether or not they have adopted the recommendations contained in the Code

The Circular in question offers listed companies a model to be followed when disclosing corporate governance issues in their annual report (copies of which are filed with the CNMV and the stock exchanges). According to the model, listed companies should describe the principles behind their corporate governance rules, giving reasons where practices adopted differ to those recommended by the Code. They should also clearly state where the corporate governance rules are set out (ie the company's articles of association or in the internal regulations) and indicate any amendments to corporate governance rules made since the last report. Finally, listed companies should explain the extent to which each of the recommendations of the Code has been adopted.

Luis de Carlos / Jesús Pérez de la Cruz

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