This reform is motivated by the increasing importance of “good governance” and “good practices” in the management of capital companies, especially in listed companies.
On December 4th the Official Gazette published Law 1/2014 amending the Capital Companies Act to implement corporate governance modifications. This reform is based on the Report of the Committee of Experts submitted to the Council of Ministers on the 23rd of May 2014.
This reform is motivated by the increasing importance of “good governance” and “good practices” in the management of capital companies, especially in listed companies. In particular, this reform has amended the remuneration system of the society’s administration body. Moreover, the bylaws of a corporation now will be able to establish a specific system of remuneration. However, the specific remuneration concept shall be determined. Amongst these systems are the following: fixed amount, profit sharing or travel expenses. Adequate configuration of these concepts is vital for tax purposes.
In the case of listed companies, besides including developments in administrators remuneration regime, its approval and the requirement to prepare an annual report, the Board of Directors now has competences to monitor fiscal risks, so that is fully involved with these issues, however, the strategic role of this body is clearly delimited.
