How must Corporate Governance work?

How must Corporate Governance work?

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A Corporate Governance has to work appropriately; it is basic in an increasingly globalized market. At Evolutiza Lawyers & Tax Advisor know it well. Antiquated standards, which made a company to be attractive, have changed a lot recently. Nowadays, investors do not only pay attention to financial data, they look at those data origins.  

In 1999, OECD deems necessary to create several basic principles for Corporate Governance activities. The intention was to establish a reference unity for companies’ leaderships. These principles remain in force, even after being revised in 2014.

  1. Effective Corporate Governance Framework. Transparency and diligence are key aspects in order to develop Governance activities, and it is necessary to arrange a legal framework which made it possible.
  2. Shareholders’ rights. These should not be lessened, on the contrary, their exercise must be possible at all times. Assignment and transfer of shares or getting societal information are some of these rights.
  3. Equitable treatment of shareholders. Warranting equality to minority shareholders or foreign ones is really important, considering that future investors will have a reliable position without buying many shares.
  4. Interested parties. Making applicants interventions possible is fundamental too, because societal cooperation could be a good direction to wealth and employment creation, as well as companies’ sustainability.
  5. Disclosure and transparency. In relation to shareholders’ rights, the opportune access to societal information must be guaranteed, as financial situation, ownership or government components.
  6. The responsibilities of the Board. Executive Management control and company’s good direction have to be included in this section. The Board will have to be held liable before company and shareholders.

For its part, Spain tries to embrace these standards. Firstly, the National Securities Market Commission has written a Unified Code of Good Governance of Listed Companies, whose aim is to put Spain on the same level with European reference countries.

On the other hand, the Spanish government, in the same way, has introduced novelties related to general meetings of shareholders’ competencies, company’s administration or consultants’ payment. These changes appeared with the “Ley 31/2014, which modifies the “Ley de Sociedades de Capital”.

This way, the Corporate Governance becomes more important every day. If you are a shareholder or an entrepreneur, in Evolutiza Lawyers & Tax Advisors we will be pleased to answer your questions.

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