RIGHT TO BE INFORMED – LEGAL FRAMEWORK
Article 197 (Right to be informed at public limited companies) of the Spanish Limited Companies Act (LSC):
1. Until the seventh day prior to the date scheduled for the meeting, the shareholders may request from directors any such information or clarification as they may deem necessary about the items of the agenda, or submit in writing any question they deem appropriate.
Directors will have the obligation to provide the information in writing until the date of the general meeting.
2. During the meeting, the company’s shareholders may verbally request any information or clarification they consider appropriate about the items of the agenda. If the shareholder’s rights cannot be met at that moment, directors shall provide the requested information in writing within seven days as of the end of the meeting.
3. Directors will have the obligation to provide the requested information under the two sections above, unless the information is unnecessary to safeguard the shareholder’s rights or there are objective reasons to believe that it might be used for non-corporate purposes or its disclosure may harm the company or related parties.
4. The requested information may not be denied where the request is supported by a number of shareholders representing at least twenty-five percent of the share capital. The Articles of Association may establish a lower percentage, provided it is above five percent of the share capital.
5. In the event of failure to meet the right to be informed recognised in section 2, the shareholder will only be entitled to demand fulfilment of the obligation to inform and to claim compensation for any damage or loss suffered; nevertheless, such violation may not be grounds for challenging the validity of the General Shareholders’ Meeting.
6. In the event of any abusive or harmful use of the requested information, the shareholder will be held liable for any damage or loss caused.
Article 272 (Approval of financial statements), section 2, of the Limited Companies Act:
2. From the moment the general meeting is called, any shareholder may obtain from the company, immediately and free of charge, the documents that are to be submitted for its approval, and, as applicable, the directors’ report and auditor’s report.
Article 518 (General information prior to the meeting) of the Limited Companies Act:
From publication of the meeting notice until the date the meeting is held, the company shall publish on its website, and keep published, at least the following information:
- The meeting notice.
- The total number of shares and voting rights existing at the date of notice, broken down by share class, if any. In the event that the Articles of Association provide for double voting due to loyalty and the special register referred to in the seventeenth Article 527 has been created, the information on the number of voting rights shall be updated upon expiration of the term for advance accreditation prior to the general meeting.
- The documents to be submitted to the General Shareholders’ Meeting, in particular, directors’, auditors’ and independent experts’ reports.
- The full text of the proposed resolutions on each and every item of the agenda, or, in case of merely informative items, a report by the relevant bodies commenting on each one of those items. The proposed resolutions submitted by the shareholders will be also included as they are received.
- In the event of appointment, ratification or re-election of members of the Board of Directors, the identity, curriculum vitae and category of each, as well as the proposal and reports referred to in the tenth Article 529.
- The forms to be used for proxy and remote voting, unless directly sent by the company to each shareholder. If it were not possible to publish the forms on the website for technical reasons, the company shall indicate on the website how to obtain the hard copies, which shall be sent to each shareholder who so requests.
Article 520 (Exercising the shareholder’s right to be informed) of the Limited Companies Act:
1. The exercising of the shareholders’ right to be informed is governed by Article 197, although the requests for information or clarification or the written questions may be submitted until the fifth day prior to the date scheduled for the meeting. The shareholders may request also the directors, in writing and within the same term, or verbally in the course of the meeting, any clarification deemed necessary about the publicly accessible information the company may have disclosed to the Spanish Securities Market Commission (CNMV) since the last General Shareholders’ Meeting and about the auditor’s report.
2. The valid requests for information, clarification or written questions and the answers given in writing by the directors will be included on the company’s website.
3. If, before any question in particular is made, the requested information is already available in a straightforward manner to all shareholders on the company’s website in a Q&A format, the directors may simply answer by referring to the information provided in that format.
Article 520 bis (Transfer of information from the company to the shareholders and ultimate beneficiaries) of the Limited Companies Act:
1. The companies shall provide the information below to their shareholders or the third party each shareholder may designate:
- the information required to allow them to exercise the rights derived from their shares and intended for all the shareholders of that share class, or
- if the information mentioned in item a) is already available to the shareholders on the company’s website, a notice indicating where that information can be found.
Said information shall be written in a language and style that make it easy to understand, specifically in straightforward, concise and accessible language.
2. For the purposes set out in the section above, the companies may send that information:
- directly to all their shareholders, or
- indirectly, in a standardised manner and in due time; through the third parties designated by the latter, the central securities depository, or intermediary entity, in which case they shall forward the information to the shareholders of the company as soon as possible.
3. In the event that the entity recognised as a shareholder in the shareholders’ register is an intermediary entity holding the shares in escrow on behalf of an ultimate beneficiary, such entity shall forward to the ultimate beneficiary the information mentioned in paragraph 1 as soon as possible.
Article 539 (Special information instruments) of the Limited Companies Act:
1. Listed, public limited companies shall fulfil their information obligations by any technical, IT or telematic means, without prejudicing the shareholders’ right to request the information in printed form.
2. Listed, public limited companies shall have a website to allow for exercise by the shareholders of their right to be informed, and to disseminate relevant information required by the securities market legislation. On their website, listed public limited companies shall publish their average term of payment to suppliers, and, where applicable, the measures referred to in the last paragraph of Article 262.1.
On the company’s website, a shareholders’ internet forum will be opened, which may be accessed, with the required guarantees, by the individual shareholders as well as any voluntary association they may organise, in order to facilitate communication among them before holding General Shareholders’ Meetings. The forum may be used to publish proposals intended to be submitted as an addendum to the agenda announced in the meeting notice, requests for support of such proposals, initiatives aimed at reaching the required percentage to exercise a minority right recognised by the Act, and offers or requests for voluntary representation.
3. The Board of Directors shall be responsible for determining the content of the information to be released on the website, as required by the Ministry of Economy and Finance, or with the latter’s express authorisation, the Securities Market Commission.
4. The shareholders of each listed company may organise specific and voluntary associations to represent shareholders at the meetings of listed companies and exercise other rights accorded hereunder. For these purposes, associations shall meet the requirements below:
- Defend, as their sole and exclusive purpose, the interests of the shareholders, avoiding any conflict of interest that may prove to be contrary to this purpose.
- Consist of, at least, one hundred persons; the shareholders holding more than 0.5% of the share capital with voting rights at the company may not take part in them.
- Be organised through a notarised public instrument to be filed with the Commercial Registry for the address of the listed company, and, for publicity purposes only, with a special register created to that end at the Securities Market Commission. The public instrument of organisation shall set out the association’s rules of organisation and operation.
- Keep accounting records as required in the Code of Commerce for business entities, and have their financial statements audited. Within one month after approval of the financial statements for the previous year by the association members’ meeting, the latter shall file a copy of the financial statements with the Commercial Registry together with the relevant auditor’s report and a report describing the activity carried out, forwarding a copy of these documents to the Securities Market Commission. As an annex to these documents, they shall further submit to the Securities Market Commission a list of the association’s members existing as at the end of the previous fiscal year.
- Keep a record of the proxy powers conferred by the shareholders for the association to represent them at general shareholders’ meetings, as well as the proxy powers exercised at each meeting, detailing the identity of the represented shareholder and the number of shares held on their behalf. The proxy register shall remain available to the Securities Market Commission and the issuing entity.
Shareholder associations may not receive, either directly or indirectly, any amount or economic benefit whatsoever from the listed company.
A set of regulations shall be laid down establishing the requirements applicable to shareholder associations for exercise of the rights accorded hereunder, including, at least, the requirements and limits for their organisation, the basis of their organisational structure, their rules of operation, and their relevant rights and obligations, especially in relation to the listed company, and the conflict of interest system aimed at ensuring due fulfilment of the purposes for which they are created.
5. Furthermore, the Government and, as applicable, the Ministry of Economy and Finance, and with the latter’s express authorisation, the Securities Market Commission shall have the power to develop the necessary technical and legal specifications regarding the provisions of this Article.
Article 28 (Shareholders’ rights to attend meetings, be represented and be informed) of the Articles of Association:
1. The shareholders of the Company, regardless of the number of shares they hold, whose ownership is recorded in their name in the corresponding accounting record five (5) days prior to the date on which the General Shareholders’ Meeting is to be held, and who can prove it by means of the appropriate attendance, proxy and voting card, shall have the right to attend Shareholders’ Meetings.
2. Shareholders’ rights of attendance, whether in person or by telematic means, representation and information in relation to the General Shareholders’ Meeting shall be governed by the regulations applicable to the Company from time to time and by the provisions of the Regulations of the General Shareholders’ Meeting.
3. The chairperson of the General Shareholders’ Meeting may authorise the attendance of Company executives, managers and specialists and other persons who have an interest in the good running of corporate affairs, as well as extend invitations to other persons other than those previously mentioned as he/she deems appropriate. The General Shareholders’ Meeting may, however, revoke such authorisation.
4. The members of the Board of Directors of the Company have the duty to attend General Shareholders’ Meetings, unless a duly justified cause prevents them from doing so. The non-attendance of any of them shall not affect the valid constitution of the General Shareholders’ Meeting.
Article 8 (Availability of information since the date of meeting notice on the Company’s website) of the Regulations of the General Shareholders’ Meeting:
1. In addition to the requirements established under the Limited Companies Act or any other legal or by-law provision, and these Regulations, from the date of publication of a Shareholders’ Meeting notice the Company shall publish and keep published, on its corporate website, the full text of the proposals for resolution on the items of the agenda, any mandatory report or other report determined by the Board of Directors, and any reasoned proposal for resolution on matters already included or to be included in the agenda of the Shareholders’ Meeting which may have been submitted by the shareholders in accordance with the applicable legislation.
2. Furthermore, from the date the meeting is convened, the Company shall make available on its website all such other information as may be deemed useful or convenient to facilitate attendance and participation by the shareholders at the Shareholders’ Meeting, including, but not limited to, the following:
(i) Steps to obtain the attendance card.
(ii) Instructions on how to exercise or delegate the remote voting right, by the methods established to that end, if any, in the notice of meeting.
(iii) Information about the place where the General Shareholders’ Meeting will be held, and about how to get there.
(iv) Information, if applicable, on the systems or procedures in place to allow for follow-up of the General Shareholders’ Meeting.
(v) Information on how the shareholders can exercise their right to be informed.
(vi) In the event that the General Shareholders’ Meeting is to address the appointment or ratification of members of the Board of Directors, from the date of publication of the notice of meeting the Company shall also make available the following updated information on its website:
(a) Professional and biographical profile;
(b) Other Boards of Directors of interest at which the Board member holds office, whether or not belonging to listed companies;
(c) Specific Board member category to which they belong, detailing, in the case of Directors representing controlling interests, the shareholder they represent or to whom they are related;
(d) Date of first appointment as Board member at the Company, and any subsequent appointment;
(e) Shares and share options held in the Company;
(f) Explanatory report by the Board of Directors containing an evaluation of the qualifications, experience and merit of the proposed candidate, and if applicable, a report by the Appointments and Remuneration Committee;
(vii) The addendum to the Shareholders’ Meeting notice, if any.
3. In every case, the notice of meeting shall contain a warning indicating that all the information required for the shareholders to exercise the rights derived from their shares will be available on the Company’s website.
Said information shall be written in a language and style that make it easy to understand, and shall be straightforward, concise and accessible.
Article 9 (Right to be informed prior to the General Shareholders’ Meeting) of the Regulations of the General Shareholders’ Meeting:
1. From the very date of publication of the Shareholders’ Meeting notice, until the fifth day prior to the date when the meeting is to be held on first call, inclusive, the shareholders may request any information or clarification deemed necessary from the Board of Directors, and may submit to the latter, in writing, any question deemed appropriate, regarding the matters included in the agenda.
2. Additionally, within the same term and in the same manner, the shareholders may request information or clarification or submit questions in writing regarding any publicly available information that the Company may have reported to the Spanish Securities Market Commission since the last General Shareholders’ Meeting. The Board will have the obligation to provide any requested information in writing until the date the Shareholders’ Meeting is held.
3. Requests for information may be submitted directly at the registered office, or may be forwarded to the Company by post or other methods of remote communication indicated in the relevant notice of meeting. Requests will be accepted insofar as the electronic document whereby information is requested contains the legally recognised electronic signature of the petitioner, or other mechanisms which, as per a resolution previously adopted to that end and duly made public, and in the opinion of the Board, provide adequate guarantees as to the authenticity and identity of the shareholder who is exercising their right to be informed.
4. Regardless of the method used to request information, the shareholder’s request must include the shareholder’s name and surname and proof of the shares held, so that this information can be cross-checked with the list of shareholders and the number of shares registered in their name as provided by Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. (“Iberclear”), or any other applicable entity, for the Shareholders’ Meeting concerned. Proof of mailing of the request to the Company in due time and manner shall be upon the shareholder. The Company’s website shall detail the necessary instructions on how to exercise the shareholders’ right to be informed, in the manner required by the applicable legislation.
5. The requests for information provided for under this Article will be answered once the requesting party’s identity and shareholder status have been confirmed, prior to the General Shareholders’ Meeting.
6. Directors will have the obligation to provide the information in writing until the date the General Shareholders’ Meeting is held, unless:
- the information is not necessary to safeguard the shareholder’s rights, or there are objective reasons to believe that it might be used for non-corporate purposes, or that disclosure thereof might negatively affect the Company or related entities;
- the request for information or clarification does not refer to matters included in the agenda or to publicly available information that the Company may have reported to the Spanish Securities Market Commission since the last General Shareholders’ Meeting;
- the request for information or clarification is regarded as abusive, in that it pertains to information which: (a) is or has been subject to any court or administrative sanctioning proceedings; (b) is protected by a trade or industrial secret or by industrial or intellectual property rights; (c) affects the confidentiality of personal data or files; or (d) cannot be disclosed by virtue of a confidentiality duty assumed by the Company;
- the requested information is clearly and directly available to all shareholders on the Company’s website in a Q&A format, in which case Directors may answer by simply referring to the information provided in that format; or
- it is thus provided under legal or regulatory provisions, or court orders.
7. Notwithstanding the exception contained in item (i) above, information may not be withheld where the request is backed by a number of shareholders representing, at least, one fourth of the share capital.
8. The Board of Directors may authorise, on a joint and several basis, any of its members, the presidents of the committees reporting thereto, or its Secretary or Deputy Secretary, to answer the requests for information submitted by the shareholders on the Board’s behalf.
9. The information requested by the shareholders will be communicated by the same means by which the request was submitted, unless otherwise indicated by the shareholder based on the methods regarded as appropriate under this Article. In any case, Directors may send the requested information by certified mail with acknowledgement of receipt requested to the shareholder’s address indicated in their request, or alternatively, the address stated on the records of the Company, or by certified fax (burofax).
10. The Company shall make public on its corporate website all valid requests for information, clarification or questions submitted, as well as the answers provided in writing by the directors, in accordance with the applicable legislation.