[vc_row][vc_column][vc_column_text]Investment funds will soon be subject to the obligation to vote in the shareholders' meetings of the companies in which they participate. An obligation that is expected to intensify the work of proxy advisors. Let's find out how they work and Juan Prieto, director of Corporance, the first Spanish proxy advisor, is with us.

Juan, how are you, welcome

First of all, we are seeing regulation moving forward and shareholder meetings, we are seeing them becoming more and more active. Beyond the big headline which is what are proxy advisor companies, tell us a little bit in detail how they work.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

A voting advisor makes voting recommendations at the shareholders' meeting, where the most important decisions are made. We also provide a series of services related to this responsible investment. Now with the new directive, which is about to be implemented, we have to make a policy of involvement and some relationship activities, of Engagement como dicen en inglés, con los emisores para monitorizarles durante todo el año. Un asesor de voto ayuda al inversor institucional en esa iniciativa. Nosotros somos el proxy advisor español, pero somos miembros de una alianza europea con proxy advisors locales, algunos llevan más de 20 años. Estamos intentando trasplantar en España las prácticas de inversores institucionales de gestores de fondos francesas, alemanas, suizas, inglesas, a las practicas españolas que serán re-lanzadas con la nueva directiva. Y al mismo tiempo también intentar mejorar con un conocimiento más profundo de los emisores locales, el análisis que se hace de las compañías y en base al cual votan los inversores extranjeros.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]It is a task that is, moreover, closely related to the whole issue of improving corporate governance that is booming in companies.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]De hecho las compañías llevan ya bastantes años desarrollando su gobierno corporativo. Aquí tenemos cuatro códigos de gobierno corporativo: el último del 2015, pero sin embargo no tenemos ningún código para los inversores. Las compañías han estado sufriendo un tsunami regulatorio para mejorar su buen gobierno durante años. Pero ahora toca la parte de los inversores, y es en la junta donde se tiene que votar y demostrar esa implicación. Efectivamente, en la junta es donde se toman las decisiones más importantes cuando nos enfocamos en el gobierno corporativo: los temas de remuneraciones, temas del consejo, en fin, todos esos aspectos que mirar los inversores más allá de la rentabilidad.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]With the experience you have, what kind of issues tend to generate the most controversy at shareholder meetings of listed companies?[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]De las cotizadas españolas, es más o menos lo mismo en todas partes, no difiere mucho. Sobre todo, cuatro temas más importantes. El primero es el de remunerations. Here in Spain since the capital companies law of 2014, you have to vote every three years a remuneration policy that is a mandatory vote within the board, in addition, every year you have to submit as an advisory vote, the remuneration report of what has actually been compensated in the company the previous year. And if it is not approved, a new policy has to be presented for the following year. We look at excessive compensation, non-alignment of long-term objectives, non-existence of metrics. Also compensation, some excessive bonuses, especially that are not related to the long term and / or not measurable.

The other issue is the council and its independence. The board is a basic pillar, not only as a management body, but also as an administration and control body. It is the link between management (the company's management) and its investors. Therefore, it has to be independent, and that independence is weak. First we have the figure of the executive chairman (which is not very well regarded in Anglo-Saxon markets), this chairman assumes the functions of CEO or is the chairman of the board which in turn is the chief executive of the company. Although there are measures being taken, and the chairmen are appointing CEOs, retiring and so on, but they do not always become independent chairmen and that is why it is important to have a sufficient number of independent directors. In Spain we have the particularity of proprietary directors (these proprietary directors, which is a characteristic of the Spanish market that represent the companies) and this over-representation is not good for corporate governance either, because even if it is a company dominated by a shareholder, it must have good governance.

Then, another issue is the capital which is crucial. There are two types: financial capital operations and shareholders' rights. We normally recommend voting against increases of more than 10% without pre-emptive rights and especially if they ask for 5-year authorisations. In matters of shareholders' rights, we ensure that there are no shares with multiple rights, for example. Now there is a danger with the transposition of the directive, because it has brought out of the blue the wrongly named "actions of loyalty". que pueden suponer un problema para el gobierno corporativo. Si hay acciones con múltiples derechos de voto, o acciones sin voto, se considera una mala práctica. Estos son los cuatro temas, en los demás estamos bien. Las auditorías son correctas y por lo general, las compañías están bastante bien en cuanto a gobierno corporativo se  refiere.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Then there is another point, which perhaps we are seeing more at an international level, which is how large institutional investors are entering companies with very clear requirements and which in some cases even mean changing or making a significant change in the policies that these companies have followed up to now. Is this expected to happen here in Spain?[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Esperamos que sí. Bueno, antes me gustaría hacer una aclaración entre los inversores activos y los inversores activistas. Yo creo que lo que hay que ser es activo, accionistas activos y responsables. Inversores que asumen su papel de fiduciario, de representante de los inversores (institucionales o no) y que ejercen esa labor de control, de monitorización sobre las compañías. Por otro lado, los activistas, que suelen ser más corto-placistas y que intentan provocar cambios inmediatos, son otra categoría que de momento no son objeto de nuestra atención. Sí que esperamos que, con esta nueva directiva, el inversor español sea un poco más activo, un poco más responsable que hasta ahora. Empieza a haber interés, por las prácticas internacionales y por la nueva legislación, que aquí en España no ha ido tan lejos como en otros países.

As I mentioned before, there are four codes aimed at companies and not a single one aimed at investors, there is not a stewardship code such as in the United Kingdom, France, Germany, Holland, Denmark and Switzerland. And here in Spain we don't have any, the participation of Spanish institutional investors has always been in favour of the board, even in a much lower percentage than the Anglo-Saxon ones. Let's hope that this changes. However, institutional investors do not participate very aggressively and normally do not take an overly activist or conflictive attitude, but rather go with the companies and try to support them. In the end it's more the EngagementThe involvement, the implication, to continue with them all year round, not only in the meetings, to visit them from time to time and to observe their evolution. So, yes, indeed, that is why we have set up here. We hope that the Spanish investors (since the issuers have already complied and have put themselves on a European and international level) will also rise to the occasion. We are here to help them and to bring these European practices to Spain.

Watch the interview here: video

Read the article from Dirigentes Digital here


Corporance Asesores de Voto


Corporance Asesores de Voto

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