Governing law `too little, too late'

Spanish economists and academics welcomed a decision by the economy ministry to bring forward the implementation of new corporate governance rules, but criticised the government for missing an opportunity for deeper reform.
"Neither the Transparency Law nor the recent ministerial decree has introduced innovative ways to promote a greater say for shareholders in annual meetings of Spanish companies," said Corporate Governance Spain, a group of economists that study shareholders' rights at Soler-Padro, a specialist law firm.
The rules oblige listed companies to publish an annual corporate governance report as well as the rules governing shareholder meetings.
In spite of the good intentions, shareholder rights activists say the reforms are too little, too late.
"In a country notorious for `rubber-stamp' style shareholder meetings, emphasis should have been placed on shareholder proposals, dissident initiatives, proxy voting processes and shareholder litigation," CG Spain, a member of the European Corporate Governance Service, said last week. The rules were brought forward in the wake of concerns over the Parlamat financing scandal and slow pace of compliance with international governance standards.