[Last updated: 1 January 2024, unless otherwise noted]

Corporate governance regulation in Spain is contained in two sets of rules. There are certain compulsory corporate governance rules primarily set forth under the Spanish Companies Act (Ley de Sociedades de Capital). There are also certain voluntary rules set forth under the Good Governance Code of listed Companies of 2015 (as amended in June 2020), which are subject to the "comply or explain" principle.

The core of the Spanish compulsory corporate governance rules are in line with European Union standards and Directives, and incorporate certain corporate governance provisions, including information and transparency duties (such as the obligation to publish an annual corporate governance report and an annual directors' remuneration report), certain directors' duties (namely in regard to conflicts of interest), provisions regarding directors' remuneration, the obligation to approve an internal regulation of the general shareholders' meetings and the board of directors or the requirement to have an audit committee and a nomination and remuneration committee, regulations concerning general shareholders' meetings (including certain rules for calling shareholders' meetings and for participating and voting in the meetings) and the exercise of shareholders' rights (such as information rights prior to the general shareholders' meeting or the recognition of the principle of equal treatment of shareholders).

The Spanish Companies Act (Ley de Sociedades de Capital) only applies to Spanish companies. Therefore, the corporate governance regulations set out therein (mainly the regulation relating to directors' duties, to the obligation to approve an internal regulation of the general shareholders' meetings and the board of directors, to the exclusion of pre-emption rights and to the exercise of shareholders' rights) are generally not compulsory for non-Spanish companies listed in Spain. Spanish law does not provide a specific legal regime for foreign companies listed in Spain and in the case of a primary listing in Spain the laws of the issuer's country of origin will need to be considered. It is common practice that non-Spanish companies listed in Spain voluntarily comply with these regulations by incorporating them to their internal regulations and by-laws.

The voluntary corporate governance rules set forth in the Good Governance Code contain recommendations relating to a wide range of corporate related matters, such as the size and functional structure of the board of directors or the recommended proportion of independent and proprietary directors. The companies required to issue an annual corporate governance report are also required to include in the report an explanation of the degree of compliance (or lack of compliance) with the recommendations included in the Good Governance Code. Therefore, Spanish legislation leaves it up to the companies to decide whether or not to follow corporate governance recommendations, but requires them to give a reasoned explanation for any deviation, so that shareholders, investors and the market can reach an informed judgment of their corporate governance practices.