The government is going to modify good governance laws for companies listed on the Spanish stock market. Minster of the Economy Luis de Guindos announced that one of the key changes will be to limit the number of years that someone can serve as an independent adviser to twelve years.
The 12-year limit marks a bona fide revolution for many companies on the Ibex, because they at least half of them will be forced to make adviser changes. BBVA, Santander and Viscofán will be hit the hardest because each one of them will have to substitute four board members. De Guindos's reform ought to make it crystal clear what constitutes an ind pendent adviser and. The goal of the measure is to guarantee that the independent advisers defend minority shareholder interests without bending their decisions to fit management's beliefs about where these companies should go.
At this point, many advisers are called "independent" even though they have links to the firms. Several presidents and vice-presidents were either CEOs or investors in the companies they now represent. It is sensible that De Guindos wants to erect some term limits, but it is more critical that these advisers have adequate training and experience to fill their roles -- whether academic or professional.
