The duties of the administrators of listed companies are the guidelines and obligations that the Capital Companies Law sets forth in the Spanish regulations in this regard. Thus, the way in which business companies should be managed and directed is established.
At present, the duties of the administrators of listed companies are included in the Capital Companies Act, more specifically in Chapter V of Title VII, called “The responsibility of administrators”.
In Spanish legislation, these concepts have been gradually developed through the different regulatory updates that this field has experienced over the years. The main antecedents regarding the duties of administrators are found in the Public Limited Companies Law of 1951, with its corresponding revisions in the following decades, and the Transparency Law of 2003, a previous step before the current law enacted in 2014.
With the current legislation, the duties of the administrators of listed companies and many other regulatory points have been reinforced in order to signal and improve their responsibilities.
Basically, the points on which this series of guidelines in the form of duties are based are two: the duty of diligence and the duty of loyalty. As the law is deepened, both duties are carefully explained in different respects.
- Duty of diligence: By law, administrators must effectively exercise their position, inform themselves promptly and diligently about the progress and proper functioning of the company, appoint and remove managers, take responsibility for surveillance or supervision tasks of the company and act accordingly. Discretionary manner and in accordance with current regulations and the company’s own statutes.
- Duty of loyalty: Administrators will have the obligation to perform this position doing it as faithful representatives of society and carried out in good faith. Also important is their responsibility when making decisions in a way that is beneficial to the company and not to themselves. In other words, avoiding potential conflicts of interest.