CMVM proposes creation of commission for the selection and evaluation of managers – Jornal de Negócios – Portugal

CMVM proposes creation of commission for the selection and evaluation of managers

The capital market regulator has placed in public consultation until 22 August some changes to the Corporate Governance Code. Among them is the creation of a committee to select and evaluate administrators.

The Securities Market Commission (CMVM) is developing a “thorough review process standards corporate governance “in the light of its commitment to periodic review of its corporate governance, changes that have been taking place every two or three years.

However, “given the lessons to be drawn from recent events in our market with regard to the selection and evaluation of directors of listed companies, a specific aspect of this review should not be delayed,” the document published by the institution led by Carlos Tavares (pictured).

So, the CMVM decided that “a proposal specific change that, because of its importance in the promotion and development of best corporate governance practices, as well as by the context and European regulatory and cultural developments in this area is justified submit in advance for public consultation “in anticipation of the review process.

In this sense, the CMVM proposes the creation of a commission for the selection and evaluation of directors of listed companies. This committee will have four main functions. The first of these is “to assess to what extent the current composition of the corporate bodies is appropriate depending on the situation and prospects of development of society by taking into account the evaluation of the performance of each of its members.”

In addition, this committee is responsible also establish criteria and requirements for the new members of the corporate bodies to the appropriate profile role to play . These profiles should include in addition to individual attributes such as independence, integrity, experience and competence, diversity of requirements, including gender.

A third function of this committee is to ensure that selection procedures are transparent and contain effective mechanisms for identifying potential candidates, “and to ensure that among alternative candidates suitable profile are chosen for appointment, election or co-option proposal those with greater merit, promote greater diversity in the composition of corporate bodies and contribute to greater gender balance. “

On the other hand, the committee must decide on the proposals on appointment or election in the General Meeting of members of corporate bodies.

These recommendations should be guided by a program to establish and publish by each society. And this must include goals to ensure, by 2020, a greater gender balance.

With these changes, the CMVM want the selection procedures for members of the management bodies are “efficient” and subject to “objective criteria relating to the profile of new members, equality of opportunity and merit the privilege.” It also aims to ensure an effective evaluation of the performance of members of corporate bodies and their composition and ensure greater diversity in the composition of the board of directors and supervision, including gender.

“A balanced composition of governing bodies not only allows a greater and more constructive confrontation of opinions in the definition of strategy society and the delimitation of the most suitable means for its implementation, but also more effective syndication of the business, based on a better control of risks, without jeopardizing the pillars of the division of labor and team collaboration, “concludes the CMVM .

To get to these changes, the CMVM preliminarily heard the Portuguese Institute of Corporate Governance (IPCG), the Association of Listed Companies Issuing Securities in Market (AEM) and the Euronext.

Until August 22, all market players, investors, academics and the general public will be able to comment on these proposed changes, “presenting their comments, suggestions and contributions.”