On June 27, 2017 the Spanish Securities Market Commission (“CNMV”) approved a Technical Guide (the “Technical Guide” and “the Guide”) on audit committees at public-interest entities (“PIEs”) to provide a number of principles, recommendations and standards for the proper functioning of audit committees.
The recommendation that listed companies should create an audit committee first appeared in Spain’s earliest good corporate governance code, the Olivencia Code, published in 1998. In 2002, that recommendation became a statutory duty for listed companies. And in 2015, the Spanish Audit Law (Ley 22/2015, “LAC”) broadened the duty to have an audit committee to public-interest entities.
Besides listed companies, the term “public-interest entities” also encompasses certain financial institutions subject to supervision and enterprises over a given size threshold (financial institutions or non-financial firms with more than 4,000 employees and a net turnover (revenues) of over €2 billion), as provided in article 3.5 LAC.