New information obligations for large undertakings and listed companies

Company Law, Corporate Governance and Compliance

Last 25 November Royal Decree-Law 18/2017 of 24 November (the “Royal Decree-Law”) was published in the Spanish State Gazette (BOE). Directive 2014/95/EU of the European Parliament and of the Council, dated 22 October 2014, which modifies Directive 2013/34/EU as regards the disclosure of non-financial information by certain large undertakings and groups and information on diversity by listed public limited companies, was thus transposed into our own legislation.

The Royal Decree-Law modifies some aspects of the Code of Commerce, the consolidated text of the Corporations Act and the Accounts Auditing Act.


The modifications brought in by the Royal Decree-Law (in force from the day after its publication in the Spanish State Gazette), will be applicable for financial years starting as from 1 January 2017.


To whom does the Royal Decree-Law apply?

The new obligations on disclosure of non-financial information apply to companies (or groups of companies) considered “entities of public interest” by the accounts auditing legislation, with an average number of workers over 500 and which are in turn considered as being “large undertakings”; that is, ones which meet at least two of the following circumstances for two consecutive financial years at the date of closing each of these years: 

- For the total amount of asset items (or consolidated assets, where applicable) to be over 20,000,000 euros.

- For the total net amount of annual turnover (or where applicable, the consolidated annual turnover figure) to be over 40,000,000 euros.

- For the average number of workers employed during the year to be over two hundred and fifty.  


These will also apply in the first two company years from the firm’s incorporation when at least two of the three aforementioned circumstances are met at closure of the first year and the average number of workers employed by the company is over 500.

They shall no longer have this obligation if they cease to meet two of the aforementioned three requirements for two consecutive financial years or when the average number of employees is not over 500 at the close of the year.

A company belonging to a group will be released from this obligation if that company and its subsidiaries are included in the consolidated management report of another company at which this obligation is indeed complied with.

The new obligations for information on diversity policies of the annual report of corporate governance are for “listed public limited companies (sociedades anónimas)”.


New statement of non-financial information

1. The Royal Decree-Law governs the content of the non-financial information statement that respectively has to be included in the management report of consolidated and individual annual accounts, or in a separate report, for the same year, with the same content and subject to the same criteria as regards approval, depositing and publication as the management report.

2. The statement of non-financial information shall include a short description of the organisation’s business model, the policies, procedures and measures applied in respect of environmental and social issues, as well as information on staff, respect for human rights and the fight against corruption and bribery, for risk identification and evaluation and on verification and control. It shall also include the results of these policies and the main risks associated with these issues, along with key indicators of any non-financial results which are relevant in respect of the specific business activity.

3. If the company does not apply any policy in the aforementioned areas, the statement of non-financial information shall contain a clear and grounded explanation about this.

4. The information must be based on recognised national or European Union or international regulatory frameworks, specifying which system this was based on. In Spain the Eco- Management Audit Scheme (EMAS) may be used, this being adapted to our legal system.

5. The information contained in the management report shall not under any circumstances justify its absence from the annual accounts when this information has to be included in these.

New information to be included in the annual report on corporate governance: diversity policy.

The Royal Decree-Law lays down the obligation of “listed companies” to include in the annual report on corporate governance a description of the diversity policy applied with regard to the board of directors (including objectives, measures applied, forms in which these have been applied and results, as well as measures agreed where applicable by the appointments committee). This shall include such issues as training and professional experience, age, disabilities and gender (referring to the measures that had been applied to attempt to include a number of women representing a balanced presence of men and women on the board).

In the event of the company not applying a diversity policy, there is no obligation to apply one, but there must be a clear explanation of the reasons for this not being applied. Small and medium-sized companies are only obliged to provide information about the measures that they had adopted as regards the gender issue.