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directors. The latter provide their direct knowledge on the Group’s management with respect to all
material executive matters.
The common purpose of this Executive Committee within the Company is mainly to deliberate and
reflect, analyse and support the Board of Directors. Therefore, it does not assume executive
functions of any type, nor does it exercise delegated powers, not even on a complementary basis
with the Board of Directors, except in specific exceptional circumstances that are subsequently
expressly ratified by the Board of Directors itself. Accordingly, there is no substitution, not even
complementary, of the Board's actual control activity which, in fact, is the common preferential body
to govern the Company, both with respect to ordinary and extraordinary matters. In this same
regard, it must be highlighted that the meetings of the Executive Committee coincide with those of
the Board itself, in most cases, but the Executive Committee meetings always take place first, the
content of which is immediately notified by the Chairman to the plenary session of the Board of
Directors.
The Secretary to the Board is also the Secretary of the Executive Committee.
38.
The Board should always be kept fully informed of the business transacted and the decisions
adopted by the Executive Committee. To this end, all Board members should receive a copy of the
Committee’s minutes.
Complies
39.
Audit Committee members, particularly the Chairman, are appointed in light of their knowledge and
experience of accounting, audit or risk management, and the majority of such members must be
independent directors.
Complies partially Explain:
Complied with in full, except with respect to the majority of its members being independent.
However, it is expected that the required resolutions will be adopted in 2016 by the General
Shareholders’ Meeting for the corresponding amendment of the Articles of Association, thereby
guaranteeing the full monitoring of this Recommendation, whose content must be complied with in
accordance with article 529 quatercedies, which will enter into force in June 2016, amended by Audit
Law 22/2015, of 20 July.
40.
A unit must exist that assumes an internal audit function, under the supervision of the Audit
Committee, to ensure the proper operation of internal control and reporting systems, which
functionally depends on the Non-executive Chairman of the Board or on that of the Audit
Committee.
Complies
41.
The unit head that assumes the internal audit function should present an annual work programme to
the Audit Committee; report to it directly on any incidents arising during its implementation; and
submit an activities report at the end of each year.
Complies
42.
The Audit Committee should have the following functions in addition to those stated by Law:
1.
With respect to internal control and reporting systems:
a)
To supervise the process of drawing up the financial information and its integrity for the
Company and its Group, where appropriate, reviewing compliance with regulatory
requirements, the suitable scope of the consolidation perimeter and the correct
application of accounting principles.
b)
Oversee the independence of the unit that assumes the internal audit functions, propose the
selection, appointment, re-election and termination of the head of the internal audit service,
as well as the budget for the service, approve the guidance service and its work plans,
ensuring that its activity is focused mainly on the Company's significant risks; receive