Annual Corporate Governance Report 2017

17 decisions, assessing the aptitudes, experience and merits of the proposed candidate, and which will be attached to the minutes of the General Meeting or of the Board itself. The proposed appointment or re- election of any director must also be preceded by a report from the Appointments and Remuneration Committee. Between the call of General Meeting and the date on which the meeting is held, the Company must publish, on an on-going basis, at least the following information on its website regarding the people proposed for appointment, ratification or re-election: a) identity and track record; b) other remunerated activities performed; c) the director class for which such people are proposed, highlighting, where appropriate, the shareholder they represent; d) the date of their first appointment as director, and of any subsequent re-elections; e) shares of the Company, and share options held by them, and f) the proposal and report referred to earlier. If the candidate is a corporation, the information must include these same particulars for the individual who is intended to be appointed as representative. Re-election (Article 13(1) of the Regulations) The directors shall exercise their duties during the period established in the Company’s articles (four years), and may be re-elected one or more times for periods of equal duration. Assessment (Article 15(2) of the Regulations) The Chairman of the Board is responsible for organising and coordinating with the chairpersons of the related Committees the periodic assessment of the Board, and, where appropriate, that of the Chief Executive Officer or of the lead executive. Removal (Article 14 of the Regulations) Directors will no longer hold their offices when so decided by the General Meeting, when they tender their resignation to the Company or once their term of office has elapsed. The directors must offer their resignation to the Board of Directors and execute the related resignation in the cases detailed in the following section C.1.21 of this Report. The Board of Directors will refrain from proposing the dismissal of any independent director before the end of the statutory term for which he/she was appointed, unless there are justified reasons, in the opinion of the Board and subject to a prior report from the Appointments and Remuneration Committee. Just cause will be deemed to exist when the director occupies new posts or assumes new obligations preventing him/her from devoting sufficient time to performing director functions, when he/she breaches the duties inherent in his/her post or when any of the circumstances arise preventing him/her from becoming an independent director. The Board of Directors will propose the dismissal of the remaining directors before the end of the statutory term for which they were appointed, when there are justified reasons, in the opinion of the Board, subject to a prior report from the Appointments and Remuneration Committee. The removal of independent directors may also be proposed when a takeover bid, merger or similar corporate operation produces changes in the Company’s shareholder structure, in order to meet the proportionality criterion set out in the Regulations. When a director, Secretary or Deputy Secretary to the Board of Directors leaves his/her post before the end of his/her term of office, he/she must explain the reasons in a letter submitted to all the Board members, without prejudice to the fact that this cessation is notified as a Significant Event to the CNMV, and that the reason for the cessation is explained in the Annual Corporate Governance Report. In particular, in the event that the resignation is due to the fact that the Board has adopted significant or reiterated decisions with respect to which the director, Secretary or Deputy Secretary have evidenced serious reservations which have led them to resign, such circumstances will be stated in the resignation letter addressed to the Board of Directors. C.1.20 Describe the extent to which the board’s annual assessment has prompted significant changes in internal organisational structure and procedures: Description of the changes The Secretary to the Board performed an analysis on the measures and proposals included in the 2017 Action Plan that formed part of the 2016 assessment report. The improvements included were: (i) in response to a favourable report issued by the Appointments and Remuneration Committee the Board has adopted a protocol for the succession of the Chairman and the Chief Executive Officer and a