Annual Corporate Governance Report 2017

18 protocol on the involvement of the Board’s Executive Committee in especially important matters; (ii) as a matter of good governance practice, the Company will now require that the external auditor hold an annual meeting with the full Board to report on the work performed and developments in the Company’s accounting and risk situations; (iv) where physical presence of directors at Board or Committee meetings is impracticable, in accordance with the provisions of the Board Regulations means have been put in place to support remote involvement by directors; (v) where the face-to-face or remote presence of a director is impracticable altogether, the Company tries to avoid concentration of proxy appointments of a single director, while abiding by the rules on this point in internal regulations, or of delegation of powers from non-executive directors to another non-executive director; (vi) the Company has included in the annual calendar of meetings of the Board and of its Committees new ordinary meetings - specifically, one Board meeting and one meeting of the Audit and Control Committee; (vii) we have increased the duration of some of the scheduled meetings of the Audit and Control Committee; (viii) we have completed the 2017 assessment process before the adoption of this report so that it would reflect the most significant steps forward. This internal analysis concluded that there had been a very high degree of compliance with and application of the 2017 Action Plan proposals. However, they will continue to be taken into account as a frame of reference in future years. C.1.20.bis Describe the process of assessment and specify the areas assessed by the board of directors, with the assistance, as the case may be, of an external consultant, as to diversity of membership and skills, operation and membership of board committees, the performance of the chairman of the board and of the chief executive of the company, and the performance and contribution of each director. In 2016 the Board decided to engage an external consultant, Deloitte Advisory, S.L., to assist the Board in self-assessment and assessment of its own members and Committees, with the technical support of the office of the Secretary to the Board. The Board will seek this outside assistance every three years in accordance with Recommendation 36 of the Good Governance Code. The 2017 assessment was conducted internally. The evaluation goes beyond the functioning of the Board as a collegial body to includes that of its committees, the diversity of the Board’s membership and skills, the performance of the Company’s Chairman, CEO and Secretary to the Board, and the performance and contribution of each director, with a special focus on the heads of the Board committees. The following elements were considered: 1) 2017 Action Plan. 2) Documentation for 2017 (minutes, notices of meeting, proxy appointments, etc). 3) The results of directors’ individual assessment questionnaires. 4) Annual reports on the structure, functioning and activity of the Board of Directors and of the Board committees, prepared and approved by the bodies to which they refer, except that of the Board, which is prepared by the Appointments and Remuneration Committee and submitted to the Board for approval. These reports are structured as follows: internal rules, powers and duties, membership, functioning and key activities in the year. They specifically refer to the changes affecting each collective body, and to regulatory developments arising in the year. The outcome of the assessment is published in a comprehensive report which contains an Action Plan for 2018, with specific verifiable proposed measures, supported by an earlier report by the Appointments and Remuneration Committee and adopted on the day of this report. C.1.20.ter Disclose any business dealings that the consultant or any of its group companies maintain with the Company or any of its group companies. C.1.21 Indicate cases in which directors are obliged to resign. According to article 14 of the Board Regulations, directors must tender their resignation to the Board and formally step down from office, if considered appropriate by the Board: a) When executive directors no longer hold the executive or management offices to which their appointment as directors was linked.