1. Secretary of the Board of Directors

The Secretary of the Board of Directors aims to ensure the correctness of the proceedings and the compliance of the regulations established (being able to be a member of the Board of Directors or not if additionally, the status of Director falls on the same person).
In addition, based on the provisions of article 529(g) of the Capital Companies Law (in Spanish LSC), it is the responsibility of the Secretary to ensure that the proceedings of the Board conform to the applicable regulations, and are in accordance with the articles of association and other internal rules.

1.1 Duties of the Secretary of the Board of Directors.

  • Facilitate the smooth development of the Board meetings
  • Assist the chairman in the convening and preparation of the agenda of the Board meetings.
  • Advise the Board on all matters of a legal or statuary nature or related to the rules of Corporate Governance.
  • Keep and have custody of the official books.
  • Record in the Minutes’ books, the development of the meetings and agreements adopted.
  • Incorporate these Minutes, once approved, to the corresponding official books.
  • Ensure the entry of the Board’s agreements in the relevant public records, as required.
  • Certify the resolutions adopted by the Board, through the issuance of certifications with the approval of the Chairman.
  • Ensure that the Board’s activity is in accordance with the Company’s laws, articles of association, regulations and internal procedures.
  • Ensure that the Company’s procedures and rules of good governance are respected and reviewed regularly.

1.2 Responsibility of the Secretary of the Board of Directors.

  • In the event of being a director: he/she shall be subject to the same liability as the rest of the directors.
  • In case of not being a director: his/her liability will be limited to the fulfilment of the duties assigned to him/her by the LSC and the internal regulations, and according to each case, could respond for “culpa in vigilando” from the irregular actions that the Board of directors may have committed.

WARNING! In any case, it is recommended that a civil liability insurance policy be taken out.

2. Legal Counsel to the board of directors.

It is convenient to discern and clarify that the figure of the Legal Counsel should not be understood as a general counsel for all of the Company’s activities, since his/her role is limited to legally advising own decisions of the Company’s top decision-making body.

The role of the Legal Counsel to the Board of Directors is not made up with the mere performance of the office of the secretary of the board of directors; however, the Legal Counsel can also assume the role of Secretary.

When the Company has a Secretary or a member of its management or administrative body who attends in the capacity of practising Counsel, with the conditions laid down in Law 39/1975, either of them may assume the duties that this Law attaches to the Legal Counsel.

2.1 The duties of the Legal Counsel.

  • Those inherent to its profession that they can be assigned by the Company’s articles of association.
  • Advise in Law on the legality of the agreements and decisions to be taken by the body that exercises the administration and, where appropriate, from the discussions which he/she attends;
  • Advise in Law on the legality of the agreements for convening the General Meetings that are adopted by the individual or the collegiate body that exercises the administration, and
  • Advise on the resolutions adopted by the Board of Directors in the implementation of resolutions of the General Meetings.

2.2 Obligation of having the figure of a Legal Counsel.

In the case of Companies resident in Spain:

  • When their capital is equal to or greater than three hundred thousand euros (€300,000.00) or,
  • When the normal business turnover, according to the balance sheet and accounting documents for the last financial year, reaches the figure of six hundred thousand euros (€600,000.00)or,
  • When the workforce of their permanent staff exceeds fifty (50) workers.

In the case of companies’ resident Abroad:

  • When their operations or business turnover in branches or premises that they have in Spain is equal to or greater than three hundred thousand euros (€300,000.00 ), or
  • When the workforce of their permanent staff exceeds fifty (50) workers.

3. Penalties

The breach of this legal obligation is legally penalised as it is established that “the infringement will be the subject of specific assessment in any process on the liability arising from the agreements or decisions of the administrative body,” which may be of particular importance considering the increase of corporate crimes that currently can be seen, the criminal responsibility of legal persons, the insolvency proceedings in which the directors’ responsibility in the corporate insolvency is tried, as well as the directors’ responsibility that creditors could demand from them.

Jose María Dutilh Carvajal.