Corporate governance

Corporate governance

Attendance and representation

The right of attendance, as well as the means and procedures for granting representation at the General Shareholders' Meeting, are regulated in article 15 of the Articles of Association of Red Eléctrica and in articles 9 and 10 of the Regulations of the Shareholders' Meeting which establish the following:

Article 9. Right to attend

Shareholders may attend the Shareholders' Meeting if they are up to date in the payment of calls on unpaid capital and prove their ownership, by means of a certificate issued in their name on the accounting record of book entries five days before the date on which the Meeting is to be held.

Shareholders shall ask the Entity in charge of the accounting record to issue the appropriate certificate of entitlement or equivalent document from the accounting record of book entries of the Company's securities, in order to obtain, where necessary, the appropriate attendance card from the Company.

Attendance cards must be issued bearing the holder's name to shareholders who prove that their shares were entered on the accounting record at least five days prior to the first call. The Entity in charge of the accounting record must send Red Eléctrica Corporación, S.A., before the date set for holding the Shareholders' Meeting, the list of cards it has issued at the request of its respective clients. The registration of attendance cards shall commence two hours prior to the time set for holding the Shareholders' Meeting.

Company Directors and executives must attend Shareholders' Meetings.

In general, in order to promote the widest dissemination of proceedings and the resolutions adopted, the media shall be allowed access to Shareholders' Meetings. Furthermore, in order to facilitate such dissemination, the Meeting may be recorded in audiovisual form.

Article 10. Representation

Shareholders who are entitled to attend may be represented at the Shareholders’ Meeting by another person, in the manner established by law and in the Bylaws. The proxy must be granted in writing and specifically for each Shareholders’ Meeting.

No person may accumulate proxies in the name of the same shareholder which confer on him voting rights in the name of such shareholder that exceed the limits established in Article 5 of the Corporate Bylaws.

Proxies may also be granted by means of postal or electronic correspondence or by any other means of remote communication, provided that the identity of the individual granting the proxy and the security of the electronic communications are duly guaranteed, pursuant to the provisions of the applicable legislation and subject, if appropriate, to the provisions of Articles 15 and 17 bis of these Corporate Bylaws on the casting of votes by the aforesaid means, insofar as this is not incompatible with the nature of the proxy granted.

The provisions of the preceding two paragraphs shall also apply to the notification to the Company of the appointment of the proxy-holder and to the revocation of the appointment.

The Company shall establish the system for electronic notification of the appointment, with the formal, necessary and proportionate requirements in order to guarantee the identity of the shareholder and of the proxy-holder(s) appointed by him.

Where instructions are issued by the represented shareholder, the proxy-holder shall cast his vote in accordance with such instructions and shall be obliged to keep the instructions for a period of one year as from the date of the relevant Shareholders’ Meeting.

Proxy-holders may hold the proxies of more than one shareholder with no limit on the number of shareholders they may represent. Where a proxy-holder holds several proxies, he may cast votes in different directions, in accordance with the instructions received from each shareholder. In all cases, the number of shares represented shall be calculated for the valid constitution of the Shareholders’ Meeting.

Prior to his appointment, a proxy-holder must provide detailed information to the shareholder on whether he has any conflict of interest, in accordance with the provisions of Article 523 of the Corporate Enterprises Law. If the conflict arises after his appointment and the proxy­holder has not warned the represented shareholder of its potential existence, he must inform the shareholder immediately. In both cases, if no new specific voting instructions have been received for each of the items on which the proxy-holder is to vote in the name of the shareholder, the proxy-holder must refrain from casting the vote.

Where the Directors of the Company, or another acting for the account or in the interests of any of them, have made a public proxy solicitation, the Director obtaining it may not exercise the right to vote attaching to the shares represented on those items on the agenda in respect of which he has a conflict of interest unless he has received specific voting instructions from the represented shareholder for each item, as provided in this Article, in accordance with Article 526 of the Corporate Enterprises Law.

Any entities registered as entitled shareholders according to the share accounting register, albeit acting on behalf of other persons, may in any case fraction their vote and vote against the proposal, further to different voting instructions, if such are received. These intermediary entities may grant a proxy to each indirect holder or to third parties designated by the latter, without limitation on the number of proxies granted.

Personal attendance of the Shareholders Meeting by the shareholder represented shall be deemed to revoke the proxy granted.

Attendance shall have the same effect on votes cast absentee, as indicated in Article 15.8 of these Regulations.

The shareholder’s proxy-holder may appoint a substitute to cast the vote where there is a conflict of interests.