Companies comply with the Corporate Governance Code (CGS), aimed at promoting good governance practices in companies, but there is still room for improvement in areas such as the appointment of independent directors, reveals a report released this Tuesday, 9th.
The CGS Annual Monitoring Report – created in January 2018 and reviewed in 2023 by the Portuguese Institute of Corporate Governance (IPCG) – indicates that 95% of the 60 recommendations, broken down into 84 sub-recommendations, have already been adopted by the 15 companies that make up the PSI, the main Euronext Lisbon index.
This acceptance percentage drops to 87% among the 35 companies monitored in 2024, the year referred to in the report prepared by the Executive Monitoring and Monitoring Committee, responsible for monitoring the application of the CGS.
In relation to the previous year’s edition, the reception percentage for all companies considered remains unchanged (87%) and there is an increase of one percentage point among the companies that make up the PSI (from 94% to 95%).
Among the CGS determinations most accepted by companies, the areas of risk, internal control and supervision stand out. In companies in the PSI index, the identification, monitoring and mitigation of risks, as well as the independence of the statutory auditor, achieved compliance rates close to or equal to 100%, according to the report.
Information on the use of artificial intelligence mechanisms in decision-making is one of the recommendations whose adoption has grown the most, rising to 89% in the total universe of companies and reaching 100% in PSI companies.
The appointment of a coordinator of independent directors, reinforcing the balance of the boards of directors, went from 50% to 61% in the global universe and from 82% to 91% in PSI companies, registering another of the most significant developments of this edition.
Among the recommendations least accepted by companies, ranging between 46% and 66% in the case of PSI companies, are rules such as the creation of specialized corporate governance committees, the inclusion of a minimum number of independent directors, the deferral of the variable remuneration of executive directors and non-face-to-face participation of shareholders in general meetings.
It is concluded, therefore, that matters related to the independence of members of corporate bodies, the participation of shareholders in general meetings, the existence of specialized committees and the qualification of appointment processes continue to require further progress.
As in the previous edition of the report, the level of recommendations most accepted (with an overlap of seven recommendations out of a total of ten) and least accepted (with an overlap of eight out of a total of ten) is stabilized.
The report for 2024 evaluated 35 companies, including the fifteen companies that were part of the PSI index, as well as three unlisted companies, one of which for the first time.
Prepared by the Portuguese Institute of Corporate Governance, the CGS constitutes “an instrument for promoting good corporate governance practices” among national companies.