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Good Corporate Governance

16 April 2019

One of the most immediate challenges faced by modern companies is the incorporation of the culture of Good Corporate Governance, and the consequent transfer of this culture to the whole organization.

In this line of action, members of the management of Grupo T-Solar (among them our CEO Marta Martínez Queimadelos has obtained DIPLOMA IC-A for Professional Counselors) have been carrying out different courses with the clear objective that our company remains in the position of leadership that corresponds for its determined will of transparency and good practices, its social, labor and environmental commitment, as well as for its innovation trajectory, with presence in six countries on three continents. The recent assignment of Grupo T-Solar as a signatory partner to the UN Global Compact, of which we reported in these same web.

We understand that there are three poles that are generating the current boom in Good Government policies for companies:

1. Pressure of the Society:

From the demands of the society in which the company is inserted (human rights, labor policies, environmental policies, anti-corruption measures, etc.),
From the international society with its different agents, agencies and programs (for example the UN or the European Commission).

European Commission: Renewed EU strategy for 2011-2014 on corporate social responsibility. Brussels, 25.10.2011

From the national governments in their respective fields. As regards our country, three are the most recent documents promulgated, regulating this area.

Law 19/2013, of December 9, on Transparency, Access to Public Information and Good GovernanceLaw 31/2014, of December 3, which modifies the Capital Companies Law for the improvement of corporate governance.Code of Good Governance of valued Companies in February 2015

2. The role of investors.

It will have to be taken into account:

The increasing internationalization of companies (globalization).
The access of these companies to financial markets.
Pressure from investors (private equity firms and institutional funds)

Undoubtedly, the investment will be made in that environment that offers the best guarantees of sustainability, permanence, and lack of risks. These three items will be part of the management of this Good Corporate Governance.

The growing awareness on the part of the top executives, board of directors, and shareholder meeting of the different companies, that their true involvement in complying with the Good Government programs, mean not only an increase in value and the corporate reputation of the company (and therefore of legitimate monetary benefits), but also an increase in the no less benefits (although not monetary), of solidarity, cooperation and human recognition (values today somewhat down) . It is what is called "emotional salary".


The conciliation measures of work and personal life are also framed within what is known as emotional salary, which can be defined as the non-monetary compensation offered by the company to the staff employed. Among the concepts that include the emotional salary are the opportunities for development, psychological well-being and the balance of life. To ensure that the staff is in a safe work environment, with recognition of professional opportunities and that they can enjoy all facets of life (work, leisure, family ...)

Source: Good practices of conciliation and co-responsibility in companies with the distinction "Equality in the company" Sector analysis and by company size.

European Union, European Social Fund.

Government of Spain. Ministry of Health, Social Services and Equality.

In this way, a Good Corporate Governance (what has been called Socially Responsible Capitalism) generates confidence in investors, exercises prevention over negative situations, configures the necessary control and balance environment and reaffirms good business practices.

The Good Corporate Governance of which we have been speaking forms part of one of the three dimensions or levels that make up the so-called Triple Bottom Line (TBL), as one of the names with which Corporate Social Responsibility (CSR) appears, Corporate Social Responsibility (RSE), Socially Responsible Investment (SRI), or the ESG, acronym of Environmental, Social and Governance.

We use the Borromean rings property to try to graph the link between the classic levels in which most catalogs give an account of their respective developments.

The graphic shows two definitions, related but with different nuances: Corporate Responsibility and Social Responsibility. The very interesting definitions are from JAMES CHEN.

We wanted to place the ILO MNE Declaration as a reference for the socio-labor aspects of businesses. Other ILO document on Corporate Social Responsibility can be found at the end.

For the British professional services firm EY the following points would be key in the management of corporate governance:

Analyze the positioning in Corporate Governance
Measure the effectiveness of the organization's internal control systems
Improve corporate reporting
Act diligently: The greatest security and protection of the counselor
Evaluate the fulfillment of the Council's objectives
Define an adequate remuneration policy for directors and executives
Ensure compliance with Corporate Governance requirements in tax matters
Support the creation of international Corporate Governance standards

The five advantages listed in the chart regarding Good Corporate Governance are presented on the web DELOITTE, abounding in each one of the points.

According to the report Director's Alert 2018, cited by Deloitte, there are three factors that could affect the control of the CORPORATE REPUTATION:

Strengthen the relationship between strategy and risk tolerance.
The CEO's transition and the impact on the organizational culture.
Maintain the pace of digital innovation.

"An organization with a good reputation is synonymous with generating value, minimizing global risks and differentiating in the market." (...) "It takes 20 years to build a reputation and five minutes to ruin it. If you think about it, you will do things differently. Warren Buffet "(...)" An allusion is made to the Reputation Economy to refer to the new paradigm of business management where the perceptions of a company are those that determine the relationships with it; without leaving behind that the focus of the decision - to buy, invest or work in it - has moved from what it does to what it is (our bold), from the quality of its products and services to its ability to satisfy the expectations of its stakeholders and generate fair value for each one of them ", Sara Cebrián 2015.

According to García López, María José (2015) in her text Triple Bottom Line, published in the Journal of Accounting and Management, nº 20, pp. 65-78 and cited by CEREM Business School in May 2018, advantages of implementing a CSR would be:

Increase in profit and the market:

Increase in market share and turnover
Increase the possibility of penetration in new markets
Quality improvement
Improvement of competitiveness
Improvement of relations with customers and the public

Improvement of the commercial margin and productivity:

Increase in operational efficiency
Reduction of costs for materials, energy and waste
Overall cost reduction
Reduction of transport, storage and packaging costs
Reduction of fines, insurance and compensation costs for workers due to work accidents
Improvement of employee mood, productivity and creativity.

Better conditions of access to capital:

Greater attractiveness for investors
Access to public subsidies.

Reduction of capital costs:

Reduction of working capital and operational costs
Reduction of fixed capital and changes in the conception of the equity balance
Reduction of capital costs through improvement with investors and the rest of the parties involved.

Improvement of organizational functions:

Improvement of the information available for decision making
Clarification of organizational and accounting responsibilities
Operational processes and business development more stable
Establishment of continuous improvement programs.

Regarding the role of investors in the configuration of the ESG , we extracted this data from the work of James Chen (already quoted) of recent news - April 2019: "According to the most recent report of the US SIF Foundation, investors had $ 11.6 billion in assets chosen in accordance with the ESG CRITERIA at the beginning of 2018, compared to $ 8.1 billion just two years before "(...)" Trillium Asset Management, based in Boston, with $ 2.5 billion under management, uses a SELECTING ESG FACTORS to help identify companies positioned for solid long-term performance. "(...)" Financial services companies such as JPMorgan Chase, Wells Fargo and Goldman Sachs have published annual reports that comprehensively review their ESG APPROACHES and results. final. "

In relation to the foregoing, a non-despicable aspect of investor evaluations with respect to companies consists of the increasing importance (with percentage increases attested) attributed to the non-financial information reported by these companies. A few brushstrokes in this regard can be found on EY web with the following headline "Transparency, creation of value long-term and social and environmental sustainability will mark the future of the business world "and where they are considered: the Annual Report, the Integrated Report, and the Press Coverage and Professional Comments, as the most requested non-financial information by investors. "


1. Environmental, Social and Governance – ESG Criteria REVIEWED BY JAMES CHEN Updated Apr 5, 2019

2. Implantación de planes de igualdad en organizaciones laborales

3. Buenas prácticas de conciliación y corresponsabilidad en las empresas con distintivo “Igualdad en la empresa” (Red DIE). Análisis sectorial y por tamaño de empresa

4. Deloitte.

5. Ernst & Young

6. Cebrián, Sara (2015): Reputación corporativa, uno de los activos intangibles más estratégicos de una compañía.

7. OIT: Iniciativa InFocus sobre responsabilidad social de la empresa 



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