Governance and Sustainability System

In the introductory book, the Purpose and Values of the Iberdrola Group [PDF] comprises the corporate philosophy that informs the focus and organisation of Iberdrola, S.A. and of the other companies of the Iberdrola Group, and guides the strategy and governs the activities, initiatives and decisions thereof. For their part, the Ethical and Basic Principles of Governance and Sustainability of the Iberdrola Group [PDF] inform the rules of IBERDROLA, S.A. and any that the other companies of the Iberdrola Group approve in the exercise of their autonomy, promoting the sustainable creation of value for their shareholders and also considering their other Stakeholders.

The first book starts with the By-Laws [PDF], a body of provisions approved by the shareholders at the General Shareholders’ Meeting which represents the maximum expression of the corporate autonomy of Iberdrola, S.A. and constitute the primary source of its internal framework and the basis for its Governance and Sustainability System. 

In the development of the By-Laws, the rules governing its corporate organisation are particularly significant in the internal framework of Iberdrola, S.A., incorporating best practices in this area and positioning it as a good governance leader. These rules establish the governance rules of the corporate decision-making bodies. They include regulations and procedures that govern, among other things, the composition, powers and rules of operation of its main decision-making and management structures, as well as the duties and obligations of their members. 

All of the foregoing operates based on the corporate and governance structure of the companies making up the Iberdrola Group and on its Business Model defined in the by-law rules and in the Foundations for the Definition and Coordination of the Iberdrola Group [PDF]. The reality of a multinational, made up of multiple companies, diversified and efficiently organised and coordinated for the best development of the corporate object and the achievement of the corporate interest of each of them is recognised therein. 

The policies comprising book two are characterised by their function of linking and solidifying ideas and values into modes, patterns and standards of conduct, rationalising management decisions in various areas and on various issues that so require due to the nature thereof: 

• The transparency and good governance policies, prepared at the forefront of transparency and good governance best practices, apply to its structure and organisation, its character and dimension, and its nature as a listed holding company of an international enterprise. 
• The policies relating to human and social capital are part of the sustainable development strategy and comprise the firm, proactive response of Iberdrola, S.A. to inescapable social challenges, objectives and goals, such as respect for and commitment to human rights, the development of professional relationships based on equal opportunities and non-discrimination, the prevention of harassment and a strong commitment to tackle it, promotion of talent, appropriate knowledge management, professional development and the balance between personal and professional life. 
• The natural capital policies reflect the leadership of Iberdrola, S.A. in the development of a sustainable energy model, based on the use of renewable energy sources and smart grids, electrification, efficiency, reduction in polluting emissions and digital transformation, where respect for and the protection of nature inspire its strategy.  
• The policies related to the sustainable value chain include the fundamental pillars for the value chain to continue creating competitive advantages in the long-term that result in a greater contribution to society.  

As an essential element of the sustainable development strategy of Iberdrola, S.A., the Governance and Sustainability System contains a robust regulatory framework relating to internal audit, the management of risks and corporate control and compliance, which responds to the most advanced requirements in these areas.

The General Risk Control and Management Foundations of the Iberdrola Group [PDF] define a comprehensive system, the purpose of which is to identify, prevent and mitigate those risks that affect the realisation of the broad and ambitious business enterprise of Iberdrola, S.A. and of the other companies of the Iberdrola Group. Regarding the corporate control, the Basic Internal Audit Regulations [PDF] regulate the nature, organisation and powers of the internal audit function, the basic activity of which consists of independently and proactively endeavouring to ensure the effectiveness of the governance, risk management and internal control processes.

For the preparation of the consolidated financial and non-financial information, Iberdrola, S.A. has approved certain basic principles, defined in a policy that responds to the principles of subsidiarity and decentralised management. Also, to guarantee the independence of the statutory audit, the Audit and Risk Supervision Committee has approved a policy with the basic rules that must govern the selection, appointment, re-election and removal of the statutory auditor and ensure that it has the necessary technical skills to effectively, responsibly and independently perform its work. 

Iberdrola, S.A. has a solid and innovative track record in compliance, which it develops on the basis of regulatory requirements and best practices. As part of its Governance and Sustainability System, it has approved a Compliance Policy [PDF] that, together with the Anti-Corruption and Anti-Fraud Policy [PDF] and the Internal Reporting and Whistleblower Protection System [PDF], represent its firm commitment to transparency, and to the ongoing monitoring and penalisation of improper conduct and acts that are illegal or contrary to law or to the Governance and Sustainability System.

The Compliance System of Iberdrola, S.A., which is configured as an effective, autonomous, robust and independent system, which contributes to the full realisation of the Purpose and Values of the Iberdrola Group [PDF] and of the Ethical and Basic Principles of Governance and Sustainability of the Iberdrola Group [PDF]. In particular, the purpose of the Code of Conduct for Directors, Professionals and Suppliers [PDF] is to ensure that Iberdrola, S.A., its professionals and its value chain act in accordance with ethical principles, legality and the Governance and Sustainability System, as well as to prevent, manage and mitigate the risk of regulatory and ethical breaches. 

Finally, in view of the presence of Iberdrola, S.A. in the securities markets and the trading thereon of its financial instruments and securities, the Governance and Sustainability System includes the Internal Regulations for Conduct in the Securities Markets [PDF]. These regulations seek to ensure the equal treatment of all investors and the protection thereof against the improper use of inside information or other conduct constituting abuse.