CaixaBank faces board restructuring after Goirigolzarri’s departure | National and international economics

In the coming months, CaixaBank is facing a major restructuring of its board of directors, with corresponding implications from a governance perspective. The unexpected departure of President José Ignacio Goirigolzarri opened the door to a scenario of corresponding changes in the highest representative body of education. On the one hand, the bank must appoint a new director and at the same time it will have to decide how to cover the terms of office of the other three representatives. According to the European Central Bank (ECB), this is the point at which the bank president will lose executive functions.

The first part has a planned date. Goirigolzarri, who resigned last month, will leave on January 1. He will be replaced by current vice-president Tomás Muniesa, one of two in-house directors representing Criteria’s first shareholder, the investment arm of the La Caixa Foundation, with a 31% stake. This change alone will require a restructuring of the board. Goirigolzarri is executive president, although Muniesa will not have those executive responsibilities. It remains to be seen whether he will remain in this new phase as an in-house director, which he will combine with the position of president, leading to the bank appointing a new independent director, or whether Muniesa will become independent and the position will be filled by a new appointed in-house director by the Streamlined Fund bank restructuring (FROB, the body through which the government ensures public participation in the bank), by Criteria or another independent entity. Asked about the issue at the latest press conference at which the results were presented, CEO Gonzalo Gortazar did not clarify the issue, only saying that the goal was to increase the weight of independents.

Either of the two decisions could raise concerns among the European Central Bank (ECB), which has been particularly concerned recently about the management of banks and their having fully independent presidents with no executive functions. The European banking regulator has recently stepped up pressure on institution presidents to relinquish their executive roles and remain in representative roles only. The company’s first shareholder, Criteria, the financial arm of the La Caixa Foundation, accepted the challenge. General manager holding company, Angel Simon, A few days before Goirigolzarri’s resignation, he assured in an interview with the newspaper Vanguard: “We saw the report. We have presented ourselves as one of the participants and we stand by what the ECB stands for. Therefore, as a shareholder of CaixaBank, we will follow the same line as the ECB.”

This will probably not be the only movement in this body. At the next shareholders’ meeting, the terms of office of three independent directors, Joaquin Ayuso, Francisco Campo and Eva Castillo, will expire. Along with Goirigolzarri, the three executives represented Bankia’s post-merger quota of directors and were appointed at the December 2020 extraordinary shareholders’ meeting, at which CaixaBank shareholders approved the integration, for four-year terms that expire next month. Sources in the sector indicate that they are studying the progress of the bank at least two of them.

After a string of departures in recent years of managers coming from Bankia, these latest departures will end an era marked by the takeover of CaixaBank’s Madrid unit. This new phase will culminate next Tuesday with the presentation of the organization’s new strategic plan, which will be defended by CEO Gonzalo Gortazar together with director of strategic planning and research Enric Fernandez.

The key moment for all these changes will be the next shareholders meeting, scheduled for spring 2025. The bank’s shareholders must then approve the appointment of Muniesa as president, as well as the replacement of Goirigolzarri on the board of directors or as a representative of Criteria. or as an independent. Also a proposal to replace Ayuso, Campo and Castillo if they are definitely not renewed. The extension of his mandate must also be put to a vote. CaixaBank has only four months to make all these decisions. Any of the new appointments must obtain the consent of the ECB, which will subject the new profiles to an examination known as suitable and correct.

Meanwhile, there is another chamomile that also needs to be picked. The Ministry of Economy can play a role in this process. Through a two-way path. First, it plans to participate in future share repurchase programs to keep its ownership stake stable at 18%, according to people familiar with the matter. Secondly, it is possible that the state’s weight in the board of directors of an enterprise may increase. Currently, FROB owns 18% of the bank’s capital, inherited from the Bankia integration, but has only one director on the highest representative body of the enterprise.

In 2020, when CaixaBank and the former Caja Madrid agreed on the deal, they agreed that public participation in the combined enterprise would be 16.11% and the right to appoint a director, who is Teresa Santero. However, the bank’s shareholder remuneration policy, which provides for share buybacks and capital amortization, allowed the state’s share in the stake to increase, and now it stands at 18%. With this percentage, he has enough influence to appoint a second director.

The Ministry of Economy has not yet begun to study this issue and, in any case, will not change the cooperation policy without government intervention in the bank. What seems clear is that their short-term plans do not involve withdrawing public participation, even though they are legally obligated to do so by the end of 2025 as stocks are at a maximum that would offset bailout losses. be reduced. However, the executive branch can change the law to extend this period, as it has done many times in the past. Instead, the company plans to pursue future share repurchase offers to maintain its shareholding at 18%.

For its part, the La Caixa Foundation, with its 31%, can still appoint a third member and further strengthen its role. The regulations on the board of directors state that the maximum number of members is 15 and that no shareholder has more than 40% or six directors. It also states that certain decisions – such as delegating authority to the CEO or appointing a president, CEO or forming an executive committee – must be made by two-thirds of the board of directors, or ten members. This means that if a shareholder has the support of six body members, they can block these decisions. The rest must receive the approval of an absolute majority of eight members.

Depending on how the board of directors is restructured, and if FROB finally wants to propose a second director, this may require changes to the board’s regulations. The bank’s charter stipulates that the board of directors should consist of 15-22 members, although the meeting of shareholders has the right to determine its final number, which is currently 15 people. Add a new state representative or He can fill the vacant position of Councilor Goirigolzarri or appoint a new one, thus the body will consist of 16 members.