8. CORPORATE GOVERNANCE

8.1. GENERAL SHAREHOLDERS’ MEETING

8.2. BOARD OF DIRECTORS

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REMUNERATION COMMITTEE

Committee designated by the Board of Directors

that is responsible for the control of the remuneration of the directors and senior

managers.

APPOINTMENTS COMMITTEE

Committee designated by the Board of Directors,

which is responsible for nominating the Directors

and Secretary of the Board, appointment of

Senior Executives and the issues related to gender diversity in the Board of

Directors.

AUDIT COMMITTEE

Committee designated by the Board of Directors

to which is responsible for the duties related to the

accounting controls and risk management, including the oversight of the compliance

with the corporate governance rules, the internal

codes of conduct and that of the corporate social responsibility policy.

THE CORPORATE GOVERNANCE OF THE ACS GROUP

GENERAL SHAREHOLDERS’ MEETING

The General Meeting is the supreme body of expression of the will of the Company, and its decisions, adopted in accordance with the provisions of the Bylaws, bind all shareholders. It is responsible for the approval of the annual financial statements, the allocation of the profit/loss

and the approval of the corporate management. Also the appointment and replacement of the officers, as well as any other positions that may be determined by the Law or the Bylaws.

BOARD OF DIRECTORS

The Board has the broadest powers to represent the company and manage it as a supervisory body that controls its activity, in addition to directly assuming the

responsibilities and decision-making regarding the management of the businesses. Its management is subjected to the approval of the General Shareholders’ Meeting.

EXECUTIVE COMMITTEE

Committee designated by the Board of

Directors, which can exercise all the powers

of the Board of Directors except for those that

can not be delegated or those that the Board considers to be solely

under its mandate.

The ACS Group, following the latest recommendations of the benchmark entities such as the Spanish Securities Market

Commission and the best practices in corporate governance, has adopted a governance model consisting of the following bodies:

COMMITTEES DESIGNATED BY THE BOARD

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RULES RELATING TO THE GOOD GOVERNANCE OF THE ACS GROUP

The good governance model of the ACS Group, as well as the composition, operation and duties of the governing corporate bodies are stated in the Group’s corporate Bylaws.

In this manner, the Group has rules on the mechanisms established to detect, determine and resolve any possible conflicts of interest between the company and/or its group, and its directors, senior management or significant shareholders.

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Corporate Bylaws

Rules Governing the General Meeting

Rules of conduct in securities markets

Diversity Policy

Bylaws Governing the Board of Directors

ACS, Actividades de Construcción y Servicios,S.A., (ACS), the parent company of the ACS Group, is a company publicly-traded in Spain, which as of December 31, 2018, has capital stock amounting to € 157,332,297, represented by 314,664,594 shares with a nominal value of € 0.5 per share, fully subscribed and paid up, all of which are of a single class with equal rights.

The General Meeting is the supreme body of expression of the will of the Company, and its decisions, adopted in accordance with the provisions of the Corporate Bylaws, bind all shareholders, including those absent, dissenting and abstaining.

The General Meeting is composed of all the holders of at least one hundred shares, whether present or represented. The owners or holders of less than one hundred shares can be grouped in order to arrive at that number, being represented, either by one of them, or by another shareholder who owns by itself the number of shares necessary to be part of the General Meeting.

The announcement of the convening of the General Shareholders’ Meeting will be published simultaneously in the Official Gazette of the Commercial Register (Boletín Oficial del Registro Mercantil), on the company’s website and on the website of the Spanish Securities Market Commission (Comisión Nacional del Mercado de

Valores), stating all the regulations which govern the following subject-matters:

– Supplement to the notice of the convening and presentation of new proposals for agreement.

– Rights of attendance and vote and register of shareholders.

– Voluntary Representation.

– Appointment or revocation of the representative and notification to the company, both in writing and by electronic means.

– Conflict of interests of the representative.

– Public request for representation and exercise of the right to vote by the officers in the event of public request for representation.

– Voting in advance remotely.

– Special information instruments: corporate website and shareholders’ online forum.

From the same date of publication of the convening of the General Meeting, until the fifth day before it, including the one which the first convening is scheduled, shareholders may request in writing the information or clarifications they deem necessary or formulate in writing the

8.1. GENERAL SHAREHOLDERS’ MEETING

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questions that they deem pertinent about the subject-matter included in the agenda, as well as that which pertains to the information accessible to the public that would have been provided by the company to the Spanish Securities Market Commission since the last general meeting took place, or with the auditor’s report on the company’s financial statements. The board of directors will be obligated to provide the information in writing by the day of the general meeting.

All these requests for information may be made by delivering the petition at the registered office or by sending it to the company by mail correspondence or by means of electronic communication or by calling in remotely. Valid requests for information, clarifications or questions made in writing along with the answers provided in writing by the board of directors will be included in the company’s website.

In addition to the written requests for information, during the General Meeting, shareholders may verbally request the information or clarifications that they deem necessary concerning the matters included in the agenda or in relation to the information made available to the public furnished by the Company to the Spanish Securities Market Commission after the execution of the last General Meeting, or the auditor’s report on the Company’s

financial statements. If it is not possible to satisfy the shareholder’s rights at this time, the Board of Directors will be obligated to provide the information in writing within seven days, following the completion of the Meeting.

From the publication of the convening notice and until the general meeting is held, the company will continuously publish on its website www.grupoacs.com the following information, which every shareholder can, in a likewise manner, examine at the headquarters, or obtain in an immediate and free manner:

– All documents or agreements that are submitted for the vote or consideration of the board and, in particular, the managers’ and auditor’s reports as well as that of the independent experts.

– The system and forms for voting by proxy, the forms for delegating the vote and the means to be used so that company can accept an electronic notification from the designated representations.

– The procedures and forms established for making the vote remotely.

The measures adopted by the Group to encourage attendance at the Board Meeting are reflected in the attendance percentages.

2013 2014 2015 2016 2017 2018

Total Quorum 75.25% 70.20% 73.23% 70.00% 64.45% 61.51%

Quorum shareholders present 20.19% 7.31% 7.52% 6.85% 1.90% 1.59%

Quorum of shareholders represented 55.06% 62.89% 65.71% 63.15% 62.54% 59.91%

© Piotr Krajewski.

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The composition of the Board of Directors is based on the principle of proportionality, by which, within the Board the interests of all groups of shareholders of ACS are represented.

The mission of the members of the independent and external advisory counsel is to represent the interests of the floating capital within the Board of Directors. The Chairman of the Board of Directors, Mr. Florentino Pérez, is also the CEO of ACS.

The General Meeting, for the purposes of the Board of Directors, serves to establish the exact number of Board members, while also appointing the individuals who will occupy those positions. As

The Board assumes the duties of representation and administration of the company, as the highest super-visory and control body of its activity. It includes among its non-delegable duties, among others11, the following:

• The investment and financing policy.

• The definition of the structure of the group of companies.

• The Corporate Governance policy.

• The Corporate Social Responsibility policy.

• The approval of the financial information.

• The Strategic or Business Plan, the management objectives, and the annual budgets.

of December 31, 2018, the ACS Board of Directors consisted of 18 members. The Company considers the composition of the Board of Directors to be adequate to represent the interests of the majority and minority shareholders. In this regard, we must also consider that a significant part (three of the four) of the other external board members are directors who, although due to the legal regulation for exceeding the maximum term of 12 years, prevent the consideration of independent members, they are considered to be directors who, considering their personal and professional conditions, can perform the respective duties without being conditioned by relations with the company or its group, its significant shareholders or its directors.

• The remuneration policy and performance evalua-tion of senior managers.

• The control and risk management policy, including the auditors, and the supervision of the internal information and control systems.

• The dividend policy, as well as that which pertains to the company’s treasury stocks and interests

• The related-party transactions, except in those cases provided for by the Bylaws.

• The determination of the tax strategy of the Company.

The principles governing the composition of the Board and its functioning can be revised in the Corporate Gover-nance Report prepared annually by the ACS Group.

For further information:Composition of the Board of Directors of ACS1. Management Bodies

Annual Corporate Governance Report

11. The complete list of non-delegable duties can be found in article 5 of the Bylaws Governing the Board of Directors.

DUTIES

8.2. BOARD OF DIRECTORS

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Executive Chairman CEO

Vice chairman

1

Vice chairman

2

Board Member

1

Board Member

2

Board Member

3

Board Member

4

Board Member

5

Board Member

6

Board Member

7

Board Member

8

Board Member

9

Board Member

10

Board Member

11

Board Member

12

Board Member

13

Board Member

14

EXPERIENCE

Sectorial

International

Academic

Public administration

KNOWLEDGE

Accounting and finance

Risks

Operations

Legal and fiscal

Technology and digital trans-formation

Human resources

WOMEN 3 MEN 15

EXECUTIVE 28% PROPRIETARY 22%

INDEPENDENT 28% OTHER EXTERNAL 22%

An analysis of the competences of the members of the Board of Directors was prepared, the results of which are reflected in the following matrix of competences:

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MATRIX OF COMPETENCES OF THE BOARD OF DIRECTORS

COMPOSITION OF BOARD OF DIRECTORS

COMPOSITION OF BOARD OF DIRECTORS BY TYPE OF BOARD

MEMBER

8.2.2. REMUNERATION OF THE BOARD OF DIRECTORS

The detail of the remuneration received by the Board of Directors, as well as the criteria for its determination, are published in the Annual Remuneration Report.

During the 2018 General Shareholders’ Meeting, the remuneration of the Board was approved with 59.10% of the votes in favor, based on the votes cast.

Number % over total

Votes cast 193,543,887 61.51%

Opposing votes 78,320,976 40.67%

Votes in favour 114,391,920 59.10%

Abstentions 830,991 0.43%

The remuneration of the members of the Board is defined by a general policy approved by the Board as a whole, in accordance with the recommendations of the Remuneration

Committee.

The specific and detailed functions of each of the Committees delegates of the Board of Directors of the ACS Group are described in title four of the

Regulations of the Board of the ACS Group.

Annual Report on Directors’ Remuneration

REMUNERATION COMMITTEE

APPOINTMENTS COMMITTEE

AUDIT COMMITTEE

EXECUTIVE COMMITTEE

8.2.1. DELEGATED COMMITTEES

6 MEMBERS11 MEETINGS

5 MEMBERS7 MEETINGS

7 MEMBERS2 MEETINGS

6 MEMBERS2 MEETINGS

EXECUTIVE 50% PROPRIETARY 17%

OTHER EXTERNAL 33%

INDEPENDENT 60% PROPRIETARY 20%

OTHER EXTERNAL 20%

INDEPENDENT 29% PROPRIETARY 28%

OTHER EXTERNAL 43%

INDEPENDENT 50% PROPRIETARY 33%

OTHER EXTERNAL 17%

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©Tishman_Speyer

8.2.3. GOOD GOVERNANCE

During the 2018 year, the parent company of the ACS Group continued to carry out the task of adapting its internal regulatory body to to follow up on recommendations of the Code of Good Governance of the listed companies. The degree of follow-up of them can be consulted at the point G. of the Corporate Governance Report that is part of and is attached to this Report of Consolidated Management.

COMPLIES 77% PARTIALLY COMPLIES 13%

EXPLAIN 3% NOT APPLICABLE 8%

COMPLIANCE WITH THERECOMMENDATIONS OF THEGOOD GOVERNANCE CODE

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