The Annual Monitoring Report of the CGS – established in January 2018 and reviewed in 2023 by the Portuguese Institute of Corporate Governance (IPCG) – reveals that 95% of the 60 recommendations, divided into 84 sub-recommendations, have been adopted by the 15 companies listed on the PSI, the main index of Euronext Lisbon.
This adoption rate decreases to 87% for the 35 companies monitored in 2024, the year to which the report by the Monitoring and Follow-up Executive Committee relates, which is in charge of overseeing CGS implementation.
Compared to the previous year’s edition, the overall company adoption rate remains unchanged at 87%, with a one percentage point increase among PSI-listed companies (from 94% to 95%).
Among the most adopted CGS guidelines by companies are risk, internal control, and auditing areas. PSI index companies achieved adoption rates close to or equal to 100% for risk identification, monitoring, and mitigation, as well as the independence of statutory auditors, according to the report.
The use of artificial intelligence mechanisms in decision-making is one of the fastest-growing recommendations, increasing to 89% adoption across all companies and reaching 100% among PSI companies.
The appointment of a coordinator among independent directors, enhancing the balance of boards, went from 50% to 61% overall and from 82% to 91% in PSI companies, marking another significant development in this edition.
Less adopted recommendations, with rates between 46% and 66% for PSI companies, include the establishment of specialized corporate governance committees, the inclusion of a minimum number of independent directors, deferring executive directors’ variable pay, and shareholders’ remote participation in general meetings.
It emerges that areas like the independence of governing body members, shareholder participation in general meetings, existence of specialized committees, and the qualification of nomination processes still require significant advances.
As in the previous report edition, the level of most and least adopted recommendations has stabilized, with an overlap of seven out of ten most adopted recommendations and eight out of ten least adopted recommendations.
The 2024 report evaluated 35 companies, including the fifteen PSI index companies and three unlisted entities, one of which was evaluated for the first time.
Prepared by the Portuguese Institute of Corporate Governance, the CGS serves “as a tool to promote good corporate governance practices” among national companies.
