“The code must keep pace with the times and be revised to ensure that companies evolve and do not become stagnant,” commented Moreira Rato regarding the release of the 2025 edition of the CGS annual monitoring report.
The code was established by the IPCG in January 2018 and underwent its first revision in 2023. In 2026, it is set to be reviewed for the second time since its inception.
Among the areas identified for improvement is the governance best practices through the utilization of Artificial Intelligence (AI).
“The code was pioneering in addressing AI, but limited it to decision-making aid for governing bodies. Since then, technology has advanced and is now so embedded within organizations that the code may be somewhat behind. It is now necessary to consider AI from the perspective of risk and other issues,” explained the official.
João Moreira Rato also mentioned that the IPCG management will work on a recommendation framework tailored for medium-sized enterprises to delve deeper into the Portuguese economic fabric.
“For certain companies, the code is a heavy recommendation structure, and therefore it makes sense to present a lighter structure to help medium-sized companies evolve towards good governance practices,” he explained.
Regarding the results of the new CGS monitoring report, which indicate that 95% of determinations have already been adopted by the 15 companies that are part of the PSI, the main index of Euronext Lisbon, and by 87% of the 35 companies analyzed, Moreira Rato stated that the IPCG’s objective is “to bring many more companies into this universe and increase the number that comply with the code.”
“In many important areas of governance, the acceptance of recommendations has stabilized at a high level. But in other areas, which are also important, it has stabilized at a relatively low level,” he noted.
Among the items to improve, the president of the IPCG highlighted “some areas linked to the medium and long-term strategic vision,” notably the inclusion of a minimum number of independent directors in decision-making bodies.
“Independent directors play a crucial role in strategic advising, identifying opportunities, and controlling risk in companies. Yet, historically, many companies still exhibit a culture of control by ‘insiders’ or minority shareholders,” he explained, adding that “even today, companies’ free float is relatively small.”
“However, many companies have already understood that even in cases where there is a core controlling shareholder, independents add value,” he added.
The deferral of executive directors’ variable remuneration and the non-attendance of shareholders in general meetings are other areas where progress is less evident in this edition of the CGS annual report.
The monitoring report evaluated 35 companies, including the fifteen that made up the PSI index, as well as three unlisted entities, one of which for the first time.
Prepared by the Portuguese Institute of Corporate Governance, the CGS serves as “an instrument for promoting good corporate governance practices” among national companies.
