Who and how will make decisions on Catalonia's new commuter rail network?

BarcelonaThe Government and Renfe announced yesterday that they already have the statutes ready to create the new commuter rail operator of Catalonia, which will assume the transfer of the service starting next year. Both parties explained that the new company will remain in the hands of Renfe, which will hold 50.1% of the shares, and the Generalitat, 49.9%. However, to offset the power struggle, the board of directors—which directs day-to-day operations—will have a greater Catalan presence: five of the nine directors, including the president, will be nominated by Salvador Illa's government, while the remaining four will be from Renfe, one of which will eventually be transferred to the workers' representatives.

But the fine print remained. Who will make the decisions? How will the majorities on the board of directors work? What decisions will have to be submitted to the shareholders' meeting chaired by Renfe? Or what happens if there is no agreement between the parties? The parties have made public today both documents that resolve these doubts: the bylaws and the shareholders' agreement. And these are the main points:

Above the general and operating directors, the board of directors is the body that will vote on the company's daily dynamics and operational decisions. Governance, therefore, will be Catalan because both the bylaws and the shareholders' agreement establish that the board will have a majority of members (five out of nine, including the chairman) proposed by the Catalan government. Their names are not yet known.

The documents also establish that this body must have gender equality—following Spanish law—and that decisions will be made at the company's first shareholders' meeting. In general terms, "resolutions will be adopted by an absolute majority of the directors," although there are some decisions for which the corporate law itself requires a favorable vote of three-quarters of the board, which will imply greater consensus.

It is responsible for agreeing on the basic design of the company's organizational structure (organizational chart), the selection process for executives, and their appointment and contracts. It is also the body responsible for any operations (construction works, construction, purchasing, contracting of services, personnel, logistics, etc.) that do not directly affect the company's basic structure.

The president of the board (a Catalan appointee) will have a casting vote to break possible ties during agreements, as stipulated in both the bylaws and the shareholders' agreement. No vice-president is established, and therefore, in the event of absence, vacancy, illness, or impediment, the president "will be replaced by the oldest person, also from among those proposed by the Generalitat de Catalunya."

Greater consensus will be required for all agreements related to the appointment or dismissal of any board member or executive, as well as the determination of their duties; the preparation of the company's annual accounts; the annual action plan and the approval of strategic operations; investments or divestments exceeding 10% of assets; changes to the bylaws; and modifications to the terms of the collective bargaining agreement. However, the shareholder agreement clarifies that this qualified or reinforced majority will not be necessary "when dealing with minutes and transactions already included in the budget or the previously approved business plan."

In this case, internal documents indicate that the matter will have to be referred to an arbitration tribunal of the Barcelona Chamber of Commerce, which is where the company's headquarters are expected to be located.

As established by law, the shareholders' meeting has the final say (over the board of directors) on matters such as the approval of annual accounts, capital increases and reductions, changes in the shareholding structure, dividend distributions, and mergers, spin-offs, or the liquidation of the company.

Neither text includes the two-year time limit initially requested by Esquerra for the majority of the shares to be transferred to Catalan hands. Thus, due to the absence of this clause, the company's ownership (50.1% of the shares) could remain in the hands of Renfe. sine die, because the change of ownership—as it affects the company's structure—must always be approved by the shareholders' meeting (led by Renfe).

The shareholders' agreement only mentions that the Generalitat "may request a transfer of shares," but it also specifies that "the alteration of the initial distribution" requires negotiation and agreement between the parties and also the legal representatives of the workers, who until now have shown complete reluctance to allow the company to belong to the Generalitat.

In the internal documents, the parties agree to agree on a business plan for the next five years and provide it with the necessary financing; to draw up an annual budget; and to maintain relationships with other companies in the group. Given that Renfe will continue to hold the majority of the shares, the debt accumulated by this company will directly impact the Spanish operator's balance sheet.

In addition, Renfe and the Generalitat (Catalan government) agree to create a "shared" governance body to the machinist training school of Hospitalet de Llobregat with the aim of "boosting training" for personnel in Catalonia—which suffers from a historical shortage of workers, leading to high staff turnover—and turning the center into a strategic training hub.