Iberdrola S A : The Company reports the Regulations of the Board of Directors

Regulations of the Board of Directors | 1

Regulations of the Board of Directors

23 February 2021

PRELIMINARY TITLE 3

Article 1. Definition and Purpose 3

Article 2. Scope 3

Article 3. Dissemination 3

Article 4. Priority and Interpretation 3

Article 5. Amendment 3

TITLE I. PRINCIPLES OF CONDUCT 4

Article 6. Main Principles of Conduct 4

Article 7. Governance and Sustainability System 4

Article 8. Corporate Interest 4

Article 9. Shareholders and Stakeholders 4

Article 10.- Social Dividend 4

Article 11. Ethical Requirements 4

TITLE II. STRUCTURE AND POWERS 4

Article 12. Structure 4

Article 13. Powers of the Board of Directors 4

TITLE III. COMPOSITION 7

Article 14. Number of Directors 7

Article 15. Classes of Directors 7

TITLE IV. APPOINTMENT AND CESSATION OF OFFICE OF DIRECTORS 8

Article 16. Selection of Candidates 8

Article 17. Appointment 8

Article 18. Disqualifications 9

Article 19. Term of Office 9

Article 20. Re-election 9

Article 21. Resignation, Removal and Cessation of Office 10

Article 22. Duty to Abstain 10

TITLE V. POSITIONS AND COMMITTEES 11

Chapter I. Positions 11

Article 23. Chairman of the Board of Directors 11

Article 24. Vice-Chair or Vice-Chairs of the Board of Directors 11

Article 25. Chief Executive Officer 11

Article 26. Checks and Balances System: Lead Independent Director 12

Article 27. Secretary, Deputy Secretary or Deputy Secretaries 12

Article 28. General Secretary and Counsel 13

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Chapter II. Committees of the Board of Directors 13

Article 29. Committees of the Board of Directors 13

Article 30. Executive Committee 14

Article 31. Audit and Risk Supervision Committee 14

Article 32. Appointments Committee 16

Article 33. Remuneration Committee 17

Article 34. Sustainable Development Committee 18

TITLE VI. OPERATION 19

Article 35. Meetings 19

Article 36. Place of Meetings 19

Article 37. Conduct of Meetings 19

TITLE VII. DIRECTOR REMUNERATION 20

Article 38. Director Remuneration 20

TITLE VIII. INFORMATION TO DIRECTORS 21

Article 39. Powers of Information and Inspection 21

Article 40. Assistance of Experts 21

TITLE IX. DUTIES OF DIRECTORS 21

Article 41. General Duties 21

Article 42. Duty of Confidentiality 22

Article 43. Duty Not to Compete 22

Article 44. Conflicts of Interest 22

Article 45. Use of Corporate Assets 23

Article 46. Non-Public Information 23

Article 47. Business Opportunities 24

Article 48. Transactions by the Company with Directors and Significant Shareholders 24

Article 49. Duty to Disclose Information 25

Article 50. Extension of Director's Duties 25

TITLE X. INFORMATION AND RELATIONSHIPS 25

Chapter I. Information 25

Article 51. Annual Corporate Governance Report 25

Article 52. Corporate Website 25

Chapter II. Relationships 26

Article 53. Principle of Transparency 26

Article 54. Relationships with the Shareholders 26

Article 55. Relationships with the Securities Markets 26

Article 56. Relationships with the Statutory Auditors 27

Article 57.- Relationships with Members of Senior Management of the Company 27

Regulations of the Board of Directors |

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PRELIMINARY TITLE

Article 1. Definition and Purpose

• 1. The Regulations of the Board of Directors (the "Regulations") of IBERDROLA, S.A. (the "Company"), in compliance with applicable legislation and as part of the Governance and Sustainability System, constitute its specific and concrete system of organisation, which further develops and supplements applicable legal and bylaw-mandated rules, taking into consideration the nature of the Company as a holding company and as the controlling entity of those included within its group (the "Group").

• 2. These Regulations have been prepared taking into account the good governance recommendations generally recognised in international markets.

• 3. The Regulations contain the principles of conduct of the Board of Directors of the Company, the basic rules for the organisation and operation thereof, and the rules for the selection, appointment, re-election, removal and conduct of its members, in order to achieve the greatest degree of transparency, effectiveness and control in the performance of its duties to develop and fulfil the corporate interest.

• 4. The principles of conduct and the rules for organisation and operation of the management decision-making bodies existing at other companies belonging to the Group shall be governed by their respective internal regulations, if any. Such regulations shall conform to the principles set forth in these Regulations, without prejudice to any adjustments that may be required based on the specific circumstances of each company, and shall, in all cases, abide by the guarantees required by the Governance and Sustainability System and the principles of coordination and information-sharing that must govern the relations among the management decision-making bodies of the various companies of the Group in order for them to fully comply with their respective duties.

Article 2. Scope

• 1. These Regulations apply to the Board of Directors, the representative decision-making bodies thereof (whether collective or single-person) and its internal committees, as well as to all members thereof.

• 2. The persons to whom these Regulations apply shall have the duty to be apprised of them, to comply with them and to enforce them, for which purpose the secretary of the Board of Directors shall provide them with a copy that has been updated with subsequent amendments as they are approved, to be acknowledged by means of a signed receipt, and shall also make it available thereto on the directors' website and publish it on the Company's corporate website.

• 3. The directors shall comply with and enforce the provisions of the Governance and Sustainability System and shall confirm such commitment in writing upon accepting their appointment or re-election in such manner as is determined by the secretary of the Board of Directors.

Article 3. Dissemination

These Regulations and any amendments hereto shall be communicated to the National Securities Market Commission (Comisión Nacional del Mercado de Valores) and registered with the Commercial Registry (Registro Mercantil) pursuant to applicable legal provisions. The current text of these Regulations shall be made available on the Company's corporate website.

Article 4. Priority and Interpretation

• 1. These Regulations further develop and supplement applicable legal and by-law provisions, which provisions shall prevail in the event of conflict with the provisions set forth herein, and shall be interpreted in accordance with law and the Governance and Sustainability System.

• 2. Any questions that may arise in connection with the interpretation or application hereof shall be resolved by the Board of Directors, which shall include such amendments, if any, as it deems appropriate.

Article 5. Amendment

• 1. The Board of Directors may, by resolution adopted by at least a two-thirds majority of the directors present at the meeting in person or by proxy, amend these Regulations on its own initiative, or on the initiative of its chairman, of one-third of the directors or of the Sustainable Development Committee, with the proposed amendment to be accompanied by a description of the reasons for and the scope of the amendment sought.

• 2. The proposed amendments shall be accompanied by a report of the Sustainable Development Committee, unless the initiative comes from the committee itself or from the Board of Directors.

• 3. Before holding the meeting of the Board of Directors called to decide upon the aforementioned proposed amendment, the entire text thereof, the report with the rationale therefor and the report of the Sustainable Development Committee, if appropriate, shall be made available to the directors.

• 4. The Board of Directors shall inform the shareholders of any amendment to the Regulations approved thereby at the next General Shareholders' Meeting.

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TITLE I. PRINCIPLES OF CONDUCT

Article 6. Main Principles of Conduct

The fundamental guidelines for the conduct of the Board of Directors, in addition to strict observance of applicable law, are com- pliance with the Governance and Sustainability System, effective engagement of the shareholders and other Stakeholders, satis- faction of the corporate interest, commitment to the social dividend and the conformance of its work and that of all of its members to the Company's Code of Ethics.

Article 7. Governance and Sustainability System

• 1. The Board of Directors shall at all times comply with the provisions of the Governance and Sustainability System, without prejudice to the powers that it vests therein to further develop, apply and integrate the rules of which it consists, in order to at all times ensure the achievement of its purposes, and particularly the corporate interest.

• 2. For purposes of maintaining the proper unity and coherence of the Governance and Sustainability System, the Board of Directors may, on its own initiative, approve reforms that simultaneously affect several documents of the Governance and Sustainability System where the approval thereof is within the purview of the Board of Directors, in which case there shall be no need for a prior proposal or report from any other body.

• 3. The Board of Directors shall always act in accordance with the provisions of the Purpose and Values of the Iberdrola group, which reflect its raison d'être and the key values that inspire and guide the strategy of the Group and all of its actions.

Article 8. Corporate Interest

• 1. The Board of Directors shall carry out its duties with unity of purpose and independent judgement, always in pursuit of the Company's corporate interest, which is understood as the common interest of all shareholders of an independent company focused on the sustainable creation of value by engaging in the activities included in its corporate object, taking into account other Stakeholders related to its business activity and its institutional reality, in accordance with the Purpose and Values of the Iberdrola group.

• 2. The Board of Directors shall endeavour to ensure that the chairman of the Board of Directors, as well as the Executive Committee and the chief executive officer, pursue the corporate interest.

Article 9. Shareholders and Stakeholders

The Board of Directors shall endeavour to ensure the effective engagement of the shareholders and other Stakeholders in the business, corporate and institutional enterprise of the Company, affording equal treatment to all shareholders in the same situation.

Article 10.- Social Dividend

The Board of Directors and its delegated bodies shall perform their duties while endeavouring to ensure that the social dividend, which is conceived, consistently with the Purpose and Values of the Iberdrola group and the Code of Ethics, as the direct, indirect or induced contribution of value of the Company's activities for all Stakeholders, particularly by contributing to the achievement of the Sustainable Development Goals (SDGs) approved by the United Nations.

Article 11. Ethical Requirements

• 1. The Company aspires for its conduct and that of the persons connected therewith to conform and adhere not only to applicable law and its Governance and Sustainability System but also to ethical principles and generally accepted principles of social responsibility. The Board of Directors has the authority for such purpose to approve a Code of Ethics that reflects this commitment, applicable to the directors, professionals and suppliers of the companies of Group.

• 2. The Board of Directors shall adopt the measures necessary to ensure that the directors, professionals and suppliers of the companies of the Group comply with the provisions of the Code of Ethics.

TITLE II. STRUCTURE AND POWERS

Article 12. Structure

Management of the Company is vested in a Board of Directors, its chairman, an executive committee called the Executive Com- mittee (Comisión Ejecutiva Delegada) and, if so resolved by the Board of Directors, a chief executive officer (consejero delegado).

Article 13. Powers of the Board of Directors

• 1. The Board of Directors has the power to adopt resolutions regarding all matters not assigned by law or the By-Laws to the shareholders acting at a General Shareholders' Meeting.

• 2. The Board of Directors has the broadest powers and authority to manage and represent the Company.