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Corporate Governance

Corporate Governance System

Iberdrola, S.A. (the “Company”) maintains a continuously updated Corporate Governance System [PDF] , which is the set of documents consisting of the By-Laws , the Corporate Policies , the Internal Corporate Governance Rules and the other internal Codes and Procedures approved by the appropriate bodies of Iberdrola, S.A. Such System has been developed taking into account the good governance recommendations generally recognized in international markets.

The development, revision and ongoing improvement of corporate governance regulations is part of the strategy that Iberdrola, S.A. and the companies belonging to the group of companies of which the Company is the controlling entity, within the meaning established by law (the “Group”), have been following for years.

Scottish Power Ltd (“Scottish Power”), whose ultimate parent company is the Company, is the head of country subholding company of the Iberdrola Group in the United Kingdom. Scottish Power has a strategic role acting as the holding company of the Scottish Power UK group (the “SP Group”).

Scottish Power operates in the United Kingdom through the following head of business subholding companies: Scottish Power Generation Holdings Ltd (SPGHL), Scottish Power Energy Networks Holdings Ltd (SPENHL) and ScottishPower Renewable Energy Ltd (SPREL), all indirectly wholly owned by Scottish Power.

Pursuant to the Corporate Governance System of the Group, the Company’s Governance Model duly separates the management and supervisory functions within Iberdrola and its Group, as well as between the central strategy function and decentralised executive responsibilities.

In this regard, Iberdrola, as the parent company within the Group, is responsible for establishing the overall management policies, strategies and guidelines of the Group, supervising the development of such strategies and guidelines on the various country subholding companies and deciding on matters of strategic significance at a Group level.

As a consequence of the decentralisation model, the Board of Directors of Scottish Power’s principal responsibility is the formulation and implementation of SP Group Strategy, entrusting to the decision-making bodies and to the head of business subholding companies of the ScottishPower Group the duties of day-to-day management and effective guidance and operational business management.

Accordingly, together with the Board of Directors of Scottish Power the head of business subholding companies SPGHL, SPENHL and SPREL have their own boards of directors which hold decision-making responsibility for operational business management.

In implementing this Corporate Governance System, the Board of Directors of Scottish Power have either approved, adopted or noted, as appropriate the Memorandum and Articles of Association, the Corporate Policies, the Internal Corporate Governance Rules and the other internal Codes and Procedures that are part of its Corporate Governance System together with those specific rules completing the system in each of the head of country subholding companies.