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This chapter is excerpted from ‘A Primer on Corporate Governance: Spain'. Spain has a civil law-based legal system in which court decisions are not a source of law but are of interpretative value. Also, it is a member of the European Union (EU) and as such follows the standards set out by EU directives and regulations. The privatization of large state-owned firms, liberalization, integration with EU, and the launch of the euro have all contributed to the transformation of Spain's financial system into a modern market. Spain is considered a bank-oriented financial system in which banks play an active role relative to markets. The close link between banks and the governance of nonfinancial firms dates back to the first stages in the process of industrialization in Spain. Thereinafter banks have had close relationships with nonfinancial companies, both through lending and through stock. Currently, the Spanish financial system is going through a process of deep restructuring and consolidation. This process has not affected the outstanding role played by banks and their close ties with the governance of nonfinancial firms. Banks in Spain are not only creditors, but also reference shareholders or sit on the board of directors of nonfinancial firms. The Spanish securities market has undergone a deep process of change and growth over the last two decades too. Technical, operating, and organization systems that support the market today have allowed important investment flows and provided the markets with greater transparency, liquidity, and efficiency. Nowadays, Spanish stock market is highly concentrated with a relatively small number of players in the utility, telecommunications, banking, construction, and energy industries. Because of the bank orientation, the corporate governance system relies heavily on the so-called internal mechanisms of governance: the ownership structure and the board of directors. The external mechanisms of control, basically the market for corporate control, are less important than in the Anglo-Saxon environment. The low number of listed companies, the usually concentrated ownership structure, and the implementation of some control-enhancing mechanism as means to increase the control power of the main shareholder along with the relatively illiquidity of the market reduce the functioning of the market for corporate control. In any case, the landscape of corporate governance in Spain is changing since the Spanish government has recently appointed a special committee for the reform of the corporate governance in the country. The conclusions and suggestions of this committee are likely to translate into forthcoming laws or even a new Code of Good Governance.