Corporate Governance Code Monitoring Committee | December 2016
Focusing on the governance of listed companies, the Dutch Corporate Governance Code (referred to below as the Code) provides guidance for effective cooperation and management. Governance concerns management and control, responsibility and influence, supervision and accountability.
The purpose of the Code is to facilitate – with or in relation to other laws and regulations – a sound and transparent system of checks and balances within Dutch listed companies and, to that end, to regulate relations between the management board, the supervisory board and the shareholders (including the general meeting of shareholders). Compliance with the Code contributes to confidence in the good and responsible management of companies and their integration into society.
The Code was first adopted in 2003 and was amended once in 2008. At the request of the National Federation of Christian Trade Unions in the Netherlands (CNV), Eumedion, the Federation of Dutch Trade Unions (FNV), Euronext NV, the Association of Stockholders (VEB), the Association of Securities-Issuing Companies (VEUO) and the Confederation of Netherlands Industry and Employers (VNO-NCW), the Code has been amended by the Corporate Governance Code Monitoring Committee (referred to below as the Committee). Ongoing developments, the spirit of the times and overlaps with legislation were reasons to amend the Code. The present Code replaces the 2008 Code.
Scope
The Code applies to:
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- all companies whose registered offices are in the Netherlands and whose shares, or depositary receipts for shares, have been admitted to trading on a regulated market or a comparable system; and
- all large companies whose registered offices are in the Netherlands (balance sheet value > €500 million) and whose shares, or depositary receipts for shares, have been admitted to trading on a multilateral trading facility or a comparable system.
For the purposes of the Code, holders of depositary receipts issued with the company’s cooperation are equated with shareholders. The Code does not apply to an investment company or an undertaking for collective investment in transferable securities that is not a manager within the meaning of Section 1:1 of the Financial Supervision Act (Wet op het financieel toezicht/Wft).
Contents of the Code
The Code contains principles and best practice provisions that regulate relations between the management board, the supervisory board, and the shareholders (including the general shareholders’ meeting).
The principles and provisions aim to define responsibilities for long-term value creation, risk control, effective management and supervision, remuneration and the relationship with shareholders (including the general meeting of shareholders) and stakeholders.
The principles may reflect widely held general views on good corporate governance. The principles have been supplemented in the form of best practice provisions. These provisions contain standards for the conduct of management board members, supervisory board members and shareholders. They reflect best practices and supplement the general principles of good corporate governance. Companies may depart from these best practice provisions, provided they give reasons for doing so. The departure conditions are explained below under ‘Compliance with the Code.’
The relationship between the company and its employees (representatives) is regulated by law. The Code addresses this relationship in those provisions relating to culture and the contact between the supervisory board and the employee participation body.
Download The Dutch corporate governance code 2016.
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