The Dutch Corporate Governance Code (the ‘Code’) was introduced in 2003 and was last revised in 2008. Although the Code applies to listed companies, it is considered a reflection of general views on good corporate governance and as such also has an indirect impact on the governance of non-listed companies.
A special monitoring committee (the ‘Committee’) was established to ensure that the Code remains practicable and up-to-date, and to monitor compliance by Dutch listed companies and institutional investors. Earlier this year, the Committee presented its annual report for 2013. The report focused on compliance as well as the Code itself.
While compliance percentages are generally high, relatively low observance is given to disclosure on anti-takeover measures and remuneration policy. In addition, the Committee is of the opinion that the level of compliance with provisions on corporate social responsibility and diversity require further attention.
As to the Code itself, the Committee reported that there are various gaps and omissions that will need to be addressed. Provisions on long-term strategy and risk management are either absent or need to be expanded. Moreover, culture and behaviour, corporate social responsibility, remuneration and diversity will need to be further embedded in the Code. The chairman of the Committee emphasized that recent incidents and international developments underline the need to update the Code. A recurrent revision cycle is therefore recommended.
The ‘supporting parties’ (including employer federations, trade unions, Euronext and the Dutch investors association) have welcomed the suggestion to update and revise the Code.
It is expected that the Committee will present a draft revision of the Code for consultation purposes by the end of 2015, with the aim of a revised Code coming into force in the first half of 2016.
The Code applies to all companies having their corporate seat in the Netherlands with shares admitted to trading on a regulated market or multilateral trading facility within the European Union or a comparable facility outside the European Union. The Code contains principles and best-practice provisions that regulate relations between the board of managing directors, the supervisory board and the shareholders. Listed companies may depart from the best-practice provisions but should explain why a provision was not applied (comply or explain).