On 27 May the Corporate Governance Code Monitoring Committee announced that VNO-NCW, VEUO, Eumedion, VEB, FNV, CNV and Euronext (the "supporters" of the Code) have requested it to draw up proposals for revisions to the Code, which was last updated in 2008.
It does not come as a surprise that the Code is to be revised. In the compliance report for the financial year 2013, which was published earlier this year, the Committee stated that the Code required updating in view of recent abuses at various companies, new legislation and the emergence of new issues.
In the compliance report, the Committee also gave a few indications as to the direction to be taken by the revisions:
Method and degree of compliance
From the results of the study into compliance with the Code, the Committee identified several points of focus pertaining to both the method and degree of compliance. For example, the Committee observed that companies generally do not provide concrete and specific information on the role of remuneration ratios in the remuneration policy and the way in which they are taken into account in that policy. It is expected that the results of earlier compliance studies will also be taken into account by the Committee in the revision process.
Evaluation of the Code
In addition to evaluating compliance with the Code, the Committee conducted an evaluation of the Code itself and identified a number of issues which, in its opinion, are not covered, are insufficiently covered or require further clarification: long-term strategy with regard to risk management, corporate behaviour and culture, corporate social responsibility, the complexity of remuneration, diversity and the one-tier board model.
Work programme for 2015
At the beginning of this year, the Committee set out four themes to which it intends to pay particular attention in the course of 2015: compliance with the Code by shareholders, the role of the external auditor, risk management and the role of the internal audit service in that regard and, lastly, disclosure in the annual report with regard to protective measures. These issues, too, will probably be addressed in the revision of the Code.
The Committee has stated that it will move quickly to get the revision process underway and expects to release a consultation document at the end of 2015 containing concrete proposals. By the look of things, the new Code will enter into force during the first half of 2016.