Dutch listed companies must from now on (i.e. starting with the annual report for the first financial year starting on or after 1 April 2009) publish a corporate governance statement containing certain prescribed information. In addition, the scope of the mandatory "comply or explain" statement has been expanded – also for listed companies to which the Dutch Corporate Governance Code does not apply – to include codes of conduct applied voluntarily by the company and other "corporate governance practices". The statement must be published in the company's annual report or on its website.
With effect from 1 April 2009, the Corporate Governance Decree (the "Decree") has been amended to require the publication of an annual corporate governance statement, thereby implementing certain provisions of Directive 2006/46/EC (the "Directive"). The statement must be published either as a specific section of, or an attachment to, the company's annual report or by placement on the company's website with a reference thereto in the annual report (in which case the statement will legally be considered to form part of the annual report).
The information that must be contained in a corporate governance statement depends upon which type of securities issued by the company are listed. The most extensive requirements apply to Dutch public limited liability companies (naamloze vennootschappen, NVs) – with the exception of investment institutions which are not themselves managers – whose shares or depositary receipts are admitted to trading on a regulated market in the EU or European Economic Area (EEA) or on a comparable system in a country outside the EU/EEA. Such companies were already required to issue a "comply or explain" statement with respect to the Dutch Corporate Governance Code. The Decree now requires the issuance of a similar statement with respect to other codes of conduct (including foreign ones) applied voluntarily by the company and with respect to "all relevant information about the corporate governance practices applied other than pursuant to a statutory provision". Neither the Directive nor the Decree makes clear what practices this provision is intended to encompass. It may refer to practices contained in guidelines or policy lines which may or may not constitute a code of conduct in the formal sense.
Under the Decree, the corporate governance statement of a listed company as referred to above must contain the following information:
- information on the main features of the company's internal control and risk management systems in relation to the financial reporting process of the company and its group companies. The amended Dutch Corporate Governance Code (which was presented by the Corporate Governance Monitoring Committee in December 2008 and has not yet taken effect) prescribes as a best practice the inclusion in the annual report of a similar description;
- if the company's shares or depositary receipts are admitted to trading on a regulated market in the EU, the information which Directive 2004/25/EC (the Takeover Directive) requires be published in the annual report (pursuant to the decree implementing Article 10 of the Takeover Directive and Article 2:392 (1) (e) of the Civil Code). This concerns information that is intended to give a potential bidder insight into the balance of control within the company, and includes, for example, information about (i) the company's capital structure, (ii) shareholders with special control rights or major holdings, (iii) voting right restrictions and (iv) the delegation to the management board of the power to issue or buy back shares. This information must from now on be contained in the corporate governance statement unless the latter is published on the company's website, in which case a reference to the annual report containing the relevant information is sufficient;
- information on the operation of the shareholders' meeting and its key powers and on shareholders' rights and how they can be exercised (unless this information is apparent from the relevant Dutch laws and regulations) as well as information on the composition and operation of the management board, the supervisory board and their respective committees, such as the appointment, remuneration and audit committees.
Except for the obligation to issue a "comply or explain" statement with respect to the Dutch Corporate Governance Code, the obligations under the Decree also apply to NVs whose shares are traded on a multilateral trading facility (such as Alternext Amsterdam).
An NV whose securities other than shares are admitted to trading on a regulated market in the EU or EEA must also publish a corporate governance statement but is subject to a lighter regime. Its corporate governance statement need only contain the information set out in point 1 (a description of the main features of the company's internal control and risk management systems) and a "comply or explain" statement with respect to codes of conduct applied voluntarily and other "corporate governance practices". Under a strict reading of the Decree, this type of NV would not be subject to any of the obligations therein. However, such a reading would be in conflict with the Directive and it is expected that the Decree will be amended later in the year to rectify this.
The Decree also contains provisions specifically directed at auditors, requiring them to consider the information referred to in points 1 and 2 in investigating whether the relevant company's annual report is consistent with its annual accounts. The auditor must also determine whether the corporate governance statement in fact contains the information prescribed by the Decree.
The Decree has not yet been amended to "anchor in law" the amended Dutch Corporate Governance Code. That will reportedly occur in the summer. An amendment to the Decree is also being prepared to declare it applicable in full to NVs whose shares or depositary receipts are admitted to trading on a multilateral trading facility if the value of the company's assets exceeds EUR 500 million.