The new Belgian Code of Corporate Governance has recently been published in the Belgian Official Gazette. This code was due for a revision because there have been numerous changes to Belgian and European regulatory framework, since its last publication in 2009, and in particular the Belgian CCA (Code on Companies and Associations) which also provides a number of new rules for listed companies.

1. General

The new 2020 Code replaces the versions previously published in 2004 and 2009 and is structured under 10 principles, considered as essential pillars of good governance. All listed companies are explected to comply with these principles at all time.

In summary, these principles correspond to the following.

Listed companies shall:

  • make an explicit choice regarding its governance structure and clearly communicate it;
  • have an effective and balanced board. The board and executive management shall remain within their respective remits and interact constructively. Specialized committees assist the board in the execition of their responsibilities.
  • have a transparent procedure for the appointment of board members, demonstrating independence of mind and always acting in the best interest of the company;
  • remunerate board members and executives fairly and responsibly, treat all shareholders equally and respect their rights;
  • have a rigorous and transparent procedure for evaluating their their governance regime;
  • publicly report on the application of the code.

2. The new management model under the CSA

This 2020 Code is the result of a new management model for listed companies, as provided for by the new CSA.

This new legislation provides the option for a dualistic management model, with a supervisory board and an executive board with distinct powers and composition. At the same time, the option of instituting a "directiecomité / comité de direction" (legal executive committee), previously adopted by a number of listed companies, has been abolished (exception for financial institutions), for which a certain number of listed companies had opted.

3. Obligations and entry into force

The new code also places even more emphasis on sustainable value creation, responsible behaviour at all levels of the company and the permanent consideration of the legitimate interests of stakeholders.

Listed companies must disclose a Corporate Governance Charter on their website and the Corporate Governance Statement as a specific section of their annual report.

However, the Code offers listed companies the possibility of deviate from its provisions in well-defined circumstances, provided that there are justified reasons for doing so, in accordance with the "comply or explain" principle.

This 2020 Belgian Code comes into force on the 1ste January 2020.

However, if companies feel they are ready eralier, they may immediately apply the new 2020 Code.