Over the past three years, Belgian listed companies have made considerable progress in complying with corporate governance rules. This is the conclusion of the Financial Services and Markets Authority (FSMA) following its third study on compliance with corporate governance rules by Belgian listed companies.

2009 Code

Belgian listed companies must respect the Belgian Corporate Governance Code, also known as the 2009 Code, in accordance with the "comply or explain" approach. This means that companies which do not comply fully with the 2009 Code must explain why they do not do so.

Certain rules of the 2009 Code have been integrated into the Belgian Company Code. These rules do not allow for exceptions. One example is the obligation for listed companies to establish a remuneration committee and prepare a remuneration report.  

Supervision by the FSMA

The FSMA has analyzed the 2009, 2010 and 2011 financial reports of Belgian listed companies in order to determine to what extent they comply with the corporate governance rules set out in the 2009 Code.

In its most recent study, the FSMA examined the 2011 reports of 113 companies listed on Euronext Brussels. This study revealed that listed companies have made substantial progress in complying with the 2009 Code ("The First Legal Remuneration Reports: Second Follow-up Study, no 38, December 2012, FSMA document no. 42, available at www.fsma.be).

Corporate governance statement

The 2009 Code seeks to achieve a high level of transparency through disclosure. Transparency is achieved, amongst other means, through the corporate governance statement in the company's annual report.

The FSMA study showed that all listed companies have included adequate corporate governance information in their corporate governance statements. The corporate governance statement must also be included in the annual report of the board of directors. 64% of the listed companies comply with this rule.

Internal control and risk management system

The corporate governance statement must contain a description of the most important characteristics of the company's internal control and risk management system. For listed companies, this is a statutory obligation (see Article 96 §2(1)(3) of the Company Code).

The Corporate Governance Committee has published a number of guidelines in this respect. At least the following characteristics should be described: the control environment, the risk management process, the activities subject to control, and the information and communication procedures (see the corporate governance directives of 10 January 2011, available at www.corporategovernancecommittee.be). These guidelines have proven useful, as 97% of all Belgian listed companies now publish the required information.

Evaluation of directors

The corporate governance statement must also contain information regarding the evaluation of the board of directors, its committees and individual directors. This, of course, is a more sensitive issue. 10% of the listed companies reported that an evaluation had occurred, but without providing any further information. 16% of the listed companies explained their failure to comply with this provision.

Remuneration report

All listed companies are obliged by law to publish a remuneration report. This report forms part of the corporate governance statement. The minimum content of the remuneration report is set out in Article 96 §3 of the Company Code, as supplemented by the 2009 Code.

The remuneration committee prepares the remuneration report and comments on the report during the general meeting. The general meeting must then vote on the remuneration report. Notwithstanding this obligation, only 14% of all listed companies published information on the remuneration of directors and executive management in their corporate governance statement or another section of the remuneration report.

The same trend can be noticed when it comes to mandatory components of the remuneration report:

  • Description of the procedure to (1) develop a remuneration policy and (2) determine remuneration: 85% of listed companies described the procedures in place.
  • Remuneration of non-executive directors: 98% of all listed companies published the individual remuneration of their non-executive directors, while only 2% reported on the global level of remuneration. 78% of the listed companies also indentified the type of remuneration granted (directly and indirectly).
  • Variable remuneration for non-executive directors is prohibited under the 2009 Code. The Company Code nevertheless allows for a system of variable remuneration, subject to approval by the general meeting. 80% of all listed companies do not provide variable remuneration. 13% of the companies analyzed provide variable remuneration via options or warrants.
  • Remuneration of the CEO and executive management: the disclosure of this information is required  by law (Article 96 §3(2)(6) and (7) of the Company Code). 88% of the relevant listed companies apply the rules. The remaining 12% do not publish this information for privacy reasons or disclose only global figures.
  • Severance payments to executive management: only 69% of companies provided information on an individual basis, notwithstanding the fact that this is a statutory obligation (Article 96 §3(2)(9) of the Company Code).


The FSMA noted that Belgian listed companies have made considerable progress in complying with the corporate governance rules. According to the FSMA, this heighted compliance can be explained by the fact that a number of corporate governance principles are now statutory obligations. 86% of all listed companies comply with the obligation to publish a separate remuneration report (a 39% improvement compared to the first study). The FSMA concludes its study with a list of recommendations, intended to facilitate compliance by listed companies with corporate governance rules