On 1 April 2009, the decree of 20 March 2009 to amend the Decree of 23 December 2004 (the Corporate Governance Decree) regarding further provisions on the substance of annual reports came into force.2 This amendment implements part of EU Directive 2006/46/EG of the European Parliament and the Council of Europe of 14 June 2006 (PbEU L 224)3, which requires listed companies to publish a statement on their corporate governance. A number of requirements currently fully or partly set out in the Dutch Corporate Governance Code are explicitly included in the amendment. Providing certain information is compulsory under the Directive, while the Dutch Corporate Governance Code allows choice of application and an opportunity to explain non-application.
The corporate governance statement must be included in the annual report or in a separate statement that is published on the website of the company together with the annual report if this is mentioned by the company in the annual report.
The statement on corporate governance must include:
- Information on all corporate governance practices that are applied in addition to the Dutch Corporate Governance Code and information on voluntary compliance with of other (foreign) governance codes;
- A description of (a) the internal control and risk management systems, (b) the functioning and authority of the shareholders’ meeting and the rights of shareholders and exercise of these rights, (c) the composition and functioning of the board of management and the board of supervisory directors and their committee’s;
- Information that must be provided in accordance with Article 10, first paragraph, points c, d, f, h and i of the Takeover Directive.
The corporate governance statement also falls within the scope of the audit. The accountant’s investigation into whether the annual report is compatible with the financial accounts will include information on internal control and risk management systems in the financial reporting as well as the information set out in Article 10, first paragraph, points c, d, f, h and i of the Takeover Directive. The accountant will check whether the other statements have been included.
The amendments to the Decree will apply to the financial years commencing on or after 1 April 2008.