The Dutch Corporate Governance Code 2008

The Dutch Corporate Governance Code (the Code) focuses on the governance of companies listed on the stock exchange.

The Code contains principles and best practice provisions that regulate relations between the management board, the supervisory board and the shareholders (i.e. the general meeting of shareholders). The principles may be regarded as reflecting the general views on good corporate governance, which enjoy wide support. The principles have been elaborated in the form of specific best practice provisions.

The Dutch Corporate Governance Code applies to all companies whose registered offices are in the Netherlands and whose shares or depositary receipts for shares have been admitted to listing on a stock exchange, or more specifically to trading on a regulated market or a comparable system, and to all large companies whose registered offices are in the Netherlands (balance sheet value > € 500 million) and whose shares or depositary receipts for shares have been admitted to trading on a multilateral trading facility or a comparable system.

Compliance with the Code is in accordance with the ‘apply or explain’ principle. Companies should apply the principles and best practice provisions of the Code. In certain circumstances companies may depart from the principles and best practice provisions. They do need to provide

sound reasons for any non-application of a provision. According to the law information on the compliance with the Code should form part of the annual report of the company.

The Code was adopted in 2003 by the Tabaksblat Committee, and amended in December 2008 by the Frijns Committee. In 2016 the Code has been revised by the Van Manen Committee. This revised Code will enter into force on January 1st 2017.

In 2017, Dutch listed companies are still required to report on compliance with the Code 2008 in the 2016 financial year. As of 2018, Dutch listed companies will report for the first time on compliance with the revised Code. The condition for this is that the revised Code must be enshrined in Dutch law by the cabinet in 2017.

The Code 2008 can be found here.

 

Overview of Guidance

Lack of clarity in the Code 2008 prompted previous Monitoring Committees to develop guidance that provided an explanation of certain principles or provisions. Guidance does not form part of the regulations in the Code, which means that listed companies formally do not have to respond to the guidance in their annual reports. Guidance, however, can be considered as guidelines for listed companies and their shareholders.

Guidance has been included in previously published monitoring reports. The current Monitoring Committee would like to improve the accessibility of these guidelines with an overview. The overview concerns an inventory of the previously given guidance from the monitoring reports that have been published since 2009 – the year in which the in 2008 updated Code was first monitored. At the request of the supporters of the Code, the Monitoring Committee is currently working on proposals for a revision of the Code. Until the revised Code has entered into force, listed companies can follow the guidelines for the current Code.

The overview of guidance can be downloaded here.

 

Overview of Code Provisions and Legislation

An overview of Code 2008 provisions and legislation can be downloaded here.