On 8 December 2016, the Monitoring Committee Corporate Governance Code published the new Dutch Corporate Governance Code, taking into account the feedback received from various stakeholders during a consultation phase. The new Code applies to any financial year starting on or after 1 January 2017. Every Dutch listed company needs to state in its management report to which extent it complies with the provisions of the Code. If a company does not comply, it has to explain why.
The Code has been significantly revised in both structure and content, and is based on a number of specific themes. It places greater emphasis on long-term value creation and risk management, and it introduces culture as a new element. The Monitoring Committee has simplified the Code by removing overlaps and conflicts with laws and regulations, and it has included new corporate governance developments. As expected, the Code emphasises the importance of a solid risk and control framework. Management boards will need to provide extended statements on risk and control in the annual report. This requires timely review by companies and possibly changes to the current risk and control framework and related processes.
Noteworthy changes to the consultation documents include a narrowed scope of the going-concern statement, different appointment terms and remuneration rules for supervisory directors, the ability to use the 180-day response time, and a ban on depositary receipt structures being used as an anti-takeover measure. Where the Code requires changes to rules, regulations or procedures, a company will be deemed compliant with the Code if those changes are implemented no later than 31 December 2017. The Monitoring Committee recommends that the key aspects of a company’s corporate governance structure and compliance with the Code will be discussed at the 2018 annual general meeting.