Dutch Corporate Governance Code

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.

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.

Compliance is in accordance with the ‘apply or explain’ principle. In other words, the principles and best practice provisions of the Code must be applied unconditionally or an explanation must be given for any departure from them. The management board and supervisory board of a company account to the shareholders for the corporate governance structure that has been adopted and for compliance with the Code.

The Code is divided into five chapters:

  1. compliance with and enforcement of the Code;
  2. the management board;
  3. the supervisory board;
  4. the shareholders and the general meeting of shareholders;
  5. the audit of the financial reporting and the position of the internal audit function and the external auditor.

The Dutch Corporate Governance Code was published in December 2003 by the Tabaksblat Committee. The Code was revised by the Frijns Committee in December 2008. The revised Code entered into force on the 1st of January 2009. You can download the revised Code here.

 

Background

The Corporate Governance Committee (Tabaksblat Committee) published the first Dutch Corporate Governance Code on the 9th of December 2003. This document includes the Code itself, as well as a preamble and explanation of and notes to certain terms used in the Code.

On the 30th of December 2004, the legislator designated the Dutch Corporate Governance Code as a code of conduct to which listed companies should refer in their annual report, in which they should indicate to what extent they have complied with the principles and best practice provisions ("the apply or explain principle").

You can download the 2003 Dutch Corporate Governance Code here. 

The 40 recommendations of the first Dutch Corporate Governance Committee (Peters Committee), as contained in the 'Corporate Governance in the Netherlands; the Forty Recommendations' report (1997), formed the point of departure for the activities of the Tabaksblat Committee.