NETHERLANDS - Dutch pension funds are doing too little to comply with the corporate governance code, according to the code's monitoring committee.

During an evaluation of institutional investors over 2009, the committee found that small and average-sized pension funds were particularly lax, following the code's rules no more than 60% of the time on average.

The eight largest pension funds - each with more than €50bn in assets - complied with the code 88% of the time on average, according to the committee, which looked into the behaviour of 10% of institutional investors.

Of the remaining 90%, more than one-third said they did not know the relevant rules of the code.

The Corporate Governance Code monitoring committee also found that it was often unclear to shareholders whether their vote had been cast or whether this had happened in conformity with their instructions.

The commission therefore recommended that institutional investors establish whether their mandates had been executed properly.

It said investors must also take responsibility for voting in accordance with their own views, adding that its research showed that too many pension funds often blindly followed the advice of two dominating voting advice bureaus, which together cover 83% of the market.

According to the monitoring committee, two-thirds of Dutch institutional investors - mainly small pension funds - own approximately 5% of local listed companies. Of these schemes, 78% have contracted out their asset management.

Jos Streppel, the former chief financial officer atf insurer Aegon, chairs the monitoring committee. The code was introduced in 2004.