Jetta Klijnsma, state secretary for the Netherlands, has decided Dutch pension funds’ supervisory boards (RvTs) will have the right under new governance legislation to suspend or fire board members if they are functioning improperly.
Klijnsma, detailing additional governance rules following Parliament’s approval of the legislation last summer, said RvTs would also be able to reject nominated board members if they failed to comply with the set profile.
She said she was responding in particular to demands from the Senate for more powerful RvTs.
Klijnsma also decided that non-executive board members – or stakeholder representatives – of one of the five board models must establish an audit committee for business aspects and risk management.
The committee must act as a countervailing power towards the executive part of the board, which is to be composed of professionals.
In addition, the independent chairman of the board model would have the right to agenda-setting, as well as the supervision on the structure and functioning of the scheme’s board, Klijnsma said.
With the detailing of these additional governance rules, the principles for good pension fund governance – launched by the Pensions Federation and the Labour Foundation (StAr) earlier this year – now have a legal basis.
However, the state secretary conceded that the code was “less ambitious” than the Cabinet had hoped for, particularly on the issue of remuneration.
The new governance legislation is to take effect on 1 July 2014.