NETHERLANDS – New Dutch corporate governance proposals have been published which aim to strengthen the role of shareholders and company supervisory boards.
The proposals follow a series of scandals at Dutch companies.
“A new code for corporate governance must help to restore trust and confidence in the honesty, integrity and transparency of the conduct of business within listed companies,” said Morris Tabaksblat, chairman of the committee and a former executive at consumer products firm Unilever.
He said the draft code – unveiled this week – “aims to strengthen the checks and balances in Dutch listed company, whilst clearly defining both the powers and responsibilities of the various bodies within the company”.
The committee says that gaps have arisen between the management and supervision of companies. “For this reason, the committee has acted to strengthen the position of he shareholders and the supervisory board.”
One proposal is that companies which fail to adhere to the code must state their reasons for non-compliance in their annual report. And the pay of managers “must be made more transparent” it says.
Under the draft code, it will be easier for shareholders to dismiss underperforming management and supervisory board members.
And major decisions, such as acquisitions of disposals, will be subject to shareholder approval. Institutional investors will have to publish their policy on voting rights on an annual basis. On request, they will have to disclose how they voted.
The new code will be effective from January 1 2004 and responses to the draft proposals are invited by September 5.