NETHERLANDS - The shareholders of a listed company should have a vote on its corporate governance policy, in order to achieve an adequate motivation in case of a deviation of the Tabaksblat Code, said Eumedion, the platform for corporate governance.

“It still happens to many times that companies only mention the deviation, without properly explaining the reason,” Eumedion stated in its evaluation to the Monitoring Committee Corporate Governance Code of the annual reports and shareholders’ meetings.

Overall, Eumedion, is satisfied with the corporate compliance of the Tabaksblat Code. “The 50 largest listed companies comply with 96% of its rules on average,” it conluded.

Based on its experience so far, the platform recommends a better description of the activities of the supervisory board, and the letter of the external accountant to the supervisory board on the annual account to be made public.

According to Eumedion, the board’s declaration on the effectivity of the internal risk management and control systems shouldn’t grow to one which looks like the 404-declaration of the US Sarbanes-Oxley Act. “Connection must be found with the international acknowledged standards framework COSO,” it stressed.

COSO, also known as the Treadway Commission, is a voluntary private sector organisation, dedicated to improving the quality of financial reporting through business ethics, effective internal controls and corporate governance.

Furthermore, the platform has proposed to use English as the common language during shareholders’ meetings, as a way to encourage foreign shareholders to participate.

Eumedion’s other recommendations are fine-tuning of the existing rules on the responsibility of shareholders (eg more transparency on fellow-shareholders), an improvement of the voting-infrastructure, discouragement of stock lending in event-driven situations for listed companies, and mandatory transparency for institutional investors.

The platform has announced to publish recommendations on governors’ remuneration, and a further specification of the code’s clauses for institutional investors next autumn.