2. The composition of the Supervisory Board should be such that board members are able to operate independently of one another and of the Executive Board and to judge critically. (2.3)
3. The annual report contains the information on Supervisory Board Members indicated by the Committee. (2.4)
4. No more than one former executive board member of the company should occupy a seat on the Supervisory Board. Special consideration should be given to the appointment of a former chairman of the Executive Board, especially when he has been put forward as a prospective chairman of the Supervisory Board (2.5).
5. All supervisory board members who are appointed on the basis of a nomination fulfil their tasks without a mandate from those who nominated them and independently of subsidiary interests associated with the company (2.6).
6. The re-appointment of supervisory board members should not be automatic and will be given careful consideration. (2.7)
7. Supervisory board members should resign before the end of their allotted term if a failure to complete their tasks adequately, a fundamental difference of insight, an irreconcilable conflict of interests or other circumstances so dictate (2.8).
8. A supervisory board member facing a conflict of interests must inform the chairman of the Board immediately (2.9).
9. The number of supervisory board seats at listed companies held by a single individual should be limited in such a way as to guarantee the satisfactory fulfilment of the allotted tasks. A company should allow employees in active service to take up supervisory posts in other companies (2.10).
10. Members of a company's Supervisory Board should not simultaneously hold a seat on the Supervisory Board of one of that company's operating companies (2.11).
11. A supervisory board member's shareholdings in the company where he has a seat on the Supervisory Board should serve as a long-term investment. The total shareholdings and options rights held jointly by the supervisory board members is published annually (2.12).
12. The remuneration of supervisory board members is not linked to the financial results of the company concerned. Any business (commercial) links with the company are published in the notes to the annual accounts (2.13).
13. Any appearance of a conflict of interests between the company and its supervisory board members is to be avoided (2.14).
14. The Chairman of the Supervisory Board has specific tasks which are laid down in a set of regulations (3.1).
15. The Supervisory Board will consider the appointment of a selections and appointments committee from among its members, as well as an audit committee and a remunerations committee (3.2).
16. The Board will meet according to a pre-determined timetable. Individual members will be asked to explain in the event of frequent non-attendance (3.3).
17. At least once a year the Supervisory Board will discuss the composition of the Executive Board, the company s strategy and the associated risks and the results of the executive board s assessment of the company s internal systems of control. This will be disclosed in the report of the Supervisory Board contained in the company s annual report (3.4).
18. At least once a year the Supervisory Board will hold a meeting from which the Executive Board is excluded to discuss the functioning of the Supervisory Board and its relationship with the Executive Board. Its discussions will further include an assessment of the Executive Board, referring also to questions of succession and salary (3.5).
19. The adoption (approval) of the annual accounts and the approval of the policies pursued by the Executive Board and the supervision exercised by the Supervisory Board, including the discharge from liability in respect of management of both executive and supervisory board members will be separate items on the agenda for the annual General Meeting of Shareholders (3.6).
20. A permanently delegated supervisory board member is considered not desirable. (3.7)
21. The Supervisory Board operates under a protocol governing the relations with the Executive Board, works council and capital providers (3.8).
22. The Executive Board reports in writing to the Supervisory Board on the corporate goals, strategy and associated risks and the mechanisms in place to manage risks of a financial nature. The main topics discussed in the report should be granted a designated space in the annual accounts (4.2 and 4.3).
23. The total salaries sum in the annual report should be broken down to indicate payments to current and former executives (4.4).
24. An executive board member's shareholdings in the company where he has a seat on the board should serve as a long-term investment. The total shareholdings and options rights held jointly by the executive board members are published annually (4.5).
25. Any appearance of a conflict of interests between the company and its executive board members is to be avoided (4.6).
26. Based on the principle that finance and influence should be in line, companies and investors should be asked to reassess the part played by capital in their company (5.1).
27. For all companies the general meeting of shareholders should be the forum in which the Executive and Supervisory Boards report on and account for the way in which they have carried out their tasks (5.2).
28. The Executive Board and the Supervisory Board must have the confidence of the meeting of shareholders. The company s appointments policy should take this into account (5.3).
29. The management of the company will assess the degree of influence exerted by investors and will report to a shareholders meeting in 1998 (5.4-5.6)
30. In principle, requests from capital providers for items on the agenda of the general meeting of shareholders will be honoured (5.7).
31. The quality and specialisation of investment analysis in the Netherlands particularly as regards industry sectors should be enhanced (5.8).
32. An efficient system of proxy solicitation should be introduced (5.9).
33. Parties which have gained control over a quoted company by holding 50 percent or more of its shares must make a bid for the remaining shares and/or non-voting depositary receipts of share within an acceptable period and under realistic conditions (5.10).
34. The company discloses the extent to which it has followed the recommendations in its annual report, with supporting arguments (6.1).
35. The company should consider whether an accountant's investigation into the accuracy of the report is deemed necessary as regards compliance with relevant and verifiable recommendations (6.2).
36. The accountant's role within the framework of Corporate Governance is primarily to advise and to signal possible problems as regards the set-up (and functioning) of the internal control system for safeguarding the reliability of the provision of financial information. The accountant can further play a role as regards internal control systems designed to safeguard the effectiveness and efficiency of company procedures and legislative and regulatory compliance (6.3).
37. The Supervisory Board or the audit committee will meet with the external accountant at least once a year (6.4).
38. Reports from rating agencies will be discussed by the Supervisory Board (6.5).
39. The Committee proposes that a knowledgeable organisation be requested to monitor, evaluate and publish the implementation of, and compliance with, the Corporate Governance recommendations, alongside the debates within the general meeting of shareholders (7.1).
40. The results and the evaluation of this monitoring process will be of significance to the further debate on the subject of Corporate Governance in the Netherlands (7.2).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For more information please contact:
Thom Hoedemakers Paddy Manning
Amsterdam Exchanges NV St James Corporate Communications
Tel: +31 20 523 4014 Tel: 0171 436 4101