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In brief

On 21 February 2022, the Corporate Governance Code Monitoring Committee (“Committee“) submitted a proposal to update the Dutch Corporate Governance Code (“Proposal”“). The Proposal (currently open for consultation up to and including 17 April 2022) provides for updating the Dutch Corporate Governance Code (“Code“) in areas such as long-term value creation, the role of shareholders and diversity. It also contains proposals to amend provisions of the Code due to changes of the Dutch Civil Code, such as introducing a statutory cooling-off period and statutory rules on the remuneration policy and report. This overview briefly outlines the most important parts of the Proposal.

Long-term value creation and environmental, social and governance (ESG) factors

The focus on ESG has increased over the last couple of years. Climate change is one of the most important themes of the current and coming decades that will have an impact on corporate governance. ESG is an important part of the strategy of companies that focus on long-term value creation. For listed companies, it is expected that ESG will be high on the agenda and that these companies will provide good insight into the way they give substance to the ESG aspects of entrepreneurship. To emphasize the importance of ESG together with long-term value creation, the Committee has proposed the following, among other things: 

  1. Companies should formulate a clear strategy in the field of ESG and formulate concrete objectives as part of their strategy for long-term value creation.
  2. The management board report should account for the ESG strategy, actions and results, including the effects on the production and value chain.
  3. The interests of relevant stakeholders should be taken into account when determining the ESG strategy. To this end, the management board should prepare a policy for stakeholder dialogue and facilitate such dialogue. 

The role of shareholders

With the introduction of the amended Code in 2016, the role of shareholders was left virtually unchanged. For the Proposal, the Committee took elements from the Eumedion Stewardship Code. The proposed changes are as follows: 

  1. A new best practice principle to encourage a dialogue between shareholders and companies.
  2. “Informed voting” by shareholders and, in case proxy advisers are involved, a dialogue between proxy advisers and companies should be encouraged.
  3. New language around institutional investor engagement policies and abstention from voting by shareholders holding greater short positions rather than long positions. In addition, stock-lending arrangements should be reversed when voting on significant matters. 

Diversity and inclusion

  1. The management board, supervisory board and executive committee (if any) should be composed in such a way that there is a balance between expertise, experience, competencies, personal capabilities, age, gender identity, nationality, (cultural) background and, in the case of the supervisory board, independency. 
  2. The supervisory board report should refer to gender identity (instead of gender) in case a supervisory board member wishes to indicate this. 
  3. Companies should have a D&I policy for the entire business, whereby attention is given to all aspects and personal characteristics on which people differ from each other. 
  4. The accountability for D&I should be expanded to also reflect the flow and retention of diverse talent in the business. 

Other proposed changes

  • Cooling-off period and response period: On 1 May 2021, the cooling-off period for a maximum period of 250 days was implemented in the Dutch Civil Code, which differs to a certain extent to the response period for a maximum period of 180 days as reflected in the Code. While the Committee has acknowledged that there are certain differences between the statutory cooling-off period and the response period under the Code, the Proposal proposes not to align the response period with the statutory cooling-off period. The best practice provision should include a specific reference that both periods can be invoked. 
  • Remuneration: As a result of the implementation of the Shareholder Rights Directive II, new rules on the remuneration policy and the remuneration report have been implemented in the Dutch Civil Code for N.V.s and B.V.s that have a listing on a regulated market in the EU. While the Committee has acknowledged that the Dutch Civil Code provides more detailed rules on this matter, it is proposed not to change the respective best practice provisions of the Code but to further clarify that the provisions on remuneration in the Code are in addition to the statutory requirements. 
  • Recommendation report “Strengthening the accountability chain”: At the request of the Dutch minister of finance, the University of Leiden conducted research on further strengthening the responsibility of audited entities on the audit and annual reporting. The minister of finance shared the recommendations of the University of Leiden with the Committee. Following its review, the Committee proposed to include some of these recommendations, including the following: 
  1. An independent third party should review the functioning of the internal audit function at least every five years.
  2. The internal audit function should preferably report to the CEO.
  3. The internal audit function should report its audit results to the management board and the audit committee (instead of only reporting the essence of the audit results to the audit committee and the full audit results to the management board).
  4. In evaluations of the management board and supervisory board, more attention should be paid to behavior and culture. 

Rebecca Kuijpers-Zimmerman is a legal director in Baker McKenzie’s Europe Mergers & Acquisitions Group, as well as the Capital Markets Practice Group. She began her career as a lawyer in 2008 and has worked for the Firm ever since


Denise Ozmis is a member of the Amsterdam Corporate M&A team. She advises on M&A, Private Equity, Capital Markets as well as Dutch corporate governance matters. Prior to joining Baker McKenzie, Denise advised on M&A transactions and corporate governance matters as an in-house lawyer for AkzoNobel, a leading global paints and coatings company. Denise has recently published a legal insight on the Dutch legislative proposal about the right of the board of management to invoke a cooling-off period of up to 250 days. Denise has published in Dutch legal journals about the Dutch Act on collective settlement of mass damage claims and supervision on housing corporations.


Mohammed Almarini is a partner in Baker McKenzie's Corporate M&A Practice Group in Amsterdam. He is a regular speaker at seminars and corporate law courses and conducts workshops on various topics of corporate law.

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