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01 January 2007 Supervision Supervision label Factsheet

Good corporate governance in financial undertakings and pension funds is important for the prudential supervision exercised by De Nederlandsche Bank (DNB). Adequate governance and checks and balances strengthen risk control and minimise the chances of problems occurring.

General

Corporate governance is important to DNB because it provides the basis for control of business operations. If the top management of an undertaking is not properly organised, the control of risks in the undertaking’s operational processes will certainly not be either. Good corporate governance thus helps to protect the interests and claims of shareholders, creditors, policyholders and other stakeholders. An adequate system of corporate governance must be arranged in order to protect all the stakeholders involved in an undertaking. Specific requirements have been drawn up for this purpose for the different sectors.

Dutch Corporate Governance Code

One of the main building blocks in this field is the Dutch Corporate Governance Code. The Tabaksblat Committee presented this code on 9 December 2003. The code applies to all companies which have their registered office in the Netherlands and whose shares or depositary receipts for shares have been admitted to an official listing on a government-recognised stock exchange. It does not therefore apply to all supervised undertakings. However, it does provide important guidelines for the structuring of the governance and the system of checks and balances for all these undertakings. This forms the basis for the control of these organisations.

Corporate governance provisions in the Wft governing financial undertakings

Corporate governance is also an important topic in the Financial Supervision Act (Wet op het financieel toezicht / Wft). This includes:

  • controlled operations
  • integrity in the conduct of business operations (sound operations)
  • trustworthiness of managing directors and persons determining or co-determining policy
  • expertise of managing directors and persons determining or co-determining policy
  • avoidance of conflicts of interests
  • financial services on preferential staff terms
  • positions requiring a high degree of integrity
  • compliance
  • role of auditor and actuary