Netherlands: changes proposed to the Tabaksblat Code

The Dutch Corporate Governance Monitoring Commission has proposed changes to the Dutch Corporate Governance Code (a.k.a. the "Tabaksblat Code"). A summary in English is available in a Word document here. This document also contains the results of a survey of Dutch institutional investors' perceptions of corporate governance in Dutch companies. Many of the changes concern remuneration. The proposed additions to the Code include the following rules:

If a variable remuneration component (shares, options or a bonus) conditionally awarded in a previous financial year would, in the opinion of the supervisory board, produce an unfair result on account of incorrect financial data or special circumstances in the period in which the predetermined performance criteria have been or should have been achieved, the supervisory board may adjust the value downwards or upwards. This power of the supervisory board shall in any event be included in new remuneration contracts with management board members.

If the remuneration committee uses the services of a remuneration consultant, that consultant should not provide advice to any management board member.

The supervisory board should aim to have a diverse composition in terms of age and gender.

For further information see this press release (in Word format).

Update (15 September 2008): The ICGN has published a letter in which it comments on the proposed changes.