Financial Crime World

Belgium Reinforces Corporate Governance Rules for Listed Companies

Background

The Belgian corporate governance landscape has undergone significant changes in recent years, shifting from soft law to hard law. One of the most recent developments is the adoption of rules requiring listed companies to ensure that at least one-third of their board members are of a different gender.

Corporate Governance Code 2009: Update and Review

The Corporate Governance Committee has been reviewing the Corporate Governance Code 2009, also known as the Daems Code, since 2017. The committee aims to update the code and incorporate changes into the Belgian Company Code (BCC). The goal is to create a clearly readable code that is suitable for all listed companies, regardless of size or governance model.

Mandatory Provisions in BCC

The BCC contains mandatory provisions on corporate governance practices, including:

  • Establishment of an audit committee
  • Remuneration committee
  • Disclosure of executive remuneration
  • Requirements for independent directors

Compliance with these provisions is ensured by the auditor and the Financial Services and Markets Authority (FSMA).

Buysse Code II: Corporate Governance Recommendations for Unlisted Companies

In addition to the 2009 Code, which applies to listed companies, the Buysse Code II contains corporate governance recommendations for unlisted companies. The committee has announced plans to review the 2009 Belgian Code on Corporate Governance in 2017, with a focus on incorporating new regulations and international standards.

Regaining Added Value

“We want the code to regain its added value and not just be seen as an exercise in compliance,” said Thomas Leysen, chairman of the Corporate Governance Committee. The committee aims to create a code that is suitable for all listed companies, regardless of size or governance model.

Increased Gender Diversity on Management Boards

The Belgian government has taken steps to increase gender diversity on management boards, with the adoption of rules requiring at least one-third of board members to be of a different gender. This move follows a January 2011 recommendation from the Corporate Governance Committee.

Specific Rules for Financial Institutions

Specific corporate governance rules apply to financial institutions, in addition to the 2009 Code. The committee is tasked with ensuring that the provisions of the Belgian Code on Corporate Governance remain relevant and up-to-date.

Resources

For more information on corporate governance rules applicable to listed companies in Belgium, visit https://thelawreviews.co.uk/edition/the-corporate-governance-review-edition-7/1140902/belgium. The Corporate Governance Committee’s website can be accessed at https://www.corporategovernancecommittee.be/en/.