corporate governance

Corporate governance refers to a set of rules and principles regarding the proper and prudent management of a company. It deals with the relations between directors, supervisory directors and shareholders. Corporate governance serves to protect the interest of all stakeholders at a company: employees, shareholders and others, as well as promoting fidelity in (large) incorporations.

The Dutch Corporate Governance Code A Code of conduct containing principles and best practices for board accountability, monitoring and relations between board members and shareholders.
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Corporate Governance Code
for listed incorporations has been implemented in The Netherlands late 2004. This code of conduct is set up by the Tabaksblat-committee and is therefore also referred to as Corporate Governance Code A Code of conduct containing principles and best practices for board accountability, monitoring and relations between board members and shareholders.
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Code-Tabaksblat
. The Code has been reviewed most recently in 2016. Many other countries have similar corporate governance codes in place.

Listed companies are required to comply with this code. If they choose not to comply, however, they must explain in the annual statements why they choose to ignore a certain rule of conduct. This is called the “comply or explain” approach.

In the Dutch Corporate Governance Code provisions are laid down about the way the board accounts for its policies and the system of monitoring the board. Furthermore the Code includes rules regarding (avoiding) conflict of interests and the remuneration of board members.

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Synonyms: corporate governance

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