Dutch insert CSR into their governance codeMay 2009
The Netherlands government is to bring new requirements on corporate responsibility into the Tabaksblat, the country’s corporate governance code.
Parliament has accepted the conclusions of a review of the national code, which includes a proposal that listed companies’ boards should have to take into account ‘relevant corporate social responsibility issues’ when running company affairs.
The new clauses are likely to come into force some time this year, although no date has been set.
The Tabaksblat applies to all companies with a balance sheet value of more than €500 million (£449m, $662m) whose registered offices are in the Netherlands. It was introduced in 2003 after several corporate fraud scandals, including accounting irregularities at the Dutch retail group Ahold. There have since been frequent calls for the code to be updated to ensure that listed companies place greater emphasis on corporate responsibility issues.
In May 2008 the economic affairs minister established a committee, which presented its findings six months later. Now the government has endorsed the proposals, which recommend new passages in the code about the relevance of social and environmental issues to company behaviour.
The revised code will say that directors ‘should take into account the interests of various stakeholders, including corporate social responsibility issues that are relevant to the company’, and that it is ‘essential’ that stakeholders feel ‘confident that their interests are represented’. This demands that businesses act with ‘integrity and transparency’.
Another amended clause states that, as a matter of best practice, managers should inform their supervisory board of ‘corporate social responsibility issues that are relevant to the enterprise’ – and that these ‘shall be mentioned in the annual report’.
After their appointment, according to the revised code, all supervisory board members must follow an induction programme on ‘social affairs’ as well as covering general financial and legal matters.
Kris Douma, head of responsible investment at the Dutch pensions company Mn – who was on the working group that reviewed the Tabaksblat – said the revised code would encourage more CSR activity among ‘the two-thirds of Dutch companies who are doing very little’. Conformity with the code is expected to be on an ‘apply or explain’ basis, and businesses failing to follow this route can be fined – although this has not yet happened.
Jean-Florent Helfre, sustainability analyst at the Dutch SRI research company Sustainalytics, told EP: ‘We think these amendments constitute progress, as it’s the first time CSR has been explicitly mentioned in the code. Many Dutch companies already have a CSR vision and the effects on them might be low. Hopefully the others will not take a greenwashing attitude to compliance.’
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