This law aims at the further implementation of the audit reform consisting of (i) the European Audit Regulation 537/2014/EU and (ii) the European Audit Directive 2014/56/EU amending the current Audit Directive 2006/43/EC.
The main themes of the audit reform are the following: external audit firm rotation and the prohibition and restrictions on non-audit services, new public supervision of auditors, extensive reporting of the auditor and the strengthening of the Audit Committee.
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This law contains several provisions concerning the profession of auditors.
- External rotation: The law retains the duration of the auditor's mandate to three years in both the public interest entities (PIEs) and in other organizations. It provides that the auditor of a PIE may carry only three consecutive terms in the same organization. However, any extension after a 3rd mandate is possible:
- if adhering to an open procedure within the meaning of Article 17 § 4 a) of European Regulation No. 537/214. In this hypothesis, it is possible to renew the mandates in order to allow for a maximum total duration of 18 years;
- in the case of the appointment of a board of auditors. In this hypothesis, it is possible to renew the mandates in order to allow for a maximum total duration of 24 years.
- Powers of the disciplinary bodies: Article 89, §1 of the Law of June 29, 2016 provides that as of June 17, 2016 the Sanctions Committee of the FSMA acquires the power to take disciplinary measures against the auditors in charge of the legal audit of the financial statements of one or more public interest entities (PIEs). However, the law delegates as a transitional measure, this new power to the existing Disciplinary Committee of the IBR to the entry into force of the future law which will transpose Directive 2014/56/EC (amending Directive 2006/43/EC) into Belgian law.
The law on the disclosure of major shareholdings modifies among other things the disclosure requirements of periodic and ongoing information and the investigative powers of the CBFA.
Especially important is the introduction of a new system of transparency requirements in the modification of major shareholdings in listed companies.
The law of 2 August 2002 provides in the creation of a legal management committee. Based on that law, the statutes of a public limited company may authorize the board of directors to delegate its powers to a legal management committee. The delegation, however, cannot relate to:
- the company's general policy;
- the control of the legal management committee;
- the powers granted specifically by law to the board of directors.
This law aims to modernize the Act of 21 March 1991 on the reform of certain economic public companies, in particular by:
- facilitating organizational constraints with regard to autonomous public companies that are mainly active in sectors open to competition, in order to place this companies on an equal footing with their competitors ("level playing field");
- aligning the appointment and functioning of the governing bodies of listed autonomous public companies to the general corporate governance rules that apply to listed companies;
- defining the framework within which the government stake in listed autonomous public companies could possibly be reduced to less than 50% plus one share.
Since 8 January 2009, listed companies are legally obliged to establish an audit committee within their statutory management body. The law transposes the provisions of the European Directive 2006/46/EC.
The audit committee has to be composed of only non-executive members of which at least one member must be independent. This independent member of the audit committee has to have the necessary expertise in the field of accounting and audit and has to fulfill the independence criteria the law sets out.
These independence criteria will also be applicable to independent directors who are member of the committee entrusted with the assessment of intra-group transactions.
On 23 April 2010, the law on the enhancement of corporate governance for listed companies and autonomous public undertakings, and on the amendment of the rules with regard to the prohibition against pursuing functions in the banking and financial sector, was published in the Belgian Official Gazette.
Each listed company is now obliged to include in its annual report a specific section on corporate governance.
Listed companies are also required to establish a remuneration committee. The remuneration committee is composed exclusively of non-executive directors, the majority of whom are independent directors. The board of directors must ensure that the remuneration committee has the necessary expertise with regard to the remuneration policy.
The Belgian Corporate Governance Code has also been imposed as the reference code for listed companies. Listed companies will be held to assign the Code as their reference code according to article 96, § 2, 1° of the Code on Companies.
The law of 20 December 2010 on the exercise of certain rights of shareholders in listed companies was adopted and published on 18 April 2011.
The law foresees the transposition of the European Directive 2007/36/EC with the view to enable shareholders to exercise their rights more easily and effectively.
- Are able to vote and participate to the annual general meeting by electronic means;
- Are able to consult documents of the annual general meeting and proxy voting on the internet site of the company;
- Have the right to put items on the agenda of the general meeting and have the right to draft resolutions if they represent 3% of the share capital.
The law on quota of women in the board of directors has been adopted. At least one third of the board of directors must be of the opposite gender. The required minimum number is rounded off to the nearest whole number.
The law also contains sanctions which apply to members of the board of directors and newly appointed members respectively.
Companies must also provide an overview in the annual report of efforts made to ensure that at least one third of the members of the board are of the opposite gender.