legislation

Law on the enhancement of corporate governance

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.

Law on the exercise of certain rights by shareholders

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.

Shareholders:

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.

Law to guarantee women a minimum representation percentage in the board of directors

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.

Law on share-based remuneration of non-executive directors

The law modifying the Belgian Code on Companies for share-based remuneration of non-executive directors has been published.

This law modifies art. 559, alinea 7 of the Code on Companies and extends the article to non-executive directors instead of independent directors.

Comments on the impact of legislation to the 2009 Code

The law of 6 April 2010 on the reinforcement of corporate governance in listed companies sets out legal obligations for listed companies, amongst which the obligation to disclose a Corporate Governance Statement. The legal obligations of this particular law have an impact on the 2009 Code, more …

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