March was an interesting month for the codes corporate governance in the Kingdom. In Curacao, the Committee Willem submitted its assessment report on the Curacao Code Corporate Governance to the government. At the moment, a consultation period of over eight weeks (up to and including 6 April 2016) takes place in the Netherlands. During that period, everyone has been invited to respond to the so-called Consultation Document of the Monitoring Committee Corporate Governance Code (the Committee Van Manen). Everyone can participate in the Dutch public debate on the revision of the (Dutch) Code.

The Curacao Code and the Dutch Code are somewhat similar. But the differences in scope are fundamental. The Curacao Code only applies to state-owned entities. The Curacao Code does not apply to private companies. The Dutch Code, on the other hand, is only meant for private companies, in particular for listed corporations . Nevertheless, most major unlisted companies in the Netherlands voluntarily follow the Code as well.

Curacao has a Corporate Governance Ordinance. It contains exact regulations for the government of the country regarding how to act as shareholder when passing crucial resolutions. For instance, the government has to seek independent advice in advance. The Netherlands doesn’t have (formal) legislation, other than a reference to the code corporate governance in the Civil Code. There are no restrictions whatsoever in the way the State executes its shareholders’ rights. No wonder that the two assessments on either side of the ocean concern totally different issues. Which is good, because the situation in both countries is very different.

The report of the Committee Willem is not yet public. According to the media, a few of the conclusions are that our Curacao Code would not be transparent and is drawn up ’rigidly’. According to the committee, a continuous formation process for directors and supervisors should be created as well. it is said that the principles and best practices of proper governance are not top of mind with the people involved. If these would indeed be some of the conclusions, I agree. The Code could indeed be made much more accessible. Currently, a group of enthusiastic master students at the University of Curacao are creating a model for a ’Code light’, a code corporate governance that is simpler and more usable for relatively small companies. Their proposal is expected mid-2016. Training is indeed crucial. Most directors and supervisors in state-owned entities want more knowledge of and insight in governance and being governed. Many things that go wrong in the governance of state-owned entities are not as much caused by unwillingness, but often by lack of knowledge and insight. This is good news, as this can be solved.

A very different discussion is taking place in the Netherlands. According to the report of the Committee Van Manen, all AEX corporations and almost all AMX, AMS, and local corporations comply with the code. Only the quality of the explanation (if the provisions are not applied in an individual case) could be improved. In the Netherlands, just like in Curacao, the ’comply or explain’-principle applies to the applicability of the code. Apparently, sufficient explanation still lacks sometimes, when the code is not applied. Another interesting conclusion that the Committee Van Manen points out, is that in many Dutch companies (40%), an internal audit function does not exist. The internal audit function is important in the internal risk and control systems. This is also identified by the Committee Willem: Curacao state-owned entities pay too little attention to risk management as well.

Another interesting conclusion in the report of the Committee Van Manen is the identified higher awareness (compared to before) in the Netherlands of diversity in management boards and supervisory bodies. This is good news. However, a provision that is not sufficiently applied in the Netherlands, in the opinion of the Committee Van Manen, is the restriction of the term of office for supervisors. In other words, supervisory directors occupy their seats for too long. A period not exceeding nine (3×3) years is recommended. In Curacao this is less relevant. We are already happy to find a good director or supervisor. That is the disadvantage of a small country. It is another good illustration of the need to continue to respect the particulars of the country when applying governance rules. The Curacao assessment and the Dutch assessment consequently are not very similar. That is fine.

Do you have a question about corporate governance yourself? Please e-mail it to and perhaps your question will be discussed in the next blogpost.

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