Since last year, employees in the financial sector in the Netherlands are obliged to take an oath or make a solemn affirmation of integrity. This was already mandatory for directors and supervisors in the financial sector. The text of the oath is as follows:
“I swear that I will perform my duties with integrity and care.
I swear that I will carefully consider all interests involved in the company, namely those of the clients, the shareholders/members, the employees and the society in which the company operates.
In that consideration, I swear that I will put the clients’ interests first and inform clients to the best of my ability and knowledge.
I swear that I will comply with the laws, regulations and codes of conduct applicable to me.
I swear that I will maintain confidentiality in respect of matters entrusted to me.
I swear that I will not abuse my knowledge.
I swear that I will act in an open and verifiable manner and I acknowledge my responsibility towards society.
I swear that I will try my best to maintain and enhance trust in the financial sector.
So help me God!”
I strongly encourage the idea to introduce a similar mandatory oath (or solemn affirmation) for directors and supervisors in our government-affiliated entities. This would send a very positive message. It would be a sign from political establishment that corporate governance and integrity in state-owned entities are important and have priority. It also creates clarity towards the directors and supervisors of these institutions. It is a confirmation that they have to act transparently and honestly in the performance of their duties and that the Government as shareholder explicitly wants this. It is also a public promise and consequently a form of accountability. If you create a ceremony for it, a photo will even be published in the newspaper!
The obligation to take an oath of integrity has been criticized in the Netherlands. Some think that the present oath is not drastic enough. Much more should be promised or sworn. Others are of the opinion that it is difficult to note violation of the oath, let alone punish it. There are also people that think it is ’the same meat, different gravy’. According to them, these are not new obligations at all, but obligations that apply in any case in the financial sector.
I do not agree with this criticism. I think that introducing an oath for directors and supervisors in our state-owned entities would be a big step forward. By taking an oath or making a solemn affirmation, each individual director and supervisor will become directly and personally responsible for the integrity of his or her conduct. This also has important legal consequences. Those who cause damage to the company or third parties with unethical conduct can be called to account legally in some cases. Under civil law, unethical conduct can lead to liability. If one has also broken one’s oath or solemn affirmation on top of it, one will be blamed more seriously for the unethical conduct.
Closer to home, in the company itself, taking an oath or making a solemn affirmation can also be useful. The supervisory director who does not respect the confidentiality of the information entrusted to him or her, can be called to account more easily if his or her colleagues have fresh memories of how this supervisory director took the oath of integrity. In short, let us include the obligation to take an oath or make a solemn affirmation of integrity as part of the revised Code Corporate Governance. And if someone does not want to do so? Very well. In that case simply do not become a director or supervisory director.
Do you have a question about corporate governance yourself? Please e-mail it to email@example.com and perhaps your question will be discussed in the next blogpost.