Milestone confirmed! Sustainability in the Dutch corporate governance code
December 10, 2008
Earlier this week the report was leaked to some journalists. In their articles no reference was made to the advice of the committee Burgmans (based on our report “Geborgd of verborgen”, see previous blogs) to include sustainability in the code. So, would this advice be wasted?
In this afternoon’s press conference all uncertainty ended and it was confirmed that the Monitoring Committee has followed the Burgmans advice. After the press conference I talked to several people who had different opinions about this. For some the inclusion is “totally superfluous”. They say, sustainability is so obvious we do not need this reference in the code. To them I say that modifications in the code were necessary also on other aspects. Apparently things do not “just happen”. Look concerns about internal controls, look at concerns about remuneration / bonuses. Moreover the context in which companies operate changes dramatically and swiftly. Sustainability is crucial and the inclusion in the code will take the governance of that to a new level: no more lip service.
Others asked the question whether sustainability should not be included in a separate paragraph. My answer is: no! The time that sustainability was a side-issue is over. By inclusion in relevant articles about the roles and responsibilities of executive and non-executive boards sustainability is part of the core business.
Of course the “proof of the pudding” will have to materialise in practice. Boards will have to give meaning to the corporate governance code, including sustainability. And stakeholders will have to take their responsibility in addressing companies on the statements they make.
For now I conclude that whereas the sustainability was explicitly kept out of the first corporate governance code, it is included in its successor. This is a milestone.
(for Dutch speaking readers I refer to a short video about our report which we have posted on Youtube)
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