A Dutch stewardship code has been drafted by a group of pension funds, insurers and asset managers led by Eumedion, which represents the views of institutional investors on corporate governance and sustainability issues in the Netherlands.

Eumedion, which is one of the seven supporting organisations of the Dutch corporate
governance code said that developments in the EU - including the adoption of the Shareholder Rights Directive earlier this year - have emphasised the key role shareholder engagement plays in ensuring good governance within listed companies.

Therefore, Eumedion said, there was greater expectations placed on Dutch and non-Dutch asset owners and asset managers that they would take their responsibility in playing an active role in promoting good corporate governance and sustainability practices of Dutch listed companies.

Eumedion noted that almost 90% of the shares of the largest Dutch listed companies are held by non-Dutch investors. It stated that non-Dutch asset owners and non-Dutch asset managers with home-country stewardship principles, or those which had signed stewardship codes in other jurisdictions that had similar objectives as this code, could choose to endorse the Dutch code.

They could also endorse the Dutch code by referring to it in their own stewardship or engagement policy and statements Eumedion said and this is what it is expecting from non-Dutch members of the organisation.

The Dutch Stewardship Code replaces the Eumedion best Practices for Engaged Share-Ownership, established in 2011. These best practices had been applied since 2011 by almost all 65 domestic and foreign institutional investors who are Eumedion members. New European obligations and responsibilities for institutional investors, will come into force from June 2019, meaning it was time for an official code Eumedion said.

A signatory of the Code is expected to publish on its website a statement that: describes how the signatory has applied each of the eleven principles of the Code and discloses the specific information requested in the principles; or if one or more of the principles have not been applied or the specific information requested has not been disclosed, explains why the signatory has not applied those elements of the Code.

Under the code institutional investors are required to monitor their Dutch listed investee companies on material issues such as long-term performance and risks and opportunities, the capital structure, social and environmental impact, corporate governance and corporate actions. They must also be prepared to enter into dialogue with their Dutch investee companies and escalate their stewardship activities when issues remain unresolved.

Eumedion has proposed the creation of a monitoring committee that will carry out an annual assessment of how Dutch asset owners and managers comply with the principles of the Code.
The committee will offer an annual report of its findings to Eumedion’s board and submit it to the Dutch government.

Eumedion is consulting on the draft code until 15th November 2017 and comments can be sent to info@eumedion.nl. The final version of the code is due to be published in December 2017.