231 Towards a diverse and expert-based supervisory board.

The proposed dual responsibility for the supervisory board offers valuable opportunities for the inclusion of diverse viewpoints and expertise in corporate governance.1 In my assessment, the underlying consensus of the perspectives is that the supervisory board as a whole should include expertise which complements the expertise of the executive board. While the executive board mainly requires executive expertise that is able to achieve the successful management of the corporation in a competitive market environment, the distinctive position and responsibility of the supervisory board allows for other forms of expertise to be included in the internal governance of the corporation. Such inclusion of other types of expertise on the supervisory board enables corporations to build the necessary capacity for considering the social and ecological interests involved in its enterprise, without requiring the composition of the executive board itself to change. The need for the inclusion of diverse viewpoints and expertise in corporate governance can therefore be accommodated through broadening the composition of the supervisory board. While the need for continued profitability merits the inclusion of experienced executives, candidates with experience in public government or with scientific expertise may deserve inclusion in order to represent wider public interests and the needs of the environment of the corporate enterprise. All in all, I would argue that the composition of the supervisory board should reflect all social and ecological aspects involved in the enterprise of the corporation. Through this, the executive board can seek assistance from relevant experts on the supervisory board in relation to its consideration of social and ecological interests. Meanwhile, the supervisory board is equipped with the necessary expertise to review the impact of board decisions on their environment and to hold the board accountable for misaligned interference.

In my view, corporations should receive sufficient freedom to design a supervisory board structure which best fits the specific circumstances in which their enterprise operates. Although a binding profiling of supervisory board members based on their wider societal and ecological experience may be merited, a further representation of relevant experts in corporate governance may equally be achieved through inclusion in sub-committees of the supervisory board. I would argue that such an inclusion of relevant experts in relation to specific topics should be left to the discretion of the corporations themselves, while being facilitated by Dutch corporate law. In my view, the guiding standard for such inclusion should be whether the design of the supervisory board enables the executive and supervisory board as a whole to assess the implications of their decisions for the public interests by which their corporation is constituted and for the resilience and flourishing of the ecosystems in which their enterprise operates. Simply put, the design of the supervisory board should allow the voices and moral viewpoints involved in its operating enterprise to be present in its internal dialogue with the executive board.2 Such a representation of relevant experience and expertise would be an important avenue for including social and ecological interests in corporate governance, and particularly in the internal process of holding the board accountable for interference with such interests.

In my assessment, such an expert-based approach to the composition of the supervisory board fits well with the development of requiring the supervisory board to engage more extensively with specific aspects of corporate governance through sub-committees.3 Such an extension of its mandate allows the supervisory board to monitor closely all factual aspects involved in the operation of its enterprise and to review the implications of these aspects. Building on this development, I would argue that Dutch corporate law could adopt the suggestions made by the ecosystem perspective in relation to introducing scientific methods into corporate governance as well as the localized engagement of relevant stakeholders and experts. The integration of the scientific approach of the ecosystem perspective in the mandate of the supervisory board would provide corporate governance with the capacity to gain a systemic understanding of the complex embeddedness of its enterprise in larger ecosystems and to align board decisions with the needs and limits of its environment. All in all, I would argue that such a combination of an expert-based composition of the supervisory board with an extensive science-based mandate enables the internal system of checks and balances in Dutch corporate governance to hold the board accountable for its interference with social and ecological interests. I therefore propose to articulate the following recommendation in relation to the capacity-building of the supervisory board: