8.2.5.4 Diversity

Diversity in the Netherlands is provided for in the Dutch Civil Code and the DCGC. Section 2: 166 DCC requires that companies that fall within the ambit of the structure regime have at least thirty per cent women and at least thirty per cent men on their board of directors or supervisory board. This also applies to the management board, but if a legal person is a member of the management board, the requirement of section 2: 166 DCC becomes applicable to this legal person. In order to achieve a balanced gender distribution, a company should consider this balanced distribution of men and women when the outline profile of NEDs and supervisory directors is formulated and when NEDs/SDs are recommended, nominated or appointed. It should also be considered when executive directors or members of the management board are appointed or proposed.

If a company fails to comply, no legal sanctions exist. But non-compliance with this rule must be explained by the company in its annual accounts, according to section 2: 391 paragraph 7 DCC. This explanation must contain a statement as to why the company has failed to achieve a balanced gender distribution, how it has tried to achieve this equal gender distribution and how it will try to achieve this equal gender distribution in the future.

Best practice provision III.3.1 is concerned with diversity in the outline profile of the supervisory board: ‘The profile shall deal with the aspects of diversity in the composition of the supervisory board that are relevant to the company and shall state what specific objective is pursued by the board in relation to diversity.’ If the company’s current situation is different from the situation of the outline profile of the supervisory board, then the company should make an estimation of the period in which they expect to achieve the aimed composition. ‘Explanation of and notes on terms used in the Code’ add that diversity must not only be considered to be gender diversity, but also needs to focus on diversity with respect to age, expertise, social background and nationality (Corporate Governance Code Monitoring Committee 2008: 42).