8.1.2 Committee Peters

With respect to supervision and the supervisory board, no important changes occurred until 1996. Then, the first Dutch Committee on Corporate Governance –referred to as Committee Peters after its chairman J.F.M. Peters – was established in 1996 at the request of the Association of Securities-Issuing Companies (VEUO) and the Stock Exchange Association Foundation (VvdE) (Maeijer et al. 2009: 29). The Committee Peters was set up because of the ‘growing internationalisation of the Dutch economy and the role, position and influence of shareholders’ (Committee on Corporate Governance 1997: 9). The committee explicitly mentioned that the failures of companies were not the reason for setting up the committee, unlike the situation in the United Kingdom. After intense market

consultation, Committee Peters published its report with forty recommendations a year later (Monitoring Commissie Corporate Governance 1998: 11). The first twenty recommendations focus on the supervisory board, and entail that supervisors should monitor the management board independently and report their findings in the annual report or to the annual general meeting. The next five recommendations concern the management board, with the focus being on transparency with respect to objectives, strategy, risks and director’s remuneration. The next eight recommendations deal with shareholders, in which respect the enhancement of shareholders’ rights (e.g. the abolishment of certain shareholder voting limitations) is the main focus. The last seven recommendations focus on a variety of issues, such as audit control and buy-back of shares. The distribution of recommendations over the different subjects shows an emphasis on the role of the supervisory board (De Jong and Roosenboom 2002: 924).

The supervisory board should act without a mandate and independently of subsidiary interests, whereas it should focus on the interests of the company (Committee on Corporate Governance 1997: 2.1). Therefore the board should be composed so that it can operate independently. Independence means that supervisory board members ‘should not commit to certain subsidiary interests while neglecting other associated interests’ (1997: 2.6). The Committee Peters added that the board should not comprise more than one former member of the management board, because a former membership of the management board might influence his functioning on the supervisory board as well as the functioning of the supervisory board and management board (2.5). Shareholdings of members of the supervisory board should be for long-term investments, and the number of shares, certificates of shares and stock options of the whole supervisory board should be disclosed in the annual report (2.12). Furthermore, supervisory board members should not receive stock options or separate remuneration for advice, as supervisory board members should not be dependent on the result of the company (2.13). Therefore, the Committee Peters stated that members of the supervisory board should not derive personal gain from the company’s activities other than their remuneration as supervisory director or the capital gains or dividends of their shares in the company (2.14). With respect to reappointments, the report requires a discussion on the reappointment of a supervisory director by his fellow supervisory board members based on a report of the chairman. Members of the supervisory board should be appointed for a certain period of time and a four-year period per term is a point of departure (2.7).

The Committee Peters had pure self-regulation in mind when composing its forty recommendations (Committee on Corporate Governance 1997: 10; Maeijer et al. 2009: 29). No legal obligations should be attached to the recommendations, as the companies differ with respect to size, product differentiation, scale of internationalisation and the composition of their investor base. Therefore no onesize fits all approach is possible. However, their report has served as a source of inspiration for the Dutch legislator (Timmerman 2002: 24).

Based on a monitoring report, the absolute majority of the recommendations about the supervisory board and management board are complied with, because the investigated listed companies agreed with these recommendations (Van Ginneken 1999: 14). Van Ginneken adds that the recommendations have not resulted in significant changes of corporate governance: shareholders’ rights are still very limited (1999: 15). De Jong and Roosenboom remark that compliance in 2001 increased in comparison to 1997 (2002: 927).