225 Extending supervision and disclosure.

The final aspect of the position of the board in Dutch corporate law is the regime to hold the board accountable for its strategy, decisions and performance. Such board accountability is mainly organized through internal supervision by the supervisory board and external disclosure in the annual report. In chapter 2 I discussed how both accountability mechanisms allow for the inclusion of social and ecological interests.

In relation to internal supervision, the supervisory board is the central governance body within the internal systems of checks and balances to monitor the board and to hold it accountable for its interference with social and ecological interests. The supervisory board is increasingly required to specifically monitor social and ecological aspects of corporate governance. Such extended responsibility in turn impacts the required mandate and composition of the supervisory board. In sections 7.5.2 and 7.5.3 I will consider in more detail the role of internal supervision in holding the board accountable for its interference with social and ecological interests.

In relation to external disclosure, current legal developments extend the contents of the annual report to include non-financial information, such as information on the corporation’s climate transition plan. Boards are also increasingly required to account for their considerations in relation to larger social and ecological interests in their annual board statement. Such an extension of disclosure to non-financial information raises issues about the alignment of reporting boundaries with the responsibilities of the board and the need for comparable standards to evaluate its self-assessment. In sections 7.5.4 and 7.5.5 I will discuss these issues in more detail.