5.5.10 Summary remarks on univariate results

20.67 per cent of the companies under review that pay attention to code compliance declare in their corporate governance statement that they comply fully with the applicable code. The manner (or lay-out) in which this code compliance is discussed in the corporate governance statements differs between the countries. An explanation by means of a list with reference to the code provisions not complied with is preferred, since such a lay-out avoids ambiguities as much as possible (see chapters 4 and 6). Although Directive 2006/46/EC does not impose standardisation, most of the companies under research already have a corporate governance statement with explanations provided by means of a list with references to code provisions. Country characteristics and traditions also play a role in the manner in which the corporate governance statements are drafted and clarify preferences in the layout of the countries under research.

The above analysis shows that, year-wise, the code compliance increases together with the quality of the explanations in the case of non-compliance. It is simultaneously noticeable that the increase in code compliance levels off. Possibly because the attention paid to code-compliance reduces or the highest point of code compliance has been reached. This last proposition seems unlikely since all the explanations for non-compliance cannot yet be considered sufficient. In embracing the 'one size does not fit all' approach it can be defended that some deviations (e.g. due to interim situations) will possibly continue to exist. Although even if this is the case, explanations that are more sufficient and understandable must be aimed for. When the a-levels are compared with the b-levels, the scores for the b-levels (the convergence levels) are slightly lower. This difference is explainable by the fact that apparently the provisions which are part of the convergence comparison are the provisions not complied with most of all, as a result of which the convergence scores are slightly lower. Nevertheless, the increase in compliance over the years 2005 until 2007 is slightly higher for the convergence comparison and an overall tendency towards more compliance and convergence between the countries under review can be seen. The temporary non-compliance (companies indicate that the non-compliance is temporary and, in the near future, they intend to arrange the implementation) decreases at first and then levels off. It is desirable that, in the near future, apart from interim situations these explanations change into compliance or become very rare.

Compared to the total number of deviations, the code provisions complied with least (top 5) constitute a considerable percentage and show few modifications over the years. Recurring deviations are the establishment of committees regarding nomination and remuneration, the remuneration and shareholdings of directors, independence criteria for directors and appointment periods. The main themes of the code provisions not complied with are, for all five countries under review, quite similar. Apparently these provisions are difficult to comply with for the companies and the reasons provided for deviations are mostly: 'having its own regulation' and 'no compliance because of the sort/structure/ character/interests of the company'. Surprisingly and unfortunately the companies still often give 'no reasons/explanation for non-compliance'. Apparently, for provisions that are hard to comply with, it is also difficult to give reasons for non-compliance, which is a development that needs to be improved. It is noticeable that, for non-compliance with remuneration and shareholding criteria for directors, companies often indicate that they have their own regulation and therefore do not comply with the criteria as laid down in the code. A remarkable development, since society explicitly desires improvements and extensive regulation has been developed in the codes Nevertheless, until recently companies have frequently not complied with remuneration-related code rules and follow their own regulation.

With respect to the quality of the explained non-compliance, an increase in quality can be seen in the years under research. Attention must be paid - by the companies, supervisors and policy makers such as national corporate governance committees - to ensure that these quality improvements will continue - as 40.21 per cent of the explanations given (see section 5.5.9, table 5.5.9a and table 5.5.9b) are still considered insufficient - and do not stagnate or level off as can be seen, for instance, in the case of the genuine explanations.