10.4.6 Enforcement

With respect to the enforcement of the independence criteria of the corporate governance codes, the three countries do not deviate much from each other. The comply or explain principle applies to all three corporate governance codes, which comprises the principle that best practice provision are complied with or – if not – their non-compliance requires an explanation. This should be included in the annual report in order to communicate it to the shareholders and other stakeholders.

In the Netherlands, the corporate governance chapter in the annual report should be approved by the auditor. In Sweden and the United Kingdom compliance is regulated through listing rules. In the United Kingdom, the FSA may suspend listing, impose fines or give warnings if it does not agree with the content of the annual report or the accompanying corporate governance chapter. The disciplinary committee of the Exchange in Sweden has measures at its disposal comparable to those of the FSA in the United Kingdom. Both the auditor in the Netherlands and the authorities in the United Kingdom and Sweden have an important function and are able to assess the quality of compliance. With respect to independence, a best approach cannot be distinguished.

(Consideration 10.11) Although regulations regarding independence may be in place, enforcement is an essential part of the preconditions building block of independence. Authorities in the United Kingdom and Sweden are authorised to issue warnings and impose fines if compliance in this respect is not good, which is a strong element of enforcement. The Netherlands might consider such measures.