NETHERLANDS Law and Practice Contributed by: Johannes de Jong and Juliet de Graaf, Osborne Clarke N.V.
• the supervisory board supervises the man - agement board and provides the manage - ment board with solicited and unsolicited advice. The DFSA determines that the day-to-day oper - ations of the bank must be determined by at least two individuals that operate from the Neth - erlands. The day-to-day management is consid - ered to be performed by the management board. The supervisory board must consist of at least three individuals. All members of the supervi - sory board must be independent in mind and appearance. In addition, at least 50% of the supervisory board members must meet formal independence criteria. If a bank is significant, the supervisory board must establish a risk commit - tee, nomination committee, and a remuneration committee from among its members. EBA Guidelines on Internal Governance Apart from the statutory laws set out in the DFSA, the EBA Guidelines on internal governance are the main source as regards the organisation of the internal governance of banks. The EBA Guidelines contain detailed provisions regarding a broad set of topics which focus on ensuring sound internal governance. For example, the EBA Guidelines determine that banks must have a compliance function, a risk function and an independent internal audit function and provide detailed provisions as regards the composition and tasks of such functions. DCGC In addition to the EBA Guidelines on internal governance, the DCGC provides best practices regarding (i) sustainable long-term value crea - tion; (ii) effective management and supervision; (iii) remuneration; and (iv) the relationship with and role of the shareholders. The DCGC is for -
mally only applicable to listed companies. How - ever, the DNB generally expects Dutch-licensed banks to take the DCGC into account. The DCGC applies on a “comply or explain” basis. Diversity Diversity at the board level has become a promi - nent focus in recent years, driven by the prin - ciples of fairness and the acknowledgement of its positive impact on governance. Banks are expected to implement policies that promote diversity, aiming for balanced representation across gender, educational and professional backgrounds, and age. 4.2 Registration and Oversight of Senior Management Fit and Proper Screening Individuals appointed as management board members (ie, day-to-day policymakers) or as supervisory board members are subject to screening by the DNB or the ECB. The division of tasks between the DNB and the ECB depends on whether it concerns screening in the context of a licence application and whether it concerns a significant or non-significant bank. The regulator (ie, the DNB or the ECB) assesses whether the integrity ( betrouwbaarheid ) of the individual subject to screening is beyond doubt and whether the individual is suitable ( geschikt ) for the function. This is sometimes also referred to as fit and proper screening. Integrity screening relates to the individual and not to the function that the individual will hold. Integrity is assessed on the basis of antecedents disclosed in a standard questionnaire. Suitabil - ity screening involves an assessment of whether the individual has sufficient and relevant knowl - edge, work experience and other relevant com - petencies for the function to be held.
405 CHAMBERS.COM
Powered by FlippingBook