Dutch Banking Code

 

On 9 September 2009, the Netherlands Banking Association published a Banking Code in response to the publication of a report by the Advisory Commission on the Future of Banks. That report, entitled ‘Restoring Trust’, called for banks to take the initiative to improve their functioning and thereby regain the public trust that had been damaged by the financial crisis. The Banking Code initially takes the form of self-regulation, although the Dutch Ministry of Finance has indicated that it intends to enshrine in legislation the principles laid down in the Banking Code. In the same manner as the Dutch Corporate Governance Code, discussed below, the Banking Code imposes a comply-or-explain duty on banks. The Banking Code entered into force on 1 January 2010.

 

At its meeting on 17 December 2009, the Supervisory Board approved revised charters of the Supervisory Board, its committees and the Managing Board. Where relevant, the provisions of the charters were revised to ensure that they fully comply with the Banking Code.

 

The Banking Code sets requirements regarding the composition and required expertise of both the Supervisory Board and the Managing Board. In addition, it imposes requirements on the Managing Board that include signing an ethical conduct declaration and ensuring that the entire organisation abides by that declaration’s principles. Furthermore, the Banking Code requires that the bank set up a programme of lifelong learning for members of the Supervisory Board and the Managing Board, with the Managing Board reporting annually on how it has implemented this programme. With regard to risk management, the Banking Code states that the Supervisory Board and the Managing Board are to ensure that the risk profile of the bank is in line with the risk appetite defined by the Supervisory Board, inter alia through the New Product Approval Process. Internal Audit has also been given a clearer mandate to assess the bank’s system of governance, risk management and internal controls. Finally, the Banking Code imposes the duty to define a restrained and long-term remuneration policy for the entire bank and for members of the Managing Board in particular. The Supervisory Board has been given the duty to approve the principles of the remuneration policy for all bank employees and to discuss the highest variable incomes.

 

NIBC is currently in the process of further implementing the procedural and operational measures that have been included in the various charters. NIBC has revised remuneration policy for staff and has completed the revision of its remuneration policy for the members of the Managing Board. In addition, the members of the Managing Board have signed the moral and ethical conduct declaration as stipulated in the Dutch Banking Code. The members of the Supervisory Board discussed their performance in March 2010, with the support of external advisors. A programme of lifelong learning is being drawn up and dates for a number of training sessions are being set.