The independently functioning supervisory board: the Dutch Central Bank updates its position

Introduction and background

Good governance is seen as an essential part of what defines a solid and sound financial sector. In the Netherlands limited liability companies have a management board which is responsible for the day-to-day management of the company determining the company’s policies and strategy. In addition a company may have a supervisory board which is responsible for supervising the policy determined and pursued by the management board and the company’s general course of affairs and advising the management board in respect of its duties. Generally having a supervisory board is optional but for large companies and for certain financial institutions a supervisory board is mandatory in the Netherlands.

Scope of the independence-requirement

Not all Netherlands-based financial institutions are required by law to have a supervisory board....