“Memorandum for the Financial Sector

Towards a National and International Alignment of the Freedom of Choice for Governance and Management Models in the Financial Sector

Brussels, 17 January 2020  - GUBERNA, the Institute of Directors, has submitted a memorandum to the chairpersons of political parties in view of a government agreement.

Through this memorandum, GUBERNA advocates for an adjustment of the governance provisions for the financial sector, with a dual objective: (1) to achieve further alignment with the new Companies and Associations Code (CAC) and (2) to develop a level playing field, both within the financial sector and in comparison with non-financial institutions that may compete with financial institutions (e.g., GAFA).

GUBERNA proposes to:

  1. Remove the current restriction on the freedom of choice.
  2. Abolish the requirement that all/some members of the management committee, top management, or executive committee must also be members of the supervisory board.
  3. Adjust the definition of independent director in line with the new provisions in the CAC.
  4. Given the specific challenges posed by the financial sector and its societal impact, several additional recommendations are warranted. GUBERNA advocates a sectoral soft law approach applicable to both listed and unlisted financial institutions.

Key elements include:

  • Independent decision-making.
  • Sufficient autonomy for the executive body.
  • Sufficient autonomy for the board/supervisory body (particularly where controlling shareholders are involved).
  • Adequate attention to the increased involvement of non-executive directors in the functioning of the financial institution.
  • Clear definition of the supervisory role of non-executive directors within a one-tier board model.
  • Sufficient interaction between the non-executive and executive levels.