The Corporate Governance Monitoring Committee has published its report on Dutch listed companies' compliance with the Code in the 2024 financial year. The overall conclusion is that compliance has declined compared to previous monitoring studies, which the Committee attributes to the enhanced reporting requirements in the 2022 Code. The monitored group has also been expanded to include foreign-listed Dutch companies, which record lower compliance levels than companies with a Dutch listing. In addition, for the first time, the involvement of institutional investors and how they apply the Code was examined.

This is the first monitoring report on compliance with the 2022 Code and the first one published by the new Monitoring Committee led by Rob van Wingerden. The last report was issued in 2022, covering the 2021 financial year. This year's report (i) reviews compliance with the 2022 Code's reporting requirements and (ii) examines the quality of reporting and the application of conduct-related provisions regarding:

• sustainable long-term value creation
• D&I policy
• digitalisation and cybersecurity
• board composition and director evaluation.

Compliance with the Code's reporting requirements

AEX and AMX companies still have a high compliance rate when it comes to the Code's reporting requirements, with a 94% and 92% compliance rate compared to 68% in the case of Dutch companies with a foreign listing. Overall compliance for all listed companies is 79%. Institutional investors score a 71% compliance rate.

Non-compliance is mainly due to missing or incomplete reporting. As to the lower compliance rate by companies with a foreign listing, the report mentions that these companies may be more focused on governance rules in the country of their listing. Another relevant aspect is that these foreign-listed companies commonly have a one-tier board, which may create challenges in applying the two-tier model-based Dutch Code.

The expanded and different composition of the reviewed group makes comparison with previous monitoring outcomes more difficult.

Quality of reporting and focus on specific themes

The 2019 financial year was the last time the Committee monitored overall compliance with the Code, so on both reporting and conduct-related provisions, showing a 95% compliance rate.

This year's in-depth study identified the following key findings:

• Sustainable long-term value creation: approximately 75% of reviewed companies prioritise innovative technologies and evolving business models in their strategy. Fair tax contributions to the countries where companies operate is the least incorporated element.
• All companies complying with the Code's sustainable long-term value creation requirements are also covered by the CSRD, which – according to these companies – significantly influences their reporting framework. Stakeholder engagement is often reported via double materiality assessments, with diversity and culture themes also reflected in CSRD reporting.
• Diversity and inclusion: companies focus primarily on diversity, with only around 30% including inclusion targets in their annual reports. A minority explained to what extent these targets were appropriate for their specific company.
• Board composition and evaluation: a third of reviewed companies do not involve an external expert. Those that do generally engage an expert for supervisory board evaluation every three years.

Monitoring Committee view and key objectives going forward

Given the time passed since the last monitoring exercise and the more stringent reporting requirements, the Committee has designated the 2024 monitoring as a "baseline" assessment. The monitoring methodology will be evaluated before the next review.

Given the significant variation in compliance rates between the identified groups of companies, the Committee will – together with the supporting parties – engage with foreign-listed companies to assess whether certain Code provisions are less suitable for them. Regarding institutional investors' lower compliance, it has emerged that there is considerable uncertainty in this group about whether they fall within the Code's scope. The Committee will address this and provide guidance where required.

Despite recognising its importance, it appears that companies continue to find culture difficult to report on in line with the Code's provisions.

The Committee has concluded that the Code remains highly relevant as a self-regulation instrument but requires active maintenance, review and adaptation. With this in mind, the Committee has set out the following priorities for the years ahead:

• initiating research and dialogue on (i) removing overlap with legislation where possible and desirable, (ii) the added value of certain reporting provisions, and (iii) monitoring methodology
• together with the supporting parties, raising awareness and engaging with companies demonstrating deficient compliance with certain reporting provisions
• aligning with international developments and best practices in foreign codes

For the 2025 financial year monitoring, the 2025 Code applies, including the new statement on risk management (VOR). Dutch listed companies are currently preparing for this requirement. The Monitoring Committee will take into account the baseline assessment findings and lessons learned when reviewing the 2025 financial year.