Governance
CHAPTER 1 – CORPORATE GOVERNANCE: WHAT’S IN A NAME
Corporate Governance (OECD) = a set of relationships between a company’s management,
board, shareholders and stakeholders. CG provides the structure and systems trough which
the company is directed and its objectives are set, and the means of atting those objectives and
monitoring performance are determined.
Belgian Corporate Governance Code 2020: a set of rules and behaviours that determine how
companies are managed and controlled; achieved through setting a proper balance between
• leadership, entrepreneurship and performance, and
• control and compliance with rules
The origins of CG
• CG has roots in ancient civilisations (Roman law, medieval guilds)
• The modern day concept dates back to late 19th and early 20th centuries
(industrialisation, corporate scandals, milestone: UK Cadbury Report (1992))
• Today, 2025:
o Accountability
o Trust
o Sustainability
o Ethical behaviour
Legal framework
• Legislation (Code, specific regulation)
• Self-regulation (CG Code for listed and non-listed companies)
• Comply or explain (principles, rules of thump)
• Best pracices
2002 Law on auditor independence and conflicts of interest
2004 CG Code for listed companies (Code Lippens)
2005 CG Code for non-listed companies (Code Buysse)
2008 Law on the audit committee
2009 CG Code for listed companies (Code Daems)
2009 GC Code for non-listed companies (Code Buysse II)
2010 Law on remuneration and good governance
2010 Shareholder’s right Act
2011 Law on gender quota
2019 New CG Code 2020
Belgian 2020 Code
• Third version for listed companies
• New approach: 10 principles, less formal
• Comply or explain remains
• Disclosure: CG charter & statement
• Monitoring: sharehlders, auditor, FSMA
• Changes:
1
, o Choice between monistic & dualistic board structure
o Focus on LT sustainably value creation
o New focus on diversity, talent management, succession planning
o Audit committee
Added value of Corporate Governance
• Alignment of corporate bodies
• More objective results focused on LT success
• Honest & transparent processing process
• Focus on determining strategy & monitoring of objectives
• Professional way to manage conflicts of interests
• Professional image and reputation
• Trust towards stakeholders
1.1 Basic principles
• CG is a means, not an objective
• Doing things right & doing the right things
• One size does not fit all
• Minimum level of
Board Governance results from a coherent interaction; combing both hard and soft elements:
• Structure
• Composition
• Organization
• Tasks
• Information
• Culture & dynamics
• Executive pay
• Evaluation
Corporate governance maturity model
• Founder-led company
o Informal, centralized governance
o Focus: operational efficiency & growth
o Challenges: lack of checks & balances, limited oversight
• Early-stage company
o Introduction of a BoD (friends/family/advisors)
o Focus: expanding the business & securing funding
o Challenges: limited resources, lack of expertise
• Growth stage company
o Establishment of formal governance structures: board committees
o Focus: scaling the business, attracting investors, complying with regulation
o Challenges: balancing growth with governance, managing complexity
• Mature public company
o Complex governance framework with multiple committees and separation of
power
o Focus: sustained growth, shareholder value, compliance with pub com
standards
o Challenges: meeting expectations of stakeholders, social and ethical issues
2
, • Global company
o Decentralized governance with regional boards and global oversight
o Focus: operating in multiple markets, cultural differences, sustainability
o Challenges: balancing local needs with global standards, managing risks
Triggers to start a corporate governance journey
Companies typically strengthen their governance when they:
• need a sounding board
• seek new challenges and ideas
• want to bring in external expertise
• aim for greater objectivity in decision-making
1.2 Corporate Governance tripod
Corporate Governance is built on a tripod of three key governance bodies, each with clearly
defined responsibilities and interacting through checks & balances
1. General assembly of shareholders
• Appoints members of BoD
• Ownership
2. Board of Directors
• Ensures checks & balances within the organization
• Delegates power to executive management
• 4-eyes principle: no concentration of power
• NIFO: Nose In, Fingers Out
=> strategic oversight without operational interference
3. Executive management
• Day-to-day management
The correct CG model does not exist: one size does not fit all, depends on many factors
(shareholders’ structure, sector, family business, maturity, future) & is dynamic.
1.3 Positioning & role Board of Directors
Positioning of the BoD
• Key lever for good CG
• Does not operate in isolation: part of CG tripod
o Requires clear delineation of powers
o Assumes that the other organs exercise their functions correctly
o Can evolve in a dynamic way
Role of the BoD: the BoD shall have the power to take any action necessary or appropriate to
achieve the goal of the company, except for those for which the General Meeting is authorized
by law
Triple role:
• Strategic role
o Define ST and LT strategy
o Approval of operational plans and policies
o Risk appetite
o Company’s culture
o Approve budgets & allocate resources
3
CHAPTER 1 – CORPORATE GOVERNANCE: WHAT’S IN A NAME
Corporate Governance (OECD) = a set of relationships between a company’s management,
board, shareholders and stakeholders. CG provides the structure and systems trough which
the company is directed and its objectives are set, and the means of atting those objectives and
monitoring performance are determined.
Belgian Corporate Governance Code 2020: a set of rules and behaviours that determine how
companies are managed and controlled; achieved through setting a proper balance between
• leadership, entrepreneurship and performance, and
• control and compliance with rules
The origins of CG
• CG has roots in ancient civilisations (Roman law, medieval guilds)
• The modern day concept dates back to late 19th and early 20th centuries
(industrialisation, corporate scandals, milestone: UK Cadbury Report (1992))
• Today, 2025:
o Accountability
o Trust
o Sustainability
o Ethical behaviour
Legal framework
• Legislation (Code, specific regulation)
• Self-regulation (CG Code for listed and non-listed companies)
• Comply or explain (principles, rules of thump)
• Best pracices
2002 Law on auditor independence and conflicts of interest
2004 CG Code for listed companies (Code Lippens)
2005 CG Code for non-listed companies (Code Buysse)
2008 Law on the audit committee
2009 CG Code for listed companies (Code Daems)
2009 GC Code for non-listed companies (Code Buysse II)
2010 Law on remuneration and good governance
2010 Shareholder’s right Act
2011 Law on gender quota
2019 New CG Code 2020
Belgian 2020 Code
• Third version for listed companies
• New approach: 10 principles, less formal
• Comply or explain remains
• Disclosure: CG charter & statement
• Monitoring: sharehlders, auditor, FSMA
• Changes:
1
, o Choice between monistic & dualistic board structure
o Focus on LT sustainably value creation
o New focus on diversity, talent management, succession planning
o Audit committee
Added value of Corporate Governance
• Alignment of corporate bodies
• More objective results focused on LT success
• Honest & transparent processing process
• Focus on determining strategy & monitoring of objectives
• Professional way to manage conflicts of interests
• Professional image and reputation
• Trust towards stakeholders
1.1 Basic principles
• CG is a means, not an objective
• Doing things right & doing the right things
• One size does not fit all
• Minimum level of
Board Governance results from a coherent interaction; combing both hard and soft elements:
• Structure
• Composition
• Organization
• Tasks
• Information
• Culture & dynamics
• Executive pay
• Evaluation
Corporate governance maturity model
• Founder-led company
o Informal, centralized governance
o Focus: operational efficiency & growth
o Challenges: lack of checks & balances, limited oversight
• Early-stage company
o Introduction of a BoD (friends/family/advisors)
o Focus: expanding the business & securing funding
o Challenges: limited resources, lack of expertise
• Growth stage company
o Establishment of formal governance structures: board committees
o Focus: scaling the business, attracting investors, complying with regulation
o Challenges: balancing growth with governance, managing complexity
• Mature public company
o Complex governance framework with multiple committees and separation of
power
o Focus: sustained growth, shareholder value, compliance with pub com
standards
o Challenges: meeting expectations of stakeholders, social and ethical issues
2
, • Global company
o Decentralized governance with regional boards and global oversight
o Focus: operating in multiple markets, cultural differences, sustainability
o Challenges: balancing local needs with global standards, managing risks
Triggers to start a corporate governance journey
Companies typically strengthen their governance when they:
• need a sounding board
• seek new challenges and ideas
• want to bring in external expertise
• aim for greater objectivity in decision-making
1.2 Corporate Governance tripod
Corporate Governance is built on a tripod of three key governance bodies, each with clearly
defined responsibilities and interacting through checks & balances
1. General assembly of shareholders
• Appoints members of BoD
• Ownership
2. Board of Directors
• Ensures checks & balances within the organization
• Delegates power to executive management
• 4-eyes principle: no concentration of power
• NIFO: Nose In, Fingers Out
=> strategic oversight without operational interference
3. Executive management
• Day-to-day management
The correct CG model does not exist: one size does not fit all, depends on many factors
(shareholders’ structure, sector, family business, maturity, future) & is dynamic.
1.3 Positioning & role Board of Directors
Positioning of the BoD
• Key lever for good CG
• Does not operate in isolation: part of CG tripod
o Requires clear delineation of powers
o Assumes that the other organs exercise their functions correctly
o Can evolve in a dynamic way
Role of the BoD: the BoD shall have the power to take any action necessary or appropriate to
achieve the goal of the company, except for those for which the General Meeting is authorized
by law
Triple role:
• Strategic role
o Define ST and LT strategy
o Approval of operational plans and policies
o Risk appetite
o Company’s culture
o Approve budgets & allocate resources
3
