The new Belgian law “to reinforce corporate governance of listed companies and autonomous governmental companies, and to change the regulation on professional exclusion in the banking and financial sector” which (in its draft status) was discussed in our ACI Quarterly 14 edition has been published in April 2010.
In regard to the audit committee, the new law aims to incorporate the Belgian Code on Corporate Governance (which was non law—not previously referred to in statutes) in Belgian law as a standard. Listed companies will need to state:
Such an interesting flexibility of non-compliance with an accompanying explanation of exceptions may also require external monitoring of the appropriateness of such explanations, but such monitoring has not yet been provided for.
What is perhaps an even more important change is that the annual report must include, by law, “a description of the most important characteristics of the internal control and risk management systems of the company pertaining to the process of financial reporting”. The recent Law of 17 December 2008 already requiress the audit committee to monitor the effectiveness of such systems, but now, these characteristics will also need to be described. Note that the assessment, reporting or confirmation of the effectiveness of the controls and risk management is not yet required, although there is the implication that they are monitored.
A more elaborate article on the Belgian Law on Corporate Governance can be found in our ACI Quarterly 14 newsletter (see Quarterly section of our website). The full text of the law in both Dutch and French is here available free of charge for download.