Views on improving the integrity of global capital markets
13 September 2016

CorpGov Roundup: Key Issues Facing Boards in EMEA and Countries Review Corp Gov Codes

August is a slow time in the corporate governance world, which gives us a chance to catch up on other developments that were not highlighted in past CorpGov Roundups but are worth noting. We start with EMEA and the release of a report by Deloitte on its survey of non-executive directors that highlights key issues facing boards as well as gather feedback on other aspects of corporate governance practices in EMEA. On the international scene, Institutional Shareholder Services (ISS) conducted its annual survey of investors and issuers on ISS’s corporate governance policies. Back in Europe, both Italy and the Netherlands reviewed their corporate governance codes. We wrap up by highlighting an open peer review in the United Kingdom where the Financial Stability Board (FSB) is asking how members have applied the G20/OECD Principles of Corporate Governance.

Europe, Middle East, and Africa

In June, Deloitte published its first EMEA 360 Boardroom Survey. The survey captured the views of 271 non-executive directors across 20 countries in the EMEA region on current issues that boards face.

The report presents what these directors identify as key issues facing boards over the past 12 months and what are expected to be the main issues in the next 12–24 months. It goes on to focus more specifically on six aspects of corporate governance: strategy and risk, innovation, cyber security, remuneration of senior executives, boardroom succession and talent, and board performance and evaluation.

The following are some key findings from the report:

  • Non-executive directors appear to be adopting a slightly more optimistic outlook for growth and competitiveness in the short to medium term compared with the recent past. Previous concerns about cost reduction and capital management, in response to adverse economic conditions, have diminished.
  • Effective and flexible strategy has remained a top priority for the respondents. A crucial element of setting this agenda is the active consideration of risk in the board’s every day decision-making processes; almost 90% of the responses indicated that non-executive directors across the region are satisfied that risk management is well integrated.
  • There were significant differences in the importance given to innovation among countries and industries: It is high on the agenda in Germany, Ireland, and Italy, countries where there is a clear government drive for innovation together with a well-established start-up and entrepreneurial culture. Unsurprisingly, innovation also features heavily on the boardroom agenda of life sciences and technology, media, and telecommunication industries, but less so in construction and energy and resources. Product innovation was the area receiving the most attention.
  • When asked to rate board awareness of cyber risks, only 48% gave a high ranking whereas 20% gave a low rating. Less than half of respondents said that their organization currently has an action plan in place to deal with cyber security matters.


An influential proxy adviser, ISS conducted its 2017 Annual Policy Survey in August. Institutional investors, companies, and other market participants were invited to let ISS know their thoughts on important ISS policies. Some of the key questions in the survey covered how to define “overboarding” for executive board chairs as well as gathered respondents’ thoughts on the preferred frequency of say-on-pay votes in the United States, use of time-based vesting shares in the United Kingdom, and use of sign-on awards for directors in Canada.

In addition to this global survey, ISS conducts a variety of regionally-based, topic-specific roundtables and conference calls to examine local market best practices and gather input that will also factor into the development of ISS’s benchmark policy guidelines globally. The open comment period is designed to elicit objective, specific feedback from investors, corporations, and other industry constituents on the practical implementation of proposed policy updates as well as any new policies.

Unfortunately, the survey closed 30 August, but you will get one more chance to comment if you are so inclined. After analysis and consideration of the survey responses, ISS will, as in prior years, later open a comment period for all interested market participants on the final proposed changes to policies for 2017.


The Italian Corporate Governance Committee met in July to conduct their first yearly review of the Italian Stewardship Principles (in Italian) and to discuss whether the countries Corporate Governance Code was in need of updating.

The Committee decided that no revision was needed of the existing Corporate Governance Code because the code that was adopted in 2015 still adequately reflects international best practices. The Committee resolved to further investigate certain topics — for example, corporate governance in small and medium-sized enterprises, enhancement of the board of directors’ role, procedures for the appointment of directors, and relationships with shareholders —to identify areas of improvement in corporate governance practices.

The Netherlands

In August, the Dutch Corporate Governance Code Monitoring Committee offered an invitation to comment on its proposal for applicability of the Dutch Corporate Governance Code to companies with a one-tier board, which is based on the proposed revision of the Code published in February 2016.

Traditionally, companies in the Netherlands have adhered to a two-tier board model. Accordingly, the Dutch Corporate Governance Code is based on this model. In a company with a two-tier board, administrative and supervisory responsibilities are divided between two corporate bodies: the executive board and the supervisory board. Companies with a one-tier board have one corporate body, composed of both executive directors and non-executive directors, in which the latter supervise the former. In a one-tier board, non-executive directors and executive directors carry collective responsibility for the company’s management.

Comments are due by 28 September.

United Kingdom

The FSB has launched a peer review on the implementation of the G20/OECD Principles of Corporate Governance (Principles).

The objective of the review is to determine how FSB member jurisdictions have applied the Principles to publicly listed, regulated financial institutions, identifying effective practices and areas in which good progress has been made while noting gaps and areas of weakness.

A questionnaire to collect information from national authorities has been distributed to FSB members. The responses will be analyzed and discussed by the FSB later this year. The peer review report will be published in early 2017.

As part of this peer review, the FSB invites feedback from financial institutions and industry and consumer associations as well as other stakeholders in the areas covered by the peer review, which could include comments on the following:

  • The design of corporate governance frameworks, including legal and regulatory powers, to promote transparent and fair markets, and the efficient allocation of resources.
  • How the corporate governance framework should protect and facilitate the exercise of shareholders’ rights and ensure the equitable treatment of all shareholders, including minority and foreign shareholders.
  • Ways in which the corporate governance framework can recognize the rights of stakeholders and encourage active cooperation between financial institutions and stakeholders in creating wealth and jobs and promoting the sustainability of financial firms.
  • How the corporate governance framework can ensure that timely and accurate disclosure is made on all material matters regarding a financial institution, including its financial situation, performance, ownership, and governance.
  • How the corporate governance framework can ensure the strategic guidance of a financial institution, the effective monitoring of management by the board, and the board’s accountability, including to the shareholders.

Comments are requested by 9 September.

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About the Author(s)
Matt Orsagh, CFA, CIPM

Matt Orsagh, CFA, CIPM, is a senior director of capital markets policy at CFA Institute, where he focuses on corporate governance, ESG, and climate change analysis. He writes and speaks frequently on these topics on behalf of CFA Institute. His paper, Climate Change Analysis in the Investment Process was named “Best ESG Paper” by Savvy Investor in 2021.

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