Christoph Van der Elst

Belgisch vennootschapsrecht: op weg naar een alternatief Rijnlandmodel

WP 2003-02

On August 22, 2002 an act modernising corporate law and introducing a number of corporate governance innovations was published in the official Belgian Gazette. This paper discusses a number of these reforms and innovations. First some of the uncertainties concerning the mandatory rule to nominate an identified individual as the representative of a legal entity in a board of directors will be examined. Further, we will argue that the new legal board structure of the public limited company offers opportunities for optimizing the internal organisation of the company. Next the reform of the rules to mitigate conflicts of interests within groups of companies will be sketched. The system offers some advantages for investors but the procedure is burdensome for listed companies. Due to some major collapses, the Belgian legislator hasstrenghtened the rules on the independence of auditors: a cooling-off period of two years has been introduced, the company's auditor will no longer be allowed to provide a number of non-audit services for the audited firm, and an independent external committee will analyse whether certain specific non-audit services impair the independence of the auditor. The act also imposes an additional procedure if the value of the non-audit services exceedsthe value of the audit service. Finally some provisions concerning the general meeting have been modernised. The new act permits the organisation of a written general meeting and it makes it easier for institutional investors to take part in general meetings by requiring shareholders to be registered.This paper briefly describes the new rules, highlights some of the inconsistencies and problems and refers, where possible, to the Dutch system.