Fortis and the reference codes

Fortis’s international structure, headed by two listed parent companies, one Dutch and one Belgian, confronts it with the daily challenge of applying two corporate governance systems, now featuring two separate reference codes. While these codes largely match in terms of their underlying principles, there are a number differences too.

Because of the specific cross-border context in which Fortis operates, we have developed our own ‘single tier’ governance structure, while naturally observing all the relevant Belgian and Dutch legal requirements. The structure is described in detail in the Fortis Governance Statement to ensure optimum transparency and to demonstrate its internal coherence. What follows, therefore, is limited to those aspects of corporate governance at Fortis that require additional explanation in the light of the Belgian (Lippens) or Dutch (Tabaksblat) Codes.

Fortis and the Lippens Code

The Lippens Code came into force on 1 January 2005. It applies to all companies incorporated under Belgian law, shares in which are traded on a regulated market. The Code uses the ‘comply or explain’ principle, which means that if a company chooses to deviate from any of the Code’s principles, it should explain the reasons for doing so in the ‘Corporate Governance’ section of its annual review.

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Fortis and the Tabaksblat Code

Since 2004, listed companies incorporated under Dutch law have been legally required to declare in their annual financial statements that they have adhered to the Tabaksblat Code or to explain any instances in which they have deviated from it. We stated in our 2004 Annual Review that Fortis had observed the principles and best practice provisions of the Tabaksblat Code in the year in question, with a number of exceptions, which we duly explained. Fortis’s statement was discussed at our annual general meetings in May 2005. Shareholders attending those meetings shared the view of the Board of Directors that the proposed reappointment of Fortis’s Chairman, Maurice Lippens, for a period of three years (i.e. until after the 2008 annual general meeting) would be in Fortis’s interest. Consequently, the AGMs resolved in this instance not to apply the maximum term of twelve years recommended by the Tabaksblat Code (Best Practice provision III.3.5).

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