Opinion of the European Central Bank of 22 December 2008 at the request of the Belgian Ministry of Justice on a draft law aimed at enhancing the rules on the functioning of company bodies, in particular by introducing into the Companies Code provisions regarding a corporate governance statement and the establishment of a remuneration committee, by limiting severance payments for certain company representatives and by reforming the system of statutory disabilities in the banking and financial sector (CON/2008/91)
Date: 2008-12-22
Institutions: European Central Bank
Subjects: Belgium, company law, company structure, corporate finance, corporate governance, financial stability, legal code, remuneration of work, severance pay

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 22 December 2008 

at the request of the Belgian Ministry of Justice 

on a draft law aimed at enhancing the rules on the functioning of company bodies, in particular by 

introducing into the Companies Code provisions regarding a corporate governance statement and 

the establishment of a remuneration committee, by limiting severance payments for certain 

company representatives and by reforming the system of statutory disabilities in the banking and 

financial sector 

(CON/2008/91) 

Introduction and legal basis 

On 5 December 2008 the European Central Bank (ECB) received a request from the Nationale Bank van 

België/Banque Nationale de Belgique (NBB), acting on behalf of the Belgian Ministry of Justice, for an 

opinion on a draft law aimed at enhancing the rules on the functioning of company bodies, in particular 

by introducing into the Companies Code provisions regarding a corporate governance statement and the 

establishment  of  a  remuneration  committee,  by  limiting  severance  payments  for  certain  company 

representatives and by reforming the system of statutory disabilities in the banking and financial sector 

(hereinafter the ‘draft law’).  

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European Community and the third indent of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 

on  the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft  legislative 
provisions1, as the draft law relates to the NBB. In accordance with the consultation request, this opinion 

focuses on the application to the members of the NBB’s Board of Directors, including the Governor, of 

the  provision  of  the  draft  law  establishing  a  limit  on  severance  payments.  In  accordance  with  the  first 

sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 

has adopted this opinion.  

1.  

Purpose of the draft law 

On a general note, the draft law is motivated by the Belgian authorities’ wish to increase confidence in the 
financial sector2. The draft law has a triple purpose. First, it transposes into Belgian law certain provisions 
of Directive 2006/46/EC3 which require listed companies to include a corporate governance statement in 

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OJ L 189, 3.7.1998, p. 42.  
Explanatory memorandum to the draft law, p. 13. 
Directive  2006/46/EC  of  the  European  Parliament  and  of  the  Council  of  14  June  2006  amending  Council  Directives 
78/660/EEC on the annual accounts of certain types of companies, 83/349/EEC on consolidated accounts, 86/635/EEC on 

 
 
 
 
                                                 
their  annual  report4;  beyond  this  transposition,  the  draft  law  also  requires  such  companies  to  include  a 
remuneration  report  in  their  corporate  governance  statement5  and  to  establish  within  their  board  of 

directors  a  remuneration  committee  composed  of  non-executive  directors  and  entrusted  with  advisory 
tasks6. Second, it introduces a limit on severance payments that may be awarded to executive directors of 
listed companies and to persons entrusted with their day-to-day management7. This limit would apply to 

the total compensation awarded to an executive director of a listed company (or of a subsidiary thereof) 
when they cease to carry out8 their mandate in the listed company9. Third, it aims at reforming the system 
of statutory disabilities in the banking and financial sector10.  

2.  General observations 

The  limit  placed  on  severance  payments  by  Article  14  of  the  draft  law  applies  to  all  listed  companies 
including the NBB as a consequence of its having the legal status of a listed company11 12. The draft law, 

the objective of which is to “dispel, in the interest of investors’ confidence in the financial markets, the 

concerns  raised  with  regard  to  the  exorbitant  severance  payments  which  may  be  awarded  to  certain 
company  representatives  when  they  cease  to  carry  out  their  mandate  in  listed  companies”13,  does  not 

target specifically the decision-making bodies of the national central bank and does not raise any issues as 

concerns compliance with the principle of personal independence. In this context it should be noted that 

the members of the NBB’s Board of Directors, including the Governor, continue to fall within the scope 

of Article 14.2 of the Statute of the European System of Central Banks and of the European Central Bank 

which provides that they may only be relieved from office if they no longer fulfil the conditions required 

for the performance of their duties or have been guilty of serious misconduct. 

the annual accounts and consolidated accounts of banks and other financial institutions and 91/674/EEC on the annual 
accounts and consolidated accounts of insurance undertakings, OJ L 224, 16.8.2006, p. 1. 
Article 3 of the draft law, introducing a new Article 96(2) in the Companies Code.  
Article  3  of  the  draft  law,  introducing  a  new  Article  96(3)  in  the  Companies  Code,  drawing  on  Commission 
Recommendation 2004/913/EC of 14 December 2004 fostering an appropriate regime for the remuneration of directors of 
listed companies, OJ L 385, 29.12.2004, p. 55.  
Article  6  and  7  of  the  draft  law,  respectively  introducing  a  new  Section  IIIter  and  a  new  Article  526quarter  in  the 
Companies Code.  
Article 14 of the draft law, introducing a new Article 520bis in the Companies Code. 
According to the explanatory memorandum, the normal expiry of the directors’ term of office is covered and the limit 
applies regardless of the party (i.e. director or company) who takes the initiative regarding the termination (explanatory 
memorandum to the draft law, pp. 16 and 17). 
Under the draft law, such compensation must not exceed the lowest of the two following amounts: (i) the remuneration 
that  would  be  due  for  the  remaining  duration  of  the  legal  relationship  which  is  terminated;  or  (ii)  the  remuneration 
corresponding  to  one-year’s  salary,  or  when  this  amount  is  higher,  a  compensation  equal  to  one  fourth  of  the  annual 
remuneration per period of five years of service with a maximum of 18 months’ remuneration. 
Articles 23 to 32 of the draft law. This system is composed of the various laws whose application is supervised by the 
Commissie  voor  het  Bank-,  Financie-  en  Assurantiewezen/Commission  Bancaire,  Financière  et  des  Assurances,  which 
establish a prohibition on carrying out the function of, in particular, director of a supervised institution which applies to 
persons who have been convicted of certain offences.  
Explanatory memorandum to the draft law, p. 16. 
See ECB Opinion CON/2002/18 of 9 July 2002 at the request of the Belgian Ministry of Finance on a draft for a new 
Article  879  of  the  Companies  Code,  introduced  by  the  Programme  Law,  as  well  as  several  articles  interpreting  and 
amending the Organic Law of the Nationale Bank van België/Banque Nationale de Belgique, introduced by paragraphs 6 
to 10 of Article 141 of the draft law on the prudential supervision of the financial sector and financial services. 
Explanatory memorandum to the draft law, p. 13. 

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3. 

Specific comments  

The ECB understands that the draft law is without prejudice to Article 2 of the Law of 22 February 1998 

establishing the Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique which 

establishes the supplementary nature of the provisions concerning public limited liability companies and 

that, hence, the competence to approve the annual report on operations and the accounts presented to the 
general  meeting  which  lies  with  the  NBB’s  Council  of  Regency14  would  not  be  affected  by  the  draft 
law15. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 22 December 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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Article 28(3) and Article 30(5) of the NBB’s Statute. 
See in particular Article 10 of the draft law, introducing an Article 554 in the Companies Code. 

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