Evaluation process governance model and code of conduct
When the Belgian Corporate Governance Committee, established by the FSMA, VBO-FEB and Euronext Brussels, launched the new Belgian Corporate Governance Code (2020 Code for short) during 2020, containing revised corporate governance regulations for listed companies, this was the ideal opportunity for Lotus Bakeries to review its governance model and Code of Conduct. A brief explanation from Corporate Legal, IP & Communication Director Brechtje Haan.
“The new 2020 Code focuses on corporate governance and sustainable value creation”, begins Brechtje. “In a regulatory context, in recent years, we’ve heard increasing calls for responsible conduct from a long-term perspective, at all levels of businesses and organisations. We decided to discuss both our governance structure (and the associated charter) and our Code of Conduct in depth and critically evaluate them.”
Strong governance framework in place
At the meeting of the Board of Directors in April, the board members reviewed the current way of working, and discussed what could be retained and what needed to be updated in view of the new 2020 Code. “This exercise confirmed that certain aspects of our structure are working really well”, says Brechtje. “One example is our decision to opt for a one-tier governance model. We have a strong governance framework with a board of directors (on which four independent directors sit), an audit committee and a remuneration and nomination committee. The board of directors has full executive powers and delegates the day-to-day management to the CEO. All members agreed that this approach is working well, so we’re going to keep to it.”
At the same time, several criteria were revised. For instance, the remuneration policy was updated so that directors are now remunerated partly in cash and partly in shares, while this was previously in cash alone. Members of the EXCO are also required to hold a package of shares by 2022. “By this kind of provisions, we underline the importance of long-term commitment for people at the top of our organisation”, says Brechtje.
“Another change is that, in our corporate governance charter, we now refer explicitly to our Code of Conduct revised in 2020 – ‘Let’s do it our way’. The 2020 Code refers more to responsible and ethical conduct than its predecessor from 2009 and the Board of Directors wanted to emphasise the importance of these themes in our revised charter.”
Six principles of conduct
The Code of Conduct itself was also reviewed. “First of all, a working group made up of corporate directors of legal & compliance, HR, quality, procurement and R&D set out the six key principles that our employees must respect at all times. These six principles also formed the basis for the rules of conduct for our suppliers.” Following validation by the EXCO and the Board of Directors, the Code of Conduct was translated into all official languages of the countries in which Lotus Bakeries is based.
“Then, we launched a campaign to familiarise our employees with the revised rules of conduct and the six principles”, continues Brechtje. “Almost everyone in the organisation has now signed the Code of Conduct, and it’s been added to the onboarding programmes. We ask all key suppliers with whom we have a framework agreement to sign the Code of Conduct as well.
Finally, by adding the Supplier Code of Conduct to our template contracts and our terms and conditions, we ensure that it is fully integrated into our collaboration model with suppliers. From the questions we receive in Compliance via our hotline, we notice that the new code is starting to have an impact in and outside the company. And that can only be positive”, concludes Brechtje.
>> Consult our Code of Conduct and Supplier Code of Conduct via Policies & Reports.