Corporate governance codes
FMO abides by two governance codes: the Dutch Corporate Governance Code and the Dutch Banking Code. We comply with the Banking Code or will otherwise explain where and how we diverge from this code, including concrete examples. This document can be found on our website. Monitoring of the Code and other operational risks are further described in the ‘Non-financial risk’ section in the ‘Risk management’ chapter.
The Dutch Corporate Governance Code (‘the Code’) only applies to organizations whose shares are listed on a regulated market. As a non-listed bank, FMO is not required to adhere to the Code, but we have chosen to do so, nonetheless. The SB and the MB fully endorse the basic principle on which the Code is based, namely that the company is a long-term partnership of our various stakeholders. FMO has published a policy specifically regarding bilateral contacts with our shareholders, which is provisioned by the Code and is available on our website.
FMO promotes diversity at all levels, including the MB and SB. As principle 2.1.5 of the Code requires, FMO has diversity policies. The aim of our diversity policy – including for the MB and SB – is to have well-balanced boards, which are up to their task and can come to good solutions, while considering the members’ different perspectives, backgrounds and experiences.
The Supervisory Board aims for a diverse composition of the SB with respect to gender, education, experience and age as well as relevant knowledge, expertise and experience in the business areas in which FMO is active. Similar diversity aspects apply to the composition of the Management Board with respect to experience, expertise, gender, cultural background and age. This is deemed important to ensure effective supervision and effective management, respectively, and, by extension, for long-term value creation. In line with FMO’s diversity policy, included in the SB Profile and in the MB Standing Rules, and in line with the Act on Gender Balance in Management and Supervisory Boards (Wet evenwichtiger verhouding tussen mannen en vrouwen in bestuur en raad van commissarissen), FMO strives - amongst others - to meet the applicable gender target.
For the Supervisory Board, the target is for the board to consist of at least one third men and at least one third women. The SB consists of 6 members. In 2022, there was one open vacancy. During the entire year, the SB consisted of two women (40%) and three men (60%). One of the SB members is non-Dutch and holds the Ghanaian and British nationality.
FMO’s Management Board consists of 5 members. The aim is for the board to consist of at least one third men and one third women. At year end, the MB consisted of two women (40%) and three men (60%). The MB consists of one Ivorian member, one member with the South-African and British nationality and three members with the Dutch nationality.
In both boards, the ages of the members are well distributed, and knowledge and experience comply with the applicable matrices.
When vacancies arise, the Selection, Appointment and Remuneration Committee and the SB give due consideration to any applicable gender requirements in its search for suitable new members with respect to meeting the fit and proper requirements as stipulated in the Dutch Financial Markets Supervision Act. As a collective group, the members should have the required expertise with regard to development banking and the aspects that come with it, aimed at FMO’s working area. This is further described in the applicable Profile and Standing Rules and, when vacancies arise, in the respective job profiles.
The relevant principles and best practice provisions of the new Corporate Governance Code have been implemented, with the exception of the following principles and best practice provisions, which can be explained as follows:
BPP 1.3.6: This provision only applies if the company does not have an internal auditor. FMO does have an internal auditor.
BPP 2.2.2: This provision refers to the reappointment of SB members. The third term of four years, as meant in the previous version of the Corporate Governance Code, is split into two terms of two years in the current version of the Corporate Governance Code. Section 2.7 of the Supervisory Board Standing Rules, which deals with reappointments and the duration thereof, will be amended accordingly at the next revision. None of the SB members exceeded the eight-year term.
BPP 2.2.4: This provision requires a written (separate) succession plan, which focuses on knowledge, experience and diversity. At FMO, knowledge, experience and diversity are included in the profiles of the SB and the MB. Succession and knowledge are regularly discussed in meetings of among others the SARC. The SB retirement schedule is placed on the website. The SB uses this currently as a basis to plan succession for the upcoming years.
BPP 2.3.10: This provision states that the SB is supported by the Corporate Secretary of FMO. Section 6.1 of the Standing Rules of the Supervisory Board states that the SB secretary might also be one of its members. In practice, it is the Corporate Secretary of FMO. This will most likely be amended at the occasion of the next amendment.
BPP 2.8.1-2.8.3: Stipulations on takeover bids are not implemented, given our stable majority shareholder, the State of The Netherlands.
BPP 4.1.4: The explanation of the agenda of the AGM is not published on FMO’s website, since this document is sent to all shareholders of FMO.
BPP 4.2.3: This provision relates to analysts’ meetings and presentations to institutional investors. This provision is of no practical significance to FMO and therefore does not apply.
BPP 4.2.6: This best practice provision requires the MB to provide a survey in the annual report of all anti-takeover measures to prevent control from being relinquished. FMO has not incorporated any anti-takeover measures in its articles of association, because it has a stable majority shareholder, namely the State of The Netherlands. Therefore, an overview as meant in this provision is not incorporated in this annual report.
BPP 4.3.3: This provision does not apply, as this provision refers to a legal entity that does not apply a so-called ‘structuurregime’. FMO is a so-called ‘structuur’ legal entity as defined in paragraph 2.4.6 of the Dutch Civil Code.
BPP 4.3.4: This provision does not apply, as it refers to financing preferred shares, which FMO does not use in its share capital.
BPP 4.3.5 and 4.3.6: These provisions do not apply, as FMO is not an institutional investor.
BPP 4.4.1 – 4.1.8: These provisions concern the issuing of depositary receipts for shares. There is no such requirement at FMO, apart from the articles of association, which lay down that the company is not permitted to cooperate in issuing depositary receipts of shares.
BPP 5.1.1 – 5.1.5: These provisions do not apply, as FMO does not have a one-tier board.