Good corporate governance is not a checkbox exercise.

In this short video, Bart De Smet, Chairman of the Corporate Governance Committee, reflects on the independence of board members and the desirability to reinforce the mandate of the FSMA in case the principles of good governance are violated.

Good corporate governance is not a checkbox exercise. It’s the foundation of our capital markets. It’s not a bureaucratic detail, nor a luxury— it’s the lifeline of investor trust and in line with the principles of hashtag#ConsciousCapitalism. As Bart De Smet clearly states: if independent board members act in the interest of a single reference shareholder or in their own interest instead of the company's interest they are legally required to represent, they violate that trust and hence cannot be called truly independent.

True independence cannot remain a façade. It’s not about being “independent on paper”. It’s about acting without fear or favour. It means defending all shareholders, not just the ones who are in control.

The allegedly fraudulent restructuring of Nyrstar shows what happens when the backbone of that principle is broken. In this case the true intention underlying the definition of independence was violated, and minority shareholders paid the price. The result: an estimated EUR 2 billion of direct damages plus an overall loss or faith by (national and international) institutional investors in the well-functioning of the Belgian capital markets. Why would they still invest money in a Belgian stock quoted company if its board can act with impunity against the interests of minority shareholders and by doing so destroy the (shareholder) value of the company they are supposed to manage to the benefit of the reference shareholder?

To prevent such impunity, Bart De Smet rightly stresses that a reinforcement of the toolbox and the mandate of the financial regulator (FSMA) constitutes an important element to ensure the correct application of the existing Code of Conduct.

We don’t need more rules - the correct reinforcement of existing governance principles and the sanctioning of deviations thereof is what is most needed to ensure that corporate governance leads to the desired behavior: a Board that acts according to the principles of Conscious Capitalism.