Galapagos’ corporate governance policies
For the reporting year beginning on 1 January 2019, the Belgian Corporate Governance Code 2009 (the “2009 Code”) (which can be consulted on www.corporategovernancecommittee.be) was our reference code. Galapagos NV’s board of directors approved a corporate governance charter (which is available on our website, www.glpg.com). The corporate governance charter applies in addition to the law, Galapagos NV’s articles of association and the corporate governance provisions included in the Belgian Companies Code and the 2009 Code.
For the reporting year beginning on 1 January 2019, the board of directors strove to comply with the rules of the 2009 Code as much as possible. At the same time, the board of directors is of the opinion that certain deviations from the provisions of 2009 Code were justified, in view of our activities, our size and the specific circumstances in which we operate. In such cases, which are mentioned in this corporate governance statement, we apply the “comply or explain” principle. Reference is made to the Remuneration of non-executive directors of Galapagos NV section below.
New legal framework for Belgian companies
On 28 February 2019, a new Belgian Companies Code (the “New Belgian Companies Code“) was approved by the Belgian Parliament. For existing companies like Galapagos NV, there is a transition regime providing for a staggered applicability of the new provisions. Certain parts of the new code apply to us as of 1 January 2020. The full transition must be completed by the earlier of (i) the next extraordinary shareholders’ meeting that amends our articles of association or (ii) 1 January 2024. On the date of this report, our articles of association have not yet been amended. The extraordinary shareholders‘ meeting, to be held on 28 April 2020, shall decide on such amendment. Each reference in this report to the Belgian Companies Code is still a reference to the Belgian Companies Code of 7 May 1999, except where expressly stated differently.
In light of the New Belgian Companies Code, the Belgian Corporate Governance Committee adopted a new Corporate Governance Code (the “2020 Code“) (which can be consulted on www.corporategovernancecommittee.be). The 2020 Code was published on 9 May 2019. The 2020 Code applies compulsorily to reporting years beginning on or after 1 January 2020. Our board of directors has adopted the 2020 Code for the reporting period beginning on 1 January 2020. Subject to approval of the new articles of association by the extraordinary shareholders‘ meeting of 28 April 2020, our board of directors will approve an updated corporate governance charter. Each reference in this report to the Corporate Governance Code is still a reference to the 2009 Code, except where expressly stated differently.
Proposal to adopt a two-tier governance structure
Under the New Belgian Companies Code, the executive committee in accordance with article 524bis of the Belgian Companies Code has been abolished. The New Belgian Companies Code introduces (among other things) a two-tier system, with two new governance bodies: the supervisory board and the management board. The supervisory board is responsible for the general policy and strategy of the company and has all powers which are specifically reserved for it under the New Belgian Companies Code. The supervisory board also supervises the management board. The management board exercises all powers which are not reserved for the supervisory board in accordance with the New Belgian Companies Code.
The 2020 Code requires companies to make an explicit choice for one of the governance structures provided for in the New Belgian Companies Code. The board of directors invites the shareholders of Galapagos NV to approve the introduction of a two-tier governance structure at the occasion of the extraordinary shareholders’ meeting, to be held on 28 April 2020.
In addition to the information set out below, we refer to the Risk management and Risk factors sections of this report for a description of the most important characteristics of our internal control and risk management systems. The Risk management and Risk factors sections are incorporated by reference in this corporate governance statement.