Galapagos’ corporate governance policies
As a listed company with its registered office at Mechelen (Belgium), Galapagos is required to apply the Belgian Companies Code and Belgian Corporate Governance Code.
In 2019, a new Belgian Companies Code (the “Belgian Companies Code“) was approved by the Belgian Parliament. For existing companies like Galapagos NV, there was a transition regime providing for a staggered applicability of the new provisions. Certain parts of the new code apply to Galapagos as of 1 January 2020 and the full transition was completed on Galapagos’ extraordinary shareholders’ meeting of 28 April 2020, which resolved to amend our articles of association as a consequence of the newly applicable Belgian Companies Code. The full text of the new articles of association is made available on the company website (www.glpg.com).
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 applies compulsorily to reporting years beginning on or after 1 January 2020.
For the reporting year beginning on 1 January 2020, the 2020 Code was our reference code. Following the amendment of our articles of association, Galapagos NV’s supervisory board approved on 28 April 2020 an updated 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 2020 Code.
For the reporting year beginning on 1 January 2020, the supervisory board strove to comply with the rules of the 2020 Code and no deviations from the provisions of 2020 Code occurred. As a result, this corporate governance statement does not contain any section making reference to the “comply or explain” principle.
Introduction of a two-tier governance structure
Under the Belgian Companies Code, the executive committee in accordance with article 524bis of the old Belgian Companies Code has been abolished. The Belgian Companies Code introduces (among other things) a two-tier system, with two new governance bodies: the supervisory board and the management board.
The 2020 Code requires companies to make an explicit choice for one of the governance structures provided for in the Belgian Companies Code. Upon proposal of the board of directors, the extraordinary shareholders’ meeting of 28 April 2020 has resolved to introduce a two-tier governance structure as provided by the Belgian Companies Code, with the supervisory board replacing the board of directors, and the management board replacing the executive committee.
Two-tier governance structure
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 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 Belgian Companies Code. Galapagos’ Corporate Governance Charter describes the main aspects of our governance system, among others, the structure, composition and their roles and responsibilities.
The supervisory board has established an audit committee and a nomination and remuneration committee, both have an advisory function. Finally, the management board has delegated the daily management of the company to one management board member, i.e. its Chief Executive Officer.
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.