Galapagos’ corporate governance policies
As a listed company with its registered office in Mechelen (Belgium), Galapagos NV (hereinafter "Galapagos NV" or the "Company") is required to apply the Belgian Code of Companies and Associations (the “Belgian Companies Code”) and the 2020 Belgian Corporate Governance Code (the “2020 Code”), both of which entered into force on 1 January 2020.
For the reporting year beginning on 1 January 2022, the 2020 Code was our reference code. On 26 April 2022, as a consequence of the introduction of a one-tier governance structure at the Company through the amendment of our Articles of Association, Galapagos NV’s Board of Directors approved an updated Corporate Governance Charter. On 21 March 2023, our Board of Directors approved an amendment to the Corporate Governance Charter. The amended Corporate Governance Charter refers to the establishment of the Management Committee supporting the Executive Committee, allows the same person to be Lead Non-Executive Director and Chairman of the Audit Committee, provides that the Lead Non-Executive Director is member or Chairman of the Nomination Committee and clarifies that the Lead Non-Executive Director supports the Chairman in ensuring the prevention and managing of conflicts of interests involving potentially a director. Galapagos NV’s Corporate Governance Charter is available on our website (www.glpg.com). The Corporate Governance Charter applies in addition to the applicable laws and regulations, Galapagos NV’s Articles of Association and the corporate governance provisions included in the Belgian Companies Code and the 2020 Code. The Corporate Governance Charter describes the main aspects of corporate governance at Galapagos NV, including its governance structure, the terms and functioning of the Board of Directors (including its Board Committees), the Executive Committee and the rules of conduct.
For the reporting year beginning on 1 January 2022, the Board of Directors strove to comply with the rules and recommendations of the 2020 Code. At the same time, the Board of Directors is of the opinion that certain deviations from the rules and recommendations of the 2020 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 as set forth in the 2020 Code. Reference is made to the About the Board of Directors and Nomination Committee sections below.
Our governance structure
The 2020 Code requires companies to make an explicit choice for one of the governance structures provided for in the Belgian Companies Code.
From 1 January 2022 until 26 April 2022, Galapagos NV had a two-tier governance structure as provided by the Belgian Companies Code, with two governance bodies: the Supervisory Board and the Management Board. The Supervisory Board was responsible for the general policy and strategy of the Company, and had all powers which are specifically reserved for it under the Belgian Companies Code. The Supervisory Board also supervised the Management Board. The Management Board exercised all powers which are not reserved for the Supervisory Board in accordance with the Belgian Companies Code, including the management of the Galapagos group and the supervision of actual performances compared to strategic goals, plans and budgets.
As from 26 April 2022, Galapagos NV adopted a one-tier governance structure as provided by the Belgian Companies Code, with the Board of Directors replacing the (former) Supervisory Board and the Executive Committee replacing the (former) Management Board.
One-tier governance structure
The role of the Board of Directors is to pursue sustainable value creation by the Company, by setting the Company’s strategy, putting in place effective, responsible and ethical leadership and monitoring the Company’s performance. The Board of Directors is the ultimate decision-making body, with the overall responsibility for the management and control of the Company, and is authorized to carry out all actions that are necessary or useful for the realization of the Company’s object with the exception of those reserved to the Shareholders’ Meeting by applicable law. The Board of Directors also supervises the Executive Committee. The Board acts as a collegiate body.
The Board of Directors has delegated certain powers to manage the Company to the Executive Committee, led by our Chief Executive Officer. The Executive Committee is responsible and accountable to the Board of Directors for the discharge of its responsibilities. Furthermore, the Board of Directors has delegated the day-to-day management of the Company to one Executive Committee member, i.e. our Chief Executive Officer.
In order to efficiently fulfill its tasks and in view of the size and activities of the Company, the Board of Directors has established an Audit Committee, a Remuneration Committee and a Nomination Committee. These Board Committees serve in an advisory capacity to the Board of Directors on the matters delegated to them respectively as set forth in the applicable laws and the Company’s Corporate Governance Charter. Until 2 May 2022, there was a combined Nomination and Remuneration Committee. As from 2 May 2022, our Board of Directors has set up a separate Nomination Committee and Remuneration Committee.
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 deemed incorporated by simple reference into this corporate governance statement.