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EU Directive as regards disclosure of non-financial and diversity information

EU Directive as regards disclosure of non-financial and diversity information

EU Directive as regards disclosure of non-financial and diversity information

23.01.2015 NL law

On 5 December 2014 the Directive on disclosure of non-financial information and diversity information in the annual report entered into force. Large undertakings that are Oobs[1] with more than 500 employees will have to disclose certain non-financial information in their annual report. Large listed entities also have to disclose their policy on diversity for the managing board and the supervisory board in their annual report.

Large undertakings[2] classed as Oobs, if they have more than 500 employees, will have to include a non-financial statement in their annual report. This will contain information relating to environmental, social and employee matters, respect for human rights, and anti-corruption and bribery matters. The annual report should provide a description of the policies pursued by the undertaking with respect to these matters, the outcome of those policies, the risks related thereto, and the way that these risks are managed. If the undertaking does not pursue policies in relation to one or more of those matters, the non-financial statement shall provide a clear and reasoned explanation for not doing so.

In addition, large[3] listed entities will have to include a statement on diversity in the corporate governance statement in the annual report. This statement should be a description of the diversity policy applied in relation to the undertaking's management board (in cases of a one tier board) or management board and supervisory board (in cases of a two tier board) with regard to aspects such as age, gender, or educational and professional backgrounds, the objectives of that diversity policy, how it has been implemented and the results in the reporting period. If no such policy is applied, the statement shall contain an explanation as to why this is the case.

Member states have to implement this Directive in their national laws by 6 December 2016. These national provisions will apply to the financial year starting on 1 January 2017 or during that same calendar year .

 

[1] Public interest entities are: (i) all entities that are both governed by the law of a Member State and listed on a regulated market; (ii) all credit institutions in the EU; (iii) all insurance undertakings in the EU, regardless of whether they are life, non-life, insurance or reinsurance undertakings; and (iv) entities designated by Member States as public interest entities, for instance undertakings that are of significant public relevance because of the nature of their business, size, or number of employees.

[2] A large undertaking meets at least two of the following criteria: (i) total assets of more than EUR 20 million; net turnover of more than EUR 40 million; and (iii) more than 250 employees. There criteria from the Accounting Directive (2013/34/EU) have not yet been implemented in Dutch legislation.

[3] See note 2.

Team

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