What is the Buysse Code?
The Buysse Code is a set of practical guidelines and recommendations concerning the way in which non-listed companies should deal with what is commonly described as good governance or corporate governance.
The Buysse Code has no legally binding force but falls under what is referred to as soft law – quasi-legal rules with a certain value in practice, which are therefore applied voluntarily by many companies.
The first version of the Buysse Code was drawn up in 2005 on the initiative of the late Paul Buysse. He wanted to encourage SMEs and family businesses to take certain measures to organise themselves more professionally, thereby enabling them to continue to grow.
Every few years, a new version of the Buysse Code is published that takes into account changing developments in the world of non-listed companies.
In the meantime the fourth edition, Buysse Code IV, was published last month.
So, what is new?
The newest version of the Buysse Code takes a closer look at the division of tasks between the board of directors and the CEO in non-listed companies. In practice, the two bodies are often still very much intertwined, with tasks and powers formally and informally interchangeable. Nevertheless, the importance of a proper division of tasks is crucial for the proper functioning of the company and avoids conflict.
For the proper functioning of the board of directors, the Code stresses the importance of sufficient diversity and the creation of a dynamic between the directors. In addition, the new version also draws attention to the issue of succession in family businesses. It is very important to lay down the necessary agreements in good time for when the current generation disappears or is no longer capable of leading the family business.
Buysse Code IV puts the emphasis on a timely approach and the drafting and development of a formal succession plan, whereby it is also important to make a distinction between so-called family matters, which are the domain of the family council and agreements between family members, and business affairs, which are the domain of the company and its management.
Finally, Buysse Code IV also highlights some topical issues.
For example, non-listed companies are explicitly advised to pay sufficient attention to the issue of sustainability, and to make adequate time and budget available for it, in view of recent legislative changes, including those concerning ESG. After all, even non-listed companies are confronted with the impact of global warming on their supply chain, for example.
In the field of artificial intelligence (AI), too, non-listed companies must take steps. Issues such as cybersecurity, the processing of personal data and the use of new technologies, such as AI, should be discussed and dealt with by the board of directors.
Conclusion?
Even though these are non-binding rules, it is highly recommended for you, as an entrepreneur, to take a closer look at the topics discussed in the new Buysse Code and to consider how your business can best deal with these challenges.
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This article was written by Tim Fransen, a specialist in company law, mergers & acquisitions, corporate law, intellectual property, ICT, data protection and privacy.