GCC: The Dutch Governance Code Culture
Governance Code Culture (GCC)
In 2006 a Governance code culture was created for the cultural sector. The purpose? Offering a normative framework for proper management and supervision in cultural organization*. The role of the code has increased in the last few years and is therefore much more important in management.
The most recent code (2019) consists of eight principles. The compliance is mandatory from 2021 if you want to be eligible for subsidies. It is important to be actively involved in the cultural sector. And that you are not only aware of the code, but also comply with it. This text explains what you need to know about the Governance Code Culture.
What is the Governance Code Culture?
Although the Code has been described positively mostly (how it should be done), it has been primarily created to reduce how things should not be done. With the Governance Code Culture bad management should be prevented, supervision improved and undesired/conflicting interests excluded. The management and supervision of cultural organisations receive the tools to ensure that management is honest and careful and that there is sufficient supervision. The code ranges from decision-making processes to responsibility for the entire management process of an organisation. The principles are broad. You are obligated to apply them correctly, or explain why they do not apply to your organisation. Accountability for the application of the Code will need to be included in your annual report and on your website.
The eight principles of the GCC
The Governance Code Culture consists of eight principles that are divided in four categories. Per principles Culture+Entrepreneurship (Cultuur+Ondernemen), the publisher of the Code, makes a number of recommendations that should clarify or ease the compliance with the principles. It is too extensive to explain all these recommendations, but below we will name one or more to give you an idea of the concept of the principles. For a complete overview of the principles and recommendations you can download the the code here*
I. Generate value for and in society
The organization reaches her societal goal by creating, carrying over or maintain cultural value,
Recommendations with the first principle are, for example, having professional management and supervision and by having an honest and open culture within the organization.
The organization applies the principles of the Governance Code Culture and explains how it has done so (apply and explain). The organization complies with the recommendations and only deviates from them with proper reason (apply and explain)
Recommendations are, for example, embedding the Code in the organization (by the management) and how the organization is held accountable or should be held accountable in the annual report.
II. Acting honestly and role consciously
Management and supervisory are independent and act honestly. They are alert to conflicts of interest, avoid undesired conflicts of interest and treat conflicts of interest in a transparent and careful way.
Recommendations to reduce conflicts of interest are, among others, to withhold from personal preference (by management and supervisory), reporting possible malpractices to the chairman of regulatory council and by setting conditions by the regulatory council for undesired conflicts of interest.
Management and supervisors are aware of their own role and the mutual division of tasks, responsibilities and authorities and how to act accordingly.
Recommendations with the fourth principle are, for example, clear and unambiguous division of managerial and supervisory responsibilities and not taking responsibilities from management or supervisory.
III. Careful management
The management is responsible for the general and daily direction, functioning and results of the organization.
De GCC recommends with this principle that the management continuously acts in the service of the societal mission of the organization and safekeeps the artistic integrity and independence.
The management treats the staff and the assets of the organization with care and responsibility.
Treating the staff and assets carefully and responsibly are further explained in the recommendations with, for example, facilitating a proper and safe work environment and managing the risks by the management.
IV. Maintaining proper supervision
The regulatory council performs its supervisory, advisory and employment role in a professional and independent manner.
The seventh principle explains what the supervisory tasks relate to (for example the compliance with law and legislation and the corporate policy). It is also recommended that the council appoints an external (in other words independent) accountant for at least four years and discusses the function and mutual collaboration at least once a year with the management.
The regulatory council is responsible for its own composition of and in that responsibility safekeeps expertise, diversity and independence.
This responsibility is complied with by the council (as it is recommended by the GCC) and the council consists of at least three members and new openings are made public. Members of the regulatory council can stay in office a maximum of two periods of four years and will make the roster of stepping down public. The compensation for the members must be fixed and appropriate.
Again: the article above is not exhaustive. For a complete overview of the recommendations per principle you can download or order this brochure*. In the Governance Code Culture the usual model for organizations has a regulatory council. But not every cultural organization has an active regulatory council. Does your organization have a management model? Cultuur+Ondernemen has an article with recommendations for a management model
The Cultuur+Ondernemen website is a learning platform for the cultural and creative sector and is therefore a good starting point to understand more about the GCC and its related subjects.
Would you like to know more about law and legislation in regard to an honest management, financing and benefits for foundations? Our sister company Lexlupa published information about the WBTR for a foundation and association as of 2021 and obtaining and maintaining an ANBI-status.