Governance Code Culture (GCC)

Governance Code Culture (GCC)

In 2006 the Governance code culture was created for the cultural sector. The purpose? Offering a  normative framework for proper management and supervision in cultural organisation*. The role of the code has increased in the last few years and is therefore much more important for management.

The most recent code (2019) consists of eight principles. 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 article explains what you need to know about the Governance Code Culture.

What is the Governance Code Culture?

Although the Code describes in positive terms (how it should be done), it has been created primarily to clarify how things should not be done. With the Governance Code Culture bad management can be prevented, supervision improved and undesired/conflicting interests excluded. The management and supervisors of cultural organisations will receive the tools they need to ensure that management is honest and responsible 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 separated into two categories Culture+Entrepreneurship (Cultuur+Ondernemen). The publisher of the Code, makes a number of recommendations that should clarify or ease compliance with the principles. The code is too extensive to explain all of these recommendations, but below we will list a number of them to give you an idea of the concepts behind 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

Principle 1

The organisation reaches its societal goal/goals by creating, preserving or maintaining cultural value.

Recommendations in accordance with the first principle are, for example: having professional management and supervision along side an honest and open culture within the organisation.

Principle 2

The organisation applies the principles of the Governance Code Culture and explains how it has done so (apply and explain). The organisation complies with the recommendations and only deviates from them with proper reason (apply and explain)

Recommendations are, for example: embedding the Code in the organisation (by the management) and how the organization is held accountable or should be held accountable in the annual report.

II. Acting honestly and consciously

Principle 3

Management and supervisors 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 manner.

Recommendations to reduce conflicts of interest include: the withholding of personal preferences (by management and supervisors), reporting possible malpractices to the chairman of the regulatory council and conditions being set by the regulatory council for resolving undesired conflicts of interest. 

Principle 4

Management and supervisors are aware of their own role and act accordingly regarding the mutual division of tasks, responsibilities and authority.

Recommendations in accordance with the fourth principle are, upholding the responsibilities of managers and supervisors, along side a clear and unambiguous division of managerial and supervisory responsibilities.

III. Careful management

Principle 5

The management is responsible for the general and daily direction, functioning and results of the organisation.

The GCC recommends that the management always acts in the service of the organisation's societal mission whilst safeguarding artistic integrity and independence.

Principle 6

The management treats the staff and the assets of the organisation responsibly and with care.

Treating staff and assets carefully and responsibly include, for example; facilitating a proper and safe work environment and the proper management of risks.

IV. Maintaining proper supervision

Principle 7

The regulatory council performs its supervisory, advisory and employers role in a professional and impartial manner.

The seventh principle explains how the supervisory tasks relate to, for example: (compliance with the relevant law and legislation and the corporate policy). It is also recommends that the council appoints an external (in other words independent) accountant for at least four years and holds discussions regarding its function and mutual collaboration at least once a year with the management.

Principle 8

The regulatory council is responsible for its own composition and must safeguard expertise, diversity and independence.

The GCC recommends that the council consists of at least three members and new openings are made public. Members of the regulatory council can stay in office for a maximum of two periods of four years, and the roster of appointments must be made public. Compensation for the council members must be fixed and appropriate.

Further reading

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 organiation's has a regulatory council. But not every cultural organisation has an active regulatory council. Does your organisation 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 the law and legislation regarding honest management, financing and benefits for foundations? Our sister company Lexlupa has published information about the  WBTR  for  foundation's  and association's as of 2021 and obtaining and maintaining an  ANBI-status.