Dutch taskforce wants to tighten corp governance

AMSTERDAM, June 5 (Reuters) - A taskforce set up by the Dutch government to look into corporate governance rules in the Netherlands has set out proposals including a six-month period for companies to respond to activist shareholders.

"As shareholders have increased influence they should also have greater responsibility, for example the responsibility to enter into a constructive dialogue with the company before they resort to more radical measures based on their statutory rights," committee chairman Jean Frijns said in a statement. The committee proposed the introduction of a response time of 180 days for a company facing shareholders seeking to change its strategy or dismiss the management board or the supervisory board.

The proposal ensures a level playing field between shareholders and management, said institutional shareholders' group Eumedion.

"This recommendation can be effective in a legal dispute between shareholders and management," said Eumedion Director Rients Abma.

The monitoring committee also recommended supervisory boards exert more control over management pay and ensure transparency and greater correlation between salaries and performance amid a national debate about executive pay.

The Netherlands introduced a self-regulating corporate governance code in 2003, making it easier for shareholders to air their views.

More than 100 billion euros' ($154 billion) worth of Dutch businesses have been bought out since 2005, with some of the companies pressured by shareholders ahead of their sale.

Office goods supplier Corporate Express CXP.AS, which is facing a hostile 1.7 billion euro bid from U.S. rival Staples (SPLS.O), was urged by shareholders last year to sell itself.

Semiconductor equipment maker ASMI (ASMI.AS) is now hoping to strike a deal with activist shareholders seeking to oust its chief executive.

Last year, British hedge fund TCI urged the sale or break-up of the Netherlands' biggest bank ABN AMRO, culminating in its takeover by a group of three banks.

The committee also recommended the adoption of rules of conduct for management and supervisory boards in takeover situations, such as making it obligatory for them to detail the effects of an offer on shareholders, workers and creditors.

Interested parties have until Sept. 15 to comment on the proposals, after which the committee will amend the code and forward it to the government in December with the request that a statutory basis be provided for the code. (Reporting by Foo Yun Chee, editing by Will Waterman)