The European Corporate Governance Institute in abbreviation "ECGI"

Chapter I - Name, registered office, purpose and term

Article 1 - Name

1.1 The name of the Association shall be EUROPEAN CORPORATE GOVERNANCE INSTITUTE, or in abbreviation "ECGI", hereinafter referred to as "the Institute".

1.2 The Institute is an international non-profit association, in accordance with provisions of Title III of the Belgian Law of 27 June 1921, granting legal personality to non-profit associations and establishments of public utility as amended.

Article 2 - Registered office

2.1 The Institute has its registered office in Belgium, at Avenue des Statuaires 120, 1180 Bruxelles. The registered office may be transferred to any other location in Belgium in compliance with the applicable legislation on languages, by a decision taken by simple majority of the Board of Directors, published in the Annexes au Moniteur belge.

2.2 The Institute may also open other administrative and operational offices, both in Belgium and abroad, by a decision taken by a simple majority of the Board of Directors.

Article 3 - Purpose

3.1 The mission of the Institute is to improve corporate governance through independent scientific research and related activities.

3.2 To achieve this purpose the Institute is to:

• Bring together academics working on corporate governance in Europe and elsewhere and promote interaction between academics from different disciplines, such as economics, law, finance, management and sociology.
• Encourage dialogue between academics, legislators and practitioners and seek to promote debate on major corporate governance issues.
• Undertake, commission and disseminate research on corporate governance.
• Advise on the formulation of policy and development of best practice based on impartial and objective research and collective know-how.
• Undertake any other activity that will improve understanding and exercise of corporate governance.

3.3 The Institute will seek to achieve its aims for example by :

• Expanding on the activities of the European Corporate Governance Network (www.ecgn.org).
• Disseminating research results and other relevant material through the Institute's web-site.
• Promoting the creation of corporate governance indicators.
• Periodically inviting distinguished academics to hold public policy lectures.
• Arranging international academic conferences.

3.4 The Institute has the right to exercise, in Belgium or abroad, alone or in collaboration with third parties, directly or indirectly, all activities related, directly or indirectly, to its purpose.

Article 4 - Term

4.1. The Institute is formed for an unlimited term.

Article 5 - Structure

5.1. The organs of the Institute are :

• the General Assembly;
• the Board of Directors;
• the Executive Director.

Chapter II - Members of the Institute

Article 6 - Members

6.1 The Institute is an association formed by the natural persons and legal entities, validly represented, signing the present Articles of Association.

6.2 Membership categories are Academic Member, General Member, Institutional Member and Research Member.

6.3 Academic Members are individuals who hold at least a 70% position with an academic institution or otherwise mostly pursue an academic activity.

6.4 General Members are individuals who otherwise take an active interest in corporate governance issues.

6.5 Institutional Members are legal persons concerned with corporate governance, for example stock exchanges, regulators, investors, companies, ratings agencies, stock price index producers and law firms.

6.6 Research Members are individuals who have been appointed research fellows or research associates by the Institute, for the duration of their appointment.

Article 7 - Application for Membership

7.1 Academic, general, institutional or research membership must be applied for through the Institute's web-site, by e-mail or letter.

7.2 Applicants must commit to abide by the Articles of Association and the Internal Rules.

7.3 Applicants must furnish, upon request and under clearly defined conditions of confidentiality, sufficient information to verify the membership class. Academic Members commit to notify the Institute immediately when the pre-conditions for academic membership cease to apply.

7.4 A duly constituted Membership Committee admits new Members. In the event of rejection, the applicant may request re-consideration of the application by the Board, the decision of which is final and requires no justification.

Article 8 - End of Membership

8.1 The membership of any Member of the Association shall terminate :

• upon decease, incapacity or insolvency of an individual ;
• upon voluntary or forced dissolution or liquidation of a legal person or association ;
• by resignation;
• upon suspension or expulsion.

8.2 Members may resign from the Institute by notifying the Board in writing. The resignation will take effect on receipt of the notification by the Institute.

8.3 A Member deemed to cause damage to the interests of the Institute may be suspended or expelled by the Board. The Member will be notified of the suspension or the expulsion. The Member concerned shall in any case have the right to present its defence beforehand. In case of expulsion, it shall also have a right of appeal before the General Assembly. A suspended Member shall not be entitled to vote, to attend meetings of the Institute, or otherwise to participate in the activities of the Institute during the suspension period.

8.4 No Member who has resigned or has been expelled, nor its beneficiaries or creditors will have any right to the assets of the Institute, nor to any reimbursement of the membership fees or donations; such Member will remain liable for all dues for the current financial year. If such Member or its beneficiaries has any debt towards the Institute, such debt shall immediately become due and payable.

Article 9 - Membership fees

9.1 Members shall pay membership fees to the Institute set by the General Assembly, which may vary by membership class. The Board determines the terms and method of payment.

9.2 Membership is only effective upon receipt of the membership fee.

9.3 In the event of resignation or exclusion of a member the fee is not reimbursable.



Chapter III - General Assembly

Article 10 - Composition and Powers

10.1 The General Assembly shall consist of all the Members of the Institute. All Members have one vote.

10.2 The General Assembly shall have all the powers conferred upon it by these Articles, namely :

• the modification of these Articles of Association;
• the decision to dissolve the Institute;
• the election and revocation of the directors;
• the approval of the Institute's budgets, accounts and annual report;
• the designation of the external auditor.

10.3 Each Member shall have the right, by means of a letter sent by regular mail or any other medium of written communication, to be represented at the General Assembly by a proxy-holder, who must be a Member of the same class. A proxy-holder shall never represent more than two other Members.

Article 11 - Ordinary and Extraordinary Meetings of the General Assembly

11.1 The General Assembly meets, at least once a year upon an invitation specifying the place, date and agenda sent by the Chairman of the Board, or his/her deputy at least 15 calendar days in advance. The general assembly will in particular,

• receive the report on the activities of the Institute during the past year;
• approve the accounts for the past year and approve the budget, the membership fees and the admission fees for the following year;
• release the Board with regard to its tasks.

11.2 An extraordinary General Assembly shall be convoked by the chairman of the Board of directors or by two directors whenever required by the interests of the Institute or upon request of at least one fifth of the Members. Save in an emergency, notice of meetings shall be served at least 15 calendar days in advance. Only an extraordinary meeting may:

• modify the Articles of Association in accordance with Article 19;
• decide the dissolution of the Institute in accordance with Article 20.

11.3 The General Assembly shall be presided over by the Chairman of the Board of Directors or, in the absence of the Chairman, by the Vice-Chairman, failing which by a director designated by his/her colleagues.

11.4 The minutes of the General assembly shall be signed by the person presiding the Assembly and kept in a separate file at the Institute's registered office by the Executive Director, at the disposal of the Members.



Chapter IV - Board, Committees, Executive Director, External Auditor

Article 12 - Board

12.1 The Board has a minimum of 3 and a maximum of 11 directors. A majority of directors are nominated and elected among persons qualifying for academic or research membership of the Institute. Such directors are deemed to resign when the pre-conditions for academic or research membership no longer apply.

12.2 In case of a vacancy, the Board has the power to provide for an interim director pending a decision by the next General Assembly.

12.3 The General Assembly may decide to remove a director. Such decision requires a two-thirds majority of the votes of the Members present or represented.

12.4 The Board elects a Chairman amongst the directors that do not qualify for academic or research membership of the Institute and a Vice-Chairman who qualifies for academic or research membership.

12.5 The Chairman or the Vice-Chairman convenes meetings of the Board. Save in an emergency, notice of meetings shall be served at least 15 calendar days in advance.

12.6 Board meetings may be held both physically and by online telecommunication. If a board meeting is held by online telecommunications, directors shall have received timely information enabling them to express a fully considered opinion on the items on the agenda. Items voted on during an online telecommunications meeting shall be recalled and confirmed at the next following physical meeting. Nevertheless, absence of such confirmation shall not invalidate the decisions taken.

12.7 The maximum term of the office for Directors shall be 3 years. Directors may be re-elected.

12.8 The minutes of the Board shall be signed by the Chairman and kept in a separate file at the Institute's registered office by the Executive Director, at the disposal of the Members.

Article 13 - Powers of the Board

13.1 The Board of Directors shall have all powers necessary to pursue the objectives of the Association, and to effect and complete all management actions, with the exception of the powers reserved by law or by these Articles to the General Assembly.

Article 14 - Representation of the Institute

14.1 Except where the Board has delegated daily management, the acts binding the Institute with regard to third parties are validly signed only by the Chairman, the Vice-Chairman or jointly by two directors, or by holder of special powers of attorney. Legal proceedings, either as plaintiff or defendant, are conducted by the Board of Directors represented by the Chairman or by any person the Board has designated to that effect.

Article 15 - Committees

15.1 The Board will appoint a Membership Committee and may appoint such other committees that it deems useful for the proper governance of the Institute, such as a Management Committee.

15.2 The Board determines the terms of reference and powers of the committees it appoints. Committees report to the Board on their activities.

Article 16 - Executive Director

16.1 The Board appoints an Executive Director who qualifies for academic or research membership of the Institute.

16.2 The Executive Director is entrusted with the day-to-day management of the Institute, under the responsibility of the Board that shall define his/her powers.

16.3 The maximum term of the Executive Director's office shall be 3 years. The Executive Director may be re-appointed.

Article 17 - External Auditor

17.1 The General Assembly appoints an external auditor drawn from the Members of the Institute of Auditors of Belgium.

17.2 The mandate of the external auditor may not exceed two years. It may be renewed. The General Assembly determines the fee, if any, to be paid to the external auditor.



Chapter V - Budget and Accounts

Article 18 - Budget and Accounts

18.1 On 31 December of every year and for the first time on 31 December 2002, the books and accounts of the Institute shall be closed and the Board of Directors shall establish the accounts of the Institute for submission to the annual General Assembly, together with the budget for the year during which the assembly is held.

18.2 The accounts of the Institute shall be audited by the external auditor.

18.3 The Institute shall be funded by

• membership fees;
• specific contributions, provided these are given with the understanding that they will in no way influence the independence of the Institute and/or its organs;
• revenues from Institute activities, for example royalties from books and publications.

Chapter VI - Decisions

Article 19 - Ordinary Decisions

19.1 Except for any provisions to the contrary mentioned in the Articles of Association, resolutions approved by the General Assembly shall be validly adopted if they obtain the affirmative vote of the majority of the Members present and represented. Except in the cases foreseen in articles 20 and 21 of these Articles of Association, the General Assembly may validly deliberate and vote, whatever the number of Members present or represented. Each Member has one vote. Another member may represent a Member unable to attend the meeting. A Member may not, however, represent more than 2 other Members. In case of a tie, the chairperson of the assembly has the casting vote. Abstentions are not counted. No decision may be taken on an item which does not appear on the agenda accompanying the notice of a meeting, save for an item included by a unanimous resolution of Members present and represented.

19.2 The Board may only validly decide and adjudicate if at least half of its members are presented or represented. Decisions of the Board are taken by a simple majority of the Directors' votes cast. Each Director has one vote. Another Director may represent a Director who is unable to attend the meeting. A Director may not, however, represent more than two other Directors. In case of a tie, the chairperson of the meeting has the casting vote. Abstentions are not counted.

19.3 Decisions of the General Assembly and/or the Board are binding on all the Members of the Institute.

Article 20 - Amendments to the Articles of Association

20.1 The General Assembly shall validly deliberate on amendments to the Articles of Association only if the object of such amendments is mentioned explicitly in the call to meeting and if one half of the Academic and Research Members as a group are present or represented at the assembly. Any amendment shall require a two-thirds majority of the votes, including a two-thirds majority of the Academic and Research Members present or represented when counted as a group. Abstentions are not counted.

20.2 If less than one half of the Academic or Research Members are present or represented at the first assembly, the Board of Directors shall have the right to call a second assembly within three weeks of the date of the first assembly, which shall validly deliberate whatever the number of academic or Research Members present or represented.

20.3 Amendments to article 3 (Purpose) of these Articles shall be effective only after approval by Royal Decree. Any other amendment to the Articles of Association of the Institute shall be effective after approval by the Ministry of Justice or its delegate and in compliance with the publicity requirements of the Belgian Law of 27 June 1921, as amended.

Article 21 - Dissolution

21.1 The Institute may be dissolved by a decision of the General Assembly where more than three-quarters of the Members present vote in favour, including a three-quarters majority of the Academic and Research Members present as a group, and inasmuch as half of the Academic and Research Members are present or represented at the assembly as a group.

21.2 If at a first assembly less than half of the Academic and Research Members are present or represented as a group, then the Board may convene a second assembly within three weeks of the first which shall validly deliberate whatever the number of Academic and Research Members present or represented.

21.3 If the Institute is dissolved, the assembly shall appoint a liquidator and determine its powers.
21.4 The General Assembly decides on the distribution of the net assets, if any, to academic and/or charitable institutions.



Chapter VII Sundry Provisions

Article 22 - Internal Rules

The General Assembly, on the recommendation of the Board, may adopt one or more Internal Rules compatible with the provisions of these Articles of Association so as to ensure smooth running and administration of the Institute. They are binding on all Members, provided that at least two-thirds of the votes cast are in favour. Abstentions are not counted.

Article 23 - Application of legal provisions

Any matters which are not covered by the present Articles of Association will be governed by the provisions of Title III of the Belgian Law of 27 June 1921, as amended.

Article 24 - Authentic language version

In case of dispute, the French version of these documents is the authentic text.