Governance, risk management and decision-making

Our system of governance is based on checks and balances, helping ensure we take the best possible decisions. We have a formal governance structure, including a Supervisory Board and a Board of Management. This structure is supported by internal policies, controls and a Code of Conduct (new window), setting out our values and commitment to responsible business.

Our organizational structure

KPMG N.V. is a holding company for our Assurance, Advisory and Business Services activities.[1] All shares in KPMG N.V. are held by Coöperatie KPMG U.A.. Our equity partners are members of this cooperative through practice companies of the individual equity partners. These partners provide services to KPMG N.V. clients under a management agreement with the cooperative. Under Dutch law, Coöperatie KPMG U.A. board members are considered co-policymakers. KPMG Accountants N.V. is a 100% subsidiary of KPMG N.V.. 

  • Note: KPMG Accountants N.V.’s Board of Management acts as the formal policymaker under the terms of the Audit Firms Supervision Act (new window) in the Netherlands. The Board of Management of KPMG N.V. acts as co-policymaker. Our Assurance leadership team is responsible for the operational management of KPMG Accountants N.V.. Members of this leadership team are also qualified co-policymakers under the Act.

External regulation

The Authority for the Financial Markets (AFM (new window)) is responsible for overseeing audit firms in the Netherlands. This oversight is, among others, based on two Acts:

To operate, all audit firms must have a license from the AFM. KPMG N.V. aims to maintain an active, two-way communication with the AFM, which conducts regular inspections of KPMG, as do the US Public Company Accounting Oversight Board (PCAOB (new window)) and the Royal Netherlands Institute for Chartered Accountants (NBA (new window)). Please see Performance on quality (new window) for more information on recent inspections.

In the Netherlands, audit clients – if they are classified as public interest entities (PIEs) according to Dutch law – must change their audit firm at least once every ten years. They need to change the external auditor at least once every five years. In addition, there is a four-year cooling-off period before a former audit firm may be re-hired. We also endorse the principles and best practices in the Dutch Corporate Governance Code (new window); while an unlisted firm as KPMG N.V. is not legally required to apply the Code, we voluntarily use it as guidance in the corporate governance disclosures made and undertake to adhere to the principles where relevant.

At an international level, KPMG regularly discusses industry matters with the International Forum of Independent Audit Regulators (IFIAR (new window)) and representatives from the Committee of European Auditing Oversight Bodies (CEAOB (new window)). See Maintaining quality across our businesses (new window) for more information on our compliance with industry policies and procedures.

Role of Board of Management and Supervisory Board

We have a two-tier management structure:

Our Board of Management is made up of four members (new window): the Chief Executive Officer (CEO), the Chief Operating Officer (COO), and the Heads of our Advisory and Assurance businesses.

Our Supervisory Board comprises six members (new window). These members are all external and independent of the firm's management. All Supervisory Board members are appointed by the shareholder, Coöperatie KPMG U.A.. Supervisory Board members are elected for terms of up to four years, and may serve no more than two terms. Our Supervisory Board members are also considered co-policymakers under the Dutch Audit Firms Supervision Act (new window). Board of Management members are appointed by our Supervisory Board, following approval by its shareholders, the cooperative. Members may serve up to a maximum of eight consecutive years. For further information, see our Supervisory Board Report (new window).

We aim for diversity among members of both our Board of Management and Supervisory Board. We believe diversity makes for better long-term decision-making. Diversity is built into the rules of procedure and profile descriptions for both the Board of Management and Supervisory Board. Under the rules, our aim is to have 50% women on our Supervisory Board and a minimum of 40% women (or, if applicable, 40% men) on the Board of Management. See the Culture and inclusion, diversity & equity (new window) section for more information.

Our Supervisory Board and Board of Management Rules may also be found online on the KPMG N.V. website (new window).

  • 1 Please note that the contents of this Governance chapter relate to KPMG N.V., but also apply equally to KPMG Accountants N.V. (our Assurance business), as well as KPMG Advisory N.V. and KPMG Staffing & Facility Services B.V.