The ‘apply or explain’ principle applies to the Code. A member of the Association in principle applies the standards of the Code. The application of the standards partly depends on the activities and other specific characteristics of the company and the group to which it may belong.
The members of the Association to which the Code applies differ in many respects. For example, they have different corporate governance structures, they operate in different markets or parts of these, and they can be nationally or internationally oriented.
Differences in the interpretation and application of the standards may be justified, provided that this can be properly justified on the basis of the specific circumstances.
Each member company conducts an annual self-assessment to determine whether the Code is being properly adhered to. The way in which this self-assessment is carried out is determined by the company itself. The changes and adjustments, the learning and improvement points that emerge from this are included in the self-assessment that accompanies the declaration.
The interpretation and implementation of the Code is carried out in accordance with the ‘apply or explain’ principle. This principle means that the company itself provides a motivated answer to the following questions:
Each year, by means of a signed declaration, the company confirms that it complies with the Code. With the declaration, the company sends its self-evaluation that demonstrates how it implements each standard. In this self-evaluation the company states:
The signed declaration and self-evaluation is reviewed and approved by the independent Advisory Board. The Advisory Board assesses whether any deviation from the Code (based on the ‘explain’ principle) is justified. The secretariat of the Advisory Board administers the declarations.
The Code has a growth model that requires our members to annually report on their compliance with the Code. The independent Advisory Board that supervises the Code evaluates these reports and issues a report on their findings to the Board of the Association for Innovative Medicines. In its report, the Advisory Board includes recommendations about possible improvements to the Code. The Board can transform these recommendations into modifications to the Code, following approval by the General Meeting of Members. The new standards are then incorporated into the member self-evaluations. As such the Code is constantly developing.
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