The BV and the NV

Under Dutch law, the principal forms of corporate and business organisations are categorised into legal entities with legal personality and entities without legal personality. The corporate entities that are frequently used for commercial activities in the Netherlands are:

• the private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid or BV); and
• the public company with limited liability (naamloze vennootschap or NV).

The BV and the NV are legal persons under Dutch law. Their equity is divided into shares that are held by one or more shareholders.

The BV is the most frequently used type of corporate entity in the Netherlands. In 2024, 1,156,074 BVs and 3,133 NVs were registered in the Netherlands. Most Dutch listed companies are NVs, but it is also possible to list a BV.

The definition of a “Dutch listed company” in this chapter refers to (i) all companies with registered offices in the Netherlands whose shares or depositary receipts for shares have been admitted to trading on a regulated market or a comparable system; and (ii) all large companies with registered offices in the Netherlands (balance sheet value > EUR500 million) whose shares or depositary receipts for shares have been admitted to trading on a multilateral trading facility or a comparable system).

Other Entities With Legal Personality

The following legal entities also have legal personality in the Netherlands:

• an association (vereniging);
• a co-operative (coöperatie);
• a mutual insurance association (onderlinge waarborgmaatschappij); and
• a foundation (stichting).

Book 2 of the Dutch Civil Code applies to all the legal entities listed in the foregoing.

Entities Without Legal Personality

Entities without legal personality do not constitute separate legal persons but may still operate as business organisations. These include:

• a general partnership (vennootschap onder firma or VOF);
• a limited partnership (commanditaire vennootschap or CV);
• a professional partnership (maatschap); and
• a sole trader (eenmanszaak).

These forms are mainly governed by Book 7A of the Dutch Civil Code and the Dutch Commercial Code (Wetboek van Koophandel).

Unless otherwise stated, the answers in this chapter will focus on BVs and NVs as the principal corporate forms under Dutch Law.

General

Several acts are sources of corporate governance requirements for BVs and NVs. The Netherlands is a member of the EU, which means that Dutch corporate law is based in large part on European regulations, which have been implemented in several relevant Dutch acts.

Dutch Civil Code (Burgerlijk Wetboek)

Book 2 of the Dutch Civil Code is the primary source of corporate law in the Netherlands. The following matters are governed by Book 2 of the Dutch Civil Code, among other things:

• the various corporate bodies within a company (eg, general meeting, management board and supervisory board);
• the duties, powers and liabilities of these corporate bodies;
• specific rules on representation and directors’ conflicts of interest;
• shareholder rights, including information, meeting and voting rights; and
• financial reporting and disclosure.

Book 2 of the Dutch Civil Code sets out the mandatory and default rules for the governance of legal persons in the Netherlands, and applies to both privately held and publicly listed companies, with some provisions tailored to listed NVs and BVs.

Financial Supervision Act (Wet op het financieel toezicht)

In addition, Chapter 5 of the Financial Supervision Act provides for rules on the supervision of the business conduct of a legal entity whose securities are admitted to trading on a regulated market (hereafter, the “issuing institution”). It contains rules on the disclosure of major holdings, financial reporting, the prevention of market abuse and the obligations of institutional investors. The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten – AFM) supervises compliance with these rules.

Dutch Corporate Governance Code

The Dutch Corporate Governance Code (hereafter, the “CG Code”) is a principle-based instrument that applies on a comply-or-explain basis. The CG Code focuses on the governance of Dutch listed companies and provides guidelines for effective co–operation and management. The CG Code was first established in 2003 and was amended in 2008, 2016 and 2022. The CG Code 2022 came into force on 1 January 2023. Dutch listed companies reported on the CG Code 2022 for the first time in 2024 in the management report for financial year 2023. The Monitoring Committee CG Code (hereafter, the “Commission”) issued an update of the CG Code on 20 March 2025, mainly introducing the risk management statement – a new risk management statement that strengthens reporting obligations on risk oversight. See 2.1 Hot Topics in Corporate Governance for more information on the risk management statement.

The CG Code applies to Dutch listed companies. The purpose of the CG Code, as set out therein, is to realise, with or in relation to legislation and regulations, a sound and transparent system of checks and balances within Dutch listed companies and to regulate the relationships between the management board, the supervisory board and the general meeting/shareholders for this purpose. Compliance with the CG Code should contribute to confidence in good and responsible management of companies and their embedding in society.

The CG Code contains principles and best practice provisions regulating the relationship between the management board, the supervisory board (or the one-tier board as the case may be) and the general meeting/shareholders of Dutch listed companies. The principles and best practice provisions aim to define responsibilities for sustainable long-term value creation, risk control, effective management and supervision, remuneration and the relationship with shareholders (including the general meeting of shareholders) and stakeholders.

The broad outline of the company’s corporate governance is set out each year in a separate chapter of the management report or on the corporate website. Here, the company explicitly states the extent to which it complies with the principles and best practice provisions stipulated in the CG Code and, where it does not comply, why and to what extent it departs from them (comply-or-explain principle).

Articles of Association

The articles of association of a BV/NV may also provide for specific corporate governance provisions within the boundaries of Book 2 of the Dutch Civil Code. They may require, for example:

• a specific quorum or qualified majority resolution for certain resolutions of the general meeting, the supervisory board or the management board;
• the allocation of powers among corporate bodies;
• certain procedures for convening and conducting general meetings; and
• certain procedures for the appointment and dismissal of board members.

The articles of association form a binding framework and play an important role in tailoring the corporate governance of a company.

General

In addition to the applicable provisions of Book 2 of the Dutch Civil Code, which also contain various specific rules for Dutch listed companies, the following regulations apply to Dutch listed companies. The requirements of the Acts are mandatory: the requirements (principles and best practice provisions) of the CG Code are based on the “comply-or-explain” principle.

Financial Supervision Act (Wet op het financieel toezicht)

See 1.2 Sources of Corporate Governance Requirements.

CG Code

See 1.2 Sources of Corporate Governance Requirements.

Sector-Specific Legislation

Sector-specific legislation is in place for certain entities, such as financial institutions. The healthcare sector, for example, has a Healthcare Governance Code.

In December 2019, the European Commission introduced the European Green Deal, the purpose of which is to transform the EU into a modern, resource-efficient and competitive economy. Several legislative initiatives have since been adopted, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

CSRD

The CSRD imposes an obligation for a large group of companies to report on their sustainability efforts in line with the European Sustainability Reporting Standards (ESRS). This Directive came into force on 5 January 2023 and should have been implemented by member states by July 2024. However, several member states, including the Netherlands, have missed this deadline. On 13 January 2025, a bill for the CSRD implementation was submitted to the Dutch Lower House.

CSDDD

On 23 February 2022, the European Commission published the proposal for the CSDDD, which aims to harmonise existing EU member state laws on supply chain due diligence, obligations regarding actual and potential human rights adverse impacts and environmental adverse impacts with respect to their own operations and those of their subsidiaries and other entities in their value chain. The directive entered into force on 25 July 2024 and must be implemented by member states by July 2026. On 18 November 2024, a draft bill to implement the CSDDD in the Netherlands was published for consultation.

Omnibus Packages

On 26 February 2025, the European Commission adopted a package of proposals in the form of two omnibus packages aimed at simplifying ESG regulations in the EU, whilst boosting competitiveness. These proposals include amendments to the CSRD and CSDDD to reduce regulatory burdens and give companies additional time to prepare for compliance. On 3 April 2025, the European Parliament, having used a fast-track procedure, voted to approve the directive that included those amendments and postponed reporting and due diligence obligations under the CSRD and CSDDD. This “stop-the-clock” directive entered into force on 17 April 2025. See 2.2 Environmental, Social and Governance (ESG) Considerations for more information on the proposed amendments to the CSRD and CSDDD in the omnibus packages.

CG Code

The main theme of the CG Code 2022 is sustainable long-term value creation. On 20 March 2025, the CG Code was updated. This update relates in particular to the risk management statement (Verklaring Omtrent Risicobeheersing). Under the updated CG Code, the management board of a company must declare the following in its management report. First, that internal risk management and control systems provide at least a limited level of assurance. Second, that the sustainability reporting does not contain any material misstatements. Third, the level of assurance these systems provide that the operational and compliance risks are controlled effectively. The risk management statement serves to provide transparency to stakeholders on the management of operational, compliance and reporting risks. See 1.2 Sources of Corporate Governance Requirements for more information on the CG Code.

Milieudefensie/Shell

See 4.7 Responsibility/Accountability of Directors for further information regarding these cases.

Milieudefensie/ING

On 28 March 2025, Dutch environmental group Milieudefensie filed a lawsuit against ING, alleging that the bank failed to meet its climate obligations (ie, to cut its total emissions in half and stop working with companies with high pollution levels). The lawsuit demands that ING halves its total emissions by 2030 compared to 2019 levels and implements stricter climate policies across eight high-pollution sectors, including steel and aviation. Milieudefensie also calls for ING to stop financing companies involved in new oil and gas projects and to require all large corporate clients to submit credible climate transition plans. The NGO argues that ING’s current approach is insufficient in addressing its climate impact, despite the bank’s claims of prioritising sustainability. The Amsterdam District Court has not yet issued a ruling.

The CSRD requires companies to publish reports on the policies, targets, performance, impacts, risks and opportunities in relation to ESG aspects of the company. The CSRD revises and strengthens rules introduced by the Non-Financial Reporting Directive (NFRD). It aims to ensure that companies provide reliable, consistent and comparable sustainability information for investors and other stakeholders.

Reporting must be done in accordance with the ESRS adopted by the European Commission. The CSRD requires companies to publish their sustainability reports in a dedicated section of their annual management reports.

Taking into account the postponements introduced by the “stop-the-clock” directive, the CSRD applies to financial years starting on or after:

• 1 January 2024 for large Dutch l listed companies that already have to report in order to conform with the NFRD;
• 1 January 2027 for large companies (grote vennootschappen); and
• 1 January 2028 for listed SMEs, which will be subject to a mitigated reporting regime.

The CSRD requires an independent assurance services provider to provide an assurance opinion on sustainability reporting. Initially, during the first few years of application of the CSRD, this opinion may be based on a limited assurance engagement. In the future, however, this may be extended to a reasonable assurance engagement after an assessment by the European Commission of the feasibility of such extension. However, in the omnibus package, it is proposed that this possibility for the European Commission to propose moving from a limited assurance requirement to a reasonable assurance requirement be removed.

CSDDD

The CSDDD sets out to ensure that large companies operating in or trading with the EU integrate environmental and human rights due diligence into their corporate governance. Its scope targets EU companies with over 1,000 employees and a global turnover of more than EUR450 million. Non-EU companies generating at least EUR450 million within the EU also fall under the scope of the CSDDD.

The CSDDD mandates that in-scope companies adopt effective due diligence policies to identify, prevent or mitigate – and ultimately end – any adverse impact of their operations on human rights, the environment and good corporate governance (including corruption).

Key obligations include:

• implementing “appropriate measures” across the entire value chain;
• expanding the scope of adverse impacts to cover a broader range of human rights issues; and
• developing a strategic plan to align business models with the global target of limiting warming to 1.5°C.

Omnibus Packages

On 26 February 2025, the European Commission published two omnibus simplification packages, introducing proposals to reduce sustainability requirements following from EU legislation.

The first omnibus package contains a proposal with temporal changes that postpone the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies, respectively) and postpone the transposition deadline and the first wave of application of the CSDDD by one year to 2028. This directive entered into force on 17 April 2025.

Further, this omnibus package includes a proposal with substantive changes, such as raising the employee threshold for mandatory sustainability reporting under the CSRD from 250 or more to 1,000 employees. If adopted, this change would significantly reduce the number of companies required to report, exempting approximately 85% of businesses that currently fall under the directive. Listed SMEs, which were previously required to report under the CSRD, would also be removed from the scope. Under the new threshold, only companies with at least 1,000 employees and either a turnover above EUR50 million or a balance sheet total exceeding EUR25 million would be subject to reporting obligations.

The Commission has outlined an explicit goal of reducing reporting burdens by 25% for large companies and 35% for SMEs, reflecting a broader effort to simplify sustainability disclosures while maintaining the EU’s ambitious environmental objectives.

Principal Bodies of BVs and NVs

All BVs and NVs have a management board and a general meeting. BVs and NVs may opt for a supervisory board or for non-executives in the board, resulting in the following three possible governance structures:

• only a management board is in place, with executive directors;
• both a management board and a supervisory board are in place (a two-tier structure); or
• a one-tier management board is in place, consisting of executive directors and non-executive directors (one-tier board structure).

Large Company Regime (Structuurregime)

A supervisory board (or a one-tier board consisting of executive and non-executive directors) is mandatory if a company has filed a statement with the Dutch Trade Register for three consecutive years, stating that it qualifies as a “large” company under the statutory two-tier rules (structuurvennootschap). This supervisory board must consist of three or more directors (or three or more non-executive directors in the case of a one-tier board). Persons employed by the “large” company or any of its dependent companies, as well as directors and employees of an employees’ organisation involved in determining the terms of employment of those persons, cannot be appointed as supervisory directors.

See 4.1 Board Structure for more information on the one-tier board.

The main characteristics of a company (structuurvennootschap) to which the large company regime applies are:

• in principle, the general meeting and the works council (ondernemingsraad) can significantly influence the composition of the supervisory board;
• the supervisory board, rather than the general meeting, is authorised to appoint the directors of the management board and to remove them from office – the supervisory board lacks this authority if the so-called mitigated large company regime applies (as described in the following); and
• certain important resolutions of the management board require the prior approval of the supervisory board (or the majority of the non-executive directors in the case of a one-tier board).

The large company regime (structuurregime) is applicable to a Dutch company that has filed a registration with the Dutch Trade Register, stating that from its adopted annual accounts it appears that:

• its issued capital and reserves amount to not less than EUR16 million;
• it has set up a works council on the grounds of a statutory requirement; and
• as a rule, it employs at least 100 employees in the Netherlands.

It must also have kept this mandatory registration with the Dutch Trade Register for three consecutive years. Upon the expiration of this three-year term, the company’s articles of association must be amended to incorporate certain mandatory provisions relating to the large company regime.

For the second and third requirements mentioned in the foregoing, the dependent companies (afhankelijke maatschappijen) of the company are also taken into account. A company qualifies as a dependent company of another legal entity if, among other things, such other entity provides at least 50% of the capital of such company.

A company that meets the criteria set out in the foregoing is required to file a registration with the Dutch Trade Register within two months after the adoption or approval of the company’s annual accounts by the general meeting. A repeated annual registration to fall under the large company regime for consecutive years is not required.

Exemptions

The large company regime does not apply to certain companies, such as:

• companies that exclusively or almost exclusively operate as holding or finance companies for their group companies, provided that the majority of the employees of the group are employed outside the Netherlands; and
• companies of which at least half of the share capital is held by a company that applies the large company regime.

Mitigated Large Company Regime (Beperkt Structuurregime)

Certain companies that fall under the large company regime (structuurvennootchappen) are allowed to apply the mitigated large company regime (beperkt structuurregime) instead of the full large company regime. This applies, for example, to structuurvennootschappen in which at least 50% of the share capital is held by a legal entity (either by itself or by its dependent company) that employs the majority of its employees outside the Netherlands. Under the mitigated large company regime, the general meeting appoints the managing directors (as opposed to the supervisory board, which is entitled to appoint the managing directors if the full large company regime applies). For more information, see 4.4 Appointment and removal of Directors/Officers.

Voluntary Application of the (Full or Mitigated) Large Company Regime

A company may also voluntarily apply the provisions of the full or mitigated large company regime if it (or a dependent company) has established a works council to which the provisions of the Works Council Act (Wet op de Ondernemingsraden) apply.

The Management Board

The primary responsibility of the management board is to manage the company and its business. In the performance of its duties, the management board is collectively responsible for:

• formulating and determining the policy and strategy;
• achieving the legal entity’s objects; and
• the day-to-day management of the company and its business.

The management board must carry out its duties in line with the company’s objectives, which are included in the company’s articles of association.

Depending on the articles of association, the management board may resolve on:

• the issuance of shares (if this authority is granted to the management board by the general meeting);
• reservations from the profits;
• (approval of) (interim) distributions; and
• the right of initiative for certain resolutions of the general meeting, such as shares issuances, amendments to the company’s articles of association, legal mergers, demergers, dissolution and conversion.

The Supervisory Board

If installed, the supervisory board supervises and advises the management board on the general course of affairs of the company and the business affiliated with it.

General Meeting – Shareholders

In principle, the general meeting may resolve on the following:

• the appointment (including remuneration and, in the case of a one-tier board, designating whether a person is appointed as an executive or non-executive director), suspension and dismissal of managing directors and supervisory directors (see 3.1 Bodies or Functions Involved in Governance and Management regarding the deviating provisions applicable to companies subject to the full or mitigated large company regime);
• any increase (including the issuance of shares) or decrease of share capital;
• the adoption of the annual accounts;
• distributions;
• amendments to the company’s articles of association, covering legal mergers, demergers, dissolution and conversion; and
• the appointment of the auditor.

The general meeting is entitled to receive information from the management board.

The articles of association may provide that certain management board resolutions are or can be made subject to the approval of the general meeting or supervisory board.

For the NV, the approval of the general meeting is required for resolutions of the management board concerning a major change in the identity or character of the company or business.

Listed Company

General meetings of a Dutch listed company hold an advisory vote on the remuneration report and adopt the remuneration policy for the management board and supervisory board every four years. The resolution to adopt the remuneration policy requires a 75% majority of the votes validly cast, unless the articles of association explicitly provide otherwise.

Management Board

The management board has collective responsibility. If collegial governance is in place, it is possible to make a division of tasks. The responsibility for fulfilling a particular board task, as part of the board policy, always remains with the entire board.

Each managing director has one vote. The articles of association may provide that a director has more than one vote, but one director cannot have more votes than the other directors collectively.

Dutch law does not include quorum requirements (the articles of association may provide otherwise). The management board adopts resolutions by simple majority of the votes validly cast (the articles of association may provide otherwise). Meeting and decision-making rules can be included in the articles of association and elaborated on in the regulations of the management board. The management board adopts resolutions inside a meeting; resolutions outside a meeting are allowed, depending on the articles of association.

Supervisory Board

The characteristics of the collective responsibility of the management board and the decision-making process as described in the foregoing are also applicable to the supervisory board.

Shareholders Meeting

The general meeting of a BV/NV is led by a chair, who is responsible for the meeting order; often, the chair of the supervisory board is the chair of the general meeting.

Every shareholder of a BV/NV has the right to attend the general meeting, speak at it and exercise voting rights, either in person or by written proxy.

A BV may have non-voting shares; shareholders with non-voting shares cannot vote but do have the right to attend the general meeting.

Managing directors and supervisory directors have an advisory vote to the general meeting.

Management Board

Dutch corporate law requires each BV and NV to have a management board that is legally responsible for managing the company and its affiliated businesses. In carrying out their duties, the members of the management board must act in the best interests of the company and its business.

Structure of two-tier board

In addition to the management board, it is possible to have a supervisory board in place (two-tier system). Under the two-tier system, the company has both a management board and a supervisory board. The supervisory board is charged with supervising the policy of the management board and the general affairs of the company, while also providing advice to the management board.

Structure of one-tier board

Alternatively, the company may adopt a one-tier system in which a single board comprises both executive and non-executive directors. The executive directors are responsible for the daily management of the company. The non-executive directors oversee the performance of the executive directors and are entrusted with supervising the general affairs of the company. All directors in a one-tier board collectively share responsibility for the overall direction and management of the company.

Both members of a supervisory board and non-executive directors in a one-tier board must be individuals. A company that falls under the large company regime (structuurregime) is obliged to establish either a separate supervisory board or a one-tier board with non-executive directors, as further addressed in 3.1 Bodies or Functions Involved in Governance and Management.

Management Board – Collective Responsibility

The management board of a legal entity is charged with the management of the company and its affiliated business. Specific tasks may be expressly attributed or delegated to an individual managing director or pursuant to the articles of association. The management board is collectively responsible for resolutions, even if resolutions are made by individual board directors.

Taking into account the general duties mentioned in the foregoing, the specific details of the management board’s role depend on several factors, such as the size and nature of the legal entity’s activities. The responsibilities of the individual board directors of Dutch companies are often set out in charters of the management board.

Chairperson

Neither Book 2 of the Dutch Civil Code nor the CG Code stipulates who appoints the chairperson of the management board or the supervisory board of an NV or BV.

Roles within a one-tier board

If a company has a one-tier board, the task of supervising the executive directors cannot be taken away from non-executive directors. The chairpersonship of the board, making nominations for the appointment of a director and determining the remuneration of executive directors cannot be assigned to (an) executive director(s).

Roles within a supervisory board

The supervisory board has collective responsibility for supervising the performance of the management board. It may also allocate duties among its members, without this relieving them of their collective responsibility. For Dutch listed companies with more than four supervisory directors, the CG Code sets out that the supervisory board should appoint from among its directors:

• an audit committee;
• a remuneration committee; and
• a selection and appointment committee.

One of the directors of the supervisory board must be a financial expert (this is mandatory law; see 4.3 Board Composition Requirements/Recommendations). The audit committee and the remuneration committee should not be chaired by the chairperson of the supervisory board, nor by a former managing director of the company. See also 4.6 Legal Duties of Directors/Officers for more information.

General Composition Requirements

The following minimum requirements apply to the composition of boards.

• Two-tier structure:
1. a management board with at least one managing director (who may be a legal person or an individual); and
2. if established, a supervisory board with at least one individual member.
• One-tier board: at least one executive director (who may be a legal person or an individual) and one non-executive director (who must be an individual).

The articles of association may restrict who is eligible to be appointed as a director by imposing specific requirements. Such requirements may be set aside by a resolution of the general meeting if at least two-thirds of the votes are cast in favour, representing more than half of the issued share capital.

Dutch Companies Within the Scope of the CG Code

According to the CG Code, each supervisory director and each managing director should have the specific expertise required for the fulfilment of their duties. Each supervisory director should be capable of assessing the broad outline of the overall management. The requirement that the supervisory board has financial expertise is enshrined in law. Pursuant to the Resolution Establishing an Audit Committee (Besluit Instelling Auditcommissie), at least one member of the audit committee must have expertise in the preparation and auditing of annual accounts. This provision has been implemented in Dutch legislation and is applicable to public interest entities (such as listed companies, banks and (certain) insurance companies).

Diversity

Each year, large companies (grote vennootschappen) must set appropriate and ambitious gender diversity targets for the management and supervisory boards and senior management. For the purpose of the Diversity Act (Wet ingroeiquotum en streefcijfers), a large company (whether listed or not) is a company that meets at least two of the following requirements on two consecutive balance sheet dates:

• the value of the assets exceeds EUR25 million;
• the net turnover for the financial year exceeds EUR50 million; and
• the average number of employees is 250 or higher.

It does not suffice to include only the size of its own assets, net sales and employees: data from group companies that must be included in the consolidation must also be considered in determining whether the thresholds are met.

Gender diversity – supervisory boards of Dutch companies within scope of the CG Code listed on Euronext Amsterdam

Supervisory boards of Dutch companies listed on Euronext Amsterdam (both NVs and BVs) are subject to a diversity quota of at least one-third male and one-third female directors. If the supervisory board does not meet this diversity quota, any appointment that does not balance the distribution is void, leaving the relevant vacancy open. Every listed company must take the diversity quota into account in every appointment or reappointment of a supervisory director. The same applies to non-executive directors in the case of a one-tier board.

Additional diversity requirements for companies within scope of the CG Code

The management board, the supervisory board and the executive committee (if any) should be composed in such a manner as to ensure a degree of diversity appropriate to the company with regard to expertise, experience, competencies, other personal qualities, sex or gender identity, age, nationality and cultural or other background.

See 4.2 Roles of Board Members regarding the composition of the committees of the supervisory board of a Dutch listed company.

Additionally, supervisory boards of Dutch listed companies whose shares or depositary receipts are admitted to trading on a regulated market, as referred to in Section 1:1 of the Financial Supervision Act in the Netherlands, are subject to a diversity quota of at least one-third male and one-third female directors. If the supervisory board does not meet this diversity quota, any appointment that does not balance the distribution is void, leaving the relevant vacancy open. The same applies to non-executive directors in the case of a one-tier board.

Reporting requirements on diversity

Large companies within the meaning of the Diversity Act must report on the following in their management report on diversity in the board:

• the current male/female ratio;
• the target ratios;
• the action plan; and
• the objectives achieved.

In addition, pursuant to the Diversity Act, large companies must set more appropriate and ambitious target ratios and draw up an action plan. Every year, the progress with the obligations under the Diversity Act must be reported to the Social and Economic Council (SER), within ten months of the end of the financial year. The basic principle is that what must be reported in the management report must also be reported to the SER. To this end, the SER has developed a diversity portal. Because large companies are required to report via this portal, it is possible to monitor how these companies satisfy their obligations and how they perform relative to others. Dutch listed companies do not have to report on the supervisory board (or on the non-executive directors on the one-tier board) in the management report, because they must already comply with the diversity quota.

Restrictions on the Number of Positions of Directors

Book 2 of the Dutch Civil Code sets a maximum number of supervisory positions that each managing director or supervisory director is allowed to hold at Dutch large companies (grote vennootschappen) and Dutch large foundations.

In principle, a managing director may:

• hold a maximum of two positions as a supervisory director of a large company in addition to their management board position; and
• not be the chairperson of a supervisory board or of a one-tier board of a large company.

A supervisory director may hold a total of five supervisory positions in large companies. The position as chairperson of a supervisory board or one-tier board counts twice.

Under the CG Code, the supervisory board’s approval is required if a managing director of the company intends to accept a supervisory board membership elsewhere.

Appointment of Directors

General rules for the appointment of managing and supervisory directors of a BV/NV

The first appointment of supervisory directors (if applicable) and of managing directors is included in the notarial deed of incorporation of the NV/BV. After the incorporation of the NV/BV, the general meeting appoints the managing directors and supervisory directors (unless the large company regime applies). See also 3.1 Bodies or Functions Involved in Governance and Management for more information on the large company regime.

The articles of association may provide that the appointment of a managing director or supervisory director by the general meeting must be based on a binding nomination. In that case, only the nominated person may be appointed as director. The binding nature of the nomination can be removed by a qualified majority resolution of the general meeting.

With respect to supervisory directors, the articles of association may provide that a maximum of one-third of the supervisory directors may be appointed by third parties.

Specific rules for the appointment of managing and supervisory directors of a BV

For a BV, the articles of association may provide that managing directors and supervisory directors are appointed by a meeting of holders of shares of a certain class or type. Nevertheless, every shareholder with voting rights must still be involved in appointing at least one managing director and at least one supervisory director.

Specific rules for the appointment of directors of a BV/NV subject to the large company regime (structuurregime)

The supervisory board appoints the managing directors (or the non-executive directors appoint the executive directors in the case of a one-tier board) unless the mitigated large company regime applies, in which case the general meeting appoints the managing (or executive) directors.

The general meeting appoints a supervisory director (or the non-executive directors, in the case of a one-tier board) following a special procedure, including a nomination right of the supervisory board (or non-executive directors); such nomination takes into account the (enhanced) right of recommendation of the works council. Supervisory board members are appointed for a maximum term of four years, which can be extended in the articles of association until the day of the first general meeting after such four-year term.

Removal of Directors

Removal of managing directors

Managing directors of a BV/NV may be suspended and dismissed at any time by the person/body authorised to appoint them. The articles of association of a BV may also grant the power of dismissal to another corporate body. The supervisory board may suspend managing directors at any time, unless the articles of association provide otherwise. The managing directors of a mitigated large company regime may be suspended and dismissed only by the supervisory board.

Removal of supervisory directors

Supervisory directors of a BV/NV may be suspended and removed by the person/body authorised to appoint them. A general meeting of a BV that is not authorised to appoint may nevertheless be granted the power of removal and suspension in the articles of association.

Removal of supervisory directors of a company subject to the large company regime (structuurvennootschap)

Each supervisory director may be subject to the following.

• Suspended by the supervisory board.
• Removed by the Enterprise Chamber of the Amsterdam Court of Appeal on account of:
1. neglect of their duties;
2. other serious reasons; or
3. a drastic change in circumstances based on which their continuation as a director of the supervisory board cannot reasonably be required from the company.

A removal by the Enterprise Chamber may take place on the basis of a request submitted by the company, represented for this purpose by the supervisory board, and also by a representative appointed for this purpose by the general meeting or by the works council.

General

The Dutch Civil Code contains no general provisions on the independence of the supervisory board and individual supervisory directors of a BV/NV. However, it is generally accepted that the supervisory board of a BV/NV should, in principle, be sufficiently independent in relation to the company and its stakeholders.

Supervisory Board of Large Companies (Structuurvennootschap)

The supervisory board of a structuurvennootschap must be properly composed. The Dutch Civil Code requires that employees of the company or a dependent company, and union representatives, cannot be supervisory directors.

Independence Requirements of a Company within Scope of the CG Code

The composition of the supervisory board safeguards that the members are able to operate independently and critically in relation to one another, the management board and any particular interests involved.

The following applies under the CG Code (best practice provision 2.1.7 through 2.1.9):

• no more than one supervisory board member meets any of the criteria set out in best practice provisions 2.1.8 (i) through (v), pursuant to which such supervisory director is deemed not independent;
• the total number of supervisory board members to whom the criteria referred to in best practice provisions 2.1.8 (i) through (vii) are applicable should account for less than half of the total number of supervisory board members, pursuant to which such supervisory director is deemed not independent;
• for each shareholder, or group of affiliated shareholders, holding directly or indirectly more than 10% of the company’s share capital, no more than one supervisory board member may be deemed affiliated with or representing them, as referred to in best practice provisions 2.1.8 (vi) and (vii); and
• the chair of the supervisory board may not be a former managing director of the company and must be independent within the meaning of best practice provision 2.1.8.

Potential Conflicts of Interest

A managing director or supervisory director may not participate in deliberations and decision-making if they have a direct or indirect personal interest that conflicts with the interests of the company. If a managing director or supervisory director nevertheless participates in the deliberations or decision-making, the management board or the supervisory board resolution becomes voidable. Any conflict of interest has an impact on internal decision-making only. This means that directors with a conflict of interest remain authorised to represent the company. There is, however, a liability risk.

Consequences of a conflict of interest of management or supervisory directors

If no management board resolution can be adopted as a result of a conflict of interest, the resolution may be adopted by the supervisory board. If there is no supervisory board, the resolution may be adopted by the general meeting, unless the articles of association provide otherwise. If all the supervisory directors have a conflict of interest, the resolution is adopted by the general meeting, unless the company’s articles of association provide otherwise.

Based on case law, a supervisory director has a duty to provide full transparency about possible conflicts of interest, while keeping conflicting interests separate from the interests of the company. A similar provision applies in the event of a conflict of interest of one or more supervisory directors.

Stricter conflict of interest rules apply to Dutch companies within scope of the CG Code

The CG Code stipulates that any form of conflict of interest between the company and the managing directors or supervisory directors must be prevented, and that adequate measures should be taken to avoid conflicts of interest. Therefore, high standards of transparency and accountability are expected from Dutch listed companies.

The entire management board of the company is collectively responsible (see 4.2 Roles of Board Members) for the policy, strategy and day-to-day management of the company, which includes:

• the management of the company (subject to any limitations in the company’s articles of association);
• keeping proper company books and records;
• preparing financial reports and publishing annual accounts in time;
• exercising management control (managing the company and its business, determining its general policy and co-ordinating its organisation, including that of the group);
• exercising financial control (managing the company’s assets, controlling the flow of funds, administering the company’s financial condition); and
• exercising control of the company’s legal acts (to ensure regulatory compliance and compliance with the company’s articles of association, and to fulfil the duty of care towards third parties, by ensuring that the company observes the legal relationships entered into with the third parties).

In the performance of their duties, directors of all boards must be guided by the best interests of the company and the business affiliated with it. This is generally determined primarily by promoting the continued success of this business (bestendig succes van de onderneming). The Dutch Supreme Court added that, in discharging their duties, directors should also – partly based on the principle of reasonableness and fairness – exercise due care with regard to the interests of all those involved in the company and its business, and that this duty of care may require directors, in serving the company’s interests, to ensure that this does not unduly or disproportionately harm the interests of those involved.

Directors should also keep in mind that the legal entity has an independent interest in ensuring that legal and statutory norms, or norms arising in part from reasonableness and fairness, including procedural norms necessary for proper decision-making, have been or are properly observed. This implies taking into account the interests of all the stakeholders, including shareholders, employees, creditors and other relevant stakeholders.

In addition, companies, corporate bodies and directors have a duty to act towards each other and other corporate bodies in accordance with the principles of reasonableness and fairness.

General

As mentioned in 4.6 Legal Duties of Directors/Officers, according to Dutch corporate law, all management and supervisory directors must act in the interest of the company and the business affiliated with it. The interest of the company is generally determined primarily by promoting the continued success of this business (bestendig succes van de onderneming). The Dutch Supreme Court added that, in discharging their duties, directors should also – partly based on the principle of reasonableness and fairness – exercise due care with regard to the interests of all those involved in the company and its business.

The management board of a BV/NV is accountable both internally and externally for the fulfilment of its duties and the exercise of the powers arising from the management task. Within the company, the management board has an accountability obligation towards the following.

• The general meeting:
1. by preparing the annual accounts for shareholders;
2. by publishing a management report; and
3. by providing the general meeting with all requested information, unless this would be contrary to an overriding interest of the company.
• The supervisory board that supervises the management board.
• The works council.

Milieudefensie/Shell Case

The ruling of the District Court of The Hague of 26 May 2021 is relevant in this respect. An alliance of associations and foundations, together with over 17,000 individual claimants, brought a case against Royal Dutch Shell (RDS) as the top holding company of the Shell group, alleging that RDS had an obligation to contribute to the prevention of dangerous climate change through its corporate policies for the Shell companies.

The District Court found that, under Dutch law, RDS owed an unwritten standard of care to Dutch residents to reduce CO₂ emissions of the Shell group’s activities by net 45% by the end of 2030, relative to 2019. In doing so, the court took into account that there is a widely supported international consensus that human rights should be protected against the consequences of dangerous climate change, and that companies must respect human rights. The court also found that RDS’ policies, intentions and ambitions were incompatible with this reduction obligation. Therefore, the court ordered RDS to comply. This is an obligation of result for the Shell group itself and a significant best-efforts obligation with regard to the Shell group’s business relations and end-users.

On 12 November 2024, the Court of Appeal of The Hague overruled the judgment of the District Court. Though both courts agree that protecting against dangerous climate change is rooted in human rights, the Court of Appeal’s decision sets out that a specific numerical reduction obligation – such as the 45% target – cannot be imposed on RDS based solely on an unwritten standard of care. Milieudefensie has lodged an appeal against this ruling with the Supreme Court.

On 13 May 2025, Milieudefensie announced that they intend to launch a second climate lawsuit against RDS. The organisation demands that RDS cease developing new oil and gas fields, arguing that these activities are incompatible with the urgent need to address the climate crisis. This new lawsuit would shift the focus from reducing emissions to halting the expansion of fossil fuel projects. Legal proceedings for this case are expected to begin soon, pending RDS’s response.

Dutch Companies Within Scope of the CG Code

According to the CG Code, the management board must pay attention to the interests of stakeholders when developing a view on sustainable long-term value creation by the company and its affiliated business, and formulate a corresponding strategy.

The CG Code describes stakeholders as groups and individuals that, directly or indirectly, influence – or are or may be influenced by – the attainment of the company’s objectives: employees, shareholders and other lenders, suppliers, customers and other stakeholders.

General

In general, managing directors of a BV or NV are not liable for the obligations of the company they are managing. Directors have considerable liberty to act as they deem fit, but must properly perform their duties towards the company. They are jointly and severally liable for damage suffered if the management board performs its duties improperly (onbehoorlijke taakvervulling), based on the management board’s collective responsibility. A distinction is made between the liability of directors towards the company (internal liability) and their liability towards third parties (external liability).

Internal Liability

The company may hold the managing directors liable for damage suffered by the company in the event of improper performance of duties (onbehoorlijke taakvervulling). To establish liability in such event, it must be proven that the managing director acted in a seriously culpable manner (ernstig verwijtbaar). This is generally the case if a managing director acts in breach of statutory provisions or in breach of the articles of association and gives rise to improper management, unless the managing director can prove otherwise.

In principle, if one managing director is in breach, all the managing directors are jointly and severally liable due to their collective liability. An individual managing director can be exonerated in the event that, also in view of the duties assigned to others, he does not bear any serious blame and he has not been negligent in taking measures to avert the consequences of improper management. Supervisory directors may also be held liable for improper supervision.

In addition to liability for mismanagement, liability for damages may also be based on tort law (onrechtmatige daad). This concerns the liability of each director individually and not the collective liability of the board.

In an insolvency situation, the trustee may sue the directors on behalf of the company.

External Liability

Personal liability of a managing director towards third parties may arise if the managing director commits a wrongful act in their capacity as a director, or in the event of the bankruptcy of the company.

In a situation in which the company is liable for damages based on non-fulfilment of contractual or statutory obligations or a wrongful act, a managing director may in some cases also be held personally liable for the damages. A managing director is personally liable only if they bear serious personal blame (ernstig persoonlijk verwijt).

Serious personal blame on the part of a managing director generally exists if:

• the managing director knows or should have known that the company cannot fulfil the obligations under the agreement and nevertheless enters into an agreement on behalf of the company and knows and should have known that the company offers no recourse; or
• the managing director causes or allows the legal entity to fail to fulfil an existing obligation and offers no recourse.

External liability in bankruptcy

A managing director may be personally liable in the event of a company’s bankruptcy. In a bankruptcy in which any claim remains unpaid, a bankruptcy trustee may hold directors liable for manifestly improper management (kennelijk onbehoorlijk bestuur) that was an important cause of the bankruptcy.

Manifestly improper management can be established if, among other things:

• the books and records (administratie) were improperly kept and the corresponding books, documents and other data carriers were not kept in such a way that the rights and obligations of the legal entity can be known at all times; or
• the company has failed to fulfil its duty to publish its annual accounts.

In these situations, it is assumed that manifestly improper management was an important cause of the bankruptcy. This assumption can be refuted by directors.

If a bankruptcy trustee’s claim is successful, each managing director is jointly and severally liable in relation to the bankrupt estate for the deficit in the bankruptcy, being the amount of the liabilities to the extent that these cannot be satisfied by the liquidation of the other assets. Individual directors can be exonerated if they can demonstrate that they cannot be held liable for the manifestly improper management and that they did not fail to take measures to mitigate the consequences of the manifestly improper management.

Other Bases of Liability of Directors

Managing directors of a BV/NV may also be jointly and severally liable in the following cases:

• for the debts of the company under social security and tax laws;
• for providing misleading (interim) accounts or annual accounts or annual reports; or
• for the company acquiring shares in its own capital in certain situations.

BV

In the case of a BV, the managing directors must give approval for each distribution before it can be made. If the company is unable to continue paying its debts after a distribution has been made, managing directors could be liable for any immediately payable company debts. Liability exists only if the directors knew or should reasonably have foreseen that the distribution would lead to the company being unable to continue paying its debts.

Limitation of Liability

In general, a managing director’s liability may be limited in two ways.

• The general meeting discharges managing directors, waiving possible claims for damages. This concerns internal liability and is a common agenda item at the annual general meeting.
• Exoneration from joint and several liability of an individual managing director in the event of (manifestly) improper management in the case of joint and several liability of managing directors, if a director can demonstrate that they cannot be held liable for the (manifestly) improper management and did not fail to take measures to mitigate the consequences of the (manifestly) improper management.

BVs

The general meeting determines the individual remuneration of managing directors, unless the articles of association provide otherwise.

NVs

The general meeting determines the individual remuneration of managing directors, unless the articles of association provide otherwise. The articles of association of an NV may provide that another corporate body will determine the individual remuneration of managing directors, often the supervisory board. The remuneration of supervisory directors is always determined by the general meeting.

In addition, NVs must have a remuneration policy in place, which must be adopted by the general meeting. The works council must be given the opportunity to take a position thereon (or give its advice in the case of a Dutch listed company); this position (or advice) shall be offered to the general meeting at the same time as the proposal to adopt the remuneration policy.

Companies Within the Scope of the CG Code

For companies within scope of the CG Code, the following applies on a “comply-or-explain” basis:

• the remuneration policy for the management board, prepared by the supervisory board’s remuneration committee, should also focus on sustainable long-term value creation for the company and its affiliated business;
• severance pay is limited to one year’s salary and will not be awarded if the managing director resigns, or in the event of seriously culpable or negligent behaviour by the director; and
• supervisory directors must not be awarded remuneration in the form of shares and/or rights to shares.

Disclosure in Relation to Remuneration

Non-listed Dutch companies

These companies must publish the following in the notes to the annual accounts.

• The amount of the remuneration, including pension charges and other benefits, for:
1. the managing directors and former managing directors; and
2. separately, the joint supervisory and former supervisory directors (this provision does not apply to micro and small companies).
• The amount of loans, advances and guarantees granted for the benefit of individual directors and supervisory directors.

Dutch listed companies

Dutch listed companies must publish a remuneration report, which must:

• be clear and understandable;
• summarise all the remuneration awarded or due to individual directors in the previous financial year;
• be submitted to the annual general meeting for an advisory vote;
• be made public on the company’s website after the general meeting and be accessible for ten years; and
• be checked by the external auditor as to whether all the required information is included in the report.

The company must explain in the remuneration report how the previous vote of the general meeting has been considered.

The management board manages the company; see 3.2 Decisions Made by Particular Bodies and 4.6 Legal Duties of Directors/Officers.

Shareholders provide the equity and, in principle, are liable only up to the amount of their investment in the company. They do not participate in most corporate decisions and may establish contractual arrangements with the company, such as relationships agreements.

See 3.2 Decisions Made by Particular Bodies regarding the adoption of resolutions by the general meeting.

General

In general, shareholders are not involved in the management of the company.

The articles of association may stipulate that the management board must act in accordance with the instructions of a corporate body of the company (eg, the general meeting). The management board should assess whether the instruction is in the interest of the company and its affiliated business.

Role of the General Meeting

It follows from case law that the following applies to Dutch companies with respect to the role of the general meeting and the policy and strategy of the company.

• The rule of law is that the management board, under the supervision of the supervisory board, is responsible for determining the policy and strategy of the company and its business.
• The management board is accountable to the general meeting in respect of its policy and strategy.
• The management board is not obliged to involve the general meeting in its decision-making in advance, nor to consult the general meeting; this is different if statutory provisions or provisions in the articles of association provide otherwise.
• The general meeting may express its opinions in this regard by exercising its powers prescribed by law or in the articles of association. Shareholders cannot force the company to include voting items, regardless of whether this is a binding or advisory vote, on the agenda of the general meeting in respect of matters that fall within the powers of the management board, such as determining the policy and strategy.

General

Both BVs and NVs must have one general meeting a year. The annual general meeting of an NV must be held within six months after the end of the company’s financial year. The articles of association may provide for a shorter period. The annual general meeting of a BV must be held once a year, unless all shareholders are also directors of the BV. The signing of the annual accounts by all directors is also considered adoption of the annual accounts (the articles of association may provide otherwise).

Extraordinary Meeting

In addition to the annual general meeting, extraordinary meetings may also be convened for matters that come up between the annual meetings and need to be addressed in a general meeting.

Convening of a General Meeting

Both the management board and the supervisory board may convene a general meeting of an NV/BV (bijeenroeping). The articles of association may also grant this power to other parties.

Shareholders whose shareholding exceeds a certain threshold may request the board and supervisory board to convene a general meeting. If this request is denied, they can enforce in court that the general meeting be convened.

The general meeting is held at a place stated in the articles (for a BV, this can also be outside of the Netherlands) or in the municipality where the company has its place of business. A general meeting of an NV can also be held elsewhere if the entire share capital is represented or if, in the case of a BV, all persons with meeting rights agree to it. A Dutch bill is pending to allow general meetings to be held entirely virtually.

Digital Meeting

On 15 January 2024, the digital general meeting bill was submitted to the Dutch parliament. This bill provides the legal basis for a fully digital general meeting. The current regime only allows for a hybrid meeting, where the shareholder has the choice of either attending the physical meeting or exercising his/her meeting and voting rights remotely. Although the aim was for the new legislation to come into effect on 1 January 2025, this legislation is still pending. The date of entry into force has not yet been determined, but the bill is currently expected to be adopted on 1 July 2025 or 1 January 2026. It is therefore not yet possible to hold a fully digital shareholders’ meeting.

Procedure at a General Meeting

Resolutions of the general meeting are adopted by absolute majority (volstrekte meerderheid) – ie, more than 50% of the votes validly cast. Certain resolutions are adopted by a qualified majority, as required by Dutch law or the articles of association.

In the case of an NV, each shareholder has at least one vote. In the case of a BV, deviations are allowed, and shares without voting rights may also be created.

In addition to shareholders with or without voting rights, other parties may also have meeting rights, which means they may attend and speak at the meeting.

Managing directors and supervisory directors have an advisory vote.

The main proceedings through which shareholders can initiate legal proceedings against the company or directors are the inquiry proceedings (as described in the following). Shareholders can also have a board resolution nullified by the court or have it determined as void.

Inquiry Proceedings (Enquêteprocedure)

The Enterprise Chamber of the Amsterdam Court of Appeal (Enterprise Chamber) (Ondernemingskamer) has exclusive jurisdiction for these proceedings, which may be initiated, among others, by shareholders owning a certain percentage of the shares.

At the written request of the shareholder, the Enterprise Chamber may appoint one or more persons to conduct an investigation into the policy and affairs of the company. The Enterprise Chamber will only grant the request if there appear to be valid reasons to doubt a correct policy or course of action.

At any stage of the proceedings, at the request of the original applicants (the shareholder), the Enterprise Chamber may also order interim measures (onmiddelijke voorziening) for the duration of the proceedings. For example, it may temporarily appoint a managing director.

The report of the outcome of the investigation shall be filed at the registry of the Amsterdam Court of Appeal. Based on the report, the Enterprise Chamber may conclude that there has been mismanagement and order one or more of the following limitative provisions, which it considers appropriate based on the outcome of the investigation:

• suspension or annulment of a resolution of the directors, supervisory directors, general meeting or any other body of the legal entity;
• suspension or dismissal of one or more managing or supervisory directors;
• temporary appointment of one or more managing or supervisory directors;
• temporary departure from the provisions of the articles of association specified by the Enterprise Chamber;
• temporary transfer of shares for management purposes; and
• dissolution of the legal entity.

Dutch law does not recognise a derivative action.

Disclosure Obligations for Shareholders in Listed Companies

Anyone who acquires or disposes of a capital interest or the voting rights of a Dutch NV whose shares are listed on a regulated market within the European Economic Area (EEA), or a non-Dutch listed company whose shares are listed on a Dutch regulated market, must notify the AFM without delay if the percentage of capital interest or voting rights reaches, exceeds or goes under any of the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% or 95%.

These thresholds may apply if shareholders obtain or lose ownership of shares (or related financial instruments) and/or votes, or due to an increase or decrease in the issued share capital of the listed company.

The same applies to anyone holding a gross short position in the company that reaches, exceeds or falls below any of the aforementioned thresholds.

The AFM publishes the notifications in its online registers.

In addition, the EU Short Selling Regulation contains disclosure obligations in respect of net short positions in EEA issuers.

Disclosure Obligations Applicable to Directors of Listed Companies

Managing directors and supervisory directors of Dutch NVs whose shares are listed on a regulated market in the Netherlands also need to notify the AFM of their shares and voting rights, and of any changes in these shares and voting rights concerning (rights to acquire) shares in the issuing institution of which they are director and in affiliated issuing institutions.

Additional reporting obligations may apply under the EU Market Abuse Regulation.

Annual Reporting Obligations for BVs and NVs

The financial report consists of three parts:

• the management board report;
• the annual accounts; and
• other information – eg, the report of the external auditor.

The management boards of both BVs and NVs must publish their annual accounts and file them with the Dutch Trade Register no later than eight days after adoption by the general meeting. If the annual accounts have not been adopted within two months after the end of the period set for their preparation, the management must publish the annual accounts with a statement that they were not adopted.

In any event, annual accounts shall be filed within ultimately 12 months after the end of the financial year, regardless of whether or not they are adopted by the general meeting, together with other parts of the financial report. See 6.3 Companies Registry Filings regarding filing requirements.

Dutch Listed Companies

Issuing institutions are subject to stricter financial reporting obligations under the Financial Supervision Act and applicable EU regulations. These companies must, among other things:

• prepare and publish their annual financial report (including audited financial statements and management commentary) within four months after the end of the financial year; and
• publish half-yearly financial reports (including condensed financial statements and an interim management report) within three months after the end of the first six months of the financial year.

Both reports must be filed electronically with the AFM and made available to the public.

General

Corporate governance arrangements that the managers of a Dutch listed company must implement to ensure compliance with the CG Code need to be disclosed in the management report. The management board describes the main risks and uncertainties to which the BV or the NV is exposed. The management report of large companies must also contain an analysis of both financial and non-financial performance indicators, including environmental and employment-related issues.

Dutch Listed Companies

Dutch listed companies must include additional information in the management report, including the following:

• the key features of the internal risk management and control systems in relation to the financial reporting process of the company and its consolidation group;
• the composition and performance of the management board, the supervisory board and their committees; and
• the diversity policy regarding the composition of the management board and the supervisory board.

Additional Information in Line With the CG Code

The CG Code provides that the company must explicitly state in a separate chapter of the management report (or a publication on the company’s website) the extent to which it complies with the principles and best practice provisions of the CG Code and, where it does not comply, why and to what extent it deviates from these principles or best practice provisions.

According to the CG Code, the management board report must include a report on sustainable long-term value creation by providing information on the effects of the actions of the company and its affiliated business on people and the environment, a report on risk management, and explanatory notes on the culture within the company, the contribution of the culture and the values to the sustainable long-term value creation and the effectiveness and compliance with the code of conduct (see also 1.2 Sources of Corporate Governance Requirements for more information on the CG Code).

Supervisory Board Report

The supervisory board report is mandatory only for Dutch listed companies and, pursuant to the CG Code, it must include:

• the role of the supervisory board, such as its involvement in the establishment of the strategy and the way in which it monitors its implementation;
• the independence of the supervisory board and of its directors and chair; and
• the way the evaluation of the supervisory board, its committees and the individual directors has been carried out.

Annual Accounts

Non-listed companies

The management boards of both non-listed BVs and NVs must publish their annual accounts and file them with the Dutch Trade Register, after which they will become publicly available.

The management board must prepare the annual accounts and make them available for inspection by shareholders at the company’s offices within five months after the end of the financial year. The general meeting can extend this deadline by five months in exceptional circumstances.

The general meeting has two months to adopt the annual accounts after the period for preparing the annual accounts has expired. Within two months after that period has expired, the general meeting must adopt the annual accounts during a general meeting.

See 6.1 Financial Reporting regarding the relevant filing deadlines and 5.3 Shareholder Meetings regarding the timing of holding general meetings.

Dutch listed companies and large companies have to disclose complete financial statements. There are exemptions for medium, small and micro legal entities.

Dutch listed companies

Dutch listed companies whose securities are admitted to trading on a regulated market in the EU must make the annual accounts publicly available and simultaneously file them with the AFM within four months after the end of the financial year.

The general meeting has two months to adopt the annual accounts, which also need to be filed with the Dutch Trade Register within eight days after they are adopted.

Please note that if the annual accounts have not been adopted within two months from the end of the period prescribed for preparation in accordance with the statutory requirements, the management board must immediately make the prepared annual accounts public.

Semi-annual accounts are only mandatory for Dutch listed companies

Issuing institutions whose securities are admitted to trading on a regulated market in the EU must publish and file semi-annual financial reports with the AFM, simultaneously, within three months after the end of the first six months of the financial year. This is in accordance with the Financial Supervision Act.

The AFM can impose an order subject to penalty for non-compliance and an administrative fine when these accounts are not filed in time.

Sanctions

Not filing the annual accounts on time is an economic crime, as stated in the Dutch Economic Offences Act. The penalty for this can range between paying a fine and prosecution. Not filing the annual accounts on time can also be proof of mismanagement, which could lead to the management board being personally liable for debt when a company is declared bankrupt on the basis of manifestly improper management (kennelijk onbehoorlijk bestuur). See also 4.8 Consequences and Enforcement of Breach of Directors’ Duties for more information on external liability in bankruptcy.

Dutch corporate law requires an audit of the financial statements for all large and medium-sized companies.

The external auditor must examine whether the annual accounts provide the requisite legal disclosures and provide a true and fair view, whether other parts of the financial report comply with the statutory requirements and whether the management report conflicts with the annual accounts or contains any other material mis-statements.

The external auditor reports on their audit to the management board and the supervisory board, and records the result of the audit in an independent auditor’s report.

Appointment of the External Auditor

Book 2 of the Dutch Civil Code provides the following regarding the appointment of an external auditor:

• the general meeting appoints an external auditor;
• if the general meeting fails to do so, the supervisory board is authorised to make the appointment; and
• in the absence of a supervisory board, the management board is authorised to appoint the external auditor.

If an NV/BV is a public interest entity, the appointment must be notified to the AFM.

Further rules on the selection and appointment of auditors of public interest entities are included in Regulation (EU) 537/2014 on specific requirements regarding statutory audit of public interest entities (the “Audit Regulation”) and in the CG Code. The audit committee plays an important role in preparing the appointment.

Public interest entities must regularly change audit firms.

An audit firm may not perform that function for more than ten consecutive years. The same firm may not carry out the statutory audit again until four years have passed. Within the relevant audit firm, the auditor responsible for the audit may not be responsible for the audit report for more than five years.

The management board is responsible for identifying and managing the risks associated with the company’s strategy and activities.

The management board informs the supervisory board about the company’s strategic policy, its general and financial risks and its internal control system at least once a year, to enable the supervisory board to perform its supervisory duties.

Additional Requirements for Dutch Listed Companies Based on the CG Code

The CG Code contains several best practices to further strengthen risk management and disclosure on a “comply-and-explain” basis:

• a Dutch listed company must have adequate internal risk management and control systems;
• at least once a year, the management board must audit the operation of the internal risk management and control systems, and carry out a systematic review of their design and effectiveness;
• this monitoring covers all material control measures related to strategic, operational, compliance and reporting risks; and
• in performing their duties, the auditors must take into account the effectiveness of internal risk and control systems and the integrity and quality of financial reports.

Internal Audit Function

The internal audit function is responsible for assessing the design and operation of the internal risk management and control systems. The management board is responsible for the internal audit function. The supervisory board supervises the internal audit function and maintains regular contact with the person performing this function. The internal audit function reports hierarchically to a managing director, preferably the CEO.

In the management report, the management outlines the main risks and certainties to which the NV or BV is exposed. For a proper understanding of the results or position of the company and its group companies, the management report also includes, if necessary, an analysis of both financial and non-financial performance indicators, including environmental and employment-related issues.