Corporate Governance in the Netherlands
Board Size and Composition
The Netherlands has specific regulations regarding corporate governance, particularly when it comes to the structure of company boards.
- Minimum Number of Directors: The minimum number of directors on the management board is one (in a one-tier board).
- Maximum Number of Directors: There is no maximum number specified for either the management or supervisory boards.
- Composition Requirements: The gender balance rules require a balanced composition of the board with at least 30% women and 30% men.
Appointment of Directors
The appointment process for directors in Dutch companies can vary depending on the company’s articles of association.
- Appointment Process: The articles of association may specify how the board members are to be appointed. In some cases, this is done by the general meeting or the supervisory board.
- Diversity Policy: The supervisory board must draw up a diversity policy addressing concrete targets related to diversity, including nationality, age, gender, education, and work background.
Board Leadership
There are specific regulations regarding the leadership of company boards in the Netherlands.
- One-Tier Boards: In one-tier boards, the functions of chair and CEO cannot be combined in one person.
- Two-Tier Boards: The managing director cannot be a member of the supervisory board at the same time in two-tier boards.
Board Committees
Mandatory committees are required to ensure effective governance in Dutch companies.
- Audit Committee: An audit committee is mandatory if the supervisory board has more than four members.
- Remuneration Committee: A remuneration committee is also mandatory.
- Selection and Appointment Committee: A selection and appointment committee should prepare decision-making for the supervisory board.
Board Meetings
There are no statutory requirements for a minimum number of meetings per year for either the management board or the supervisory board.
Disclosure Requirements
Dutch companies must disclose certain information to maintain transparency and accountability.
- Relationships between Corporate Bodies: Information about relationships between corporate bodies and within these bodies should be publicly available through registration in the Trade Register.
- Supervisory Board Regulations: Supervisory board regulations and management board regulations should be posted on the company’s website.
Remuneration of Directors
The remuneration policy for the management board is adopted by the general meeting, while individual remunerations can be adopted by the supervisory board.
- Share-Based Compensation: Proposals for share-based compensation require approval from the general meeting.