Expert Group submits final advice on modernisation of Dutch NV-law

No separate act on listed companies

One piece of advice relates to the current dissemination of the provisions applicable to listed companies, in Book two of the Dutch Civil Code (DCC) as well as in the Financial Supervision Act (Wet op het financieel toezicht, Wft). The Expert Group advises against a separate act for listed companies or transferring Wft provisions to Book two DCC or vice versa. The Expert Group believes there is limited added value in concentrating provisions on listed companies in a separate section in Book two DCC. Instead, they recommend amending the DCC and Wft to eliminate overlap and ambiguity, with necessary references in Book two DCC to additional provisions in the Wft.

Listed BVs

The Expert Group recommends that the rules for disclosure of voting rights, capital, control and capital interest in listed companies as well as the mandatory bid rules in the Financial Supervision Act, should also apply to listed private limited liability companies (beursgenoteerde BVs).

Update current NV-law

Another piece of advice of the Expert Group concerns several topics of ‘general’ NV-law, such as the introduction of non-voting shares and non-profit sharing shares, depositary receipts of shares, distributions of profits/reserves, shortening the convocation term for general meetings, the (geographical) location where general meetings can be held, share transfer restrictions, conflict of interests and chair of the one tier board.

Broadening scope cross-border mergers, demergers and conversions

The Expert Group advises broadening the geographical scope of the Dutch rules on cross-border mergers, demergers and conversions, like in several other EU Member States, to enable cross-border mergers, demergers and conversions to or from countries outside the European Economic Area (EEA). These rules should, to the extent possible, offer the same guarantees for shareholders, creditors and employees as those within the EEA.

Loyalty shares

The Expert Group previously advised in 2022 that statutory rules to stimulate loyalty shares are unnecessary and undesirable. Companies can already introduce loyalty schemes under current law and no legal amendments are required.

Directors’ remuneration at major corporate events

In spring 2024, the Expert Group addressed directors’ remuneration at major corporate events like mergers and acquisitions. They acknowledged that such remuneration can provide financial incentives that could lead to improper judgement by directors of listed companies. The Expert Group also pointed out that the amount and other modalities of remuneration at major corporate events can lead to (social) discussion. The Expert Group concluded that the governance framework offers sufficient guarantees to adequately address the possible risk of improper judgement, and additional statutory ‘skimming’ provisions (afroomregeling) in addition to the current checks and balances are not needed.

For more information read the Expert Group and all recommendations (in Dutch only). Christiaan de Brauw and Günther Rensen, both from our Amsterdam office, were two of the fourteen members of this Expert Group.