NETHERLANDS Law and Practice Contributed by: Jan-Willem van Rooij, Anne Brugmans and Jordy Kusters, Loyens & Loeff
9. Duties of Directors 9.1 Principal Directors’ Duties
a prospectus or equivalent disclosure document will generally be required when structuring a takeover as a share-for-share exchange if the offeror itself is not already listed on an EEA regulated market. 8.3 Producing Financial Statements In an offer memorandum, the offeror must include cer- tain financial information of the target company, to the extent available. This includes: • (i) a comparative overview of the balance sheet, profit and loss accounts and cash flow statement from the adopted annual accounts over the past three years, as well as the most recent adopted annual accounts; • (ii) an audit report in connection with the informa- tion under (i); • (iii) any semi-annual financial information which has been made publicly available to comply with regulations implementing the Transparency Direc- tive or similar requirements under the laws of a third country; and • (iv) a review report of an accountant in connec- tion with the information under (iii), unless the offer memorandum provided describes special circum- stances which make it impossible for the offeror to obtain such review report. In case of a stock-for-stock offer, the information under (i)–(iv) above will also have to be included in relation to the company whose shares are offered as consideration in the offer (but only for the past two years). Should the transaction trigger the need for a prospectus, additional financial information regarding the offeror will need to be included. In the Netherlands, financial statements must be pre- pared in accordance with the applicable standards (ie, for listed companies, IFRS EU for consolidated accounts, and Dutch GAAP for non-listed entities). 8.4 Disclosure of Transaction Documents There is no general requirement for parties to make copies of transaction documents publicly available or to file the full transaction documents. However, certain elements must be described in the offer memorandum which is made public (as previously set out).
Under Dutch law, directors’ duties are not owed exclu- sively to shareholders but extend to the interests of the company and its business as a whole, including those of employees and other stakeholders. This so- called stakeholder model has been shaped primarily through case law. The Dutch Supreme Court clari- fied that shareholder interests do not prevail over the broader interests of the company, thereby confirming that the board of directors retains discretion to reject a takeover offer if it believes this better serves the continuity of the enterprise. Furthermore, the Supreme Court held that directors must act in the best interests of the company and its affiliated enterprises, and that the content of these interests depends on the specific circumstances, considering, among other things, the company’s sec- tor, geographical presence, development stage, and financial health. While the continued success of the enterprise serves as the principal guideline, directors are expected to ensure that the interests of stake- holders are not unnecessarily or disproportionately harmed. These principles have subsequently been applied by the Enterprise Chamber in takeover contexts. The Enterprise Chamber emphasised that during a pub- lic offer process the board must carefully weigh the interests of all stakeholders, rather than simply follow- ing the wishes of shareholders. This confirms that in a business combination, the directors’ principal duty is to act in the best interests of the company, mean- ing the sustainable success of its enterprise, while at the same time exercising due care for shareholders, employees, and other stakeholders involved. 9.2 Special or Ad Hoc Committees To ensure an independent assessment and safeguard proper decision making, in the Dutch practice, boards of directors may establish special or ad hoc commit- tees in the context of takeover offers or other busi- ness combinations, particularly where conflicts of interest are present. There is, however, no statutory requirement to do so, nor does the Dutch Corporate
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