NETHERLANDS Law and Practice Contributed by: Bastiaan Cornelisse, Bastiaan Kemp, Michel van Agt and Philippe Hezer, Loyens & Loeff
6. Shareholders’ Rights as Regards Directors and Auditors 6.1 Rights to Appoint and Remove Directors For a BV, directors are appointed either by the general meeting or, if the articles of association so provide, by a meeting of holders of shares of a particular class or designation. For an NV, such appointment is made by the general meeting. The same body within the company authorised to appoint directors is authorised to dismiss and sus- pend directors. 6.2 Challenging a Decision Taken by Directors Shareholders can challenge resolutions, including those adopted by the board. See 2.11 Challenging a Resolution and 10.1 Remedies Against the Com- pany . Shareholders have no legal remedy to force directors to take certain action, although proceedings and the exercise of shareholder rights can be used to exert influence on directors’ conduct. The articles of asso- ciation may provide that the general meeting or certain classes of shareholders can give instructions to the board. 6.3 Rights to Appoint and Remove Auditors Appointment As a starting point, the company’s auditor is appoint- ed by the general meeting. If the general meeting fails to make such appointment, the auditor is appointed by the supervisory board or, in the absence thereof, the management board. If the company is a so-called public interest entity, the appointment must be noti- fied to the AFM. Removal The assignment may be withdrawn by the general meeting but only for sound reasons, which shall not include a difference of opinion about reporting meth- ods or audit activities. The general meeting shall hear the auditor at his or her request regarding the with- drawal of an assignment or regarding the auditor’s stated intention to withdraw. The management board and the auditor shall notify the AFM immediately of the withdrawal of the auditor by the legal entity or of the
interim termination by the auditor, and shall provide sufficient motivation.
7. Corporate Governance Arrangements 7.1 Duty to Report
Shareholders will typically have access to documenta- tion setting out the company’s governance arrange- ments. Among other things, extracts and filings of the company, including its articles of association, are publicly accessible through the trade register and, in practice, are usually also provided to shareholders upon request. Individual shareholders have a statu- tory right to inspect the shareholders’ register and can access a list of shareholders’ resolutions. Listed companies are subject to the Dutch Corporate Governance Code, which provides for certain report- ing obligations, including on compliance with the Code. Each year, the broad outline of the company’s corporate governance, based partly on the principles set forth in this Code, shall be set forth in a separate chapter in the management report or placed on the company’s website, with the company explicitly stat- ing the extent to which it follows the principles and best practice provisions set out in this Code and, if not, why and to what extent it deviates from them on a comply-or-explain basis. In exercising their rights as a shareholder, a share- holder may in principle act solely in their own inter- est, unless this would be contrary to the principles of reasonableness and fairness vis-à-vis the company and those involved in its governance. This effectively means that shareholders may not exercise their rights in such a way that would disproportionately harm such other interests and, in certain cases, may even be under a duty of care to protect such interests. Gen- erally speaking, the larger the control and influence of the controlling shareholder, the more weight it should give to such other interests. In certain circumstances, 8. Controlling Company 8.1 Duties of a Controlling Company
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