NETHERLANDS Law and Practice Contributed by: Bastiaan Cornelisse, Bastiaan Kemp, Michel van Agt and Philippe Hezer, Loyens & Loeff
also be the subject of inquiry proceedings and, if the director is also a shareholder, can constitute grounds for compulsory share transfer proceedings (see 10.1 Remedies Against the Company ). 10.3 Derivative Actions Dutch law does not provide for derivative actions, meaning that shareholders do not have the right to bring an action on behalf of the company. Individual shareholders also cannot bring an action in their own name for derivative damages if a third party harms the company, unless the cause for the liability of such party also constitutes a tortious act directly against that shareholder. 11. Shareholder Activism 11.1 Legal and Regulatory Provisions Shareholder rights are primarily governed by the fol- lowing legal and regulatory sources: • the Civil Code, Book 2 of which sets out the basis of Dutch company law and Dutch corporate gov- ernance; • the Dutch Corporate Governance Code, which sets out principles and best practices for the govern- ance of Dutch listed companies and is applied on a “comply-or-explain” basis; • the Financial Markets Supervision Act, which includes certain disclosure requirements for listed companies whose shares are admitted to a regu- lated market; • the EU Market Abuse Regulation, which governs the disclosure and use of inside information for listed companies whose shares are admitted to a regulated market (regulatory frameworks with a similar scope exist in the US and other jurisdic- tions); and • the company’s constitutional documents further set out the company’s governance and thus play an important role in governing shareholder rights – the company’s articles of association, policies and regulations, and shareholders’ agreements (if any) are of principal importance. Dutch corporate governance has traditionally been board-oriented, granting significant autonomy and
discretion to the board where it pertains to the strat- egy and policy of the company, including the use of defence measures. In doing so, the board should act solely in the interest of the company, taking into account all stakeholder interests, seeking to cre- ate long-term sustainable value. The board is held to account by shareholders, however, who have the right to express their views through engagement and exercise of their rights. In doing so, shareholders must abide by the principles of reasonableness and fair- ness. Within this framework, shareholders may adopt sev- eral activist strategies and tactics, including those set out in 11.3 Shareholder Activist Strategies . To do so, they typically leverage their statutory rights (such as the right to attend shareholders’ meetings, submit shareholder proposals or request extraordinary gen- eral meetings) and soft instruments, such as engage- The goals of activist shareholders are diverse and may include, for instance, improving the capital structure, improving the corporate governance, selling non-core parts, dividend payments and share buyback pro- grammes. There is also increased activism around ESG-related topics, seeking to effect climate action or pursuing other such goals. 11.3 Shareholder Activist Strategies Depending on their goals, activists tend to combine one or more tactics to pursue their objectives, includ- ing: • private engagement – for instance, by means of a “dear board” letter; • public engagement, expressing criticism of certain aspects of the company’s strategy, governance or performance, including orchestrating a “vote no” campaign; • stakebuilding, to build up pressure and show com- mitment to the board; • seeking strategic partnerships with other share- holders and stakeholders, including (potential) bidders; ment outside of the general meeting. 11.2 Aims of Shareholder Activism
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