NETHERLANDS Law and Practice Contributed by: Manon Cremers, Heleen Kersten and Frédérique van der Wegen, Stibbe
3.4 Appointment and Removal of Directors/ Officers Appointment of Directors The first appointment of supervisory directors (if applicable) and managing directors is included in the notarial deed of incorporation. After incorporation, the general meeting appoints managing and supervisory directors unless the large company regime applies. The articles may require appointment from a binding nomination, which the general meeting may remove by qualified majority. For supervisory directors, the articles may allow third parties to appoint up to one- third of the board. For a BV, the articles may provide that managing and supervisory directors are appointed by a meeting of holders of shares of a certain class or type, provided every shareholder with voting rights is involved in appointing at least one managing director and one supervisory director. Under the large company regime, the supervisory board appoints managing directors (or non-executive directors appoint executive directors in a one-tier board), unless the mitigated regime applies. Super - visory directors are appointed through a special pro - cedure involving a supervisory board nomination and the works council’s recommendation right. Their maxi - mum term is four years, extendable in the articles until the first general meeting after that term. Removal of Directors Managing directors of a BV/NV may be suspended and dismissed at any time by the person or body authorised to appoint them, subject to statutory and articles-based exceptions. Supervisory directors may be suspended and removed by the person or body authorised to appoint them. For a company subject to the large company regime, a supervisory director may also be suspended by the supervisory board and removed by the Enterprise Chamber for neglect of duties, other serious reasons or a drastic change in circumstances. 3.5 Independence of Directors The DCC contains no general provisions on the inde - pendence of the supervisory board and individual
supervisory directors of a BV/NV. However, it is gen - erally accepted that the supervisory board should be sufficiently independent in relation to the company and its stakeholders. Supervisory Board of Large Companies (Structuurvennootschap) The supervisory board of a structuurvennootschap must be properly composed. Employees of the com - pany or a dependent company, and union representa - tives, cannot be supervisory directors. Independence Requirements of a Company Within the Scope of the CG Code The supervisory board must be able to operate inde - pendently and critically in relation to one another, the management board and any particular interests involved. Under the CG Code, no more than one supervisory board member may meet certain non- independence criteria, the total number of non-inde - pendent supervisory directors must account for less than half of the board, and no more than one supervi - sory board member may be affiliated with or represent each shareholder or group of affiliated shareholders holding more than 10% of the share capital. The chair may not be a former managing director and must be independent. Potential Conflicts of Interest A managing or supervisory director may not partici - pate in deliberations and decision-making if they have a direct or indirect personal interest that conflicts with the company’s interests. If they nevertheless par - ticipate, the resolution becomes voidable. A conflict affects internal decision-making only, so conflicted directors remain authorised to represent the company, although liability risk may arise. If no management board resolution can be adopted because of a conflict, the supervisory board may decide; if there is no supervisory board, the general meeting may decide unless the articles provide oth - erwise. If all supervisory directors have a conflict, the general meeting decides unless the articles provide otherwise. The CG Code stipulates that any form of conflict of interest between the company and the man - aging directors or supervisory directors must be pre - vented, and that adequate measures should be taken
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