NETHERLANDS Law and Practice Contributed by: Manon Cremers, Heleen Kersten and Frédérique van der Wegen, Stibbe
Internal Liability The company may hold managing directors liable for improper performance of duties if it is proven that the managing director acted in a seriously culpable man - ner ( ernstig verwijtbaar ). This is generally the case if a managing director breaches statutory provisions or the articles and this gives rise to improper manage - ment, unless the director proves otherwise. If one managing director is in breach, all managing directors are in principle jointly and severally liable. An individ - ual director can be exonerated if, in view of the duties assigned to others, they do not bear serious blame and were not negligent in taking measures to avert the consequences. Supervisory directors may also be liable for improper supervision. Tort liability may also apply. In insolvency, the trustee may sue directors on behalf of the company. External Liability Personal liability of a managing director towards third parties may arise if the director commits a wrong - ful act in that capacity or in the case of manifestly improper management that leads to bankruptcy. A managing director is personally liable only if they bear serious personal blame ( ernstig persoonlijk verwijt ), for example where the director knew or should have known that the company could not fulfil obligations and would offer no recourse, or caused or allowed the company to fail to fulfil an existing obligation without recourse. External liability in bankruptcy In bankruptcy, a trustee may hold directors liable for manifestly improper management ( kennelijk onbe- hoorlijk bestuur ) that was an important cause of the bankruptcy. Improper books and records or failure to publish annual accounts can establish manifestly improper management and a rebuttable presumption of causation. If the claim succeeds, each managing director is jointly and severally liable for the bankrupt - cy deficit, subject to individual exoneration. 3.9 Other Claims/Enforcement Against Directors/Officers Managing directors of a BV/NV may also be jointly and severally liable for the debts of the company under social security and tax laws, for providing mislead - ing interim or annual accounts or annual reports, or
for the company acquiring shares in its own capital in certain situations. In the case of a BV, managing directors must approve each distribution before it can be made. If the company is unable to continue paying its debts after a distribution, managing directors could be liable for any immediately payable company debts if they knew or should reasonably have foreseen that consequence. Limitation of Liability A managing director’s liability may be limited by dis - charge granted by the general meeting in respect of internal liability, or by individual exoneration from joint and several liability for (manifestly) improper manage - ment where the director cannot be blamed and did not fail to take measures to mitigate the consequences. 3.10 Payments to Directors/Officers BVs The general meeting determines the individual remu - neration of managing directors, unless the articles provide otherwise. NVs The general meeting determines individual remunera - tion of managing directors, unless the articles provide otherwise. The articles of an NV may assign this to another corporate body, often the supervisory board. Supervisory directors’ remuneration is always deter - mined by the general meeting. NVs must also have a remuneration policy adopted by the general meeting, after the works council has had the opportunity to take a position or, for Dutch listed companies, give advice. Companies Within the Scope of the CG Code On a comply-or-explain basis, the remuneration policy for the management board should focus on sustain - able long-term value creation, severance pay is limited to one year’s salary and will not be awarded in cer - tain circumstances, and supervisory directors must not receive shares or rights to shares as remuneration. Disclosure in Relation to Remuneration Non-listed Dutch companies must disclose in the notes to the annual accounts, the remuneration, including pension charges and other benefits, for cur - rent and former managing directors and, separately, for supervisory directors, except where exemptions
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