NETHERLANDS Law and Practice Contributed by: Manon Cremers, Heleen Kersten, Frédérique van der Wegen and Sandra Rietveld, Stibbe
4.9 Other Bases for Claims/Enforcement Against Directors/Officers Other Bases of Liability of Directors Managing directors of a BV/NV may also be jointly and severally liable in the following cases: • for the debts of the company under social security and tax laws; • for providing misleading (interim) accounts or annual accounts or annual reports; or • for the company acquiring shares in its own capital in certain situations. BV In the case of a BV, the managing directors must give approval for each distribution before it can be made. If the company is unable to continue paying its debts after a distribution has been made, managing directors could be liable for any immediately payable company debts. Lia - bility exists only if the directors knew or should reasonably have foreseen that the distribution would lead to the company being unable to con - tinue paying its debts. Limitation of Liability In general, a managing director’s liability may be limited in two ways. • The general meeting discharges managing directors, waiving possible claims for dam - ages. This concerns internal liability and is a common agenda item at the annual general meeting. • Exoneration from joint and several liability of an individual managing director in the event of (manifestly) improper management in the case of joint and several liability of managing directors, if a director can demonstrate that they cannot be held liable for the (manifestly) improper management and did not fail to take
measures to mitigate the consequences of the (manifestly) improper management. 4.10 Approvals and Restrictions Concerning Payments to Directors/ Officers BVs The general meeting determines the individual remuneration of managing directors, unless the articles of association provide otherwise. NVs The general meeting determines the individual remuneration of managing directors, unless the articles of association provide otherwise. The articles of association of an NV may provide that another corporate body will determine the individual remuneration of managing directors, often the supervisory board. The remuneration of supervisory directors is always determined by the general meeting. In addition, NVs must have a remuneration policy in place, which must be adopted by the general meeting. The works council must be given the opportunity to take a position thereon (or give its advice in the case of a Dutch listed company); this position (or advice) shall be offered to the general meeting at the same time as the pro - posal to adopt the remuneration policy. Companies Within the Scope of the CG Code For companies within scope of the CG Code, the following applies on “comply-or-explain” basis: • the remuneration policy for the management board, prepared by the supervisory board’s remuneration committee, should also focus on sustainable long-term value creation for the company and its affiliated business; • severance pay is limited to one year’s sal - ary and will not be awarded if the managing
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