Corporate Governance

What we do

Corporate Governance is the body of behavioral norms and rules for enterprises. The purpose of Corporate Governance is to define what constitutes good, efficient, and responsible business operations and organizational structure. The Corporate Governance Code 2016 is the document drafted by the Corporate Governance Committee in which these rules of conduct are bundled. In principle, corporate governance standards are not binding. However, for listed companies, certain standards and rules are mandatory in nature.

It is advisable for every organization to seek advice on Corporate Governance. This often involves standards that are generally accepted in society. Compliance with the Corporate Governance Code impacts the organization's image. Some topics covered by Corporate Governance include:

• The authority of organs
• The remuneration structure of board members
• Rules regarding conflicts of interest of board members
• Supervision of the management
• The influence and decision-making structure of shareholders

Overarching themes such as transparency, diversity, and environmental awareness can also be considered.

We have the knowledge and expertise to assume diverse roles: from advisory services to dispute resolution. We have an experienced team of lawyers and legal experts in the field of corporate governance. Contact us to discuss the possibilities.

The legal framework of corporate governance

Corporate governance is not separate from the law. Its foundations lie in Book 2 of the Dutch Civil Code, which regulates the organization and management of legal entities. The management of a public limited company is regulated in Article 2:129 of the Civil Code, and that of a private limited company in Article 2:239 of the Civil Code; both provisions stipulate that the management acts in the interest of the company and its affiliated enterprise. Internal supervision by a supervisory board is based on Article 2:140 of the Civil Code (public limited company) and Article 2:250 of the Civil Code (private limited company). Furthermore, for large companies, the structural arrangement may apply, granting additional powers to the supervisory board pursuant to Articles 2:158 and 2:164 of the Civil Code (public limited company) and Articles 2:268 and 2:274 of the Civil Code (private limited company).

The flip side of these duties is liability. In the event of improper performance of duties, a director may be jointly and severally liable to the company pursuant to Article 2:9 of the Dutch Civil Code. Good governance—clear powers, sound decision-making, and proper handling of conflicting interests pursuant to Article 2:129 paragraph 6 and Article 2:239 paragraph 6 of the Dutch Civil Code—is therefore not only a matter of image, but also of personal risk management for directors and supervisory board members. Our lawyers and in-house counsel translate these statutory frameworks into workable articles of association, regulations, and decision-making processes.

The revised Corporate Governance Code 2022

The Corporate Governance Code has been updated since 2016. On December 20, 2022, the Corporate Governance Monitoring Committee published the revised Corporate Governance Code 2022 , which applies as of the 2023 financial year. Sustainable long-term value creation is central to the updated Code , and the so-called ESG factors (Environmental, Social, and Governance) are explicitly anchored in the strategy and accountability. More attention has also been paid to corporate culture, diversity and inclusion, digitalization, and the role of shareholders.

The Code continues to operate according to the “comply or explain” principle: a listed company applies the principles and best practice provisions, or provides a reasoned explanation in the management report for deviations. The Code is self-regulation and applies directly to listed companies with their statutory seat in the Netherlands. We closely monitor developments regarding the Code and the annual monitoring reports to ensure your governance and reporting remain up to date.

Corporate governance for SMEs and family businesses

Although the Corporate Governance Code formally applies only to listed companies, good governance is just as relevant for unlisted companies, family businesses, and small enterprises. From international conglomerates to the baker on the corner: as soon as multiple shareholders, a succession issue, or an external investor comes into the picture, there arises a need for clear agreements regarding control, supervision, and accountability.

For SMEs and family businesses, it often involves tailor-made solutions: establishing a (voluntary) supervisory board or advisory board, separating ownership and management, recording governance agreements in articles of association, a shareholders' agreement, or management regulations, and regulating decision-making in cases of conflicting interests. Our mixed teams of lawyers and in-house counsel tailor the governance to your company, without imposing the unwieldy burden of a stock exchange regime.

Governance in mergers, acquisitions, and investments

Corporate governance is a common thread running through every transaction within Corporate, Mergers and Acquisitions. During a merger or acquisition, the governance of the target company is critically examined: decision-making deficiencies, missing approvals, and conflicts of interest come to light during the due diligence investigation . After the transaction, the control structure must be restructured, often in combination with agreements regarding remuneration policy and the structure for the board and management.

In joint ventures and partnerships, as well as in investments by private equity or venture capital, governance is also key: who appoints the board, which decisions require approval from shareholders or supervisory board members, and how are deadlocks prevented? Good governance agreements prevent disputes and protect the value of your company.

Our approach and services

We guide companies through the entire governance process. This begins with advice — establishing or revising the governance structure, articles of association, and regulations — and continues to resolving disputes regarding control, management, and supervision. Specifically, we provide support with, among other things:

• drafting and revising articles of association, regulations for the Board of Directors and Supervisory Boards;
• establishing a supervisory board or advisory board;
• governance agreements in shareholders' agreements;
• issues regarding conflicts of interest and directors' liability;
• compliance with the Corporate Governance Code and reporting;
• disputes concerning decision-making, control, and supervision.

Our mixed teams of lawyers and (in-house) legal counsel switch between strategic advice and legal execution, ensuring that governance is not a paper reality for you, but actually works.

Frequently asked questions about corporate governance

Does the Corporate Governance Code also apply to my private limited company?

The Corporate Governance Code 2022 formally applies only to listed companies with their registered office in the Netherlands. For a private limited company or family business, the Code is not mandatory, but it often serves as a source of inspiration for good, tailored governance.

What is the difference between corporate governance and the legal framework?

The statutory framework (Book 2 of the Dutch Civil Code) mandatorily determines the relationship between management, supervision, and shareholders. The Corporate Governance Code adds self-regulation to this through a “comply or explain” principle. Good governance combines both: compliance with the law and with widely accepted standards of conduct.

Can a director be held personally liable for poor governance?

Yes. In the event of improper performance of duties, a director may be jointly and severally liable to the company pursuant to Article 2:9 of the Dutch Civil Code. Clear powers and sound decision-making limit that risk.

Contact us about corporate governance

Would you like to have your governance structure reviewed, articles of association or regulations revised, or resolve a dispute regarding control and supervision? Our experienced team of lawyers and in-house counsel assists enterprises ranging from international corporations to the baker around the corner. Contact us to discuss the possibilities without obligation.