Trend Report: Developments In The Regulation Of The Position Of Shareholders Of Dutch Listed Companies

Law FirmLoyens & Loeff
Subject MatterCorporate/Commercial Law, Corporate and Company Law, Corporate Governance, Shareholders
AuthorMr Bastiaan Kemp, Michel Van Agt, Menno Baks, Philippe Hezer and Eline Viersen
Published date22 February 2023

In December 2022, the Dutch Corporate Governance Code (the "DCGC") was updated for the first time since 2016. Amendments on ESG topics, such as sustainability, diversity & inclusion and company culture, took the spotlight. However, this update also introduced various obligations for shareholders of listed companies which may impact their ability to exercise their shareholder rights. How will this affect the position of shareholders in Dutch listed companies, and what will the future hold?

The Dutch Corporate Governance Code

The DCGC was first introduced in 2003 and has since been updated and amended several times by the Monitoring Committee Corporate Governance Code at the request of, among others, interested parties representing listed companies, institutional investors, employees and employers. The latest amendment was published on 20 December 2022 and will apply to Dutch listed companies as from their financial year starting on or after 1 January 2023. Reference is made to our news flash summarising the main changes to the DCGC, which can be found here.

The DCGC applies to Dutch listed companies and regulates the relations between the management board, the supervisory board and the (general meeting of) shareholders. The DCGC applies to such companies on a 'comply or explain' basis: the company either complies with the best practice provisions or explains in its annual board report why it deviates from them.

Newly introduced obligations regulating the position of shareholders

Building on a development of regulating the position of shareholders in the various amendments of the DCGC, several new obligations for shareholders have been included in the 2022 update of the DCGC. We have identified three principal points that may impact the position of shareholders of Dutch listed companies:

  1. Recognition of strategy Shareholders, including institutional investors, should recognise the importance of the company's strategy for sustainable long-term value creation as defined by the management board. The aim of this provision is to align shareholders with the company by obliging shareholders to take this strategy into account when exercising shareholder rights. Institutional investors are required to reflect in their engagement policy how they recognise the importance of strategies of Dutch listed companies and are subject to certain periodic disclosure requirements under the DCGC.

  2. Constructive dialogue. The updated DCGC puts more emphasis on dialogue between...

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