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Management board - in the Netherlands

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  • Management board in the Netherlands

What is a management board - under Dutch law?

Management board in the Netherlands

Under Dutch law, a management board oversees the general operation of a company. The board is composed of skilled directors, who determine the strategies that ensure both a company’s survival and progression.


Duties of a Management Board in The Netherlands

The management board has exclusive rights and powers within a company, through which they must fulfil certain duties. They must periodically monitor the company and our held to account in failing to notice events which may destabilase the company. This includes the day to day functioning of the company, but also extends to assessing the state of the company’s assets and liquidation position.

A management board must have awareness of the company’s financial position and develop a risk management process. Further, they are responsible for weighing the competing interests that envelops all company’s. They must carefully balance these interests to ensure the overall company interest is maintained. This extends to:

  1. shareholders
  2. stakeholders
  3. employees
  4. creditors
  5. suppliers
  6. unions
  7. the local community
  8. the government (potentially).

They achieve this by hosting annual general meetings with the shareholders and adopting the resolutions put forth by the legitimate corporate bodies.

The management must adhere to all the above obligations in line with the company’s Articles of Association. In carrying out their duties, they must ensure the main activities and information of a company is documented and kept up to date. This applies both to the business and shareholder registers and the annual account reports.

They must consider any legal rules applicable in the management of the company, many of these rules stem from the Dutch Corporate Governance codes. The board is responsible in guaranteeing the company abides by these rules and any other relevant codes or regulations.


Authority of a management board under Dutch Law

The management board’s authority in a company is quite strong and can influence almost all other elements in the corporate structure. As such, they carry authority to direct other actors in the company and must ensure each of them fulfil their own obligations. Whilst they do face restrictions, the competing interests noted above can give the board much wider powers in their management of a corporate regime.


Appointment and removal of a management board in the Netherlands

When first selected, the management board is appointed by way of a deed of incorporation. Once established, any changes in membership must generally be effected by a resolution adopted in the general meeting. However, the process for both the appointment and removal of a member of the board is also stipulated in the Dutch company’s Articles of Association. As such, a meeting with the holders of a certain class of shares could give effect to an appointment, providing each shareholder at a minimum, has the opportunity to vote on at least one of the appointments. In addition, the company’s rule book may set additional criteria for the appointment, such as the requirement of a specific skills set or specific past experience.

Under Dutch law, a seat on the board can be held by either a natural or legal person and they can hold this seat for a fixed or indefinite period of time. Once a managing director has been appointed, their name must be registered in the trade register of the relevant Chamber of Commerce. The appointment process must ensure a candidate has no possible conflict of interest or that they could possibly develop one whilst carrying out their duties.


Starting a business in Holland

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Employment law in the Netherlands
Duration of employment Probation period Non-competition clauses Sick pay in the Netherlands Business reorganization Works council in the Netherlands
Commercial contracts under Dutch law
Agency contracts Termination of agency Goodwill compensation Franchising in the Netherlands
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