Corporate Governance 2020 A practical cross-border insight into corporate governance law 13th Edition Featuring contributions from: Advokatfirmaet BAHR AS Hannes Snellman Attorneys Ltd Olivera Abogados / IEEM Business School Al Hashmi Law Herbert Smith Freehills Pinsent Masons LLP Arthur Cox Houthoff Schoenherr Rechtsanwälte GmbH Baker McKenzie Lacourte Raquin Tatar SZA Schilling, Zutt & Anschütz Rechtsanwaltsgesellschaft mbH Bowmans Law Firm Neffat Tian Yuan Law Firm Cravath, Swaine & Moore LLP Lenz & Staehelin Uría Menéndez Creel Abogados, S.C. Macfarlanes LLP Wachtell, Lipton, Rosen & Katz Cyril Amarchand Mangaldas Mannheimer Swartling Advokatbyrå Walalangi & Partners (in association with Davis Polk & Wardwell LLP Marsh & McLennan Companies Nishimura & Asahi) Ferraiuoli LLC Nielsen Nørager Law Firm LLP Wolf Theiss GSK Stockmann Nishimura & Asahi Zunarelli – Studio Legale Associato Table of Contents Expert Chapters Dual-Class Share Structures in the United States 1 George F. Schoen & Keith Hallam, Cravath, Swaine & Moore LLP Legal Liability for ESG Disclosures – Investor Pressure, State of Play and Practical Recommendations 11 Katherine J. Brennan & Connor Kuratek, Marsh & McLennan Companies Joseph A. Hall & Betty Moy Huber, Davis Polk & Wardwell LLP Corporate Governance for Subsidiaries and Within Groups 17 Martin Webster & Tom Proverbs-Garbett, Pinsent Masons LLP Global Transparency Trends and Beneficial Ownership Disclosure 22 Nancy Hamzo, Bonnie Tsui, Olivia Lysenko & Paula Sarti, Baker McKenzie Q&A Chapters Australia Mexico 28 Herbert Smith Freehills: Quentin Digby & 143 Creel Abogados, S.C.: Carlos Creel C., Gustavo Philip Podzebenko Struck & Ilse Bolaños Austria Netherlands 36 Schoenherr Rechtsanwälte GmbH: 149 Houthoff: Alexander J. Kaarls Christian Herbst & Roman Perner Norway China 156 43 Advokatfirmaet BAHR AS: Svein Gerhard Simonnæs Tian Yuan Law Firm: Raymond Shi & Asle Aarbakke Czech Republic 52 Oman Wolf Theiss: Jitka Logesová, Robert Pelikán, Radka 161 Al Hashmi Law: Omar Al Hashmi & Syed Faizy Ahmad Václavíková & Kateřina Kulhánková Poland Denmark 166 61 Wolf Theiss: Maciej Olszewski, Joanna Wajdzik, Nielsen Nørager Law Firm LLP: Monika Gaczkowska & Izabela Podleśna Peter Lyck & Thomas Melchior Fischer Puerto Rico Finland 172 Ferraiuoli LLC: Fernando J. Rovira-Rullán & 70 Hannes Snellman Attorneys Ltd: Andrés I. Ferriol-Alonso Klaus Ilmonen & Lauri Marjamäki Romania France 179 Wolf Theiss: Ileana Glodeanu, Mircea Ciocirlea, 78 Lacourte Raquin Tatar: Serge Tatar & Luciana Tache & George Ghitu Guillaume Roche Slovenia Germany 188 89 SZA Schilling, Zutt & Anschütz Law Firm Neffat: Leonardo Rok Lampret & Rechtsanwaltsgesellschaft mbH: Domen Neffat Dr. Christoph Nolden & Dr. Michaela Balke South Africa 195 India Bowmans: Ezra Davids, Ryan Kitcat & Lauren Midgley 97 Cyril Amarchand Mangaldas: Cyril Shroff & Amita Gupta Katragadda Spain 203 Uría Menéndez: Eduardo Geli & Ona Cañellas Indonesia 105 Sweden Walalangi & Partners (in association with Nishimura 214 & Asahi): Andhika Indrapraja, Femalia Indrainy Mannheimer Swartling Advokatbyrå: Patrik Kusumowidagdo & Raditya Pratamandika Putra Marcelius & Isabel Frick Switzerland Ireland 220 112 Arthur Cox: Brian O’Gorman & Michael Coyle Lenz & Staehelin: Patrick Schleiffer & Andreas von Planta Italy 120 United Kingdom Zunarelli – Studio Legale Associato: 228 Luigi Zunarelli & Lorenzo Ferruzzi Macfarlanes LLP: Tom Rose & Dominic Sedghi USA Japan 237 128 Nishimura & Asahi: Nobuya Matsunami & Wachtell, Lipton, Rosen & Katz: Kaoru Tatsumi Sabastian V. Niles Uruguay Luxembourg 248 136 GSK Stockmann: Dr. Philipp Moessner & Olivera Abogados / IEEM Business School: Anna Lindner Juan Martín Olivera Chapter 20 149 Netherlands Netherlands Houthoff Alexander J. Kaarls 1 Setting the Scene – Sources and 1.2 What are the main legislative, regulatory and other sources regulating corporate governance practices? Overview Dutch corporate law is primarily found in the Dutch Civil 1.1 What are the main corporate entities to be discussed? Code (“DCC”). Topics covered in the DCC for the BV and the NV are: (i) the shares; (ii) the capital of the company; (iii) the general meeting (“GM”) of shareholders; (iv) the manage- Under Dutch law, there are various types of corporate enti- ment board and supervision of the management board; (v) the ties. The most common Dutch corporate entities are: (i) the so-called “large company regime” (structuurregime, as described private limited liability company (besloten vennootschap met beperkte in question 3.1 below); and (vi) the balanced allocation of seats aansprakelijkheid or “BV”); (ii) the public limited liability company among men and women for boards of certain BVs and NVs. (naamloze vennootschap or “NV”); and (iii) the cooperative (coӧper- The majority of these topics are incorporated by reference to atie or “Coop”). BVs and NVs are limited liability compa- the Coop. The law applicable to legal trading forms without nies. The following three different liability arrangements may legal personality are addressed in the Dutch Commercial Code be chosen for a Coop: (i) statutory liability (wettelijke aansprake- (Wetboek van Koophandel). European legal entities (e.g., the societas lijkheid or “W.A.”); (ii) excluded liability (uitgesloten aansprakeli- Europaea or “SE”) are not addressed in this chapter, albeit that jkheid or “U.A.”); or (iii) limited liability (beperkte aansprakelijk- if an SE is domiciled in the Netherlands, the rules applicable to heid or “B.A.”). The selected liability arrangement should be NVs will largely apply mutatis mutandis to such an SE. mentioned in each specific Coop’s statutory name. In deviation In addition, the DCC contains legislation for all legal enti- from a BV and an NV, a Coop does not have shareholders and ties regarding the company’s annual accounts. Pursuant to shares, but has members and memberships. these provisions, publicly traded companies in the Netherlands A business that does not seek to make profit distributions must disclose compliance with a code of conduct in its annual can also be organised in the form of a foundation (stichting). A accounts on a comply-or-explain basis. This so-called Corporate foundation is not allowed to have any shares or memberships. Governance Code (“Code”) comprises of principles and best In addition, a foundation is in most cases not allowed to make practice standards. The provisions laid down in the Code are a profit distribution. A publicly traded company, itself most not legally binding. In case a company deviates from the Code, often an NV, may use a foundation in relation to the imple- it should say so and explain why a provision is not applied. mentation of an anti-takeover measure. Smaller, family-con- The articles of association (the “Articles”) of a company may trolled, non-publicly traded companies may use a foundation for be another source of corporate governance rules applicable to participation plans for family members or other investors in an the specific company. The Articles may contain clauses that effort to limit the loss of family control. Please also refer, for an deviate from the DCC if the DCC allows doing so. Generally, in-depth description of the manners in which a Dutch stichting the Articles may state that a supermajority is required for corpo- can play a key role in international corporate and group struc- rate resolutions identified therein. turing, to: https://iclg.com/practice-areas/mergers-and-acquisi- tions-laws-and-regulations/3-the-dutch-stichting-an-effective- and-useful-tool-in-global-structuring. 1.3 What are the current topical issues, developments, Separately, under Dutch law, there are several types of legal trends and challenges in corporate governance? trading forms without legal personality. Most well-known is the general partnership (vennootschap onder firma or “VOF”), which is In 2016, a revised Code was published. Publicly traded Dutch commonly used for joint ventures. The joint venture partners companies are to follow this new Code on a comply-or-explain will exercise control and they will be jointly and severally liable basis in their 2017 annual accounts (i.e., as of 2018). The revised for debts of the VOF. Code has given a central role to long-term value creation, and This chapter will predominantly focus on the BV and the NV, the introduction of “culture” as a component of effective corpo- unless stipulated otherwise. rate governance. Another trend is the increase in more active shareholder engagement in the Netherlands. Recent examples include (i) shareholder engagement on an unsolicited public bid on AkzoNobel (by PPG), (ii) discussions that led to a bid price increase with respect to Qualcomm’s bid for NXP Corporate Governance 2020 © Published and reproduced with kind permission by Global Legal Group Ltd, London 150 Netherlands Semiconductors, and (iii) shareholder involvement on discus- 2 Shareholders sions regarding Ahold Delhaize (i.e., the continued validity of Ahold Delhaize’s anti-takeover device). These developments have caused debates in the Dutch parliament. In October 2.1 What rights and powers do shareholders have in the strategic direction, operation or management of the 2017, the Dutch coalition government proposed to take meas- corporate entity/entities in which they are invested? ures aimed to shift influence from shareholders for boards to focus on long-term sustainable value creation. To this end, the coalition government published a draft bill in December 2018 Neither the Board nor the GM may exceed the