Dutch company law sets requirements on the gender balance of the boards of large companies. For listed companies a statutory quota applies: the supervisory board must consist of at least one third women and at least one third men, and an appointment that does not contribute to that balance is void – the seat simply stays vacant. Large companies more generally must set their own appropriate and ambitious targets for the management board, the supervisory board and senior management, draw up a plan to achieve them, and report annually on progress.
The two regimes are often confused. The quota is a hard rule with a legal sanction and applies only to listed companies; the target regime applies to a much wider group and is enforced through transparency rather than nullity.
What does the NV law modernisation proposal change?
A separate legislative track aims to modernise the law for the public limited company (NV), the Dutch legal form most often used by larger and listed businesses. According to the explanatory notes, the goal is to remove rules that entrepreneurs experience in practice as unnecessarily restrictive. We set out the main points below; this proposal has not yet been enacted.
One point of attention is the position of minority shareholders. Because an NV currently has wide freedom to organise itself, minority shareholders can end up bound by decisions of the majority, in particular in the general meeting. To prevent the interests of minority shareholders from being overridden, the proposal would give them extra protection, for example by requiring their consent for certain decisions.
Another point is the mandatory share capital. Under the proposal, an NV would, like the BV, no longer be required to state a share capital (the sum of the nominal value of all shares) in its articles of association. The idea is to give entrepreneurs using the NV more room to raise capital without first having to amend the articles.
Where the articles of association do state a share capital, a fifth of it would still have to be issued under the proposal. The minimum requirements for the issued and paid-up capital of an NV are not affected by this: both must still amount to at least € 45,000, under article 2:67 of the Dutch Civil Code (niet opnieuw gecontroleerd).
The proposal would also bring a concept already familiar from BV law into NV law: shares with a specific designation. A designation lets a company attach specific rights to shares within one or more existing classes, without having to create a new class of shares. The articles of association would set out exactly which rights are attached; a holder of ordinary shares with a designation could, for example, be given a specific controlling right described in the articles.
The proposal further addresses the voting rights of pledgees and usufructuaries. It would make clear that voting rights on pledged or encumbered shares may also be granted at a later stage, subject to a suspensive condition set when the right of pledge or usufruct is established. This would bring NV law into line with the position that already applies under BV law.
The proposal also contains changes to decision-making. Under current law, shareholders and other persons with meeting rights can only decide outside a physical meeting if the articles of association allow it; this is not possible at all where the company has bearer shares or has issued depositary receipts for shares, and any such decision must be unanimous. Under the proposal, decision-making outside a meeting would become possible as a starting point, provided everyone with meeting rights agrees, and it would also become possible for an NV to hold its general meeting outside the Netherlands – relevant for NVs with an international shareholder base.
Finally, the proposal addresses the costs of incorporating an NV. It would allow the company itself, rather than only the founders personally, to be bound to pay these costs from the moment of incorporation, removing the need for the board to separately ratify the relevant acts afterwards. This could also do away with the obligation to file the formation costs with the Trade Register, mirroring a change already made for the BV.
Where does the male/female ratio for NVs currently stand?
Separately from the NV law modernisation proposal, the rules on gender balance at the top of large companies have already changed: since 1 January 2022, the quota described above applies to the supervisory boards of listed companies. The government’s underlying assumption is that a more diverse top leads to better decision-making and business results.
Large companies generally – not only listed NVs – must set their own appropriate and ambitious target figures for the management board, the supervisory board and senior management, put together a plan to achieve them, and report on progress. For listed companies specifically, the supervisory board must reach at least one third men and at least one third women.
For example, a supervisory board of three people generally needs at least one man and one woman to meet that one-third/one-third standard. An appointment that does not contribute to a balance of at least 30/70 either way is void; this does not affect the validity of decisions the board took together with the person whose appointment was void.
In short, these are two different tracks. The gender-balance rules for the supervisory board and the target-figure regime are already in force. The wider modernisation of NV law – minority shareholder protection, share capital, designated shares, pledgee and usufructuary voting rights, decision-making outside meetings and incorporation costs – is still a legislative proposal and has not yet taken effect.
An illustrative example
Say a listed NV appoints a new supervisory director and, after that appointment, the board has two women and one man. That outcome is within the one-third/one-third standard, so the appointment is valid. If the board had instead ended up with three men, the appointment that caused that outcome would be void by operation of law, and the seat would remain vacant until a compliant candidate is appointed. The rest of the board’s decisions taken in the meantime would still stand.
Frequently asked questions
Does the quota apply to my company?
The hard one-third/one-third quota applies only to the supervisory board of listed NVs. If your company is not listed, the target-figure regime may still apply once it meets the size criteria for a large company; ask us to check this for your specific situation.
Is the NV law modernisation already in force?
No. It is a legislative proposal that would ease several NV rules, such as the mandatory share capital and decision-making outside a meeting. Until it is enacted, current NV law continues to apply in full.
In summary
- Listed companies already have to meet a one-third/one-third quota for their supervisory board; a non-compliant appointment is void and the seat stays vacant.
- Large companies more generally must set their own target figures for the management board, supervisory board and senior management, and report on progress.
- A separate, still pending proposal would modernise NV law more broadly: optional share capital, designated shares, clearer pledgee/usufructuary voting rights, decision-making outside meetings, and meetings outside the Netherlands.
- The minimum issued and paid-up capital for an NV remains € 45,000 regardless of the proposal.
- The gender-balance rules are current law; the NV law modernisation is not.
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