4.4.7 Summary of composition of boards

The Netherlands traditionally have a two-tier board system, even though having a supervisory board is not required by law, except in Structure Regime companies. Listed companies have about 3 to 5 managing board members and an average of about 6 supervisory board members.

Structure Regime companies have a mandatory supervisory board with substantial powers.

Although most other companies have a supervisory board, there are some examples of one-tier boards with executive and non-executive directors.

The Act on the one-tier board as alternative option is made up of a short set of practical articles. Structure Regime companies can fall onder the Act and can have a one-tier board as well, in which cases the rules for supervisory directors are mutatis mutandis applied to the non-executive directors.

I propose to change article 3.19 Wft so that banks and insurance companies are also permitted to have one-tier boards with at least three non-executive directors.

When considering a one-tier board one should realize that this system has developed in different directions in the UK and the US. UK boards typically have about 4 executive officers, a separate chairman and 5 or 6 NEDs, while US boards on average have a CEO/chairman and about 7 independent directors, who interestingly often meet separately before or after each board meeting.