8.1.1 Structure regime

The importance of shareholders’ interests for the supervisory board remained unaltered until 1949. In the Doetinchemse IJzergieterij1 case the Dutch Supreme Court decided that supervisory directors – at that time only referred to as supervisory directors and not as supervisory board – had to look after the interests of the entire company and not solely the shareholders’ interests. In 1971, a new change with respect to supervisory directors occurred with the introduction of the structure regime. In section 50 of the (old) Commercial Code (Wetboek van Koophandel) the structure regime obliged companies with certain characteristics2 to establish a supervisory board that had to focus on supervising the conduct of business of the management as well as the general course of affairs in the company and its affiliated enterprise on behalf of all stakeholders (Memorie van Toelichting 1969: 7-8). From that moment onwards, the law explicitly mentioned supervisory board instead of supervisory directors (Maeijer et al. 2009: 484). In line with the Doetinchemse IJzergietery case, the focus was now on the interests of the entire company (Raaijmakers 2006: 315; Van Schilfgaarde and Winter 2009: 235-239).

The structure regime effectuated the shift from a focus on shareholders’ interests to a focus on the company by the allocation of more power to the supervisory board at the expense of shareholders’ power. The supervisory board became responsible for the appointment and dismissal of members of the management board, adoption of the annual accounts and consent for important decisions. Moreover, the general meeting of shareholders was no longer entitled to appoint or dismiss the supervisory board. Controlled co-optation was implemented, through which the current supervisory board selected the new members. To counterbalance this co-optation system the general meeting and the works council were awarded rights of recommendation and objection with respect to the selected new members of the supervisory board (Maeijer et al. 2009: 517). In 2004 the structure regime was softened and shareholders’ rights increased (Van Schilfgaarde and Winter 2009: 235-239).3