The One-Tier Board (IVOR nr. 85) 2012/1.1:1.1 General introduction

The One-Tier Board (IVOR nr. 85) 2012/1.1

1.1 General introduction

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

Each country has developed its own corporate governance.

"The lack of universal solutions for management problems does not mean that countries cannot leam from each other. Looking over de borders is one of the most effective ways of getting ideas for management. But their application calls for prudence and judgment."1

I have chosen for the comparison of the UK, the US and The Netherlands, because UK and US investors directly or indirectly own about 50% of the Netherlands' shares and the UK and US have given corporate governance so much thought.

What are the differences in law and in practice?

Do the three systems converge, in line with growing internationalization?

Can they learn from each other 's examples?

This study will concentrate on the structure and functioning of boards in these countries and especially on the pros and cons of one-tier and two-tier boards. My research focuses on companies whose shares are traded on stock exchanges. Corporate Governance Codes in the UK and the Netherlands are applicable to listed companies; US corporate acts also have listed companies as their focus. On the other hand, private companies too are affected by board structures and best practice codes; I will therefore also briefly touch on examples of family companies.

The Netherlands' management culture is used to a two-tier board system with supervisory boards. On 6 June 2011 the Netherlands' Upper Chamber, the Senate, confirmed a new act creating the possibility for an optional one-tier board: the One-tier Board Act ("the Act"). The Act will probably be effective on 1 July 2012 and is meant to accommodate the foreign — mainly US and UK — shareholders. The introduction of an optional UK and US corporate governance system is a good moment to look into the UK and US practices. The practices of these two countries have interesting differences. These countries have put much thought into better corporate governance and their investment institutions are the most influential.

This study has five main chapters:

1.

Introduction

2.

UK

3.

US

4.

The Netherlands and

5.

Conclusion: changes, convergence, differences, examples worth following, which is at the same time the summary of the whole book.

Each of the country chapters 2 (UK), 3 (US) and 4 (The Netherlands) are composed of sections 1— history and culture, 2 — who owns the shares, 3 — acts and informal codes, 4 — composition of boards, 5 — role of directors, 6 — duties and 7 — liability of directors. Each time the sections 4, 5, 6 and 7 are concluded by a summary of that section.

With the new altemative in the Netherlands for a one-tier board beside the traditional two-tier board this study aims at those who are interested in the Dutch corporate world. I also hope it will be of interest to UK and US directors and advisors, who may be active in, or for, Dutch boards or want to make a comparison with their own practices.

Deze functie is alleen te gebruiken als je bent ingelogd.