4.5.3 The legal context of the division of powers between shareholders and board members

The general meeting of shareholders is not the highest organ of a company since it cannot instruct the management board.1 Until 2004, shareholders in the Netherlands, notwithstanding their technical rights onder the DCC,2 were disinclined to get involved in discussions about strategy or about any other company matters for that matter. They were not required to make allowance for the interests of the company and generally voted in their own interests.3 The Tabaksblat Code of 2004 and the Frijns Code of 2008 made clear that the management board develops strategy, the supervisory board supervises and shareholders may exercise their right to vote, add items to the agenda and call a meeting.4 Furthermore, shareholders can engage in dialogue with the company.5

The management board and the supervisory board are accountable to shareholders in the shareholders' meeting. There are many stipulations in the Frijns Code concerning transparency and the timely provision of information by the management board to the shareholders.6

As regards dialogue between boards and shareholders, the Frijns Code does mention in paragraph IV.4, second principle, that shareholders should be open to dialogue, but the Code makes no reference to any obligation on the part of management to initiate dialogue with shareholders. The only obligation mentioned is that the chairman should act as the main contact for shareholders regarding the functioning of management and supervisory board members.7 This is different from the UK Corporate Governance Code, which obliges the board in many different ways to engage in dialogue with shareholders about strategy.8

The Stork, ABN AMRO and ASMI cases of 2006, 2007 and 2010 respectively, show that shareholders have become more active and have a wish for dialogue. This has created a discussion as to whether management and supervisory boards have obligations to enter into dialogue with shareholders. The general view is that the management and supervisory boards should ensure that communication between shareholders and the two boards is as good as possible,9 although it is clear that boards have no real obligation to discuss strategy with shareholders or to mediate between management and shareholders.10