Hoofdstuk 8 Summary and conclusions

The agenda of the general meeting is an important document. After all, the starting point of the law is that a general meeting may only pass resolutions on items that are on the agenda. Resolutions on items that have not been put on the agenda are (in principle) subject to annulment. This means that all potential ‘power’ that the general meeting has through its powers, can only be exercised if the agenda allows it. The agenda is also important for making decisions and discussing matters. With regard to discussions, for example, it is true that any subject can be addressed at the meeting, but if a subject is explicitly included in the agenda as a separate item for discussion, there will be more room for discussion than if the subject is brought up in the round of questions (or if it is not on the agenda: at the end of the meeting). The person preparing or co-preparing the agenda thus has a great deal of influence. In this context, it is important that the first item at the top of the agenda is the opening. The opening of the general meeting marks the moment when a number of powers concerning the placement of items on the agenda are transferred from the person who convened the meeting (or the person who has had items placed on the agenda) to the general meeting. These include the power to change the order of items on the agenda and the power to withdraw or amend an item.

Because the agenda gives direction to what will happen at the meeting, the law and the NCGC (and regularly also the articles of incorporation) set requirements for agenda preparation and dissemination and for the presentation of agenda items. As far as the requirements laid down by law for agenda dissemination are concerned, I note that there is too little consideration given to increasing multiple corporate citizenship. It would be good to pay attention to this in a subsequent amendment of the law. With regard to some subjects, it is best practice to put them on the agenda separately. This does not alter the fact that these agenda items can still be made conditional on another agenda item. In my opinion, however, the board of directors should, in principle, not be permitted to make items that have been validly submitted by a provider of capital conditional on another item on the agenda. Conversely, the board of directors and the supervisory board can make an item placed by them on the agenda conditional on the outcome of a vote on an item submitted by a provider of capital.

An item on the agenda must be displayed in such a way that a person called upon to attend can objectively assess whether his or her interests are affected by the discussion of the item. A resolution passed on an incorrectly stated agenda item is subject to annulment. Sometimes it is possible to prevent the resolution from being annulled by providing explanatory notes. The explanatory notes can in fact be an amendment to a particular proposal. This is problematic because after the meeting has been opened the board of directors is no longer authorised independently to amend the items it has placed on the agenda. Moreover, in the case of listed companies, amendments at the meeting are often no longer possible at all.

The fact that the agenda determines whether the general meeting can exercise a power vested in it and that the right to speak and ask questions of those entitled to attend the meeting is framed by the agenda, means that the right to put items on the agenda is an important right. There are several persons entitled to put an item on the agenda. The right to put items on the agenda will entail something different depending on the person entitled to do so. For example, for the board of directors, whether or not to put items on the agenda is part of the board’s duty, whereas for the shareholder the right to put an item on the agenda is a right of control.

The statutory right of providers of capital to put items on the agenda has existed since 2004. Before that time, only the board of directors and, if established, the supervisory board had a statutory right to put items on the agenda. The providers of capital have had the right to request the company to convene a general meeting for some time (art. 2:110 through art. 2:220 of the Dutch Civil Code (‘DCC’)). This right includes the right to have items placed on the agenda. If the board of directors and the supervisory board do not proceed to convene the meeting, a request for authorisation to convene the meeting may be submitted to the court in preliminary relief proceed­ings. The court in preliminary relief proceedings will grant such authorisation if the requesting providers of capital have a ‘reasonable interest’ in holding the meeting. There is a line in case law where this reasonable interest criterion is being interpreted too broadly.

Much has been done over the years to modify the statutory right of providers of capital to have items placed on the agenda, especially with regard to listed companies. A large amount of the laws and regulations introduced can be seen as a response to incidents involving activist shareholders. As a result of multiple corporate citizenship and the flexibilisation of private limited company law, it has become increas­ingly complicated to determine exactly which rules for placement on the agenda apply to a company whose shares or depositary receipts for shares are listed. There are currently some inconsistencies in the legal and regulatory framework that should be resolved in the next round of amendments.

A provider of capital who is entitled to put items on the agenda may submit a request for placement on the agenda at any time of the year. It is irrelevant how long he has held his shares, and for a discussion of the subjects submitted it makes no difference whether he holds the shares until the convocation or the date of the meeting. Unlike German and US federal law, there is no ‘Haltepflicht’ or ‘Vorbesitzzeit’ in the Netherlands. Partly in view of the effectiveness (or lack thereof) of article 5:25k bis of the Financial Supervision Act (Wet financieel toezicht - Wft) and promoting long-term shareholder engagement, I believe that the introduction of a Haltepflicht and a Vorbesitzzeit deserves consideration. I am in favour of a Haltepflicht until the general meeting. Further research is needed to determine how long the Vorbesitzzeit could and should be. Because shareholders with a negative net interest have an interest that is diametrically opposed to the interests of the company and those of other shareholders (with a positive interest), I believe that a ban on exercising the right to put items on the agenda should be imposed for these shareholders. Another consid­eration in the recommendation to introduce a Vorbesitzzeit and a Haltepflicht is that the board of directors of an NV or BV listed on a regulated market cannot invoke a response time in view of Article 6(3) of the Shareholders’ Directive. The boards of other NVs and BVs falling within the scope of the NCGC and applying bpp 4.1.6 and 4.1.7 may do so under certain conditions. A problem with this, however, is that the provider of capital who wishes to put an item on the agenda only has to respect the response time invoked if he has indicated that he will comply with the part of bpp 4.1.6 NCGC directed at him. I consider what the EC held in Cryo-Save about respecting the response time to be incorrect.

The right of providers of capital to have items placed on the agenda is first of all limited by the distribution of power within the company. A provider of capital who is entitled to put an item on the agenda cannot force an (informal) vote on a topic that falls outside the decision-making power of the general meeting. Upon request, however, such a topic shall in principle be put on the agenda as a discussion item. There is only very limited scope for keeping a formally correct subject off the agenda altogether. It must then involve an abuse of the right to put items on the agenda or cases that touch on similar issues. The rules governing Dutch BVs (art. 2:224a DCC) have provided a little more scope for refusal. An important subject that falls (in principle) outside the decision-making power of the general meeting is (determining) the strategy (and policy) of the company. The broader the term strategy (and also the term policy) is interpreted, the more it qualifies as a company matter (bestuursaangelegenheid). By extension, the more subjects are grouped under the company’s strategy, the fewer items providers of capital can submit for the agenda as a voting item. My impression is that there is a tendency to interpret the term strategy ever more broadly. I believe it is desirable to conduct a scientific study into what exactly the term ‘strategy’ means in and outside company law.

With regard to a subject that falls under the decision-making power of the general meeting, the provider of capital who is entitled to place an item on the agenda may, in principle, rightfully demand that it be put to a vote. This is different if the law permits the exercise of a given power of the general meeting in the articles of incorporation to be made dependent on the initiative of another (body), and a provision to this effect is also included in the articles of incorporation. In that case, the provider of capital who is entitled to place an item on the agenda can no longer legitimately demand that an item submitted by him and which falls within that power, be put on the agenda for a vote. Another clause is the provision pursuant to which a resolution of the general meeting can only be passed after prior approval of the supervisory board or another (corporate) body. In this case, the restriction is permitted if not prohibited by law. However, the effectiveness of this oligarchic clause is question­able. It can be argued that the person who must decide on the approval has little room to refuse the approval. The clause requiring that a resolution of the general meeting be subsequently approved by another (body) does not limit the right to put an item on the agenda. The same applies to the clause which states that if the board of directors (or the supervisory board) puts a specific item on the agenda on its own initiative, it can be decided on by a simple majority, whereas the resolution if included in the agenda on the initiative of a provider of capital, must be passed by a simple (or reinforced) majority representing at least one-third or one-half of the issued capital.

On 1 May 2021, art. 2:114b DCC has entered into force. By virtue of this article, listed companies may, in response to specific requests for placement on the agenda, invoke a cooling-off period of up to 250 days under certain conditions. During the cooling-off period, the general meeting is in principle not allowed to vote on proposals for the appointment, suspension, or dismissal of directors and supervisory directors, or on proposals for the amendment of one or more provisions in the articles of incorporation that relate to the appointment, suspension or dismissal of directors or supervisory directors. It is doubtful whether the statutory cooling-off period is a justified barrier to the free movement of capital and the freedom of establishment. The question is whether the CJEU will accept careful decision-making at listed companies and improved consideration of public interests in decision-making as an overriding reason of general interest.

Against the background of increasing multiple corporate citizenship, the call for a legal basis underpinning the digital general meeting and a new form of activism (‘ESG activism’), the question may arise at some point whether (the scope of) the right to put items on the agenda merits a reassessment. Another factor in this respect is that it is a principle of good corporate governance that the general meeting should be able to exert such influence on the policy of the board of directors and the supervisory board that it plays a fully-fledged role in the system of checks and balances within the company (principle 4.1 NCGC), and that the question can be raised whether this is still the case today. The point raised is of a legal-political nature and therefore goes beyond the scope of this dissertation. If the legislator at some point believes that it should recalibrate the right to put items on the agenda (the well-known pendulum of time may also swing the other way), it should, in my opinion, turn the right to place an item on the agenda into a loyalty right by introducing a Vorbesitzzeit (combined with a Haltepflicht until the meeting, see below).11 Art. 2:114b DCC can be deleted and the overriding interest should be incorporated (again) in art. 2:114a DCC (and in articles 2:110 and 2:111 DCC). In cases where the board of directors feels that it cannot refuse an item that has been brought forward but believes refusal would be desirable, the board of directors can always turn to the EC. The past has shown that an immediate provisionally enforceable decision can be used to temporarily prevent a vote on a proposed item. The immediate provisionally enforceable decision can also be used to temporarily prevent a submitted item from being placed on the agenda.

Apart from this recommendation in case a reassessment of the right to put items on the agenda is considered advisable in the future, I would like to make the following concrete recommendations with regard to the currently applicable law.

To the legislator:

To academia: