210 Shareholder dominance versus shareholder stewardship.

In Dutch corporate law, shareholders have a central role in the system of checking and balancing board autonomy. The general meeting of shareholders (algemene vergadering) has the right to appoint executive and supervisory board members, to decide on the emission of shares, to make amendments to the articles of association, to decide on the acquisition of other corporations, to approve changes to the identity or character of the corporation, and to decide on any other non-allocated issues.1 If the structural regime applies, executive board members are appointed by the supervisory board, which in turn is appointed by the meeting of shareholders.2 Considering that most Dutch listed corporations are not bound by the structural regime, shareholders in general have elaborate rights to engage with the board and to voice their interests.3

Despite this dominant role of shareholders, the board maintains its autonomy to pursue a social and ecological strategy without the need for explicit support from the meeting of shareholders or being under a threat of replacement when failing to prioritize shareholder interests.4 Meanwhile, the overall distribution of rights and duties between the shareholders meeting, the supervisory board and the executive board provides a strong position for shareholders to hold the board accountable for its long-term strategy and decisions. An important example of this is the right to add a topic to the agenda of the general meeting (agenderingsrecht), as used by FollowThis to pressure the board of Shell to adopt the climate goals in the Paris Climate Accords.5 Softer legal instruments like the Dutch Corporate Governance Code also encourage boards to engage in a constructive dialogue with their shareholders in their strategy-making process, echoing the important position of shareholders in relation to the adoption of social and ecological strategies.6

Although the board has final responsibility for determining its strategy, shareholders are therefore in a unique position to orient the corporation towards a more social and ecological strategy. Increasingly, shareholders leverage this opportunity by adopting stewardship responsibilities, such as those included in the voluntary Dutch Stewardship Code.7 While shareholders have the legal right to use their governance rights in their own interest, the debate in Dutch legal literature is increasingly moving towards the expectation that shareholders should have a duty to consider the durable success of the corporation in the exercise of their governance rights (similar to the duty of the board).8 In Funda, the Dutch Enterprise Chamber has recently adopted a similar notion that article 2:8 Dutch Civil Code may require an influential shareholder to let the interest of the corporation as a whole (belang van de vennootschap) prevail over its own partial interests.9 All in all, this points to a movement away from shareholder dominance towards shareholder stewardship, perceiving shareholders as the stewards of the long-term continued performance of the corporation oriented towards the benefit of all stakeholders. Such shareholder stewardship is closely linked to the inclusion of social and ecological interests in corporate governance, and therefore merits further consideration. To that end, the particular issue that I have identified is what rights and responsibilities should shareholders have in relation to social and ecological interests.10