4.1.2 Historical influences on Dutch boardroom culture

Water, trade and a long history of corporate governance are three factors that have influenced boardroom culture.

The ever present awareness of water as friend and foe has been at the root of the Dutch talent for cooperation in small groups, with a free voice for each member and with minimal hierarchy. The topic of discussion was usually a practical problem and the solution had to reflect the interests of all concerned. In the beginning, large parts of the territories that would become the United Provinces of the Netherlands were marshes, lakes and river deltas along the coast of the North Sea. The Dutch had to fight the tides and floods. They built dikes, dug channels and constructed windmills to pump the marshes dry and change them into "polders" where they could farm and build their cities. Although they succeeded in taming the water, it was still everywhere. Ships plied the inlaad waterways, making the exchange of people and ideas easier. Soon Dutch ships were exploring the world, taking cargo to and from the Baltic, the Americas and the Indies. From the end of the 19^th century, shipping once again triggered growth.

The successful organization of cargo trade and the operation of merchant ships depended on the responsibility of many a captain, boatswain, marmer, stevedore, shipowner and middleman. People learned to cooperate and to respect one another 's responsibility and initiative. The exchange of goods led to a spirit of give and take. As the land was split up by rivers and lakes, the population was obliged to concentrate in small communities, which grew into towns and cities as early as the 13^th century. The minor land owners, local counts and bishops had to cooperate with these townspeople to keep the land dry and the public treasuries filled. These circumstances naturally led to forms of commercial cooperation for a specific polder and its management, the equipment of a merchant ship or fleet, initially perhaps for one specific voyage and later for general shipping and trading and for the colonization of overseas territories. The Netherlands was and is a collection of cities and small cooperatives. In all the cities successful merchants assumed the reins of government. In the absence of hereditary aristocracy or a central King's Court, local elites became a ruling oligarchy rooted in trade and shipping.

Efforts for which many hands, heads and purses are needed in a spirit of give and take and mutual respect for one another's interests usually focus on finding practical solutions to problems. The Jack of hierarchy and the absence of a central, monarchical power was compensated for by the respect for an oligarchy consisting of the most able and successful entrepreneurs, shipowners and merchants, who at the same time governed the cities. In effect, the concept of a single king commanding the allegiance of the nation was replaced by that of a hundred small kings cooperating with each other and with the people who made these efforts possible.

Throughout the corporate history of the Netherlands companies have tended to be led by a small group of directors who consult together in order to achieve consensus. Usually this has been arranged in a two-tier system, where some are responsible for day-to-day management and others play a supervisory role. Supervisory boards as we know them today have existed since 1623, when the Dutch East India Company (the VOC) created such a body. This two-tier system continued down the centuries. In 1898 Royal Dutch Petroleum1 used defensive clauses in its articles of association, effectively allowing the board to co-opt members in order to ward off Standard Oil. A tradition of supervisory boards with oligarchie provisions in the articles of association allowed boards of public limited liability companies (NVs) to continue to manage companies by means of consultation aimed at consensus throughout the 20^th century and was considered to be the Dutch tradition of governance. The evolution of Dutch corporate governance is described in detail in 4.1.5 and the cultural development of Dutch supervisory boards is related in 4.1.6(c) after discussing the influences of water in 4.1.3 and trade in 4.1.4.