8.3.2.1 Board structure and composition

The composition/structure building block in the Netherlands is strong. The Dutch situation is primarily characterised by a dual board structure with a separate management board and supervisory board. This board structure in itself has benefits with respect to independence, because people involved in daily business and monitoring are physically separated. However, the supervisory board holds the majority of its meetings together with the management board, which might diminish this effect. Only one supervisory board member is allowed to be non-independent. From an independence viewpoint this is a good practice, but it takes away the possibility to include more than one supervisory board member with, for example, executive experience in the company. This executive experience might have benefits where the tasks of the supervisory board are concerned. The requirement of at most one non-independent supervisory director should therefore be reconsidered.

The unitary board structure is less common in the Netherlands, but is well-constructed from an independence perspective. The majority of the board of directors must consist of independent NEDs. The weak element of the unitary board structure is the lack of principles and best practice provisions in the DCGC for unitary boards. As a dual board structure is the predominant structure in the Netherlands, the DCGC is formulated with this board structure in mind. Although a number of best practice provisions are especially for unitary board structures, the DCGC must be adjusted for the possibility of establishing a unitary board structure.