Corporate Law Commission supports modernisation of public limited company law

The Joint Committee on Company Law (GCV) supports the modernization of public limited company law and improving gender balance in the management of large companies. However, the committee questions why both topics have been included in a single draft bill with a somewhat short consultation period.

This is what the committee writes in its advisory report (pdf) on a preliminary draft amendment to Book 2 of the Dutch Civil Code. The amendment focuses on modernizing the law for public limited companies and improving the gender balance on the management and supervisory boards of large public limited companies and private limited companies.

Modernization
The preliminary draft contains several technical improvements to simplify and increase flexibility in public limited company law. This aligns with the simplification and flexibilization of private limited company law in 2012. According to the GCV, this aspect requires further consideration. Among other things, the relationship between company law and financial law, and between public limited companies (NVs) and private limited companies (BVs), requires further examination. The digital facilitation of shareholder meetings also provides food for thought regarding possible further adjustments to the structure of public limited companies (NVs).

Separate bill
The GCV believes this opportunity can be used to analyze what works well in the current private limited company law and which aspects require adjustment or clarification. Because this issue is unrelated to the more balanced gender balance, the GCV recommends developing the topic of modernizing public limited company law in a separate bill.

Balance
The preliminary draft also includes two proposals to achieve a more balanced gender ratio at the top of large companies. First, large public and private limited companies are required to formulate appropriate and ambitious targets for the management board, the supervisory board, and sub-management. They must also develop concrete plans to implement these targets and be transparent about the process.

A third
According to the second proposal, the supervisory board of listed companies must consist of at least one-third men and one-third women. If this is not the case, the appointment is null and void. The GCV considers swift implementation of these measures important. The phase-in quota and the target figure regulation stem from a extensively documented and monitored preliminary policy process that has not been sufficiently effective. The GCV has no further comments on this matter.