Act on the Management and Supervision of Legal Entities not fully in effect

Not all provisions of the Dutch Corporate Governance and Supervision Act (WBTR) will take effect on July 1st. The implementation of the provisions concerning the one-tier board model and the absence and impediment regulations for public limited companies (NVs) will be postponed. This is evident from an amended implementation decree.

According to the original effective date, the WBTR will fully enter into force on July 1st. According to the new effective date, some provisions will not yet enter into force.

Monistic governance model
Firstly, the entry into force of the provisions facilitating the one-tier board model for associations, cooperatives, mutual insurance companies, and foundations will be postponed. Under this system, the supervisory role is fulfilled by non-executive directors. These non-executive directors, like the executive directors, are members of the board. This is also known as a one-tier board.

Trade Register
These provisions and the necessary amendment to the Trade Register Decree 2008 will enter into force when the technical capability is achieved for associations, cooperatives, mutual insurance companies, and foundations to indicate in the Trade Register whether a director is executive or non-executive. Despite the lack of this legal basis, these legal entities already use a one-tier board model in practice. They may continue to do so.

Absence and impediment regulations for public limited companies
The second postponement concerns the component that stipulates the addition of a fourth paragraph to Article 2:142 of the Dutch Civil Code, which stipulates that the articles of association of a public limited company must contain provisions for the absence or inability to act of (all) supervisory directors. This provision must specify how the duties and powers will be provisionally exercised in the event of the absence or inability to act of (all) supervisory directors.

Collective law
This section cannot yet enter into force because the WBTR (Dutch Corporate Governance Act) mistakenly omitted transitional law for public limited companies (NVs) for this provision. A separate law will stipulate that public limited companies (NVs) must include a provision for the absence and inability to act for supervisory directors in their next amendment of the articles of association. When this amendment to the WBTR transitional law enters into force as part of the law, the WBTR's provisions for the absence and inability to act for supervisory directors of public limited companies will take effect.