It is expected that the legislative proposal for the Act on Management and Supervision of Legal Entities (wetsvoorstel Wet bestuur en toezicht rechtspersonen) will be discussed in Dutch Parliament later this year. The Act intends to improve the quality of management and supervision within foundations and associations. The reason for the proposal is the current variation in existing rules for each legal entity. The aim is to have uniform rules on governance and conflicts of interest for all Dutch legal entities, i.e. BVs, NVs, foundations, associations, cooperatives and mutual insurance associations.

The most important aspects of the Act regulate the role of directors and supervisors such that they (i) act exclusively in the best interest of the legal entity and the organization connected with it in the performance of their duties; (ii) must abstain from participating in the deliberations and the decision-making process regarding a topic with respect to which they have a conflict of interest; (iii) can be held liable for damage resulting from their improper performance; and (iv) can be held jointly and severally liable for a negative balance in the case of bankruptcy, if the bankruptcy was caused to a significant degree by their improper performance. The provisions in the legislative proposal correspond with those currently in force for NVs and BVs.

The legislative proposal also provides for an increase in the grounds for the dismissal of directors and supervisors of foundations. In addition to the existing grounds for dismissal, it is proposed that directors and supervisors who harm the interest of the foundation in such a way that continuation of their directorship or membership of the supervisory body cannot reasonably be tolerated, can be dismissed at the request of the Public Prosecution Service (Openbaar Ministerie) or an interested party. This provision is meant as an addition to the rules on dismissal laid down in the foundation’s articles of association.

Furthermore, a legal basis for the establishment of a supervisory body within foundations and associations will be introduced. 

The legislative proposal is designed for all associations and foundations. Non-commercial associations and foundations, charities, educational institutions, pension funds and administrative offices (stichting administratiekantoor) will also be required to amend their articles of association, rules and regulations and daily procedures in accordance with the new rules.

In the preliminary draft of the legislative proposal, amendments will be introduced in Books 2 and 10 of the Dutch Civil Code and the Bankruptcy Act. The Act will possibly come into effect as soon as January 2016.