General

Primary sources

What are the primary sources of laws and regulations relating to shareholder activism and engagement? Who makes and enforces them?

The primary source of corporate law is Book 2 of the Dutch Civil Code (DCC). Its provisions are applicable to all companies organised under Dutch law, regardless of their listing venue, and are generally enforced through the civil court system or in proceedings before a specialised court (the Enterprise Chamber of the Amsterdam Court of Appeals).

The primary sources of securities laws are the Dutch Financial Supervision Act (DFSA) and directly applicable EU regulations such as the Market Abuse Regulation (MAR) and the Short Selling Regulation. The DFSA-provisions relating to takeovers of listed companies and disclosure obligations for listed companies and major shareholders apply to all Dutch companies whose shares or depositary receipts for shares are listed on a regulated market within the EEA. The MAR and the Short Selling Regulation apply to (Dutch companies whose) shares or other financial instruments are listed on a regulated market within the EEA. The Dutch Authority for the Financial Markets (AFM) is the competent authority for supervising compliance with the DFSA and, to the extent these regulations allocate competence to the competent authority in the Netherlands, the MAR and the Short Selling Regulation.

A breach of certain statutory provisions of the DCC, the DFSA and the MAR qualifies as a criminal offence, though prosecution is rare.

The revised EU Shareholders Rights Directive, which must be implemented in Dutch law by June 2019, sets out rules on - inter alia - say on pay, identification of shareholders, transmission of information and transparency of institutional investors, asset managers and proxy advisers.

The above statutory requirements are supplemented by the Dutch Corporate Governance Code (DCGC), which was revised in December 2016 and contains principles and best practice provisions regulating relations between the board(s) and shareholders. The DCGC applies to listed Dutch companies, even if the shares are only listed on a stock exchange outside the EEA. While the DCGC applies on a comply-or-explain basis, certain principles and best practices may be considered part of the statutory requirement for board(s) and shareholders to act vis-à-vis each other in keeping with the principles of reasonableness and fairness and may as such be binding.

The Dutch Stewardship Code, developed by pension funds, insurers and asset managers participating in Eumedion, applies since 1 January 2019. It sets out guiding principles for institutional investors with a view to constructive engagement with listed companies on strategy, risk, performance and environmental, social and governance (ESG) aspects, transparency regarding voting policies and their implementation and voting in a well-informed manner with a view to long-term value creation.

Proxy advisory firms such as ISS and Glass Lewis have issued proxy voting guidelines that also cover Dutch-listed companies.

Shareholder activism

How frequent are activist campaigns in your jurisdiction and what are the chances of success?

Activist campaigns can play out publicly or privately. Private campaigns can have a significant impact on companies as the considerable pressure put on boards may cause them to change the company’s strategy to appease the activist and prevent a public campaign.

Several public activist campaigns played out in 2017 and 2018, including Elliott’s campaign against AkzoNobel, CIAM’s campaign against Ahold Delhaize and a ‘vote no’ campaign of four pension funds against Mylan. In addition, there were several court cases about the position of shareholders in listed companies, notably Talpa/TMG (2017) and Boskalis/Fugro (2015-2018), which are relevant to the position of activist shareholders.

The results have been mixed in 2017-2018: Elliott and Boskalis lost their court battles. The ‘vote no’ campaign against reappointment of Mylan’s directors failed; only the non-binding advisory say-on-pay vote was rejected. CIAM did not succeed in getting Ahold to seek shareholder approval for the extension of its takeover defence. Qualcomm raised its offer for NXP following a push by Elliott for a higher price, but ultimately called off the deal. After AkzoNobel successfully fended off the unsolicited approach by PPG and prevailed in litigation initiated by Elliott, it entered into a standstill agreement with Elliott and appointed two new supervisory directors supported by Elliott; in the meantime, it had already announced to sell off its specialty chemicals business.

How is shareholder activism generally viewed in your jurisdiction by the legislature, regulators, institutional and retail shareholders and the general public? Are some industries more or less prone to shareholder activism? Why?

Due to Dutch and EU company law reforms introducing new or strengthened shareholder rights around the turn of the 21st century, shareholder activism in the Netherlands rose sharply. After 2007, corrective measures to curb shareholder activism were implemented in the DCC (increased threshold for shareholders to put items on the agenda), the DFSA (lower threshold for notification by major shareholders), the Dutch Corporate Governance Code (response time), case law (strategy falls within the domain of the board) and by listed companies themselves (renewed appreciation for takeover defences available under Dutch law). See also ‘Update and trends’.

In the Netherlands, no particular industries are more or less prone to shareholder activism. Activist campaigns against ‘national champions’ tend to face more backlash from the general public and politicians.

What are the typical characteristics of shareholder activists in your jurisdiction?

Historically, activist campaigns have predominantly originated from well-known international activist funds with a global or European investment focus such as Centaurus, Elliott, Hermes, JANA Partners, Knight Vinke, Paulson and TCI. In recent years, fuelled by calls from politicians to take a more active role, Dutch pension funds and other long-term institutional investors have become more vocal.

What are the main operational governance and sociopolitical areas that shareholder activism focuses on? Do any factors tend to attract shareholder activist attention?

High-profile activist campaigns at Dutch companies by activist hedge funds typically focused on a company sale or break-up, increased offer price (‘bumpitrage’) or return of capital. Long-term institutional investors tend to focus more on ESG topics and executive compensation or ‘say-on-pay’.

Factors that tend to attract activists’ attention include announced or potential M&A events, low leverage or strong cash positions, as well as perceived corporate governance issues, underperformance and inflated executive pay.

Shareholder activist strategies

Strategies

What common strategies do activist shareholders use to pursue their objectives?

Depending on the type of activist, its goals and the company’s takeover defences, activists may use a number of different tactics to pursue their objectives, such as:

  • privately engaging through informal discussions or ‘dear board’ letters (the starting point of most activist campaigns and the preferred tool of most institutional investors);
  • publicly criticising a company’s strategy, governance or performance or calling for a sale, break-up, return of capital or bumpitrage;
  • short-selling stock and starting a public campaign to drive down stock prices;
  • stakebuilding to build up pressure on the boards and signal seriousness;
  • partnering with a hostile bidder;
  • participating in and voting at general meetings;
  • orchestrating a ‘vote no’ campaign;
  • making a shareholders’ proposal or requesting an EGM be convened (see questions 7 to 9); or
  • initiating litigation (see question 10).
Processes and guidelines

What are the general processes and guidelines for shareholders’ proposals?

Items that shareholders representing individually or collectively at least 3 per cent of a Dutch company’s capital request must be included in the convening notice or announced by the company in the same manner, if the company has received the substantiated request or a draft resolution no later than on the 60th day before the day of the general meeting. The company’s articles may provide for a lower minimum percentage (eg, 1 per cent, the former statutory threshold) or a shorter period.

The company may refuse to put an item on the agenda as a voting item (rather than a discussion item) if it concerns a matter that falls outside the power of the general meeting. Exceptionally, a company may refuse to put an item on the agenda if it contravenes the principles of reasonableness and fairness.

The Dutch Corporate Governance Code provides that a shareholder should only exercise its right to put items on the agenda after consultation with the (management) board. See question 19 for the (management) board’s right to invoke a 180-day response time.

May shareholders nominate directors for election to the board and use the company’s proxy or shareholder circular infrastructure, at the company’s expense, to do so?

Some listed Dutch companies are subject to the large company regime, in which case the following applies by default. The members of the management board are appointed by the supervisory board (instead of the general meeting) and members of the supervisory board are appointed by the general meeting upon a nomination by the supervisory board. If the binding nomination is not overruled by the general meeting, the person is appointed; if the binding nomination is overruled, the supervisory board shall make a new binding nomination.

The articles of association of many listed Dutch companies that are not subject to the large company regime, provide that the general meeting can only appoint directors upon a binding nomination by the (supervisory) board or that the (supervisory) board may elect to make a binding nomination. The binding nomination can typically be overruled either by absolute majority of the votes cast representing at least one-third of the issued share capital (maximum under the Dutch Corporate Governance Code) or by two-thirds of the votes cast representing more than half of the issued share capital (statutory maximum).

If the appointment of a director is not subject to a binding nomination, a nomination by shareholders can be made in accordance with the procedure set out in question 7 or question 9.

May shareholders call a special shareholders’ meeting? What are the requirements? May shareholders act by written consent in lieu of a meeting?

Shareholders representing individually or collectively at least 10 per cent of a Dutch company’s capital (or a lower percentage as prescribed in the company’s articles) may request the board(s) to convene a general meeting. The request must set out in detail the matters to be discussed. If the board(s) have not taken the steps necessary to hold a general meeting within eight weeks (or six weeks, if the company’s shares are not listed on a regulated market within the EEA) after such request, the requesting shareholder may be authorised by the district court in preliminary relief proceedings to convene a general meeting provided that they have a reasonable interest in holding such meeting. As part of the reasonable interest test, the court will weigh the interests of the requesting shareholders against the interests of the company.

See question 19 for the (management) board’s right to invoke a 180-day response time.

While shareholders of a Dutch public company may pass resolutions outside a meeting if the company’s articles of association so allow, such written resolutions can only be passed by a unanimous vote of all shareholders with voting rights.

Litigation

What are the main types of litigation shareholders in your jurisdiction may initiate against corporations and directors? May shareholders bring derivative actions on behalf of the corporation or class actions on behalf of all shareholders? Are there methods of obtaining access to company information?

Shareholder litigation regarding listed Dutch companies mostly takes place in inquiry proceedings before the Enterprise Chamber. Inquiry proceedings allow shareholders (above a statutory share ownership threshold) of a Dutch company to request the Enterprise Chamber to appoint experts to conduct an investigation into the policy and affairs of the company and to impose certain measures of a definitive or preliminary nature. Depending on the capital structure of the company (ie, low nominal value of the shares), the threshold for an activist to have standing in inquiry proceedings can be very high. The Enterprise Chamber may order an inquiry if the applicant demonstrates that there are well-founded reasons to doubt the soundness and propriety of the company’s policy and affairs (eg, deadlock situations; unacceptable conflicts of interest; disturbed relationships; unjustified use of takeover defences). Based on the reported findings of the court-appointed investigators, the applicant may file a petition for a declaratory judgment that mismanagement occurred. At any point during the inquiry proceedings, the Enterprise Chamber may be requested to impose (far-reaching) interim measures by way of injunctive relief (eg, enjoining the execution of board resolutions, appointing one or more independent directors to the board, suspending voting rights of a shareholder or delaying a shareholder vote).

In addition to inquiry proceedings, shareholders can seek nullification of corporate resolutions (arguing for instance that the resolution is contrary to the principles of reasonableness and fairness to be observed) or bring wrongful act claims against a company or its directors (arguing that a particular conduct of the company or its directors constituted a tort against the claimant).

Derivative actions do not exist under Dutch law. The DCC does provide for a collective action, initiated by a foundation or association whose objective is to protect the rights of a group of persons having similar interests. Presently, such action cannot result in an order for payment of monetary damages but may only result in a declaratory judgment. To obtain compensation for damages, individual claimants may file follow-on suits based on the declaratory judgment. Alternatively, in order to obtain compensation for damages, the foundation or association and the defendant may reach a settlement, which can subsequently be declared binding upon all injured parties by the Amsterdam Court of Appeal with an opt-out choice for an individual injured party. A bill is currently pending before the Dutch Senate that would remove the restrictions on seeking monetary damages on a collective basis while at the same time imposing additional requirements on collective action organisations as well as enhanced admissibility thresholds for collective actions.

At general meetings of Dutch companies, boards are required to provide the shareholders with all the information requested by them, unless doing so would be contrary to an overriding interest of the company. While the concept of discovery does not exist under Dutch law, a party with a legitimate interest may submit a motion to the court demanding the production of specified documents pertaining to a legal relationship to which the requesting party or its legal predecessor is a party.

Shareholders' duties

Fiduciary duties

Do shareholder activists owe fiduciary duties to the company?

Under Dutch law, shareholders may - in principle - give priority to their own interests. However, they must act vis-à-vis each other and the board(s) in keeping with the principles of reasonableness and fairness. Courts apply an ‘all facts and circumstances’ test to determine whether an act was in keeping with such principles. The Dutch Corporate Governance Code adds that this includes a willingness to engage with the company and fellow shareholders, and that the greater the interest of the shareholder in a company, the greater is his or her responsibility to the company, fellow shareholders and other stakeholders.

Compensation

May directors accept compensation from shareholders who appoint them?

There is no Dutch law that prohibits a director of a Dutch company from accepting compensation from a shareholder who nominated or appointed him or her. Irrespective of whether a director is nominated, appointed or compensated by a specific shareholder, Dutch corporate law requires all directors to be guided by the corporate interests of the company and its business in performing their duties and to consider with due care the interests of all stakeholders. To the extent that any such compensation creates, in respect of a particular board matter, a direct or indirect personal interest for the director that conflicts with the interests of the company and its business, the director may not participate in the deliberations and decision-making of the board on that matter.

The Dutch Corporate Governance Code considers a director non-independent if it is a representative of a 10 per cent-shareholder. Being a shareholder representative generally involves receiving compensation from such shareholder. Therefore, compensation received by a director from a 10 per cent-shareholder is indicative of being a shareholder representative and is a relevant factor in determining that director’s independence.

Mandatory bids

Are shareholders acting in concert subject to any mandatory bid requirements in your jurisdiction? When are shareholders deemed to be acting in concert?

The Dutch mandatory offer rules only apply to Dutch public companies whose shares or depositary receipts for shares are listed on a regulated market within the EEA. Pursuant to the DFSA and subject to limited exemptions, a mandatory offer requirement is triggered if a person, or a group of persons acting in concert, obtains the ability to exercise at least 30 per cent of all outstanding voting rights in a company (predominant control).

Concert parties are natural persons, entities or companies collaborating under an agreement with the purpose to acquire predominant control in a company or, if the target company is one of the collaborators, to thwart an announced public offer for such target. Persons, entities and companies are in any event deemed to act in concert with: (i) entities that are part of the same group; and (ii) their subsidiaries or other controlled entities. Enforcement of the obligation to make a mandatory bid rests with the Enterprise Chamber, which - as an independent judicial authority - is not bound by ESMA’s white list on acting in concert.

Disclosure rules

Must shareholders disclose significant shareholdings? If so, when? Must such disclosure include the shareholder’s intentions?

Pursuant to the DFSA, any person who acquires or disposes of shares or voting rights of a Dutch company whose shares are listed on a regulated market within the EEA, must forthwith (generally, the next trading day) notify the AFM if the percentage of capital interest or voting rights reaches, exceeds or falls below any of the following thresholds: 3, 5, 10, 15, 20, 25, 30, 40, 50, 60, 75 and 95 per cent. Notifications are published in the AFM’s online registers. The DFSA does not require shareholders to disclose their intentions.

At a few listed Dutch companies, the articles of association impose additional notification obligations on shareholders.

Do the disclosure requirements apply to derivative instruments, acting in concert or short positions?

Depositary receipts for shares, convertible bonds, options for acquiring shares, cash settled instruments of which the value is at least in part dependent on the value of shares (eg, contracts for difference and total return swaps) and any other contracts creating a similar economic position are taken into account for purposes of calculating the percentage of capital interest and voting rights.

For purposes of calculating the percentage of capital interest and voting rights held by a person, shares and voting rights held by such person’s controlled entity, by a third party for such person’s account or by a third party with whom such person has concluded an agreement to pursue a sustained joint voting policy, are taken into account.

Any person who acquires or disposes of financial instruments as a result of which such person’s gross short position reaches, exceeds or falls below the thresholds mentioned in question 14, must forthwith notify the AFM. Notifications are published in the AFM’s online registers. In addition, the EU Short Selling Regulation requires any person holding a net short position to privately notify the relevant competent authority the next trading day if the position reaches or falls below 0.2 per cent (and each 0.1 per cent above that) of the issued share capital of a Dutch listed company. Notifications for a net short position of 0.5 per cent or above are made public.

Insider trading

Do insider trading rules apply to activist activity?

Yes, the MAR applies with respect to Dutch companies whose shares or other financial instruments are listed on a regulated market within the EEA. Pursuant to the MAR, no person may:

  • engage or attempt to engage in insider dealing;
  • recommend that another person engage, or induce another person to engage, in insider dealing;
  • unlawfully disclose inside information; or
  • engage, or attempt to engage, in market manipulation.

Company response strategies

Preparation

What are the fiduciary duties of directors in the context of an activist proposal? Is there a different standard for considering an activist proposal compared to other board decisions?

Dutch corporate law requires all directors to be guided by the corporate interests of the company and its business in performing their duties. If the company has a business, the interests of the company generally are particularly defined by the interest of promoting the sustainable success of the company’s business (ie, a focus on long-term value creation, as also expressed in the Dutch Corporate Governance Code). Under Dutch law, there is no duty to maximise shareholder value at all costs. Instead, boards must weigh all relevant aspects and circumstances and shall consider with due care the interests of all stakeholders, including shareholders, employees, creditors and business partners. Boards have a large discretion on how to weigh the various stakeholders’ interests against each other, although the duty of care may require boards to prevent unnecessary or disproportionate harm to the interests of specific stakeholders. The (management) board is responsible for determining and implementing the strategy of the company (in a two-tier board structure: under supervision of a supervisory board).

Responding to an unsolicited approach or activist proposal seeking to change the company’s strategy (including by means of efforts to change the board composition) forms part of the company’s strategy and, as such, falls within the domain of the board. There is no shift of fiduciary duties: the directors must continue to act in the best interests of the company and its business with a view to long-term value creation, taking into account the interests of all stakeholders. Boards should ensure that they have all relevant information to make an informed decision and the proposal should be carefully reviewed, without bias, and assessed against all available alternatives. Shareholders do not have to be consulted prior to the company’s response; boards are (retrospectively) accountable to the shareholders.

Dutch case law confirms the absence of a general obligation for boards to engage with a bidder or activist to discuss the proposal. While boards may ‘just say no’, they should do so only after careful consideration of a serious proposal on its merits and boards should consider whether some form of interaction with the bidder or activist is needed to make sure the directors have all relevant information to make an informed decision.

What advice do you give companies to prepare for shareholder activism? Is shareholder activism and engagement a matter of heightened concern in the boardroom?

Although the absolute number of activist campaigns in the Netherlands is limited, the uptick in (high-profile) activist campaigns in recent years has made shareholder activism and engagement a discussion topic in the boardroom of many listed Dutch companies. No company is immune to activism and preparedness is key. While recommended advance preparations depend on the specifics of the company, a few useful preparations are:

  • continuously monitoring market activity, financial performance (particularly relative to peers) and the company’s industry and competitors;
  • setting up a small defence team of key directors or officers plus legal counsel, investment banker and public relations firm that meets periodically;
  • ‘thinking like an activist’, routinely assessing the company’s strengths and weaknesses and its takeover defences and exploring available strategic alternatives (consider red teaming);
  • building relationships and credibility with shareholders and other stakeholders before activists emerge and maintaining regular contact with major shareholders, the marketplace generally and key stakeholders; and
  • communicating clearly and consistently on ESG and corporate social responsibility matters, the company’s long-term strategy, its implementation and the progress in achieving it.
Defences

What defences are available to companies to avoid being the target of shareholder activism or respond to shareholder activism?

Most listed Dutch companies have adopted one or more structural takeover defences, often in their articles of association. Examples include:

  • binding nomination rights and supermajority requirements for appointment and involuntary dismissals of directors;
  • staggered boards;
  • evergreen call option for preference shares to an independent Dutch foundation whose purpose is to safeguard the interests of the company and its stakeholders and resist any influences that might adversely affect or threaten the company’s strategy, independence or continuity in a manner contrary to such interests, pursuant to which the foundation can effectively acquire up to 50 per cent of the votes;
  • loyalty voting shares, providing for additional voting rights for ‘loyal’ shareholders;
  • priority shares with certain control rights; or
  • listing of depositary receipts for shares rather than the shares itself.

In addition, Dutch companies may use a variety of other tactics such as:

  • engaging with the activist, which may result in some form of agreement (see question 21);
  • engaging with shareholders and other stakeholders (eg, convince major shareholders with compelling long-term plans or mobilise employees, customers or politicians);
  • invoking a response time under the Dutch Corporate Governance Code, pursuant to which the (management) board may stipulate a reasonable period of up to 180 days if shareholders seek to convene an EGM or put items on the agenda that may result in a change in the company’s strategy (eg, dismissal of directors) and during which the board should deliberate, consult stakeholders and explore alternatives (according to case law, such response time must be respected by shareholders absent an overriding interest);
  • invoking the put-up-or-shut-up rule under the Dutch public offer rules;
  • exploring strategic transactions that make the company a less desirable target;
  • issuing new shares (under existing authorisations) or selling treasury shares to a friendly third party (white knight); or
  • issuing bonds with a mandatory redemption at a higher value in case of a change of control (macaroni defence).
Reports on proxy votes

Do companies receive daily or periodic reports of proxy votes during the voting period?

It depends on the listing venue. Dutch companies with a US listing often (choose to) receive regular updates on the vote tally, especially in contested situations, consistent with market practice in the United States. Historically, this has been less so at Dutch companies with an EU listing. In recent years, the practice in the Netherlands has shifted more towards the US practice of companies receiving updates on the vote tally prior to the general meeting.

Private settlements

Is it common for companies in your jurisdiction to enter into a private settlement with activists? If so, what types of arrangements are typically agreed?

While private settlements with activists are not common in the Netherlands, they do occur from time to time. A company may seek to enter into a pure standstill agreement to reach a truce with an activist shareholder in return for, for instance, a commitment to consult the activist (and other major shareholders) on new director nominations. In case of activists with a significant shareholding, a settlement may take the form of a relationship agreement wherein the company and the shareholder agree on topics such as strategy and governance and wherein the company may give one or more (supervisory) board seats to the activist.

Shareholder communication and engagement

Rules on communication

Is it common to have organised shareholder engagement efforts as a matter of course? What do outreach efforts typically entail?

Organised shareholder engagement outside of general meetings and earnings calls, through investor days, road shows, presentations at conferences or bilateral contacts, has increased in recent years but tends to vary considerably from company to company. Especially larger issuers tend to organise structural shareholder engagement. Engagement efforts tend to be elevated when the company is faced with a crisis or shareholder discontent (eg, an unsolicited approach or activist campaign, a negative recommendation from proxy advisory firms or poor voting results on say-on-pay or discharge of directors).

In line with the recommendation of the Dutch Corporate Governance Code, most listed Dutch companies have formulated an outline policy on bilateral contacts with shareholders and posted such policy on their website. Mostly, such policies leave large discretion to the company to decide whether to enter into, continue or terminate any dialogue and to determine the company participants for such meetings.

Are directors commonly involved in shareholder engagement efforts?

Depending on the company and the topic and shareholder concerned, shareholder engagement efforts may be led by a company’s investor relations department or one or more managing or executive directors, in particular, the CEO or CFO. Non-executive or supervisory directors are less frequently involved in shareholder engagement, though non-executive or supervisory directors may lead conversations with investors regarding the performance or remuneration of managing or executive directors.

Must companies disclose shareholder engagement efforts or how shareholders may communicate directly with the board? Must companies avoid selective or unequal disclosure? When companies disclose shareholder engagement efforts, what form does the disclosure take?

Most listed Dutch companies have published a policy on bilateral contacts (see question 22). Companies are not required to disclose shareholder engagement efforts. The Dutch Corporate Governance Code does recommend that presentations to institutional or other investors and press conferences be announced in advance, that all shareholders be allowed to follow these meetings and presentations in real time and that the presentations be posted on the company’s website after the meeting.

Selective disclosures by a Dutch company whose shares are listed on a regulated market within the EEA, must comply with the requirements under the MAR. In addition, Dutch companies must ensure equal treatment of all shareholders who are in the same position.

What are the primary rules relating to communications to obtain support from other shareholders? How do companies solicit votes from shareholders? Are there systems enabling the company to identify or facilitating direct communication with its shareholders?

See question 24 for rules on selective or unequal disclosure.

The explanatory notes to the agenda for a general meeting set out the company’s position with respect to the agenda items. The meeting materials are posted on the company’s website. Other public communications often take the form of press releases. Listed Dutch companies may decide to engage proxy solicitation firms or investor relations specialists to actively reach out to shareholders (particularly Dutch companies with a US listing do so in line with US market practice).

Notified major shareholdings (greater than 3 per cent) can be found in the online AFM registers. In addition, a listed Dutch company whose shares trade in book-entry form through Euroclear Nederland can - at its own initiative or upon a timely request by shareholders representing at least 10 per cent of the company’s capital - run a process in the lead-up to a general meeting to identify its shareholders holding 0.5 per cent or more of the company’s capital. The company may approach Euroclear Nederland and relevant intermediaries to provide certain information on the identity of the company’s shareholders. The company must keep such information confidential. The company may use such information to disseminate information to its shareholders, provided it also posts such information on its website. The statutory provisions on identification of shareholders will be amended in the course of 2019 to bring them in line with the revised Shareholders Rights Directive.

Must companies, generally or at a shareholder’s request, provide a list of registered shareholders or a list of beneficial ownership, or submit to their shareholders information prepared by a requesting shareholder? How may this request be resisted?

If a shareholder so requests, the (management) board must provide the shareholder, free of charge, with an extract of the information in the company’s share register concerning the shares registered in the shareholder’s name. Dutch companies are not required to provide access to or a copy of the full shareholders register. See also question 10 regarding rights of shareholders to information.

If an identification as referred to in question 25 has occurred and shareholders holding 1 per cent of the issued share capital or shares with a value of at least €250,000 so request, the company must disseminate to its shareholders (and publish on its website) any information prepared by the requesting shareholders relating to an agenda item for the general meeting. The company may refuse the request if the information:

  • is received less than seven business days prior to the meeting;
  • sends, or may send, an incorrect or misleading signal regarding the company; or
  • is of such a nature that the company cannot reasonably be required to disseminate it (criticism of the company’s policy or affairs is in itself no valid ground for refusal).

Update and trends

Recent developments

What are the current hot topics in shareholder activism and engagement?

In recent years, high-profile unsolicited approaches and increasing pressure from activists have prompted a public debate in the Netherlands on the dangers of short-termism and the effectiveness of defence measures available to listed Dutch companies.

In December 2018, the Dutch government published draft legislation that, if enacted in its current form, introduces a statutory cooling-off period of up to 250 days that the board may invoke in case of an unsolicited takeover bid or when faced with activists proposing to dismiss, suspend or appoint board members, if such bid or proposal materially conflicts with the interests of the company and its business (as reasonably determined by the board). During the cooling-off period, the general meeting cannot validly resolve on the dismissal, suspension or appointment of board members, unless proposed by the board itself.

Shareholders representing 3 per cent or more of the company’s capital may request the Enterprise Chamber for early termination of the cooling-off period. The Enterprise Chamber must deny the request if the board, in view of the circumstances at hand when the cooling-off period was invoked, could reasonably have come to the conclusion that the bid or proposal constituted a material conflict with the interests of the company and its business. The cooling-off period also ends early if the hostile bid is declared unconditional.

The cooling-off period is aimed at taking some of the (short-term) pressure off of target boards, to allow for a careful decision-making process in which - in accordance with the Dutch stakeholder model - the interests of all stakeholders are considered and weighed with a view to long-term value creation.

The legislation would apply to all Dutch companies whose shares or depositary receipts for shares are listed on a regulated market or MTF in the EEA or any similar stock exchange outside the EEA (eg, Nasdaq and NYSE).