18 February 2021

Pre-election update on Dutchcorporate governancelegislation

With a caretaker government in place and elections set for March 2021, we take a moment to look at the status of pending corporate governance legislation. The government has not declared any of these bills controversial, but the lower house election recess, lasting through 22 March 2021, may cause delays.

Covid-19 emergency measures

This legislation has been extended for the fourth time, moving the end date of the temporary act back to 1 April 2021. This means that Dutch companies can hold virtual general meetings until at least that date. No certainty can be given for meetings planned later in the year, as we await further news from the government. Click here for more information on the emergency bill.

Gender diversity

A bill setting gender diversity quotas for Amsterdam-listed NVs and BVs and gender balance targets for all "large" listed and non-listed NVs and BVs, including those listed on a stock exchange other than Euronext Amsterdam, was adopted by the lower house on 11 February 2021. At the end of 2020, the Minister for Legal Protection had requested a rapid parliamentary process to fill the regulatory gap on gender diversity (existing since January 2020). Earlier on in the parliamentary process, some technical amendments were made, These included a transitional provision on the obligation of "large companies" to report on gender diversity targets. As of the bill's entry into force, these companies will have to set "appropriate and ambitious" targets on gender balance and make a plan for how to achieve this. Assuming the bill enters into force in 2021, they will have to account for these targets, and for the progress made over 2021. You can read more about the bill in our previous In context article, and we will keep you informed as the bill makes its way through the parliamentary stage in the upper house.

Statutory response time

A bill giving management of Dutch listed companies a statutory timeout right is in the final phase in the parliamentary process. The plenary debate by the upper house is planned for 16 March 2021, thus missing the government's intention for the bill to enter into force on 1 March 2021. Under the new law, management of Dutch companies listed on a stock exchange or on a multilateral trading facility, either in or outside the EU, can initiate a timeout of up to 250 days to respond to shareholder attempts to change the composition of the company's boards or to unsolicited public offers. We will provide detailed information and guidance on this important piece of legislation as soon as the bill is adopted.

And finally, reporting in ESEF delayed

The Minister of Finance informed the lower house in a letter of 18 January 2021 that Dutch listed companies will have another year to prepare their financial reporting in the European Single Electronic Format (ESEF). Dutch issuers will have to report in ESEF for the financial year starting on or after 1 January 2021, but they can start using the ESEF format earlier, for the 2020 financial year. More information on ESEF can be found on the site of the Dutch Authority for the Financial Markets (AFM).