This article was most recently updated on 24 April 2020. The Dutch government's emergency bill on coronavirus-related matters includes temporary facilities to mitigate the impact of the coronavirus outbreak on various aspects of Dutch society. For Dutch companies, the bill contains measures aimed at helping organise and time general meetings amidst the coronavirus pandemic, including the option of holding virtual meetings. The bill became law and took effect on 24 April and has retroactive effect, covering general meetings held on or after 16 March 2020. This article provides companies with guidance on the temporary rules for general meetings of listed companies.
Why an emergency act?As part of its efforts to limit the spread of the coronavirus, the Dutch government has imposed several restrictions on public and private gatherings. As discussed in this recent article, this raises the issue that Dutch law does not facilitate general meetings where any physical attendance is excluded. Another issue is that public limited liability companies have a statutory obligation to hold their annual general meeting within six months after the end of their financial year. This tension between the need to minimise public and private gatherings and the legal requirements regarding annual general meetings, has put many Dutch companies in a difficult position. The fact that various listed companies have already postponed or cancelled their annual general meetings, reflects this dilemma.
Virtual general meetings made possibleThe emergency bill allows companies to organise virtual general meetings. This means that anyone attending the meeting, including directors and shareholders, can only do so electronically. This includes providing shareholders the option to follow the general meeting by video or audio webcast. Shareholders are not entitled to participate in two-way discussions in real time but may submit written or electronic questions before the meeting and follow-up questions during the meeting. This setup will not require directors to assemble at an agreed location and participate in the virtual meeting as a group. They may attend from different locations. Shareholders attending the virtual meeting electronically will, by default, be unable to vote during the meeting. Unless the company's board has facilitated electronic voting during the meeting, votes may only be submitted ahead of the meeting. Although the initial bill was not fully clear on this point, this was clarified specifically by the government on April 10. Virtual general meetings will be available to companies irrespective of what arrangements are set out in their articles of association. The bill enables companies' boards to determine whether a virtual meeting is to be held.
Requirements for holding virtual general meetingsFor a company to hold a virtual general meeting, a number of requirements must be met:
- The notice to the meeting must state that the meeting will be held as a virtual meeting. If the meeting has already been convened, the company may still change the meeting into a virtual meeting, provided that notice of this change is given at least 48 hours before the meeting.
- The meeting must be broadcasted live, by video or audio cast, to shareholders.
- Ahead of the meeting, shareholders must be able to submit written or electronic questions to the company regarding items tabled for discussion or for a vote at the meeting.
- The deadline for shareholders to submit questions is 72 hours before the meeting. The deadline is 36 hours, however, if a general meeting was changed into a virtual meeting five days or less before the meeting.
- Questions submitted timely by shareholders must be answered at the latest during the meeting, but may also be answered before the meeting. Questions need not to be answered individually, but may be grouped based on the relevant theme. The answers must be posted on the company's website or made available electronically to shareholders.
- The board of a public limited liability company (NV) must enable shareholders to submit follow-up questions during the meeting, but the meeting's chairman will have discretion in this and may – in certain circumstances – decide on which questions will be answered and how, in order to safeguard the order of the meeting. According to the bill, shareholders may in principle pose follow-up questions only if they have also submitted written or electronic questions prior to the meeting. In the case of a private limited liability company (BV), the board must make efforts to provide for the option to ask questions.