Bill

Bill to improve men-women ratio in boards

Bill to improve men-women ratio in boards
Bill to improve men-women ratio in boards 1920 1000 Corpvision

New bill to improve the men-women ratio in boards

As per January 1, 2022, a new bill to improve the men-women ratio in management boards and supervisory board of listed companies and certain large companies (BVs and NVs) is effective. Basically, two measures have been introduced pursuant to the bill: the ingrowth quota and the target scheme.

Ingrowth quota

A so-called ingrowth quota has become applicable to supervisory boards of listed companies and will result in a more balanced composition of the respective supervisory boards: a supervisory board should consists of at least one third men and at least one third women. Pursuant to the ingrowth quota, an appointment of a new individual as member of a supervisory board will in principle be void if it does not lead to a more balanced composition of the supervisory board. The foregoing also applies to the appointment of non-executive directors of a listed company in case of a one-tier model.

Target scheme

For certain large companies, the bill has introduced an obligation to set appropriate and ambitious objectives in the form of a target scheme. This should result in a more balanced men-women ratio in the management board, supervisory board and key management. Furthermore, such large companies should prepare a plan in order to achieve the targets set forth in the target scheme and report the targets to the Social and Economic Council and in the management report.

The Social and Economic Council has reported earlier that most companies do not yet meet the requirements of a balance composition of their respective boards. In addition, most companies have not yet started with the required preparations. Given the fact that the bill has come into force, it is expected that the board composition will be on the board agenda’s soon.

Dutch implementation of the Trust register

Bill for the Dutch implementation of the Trust register
Bill for the Dutch implementation of the Trust register 1920 1000 Corpvision

On November 23, 2021, the Dutch Senate has approved a legislative proposal for the implementation of the Dutch UBO-register for trusts. The Trust Register is a public register containing information of the ultimate beneficial owners of trusts and similar legal arrangement such as the Dutch mutual funds (FGRs). It is expected that the Trust Register will be implemented later this year. After implementation, trustees will have 3 months to register the UBOs of trusts.

The Trust register is applicable to (i) trusts and (ii) similar legal arrangements. A trust is a legal relationship under which assets have been placed under the control of a trustee, who manages those. The Netherlands has qualified certain funds without legal personality as legal arrangement similar to trusts. The most common example of a fund that falls under the scope of the Trust Register is the Dutch mutual fund (FGR)).

Who should make the registration?

The trustee – of a trust has the obligation to register information in the Trust Register. In case of a Dutch mutual fund, the manager of that fund will generally be the trustee.

Trusts are not subject to the registration requirement in The Netherlands if the trust and its UBOs are registered in a Trust Register of another Member State of the European Union.

Who is an UBO?

An UBO should always be an individual person, unless certain exceptions apply. The following individuals will in any event be considered to be a UBO:

  • the settlor(s);
  • the trustee(s);
  • the protector(s), if applicable;
  • the beneficiaries, or if no individual beneficiaries can be determined, the group of individuals in whose interest the trust in principally established or active; and
  • any other individual who, through direct or indirect ownership interest or through other means, can ultimately exercise control over the trust.

Sanctions

Violation of the registration obligations as set forth above is considered a Dutch economic offence which can be sanctioned by criminal or administrative sanctions.

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