In the world today, governance presents significant challenges for companies, particularly in the international arena. The playing field is becoming increasingly complex, shareholders are more demanding, the number of stakeholders is growing, and regulations are constantly evolving. As a result, boards and supervisory boards might find themselves under pressure at unforeseen moments.
A stress test is a tool that quickly shows how well the company’s governance structure is capable of withstanding critical situations: situations such as hostile takeovers, internal conflicts, problems with the authorities, major legal proceedings and changes in legislation such as the new Dutch Management and Supervision of Legal Entities Act (Wet bestuur en toezicht rechtspersonen), which entered into force on 1 July 2021.
Our multidisciplinary team with experts in corporate governance and regulatory and corporate litigation are adept in carrying out governance stress tests to improve and reinforce your governance practices. Marry de Gaay Fortman explains, “Often, it is only when a company or institution finds itself in a critical situation that its governance is put to the test for the first time. These companies and institutions generally learn that reality is more difficult to manage than a description on paper.” A governance stress test anticipates these critical situations by showing how well the company or institution is capable of withstanding internal and external high-impact events, and what aspects need to be improved. “A stress test gives boards and supervisory boards the tools to safeguard a lasting and future-proof governance structure for the company’s benefit,” adds Marry.
