Background
One of the key elements is the statutory basis for, and the description of the duties of, the supervisory board (raad van commissarissen, RvC) of a foundation or association, which may also be referred to as a supervisory council (raad van toezicht, RvT). In that context, the relationship between the one-tier board model (monistisch bestuursmodel) and the RvC/RvT model has also been clarified. The choice of a one-tier board operates on an exclusive basis: a legal entity whose articles of association provide for a one-tier board cannot combine this with an RvC or RvT. This exclusive character is laid down for foundations in Article 2:292a(1) of the Dutch Civil Code (DCC), which reads: “Unless effect has been given to Article 291a(1), the articles of association may provide that there shall be a supervisory board.”
Article 2:292a(1) DCC thus refers to Article 2:291a(1) DCC, the provision on the one-tier board model for foundations. Article 2:292a(1) DCC entered into force on 1 July 2021, but Article 2:291a DCC has not yet done so.
Why has Article 2:291a DCC not yet entered into force?
The entry into force of the provisions on the one-tier board model for associations and foundations was postponed on 11 June 2021 (Staatsblad 2021, no. 284) to a date to be determined by royal decree (koninklijk besluit). The reason given was that the Chamber of Commerce (Kamer van Koophandel) did not yet have the technical capability to indicate in the commercial register (handelsregister) whether a director is executive or non-executive. As long as that technical adjustment has not been implemented, the statutory framework for the one-tier board model for foundations and associations remains on hold. As of today, no royal decree establishing the entry into force of Article 2:291a DCC has been published. The expectation is that this provision will enter into force once the Chamber of Commerce has the necessary registration forms and systems in place.
One-tier board already possible in practice
The fact that Article 2:291a DCC has not yet entered into force does not affect the possibility of already operating under a one-tier board model in practice. Various foundations and associations have used such a structure for a considerable time – pension funds (pensioenfondsen) being a notable example. The explanatory memorandum (memorie van toelichting) to the Wbtr expressly acknowledges this: various associations and foundations were already operating under a one-tier board model in practice before the bill was submitted. Although the absence of a specific statutory basis gives rise to some legal uncertainty, it does not preclude the use of such a model.
Stacking of supervisory models not permitted
What the Wbtr has expressly regulated since 1 July 2021 is that stacking supervisory models is not permitted. The explanatory memorandum to the bill states: “The possibility of establishing a supervisory board does not exist where the legal entity operates under a one-tier board model.”
This prohibition is consistent with the system of the Act: under a one-tier board, the non-executive directors supervise the executive directors. A separate supervisory board would create duplication.
Specific supervisory body permitted
It can also be inferred from the legislative history (wetsgeschiedenis) that a foundation may – whether or not alongside a one-tier board – establish a body that does not qualify as an RvC/RvT. An example would be a body whose sole task is to supervise a specific area of policy, such as the financial affairs of the legal entity. Such a body is not an RvC or RvT within the meaning of the Act, since a key element of the RvC/RvT’s duties is to supervise the general affairs of the legal entity and its associated enterprise or organisation. A body that supervises only a specific area does not meet that description and therefore falls outside the scope of the prohibition on stacking.