The rules on the procedure and terms applicable to the appointment and reappointment of supervisory board members are fragmented across various types of governance codes and statutory provisions. A maximum term of four years, with the option of one or two reappointments, is most common.

In practice, it is often necessary to deviate from the prescribed maximum terms. Sometimes this is done deliberately and with justification; at other times, terms are 'accidentally' exceeded due to insufficient monitoring. If members are not appointed or reappointed on time, the supervisory board may face uncertainties, invalidation of its resolutions or even continuity issues.

Marry de Gaay Fortman and Erykah Sackey explore the importance of a properly regulated supervisory board appointment cycle and provide four practical recommendations. 

Read the entire article here (in Dutch).

Subheading: Practical recommendations

In view of the above, it is important to monitor the appointment terms of current supervisory board members and remain alert to the requirements applicable to reappointment, including the obligation to state reasons.

To ensure a smooth supervisory board appointment and reappointment process at the company, we recommend the following four practical measures:

• Take the time to properly set up the supervisory board appointment and reappointment procedures. Pay particular attention to laying down the appropriate terms in both the articles of association and any regulations in that regard. It is advisable to evaluate the reappointment rules once in a while, to check whether they still align with current practices and any specific governance codes applicable to the organisation.
• Implement a rotation schedule and ensure it is strictly monitored and enforced. If the organisation has a corporate secretary or general counsel, they can also assist in this. Including the topic of appointment and reappointment of supervisory board members on the annual agenda can be helpful here. This is particularly important for foundations, to avoid a situation where simultaneous retirements of supervisory board members would make reappointments impossible. Using a 'staggered' rotation schedule is therefore recommended.
• Implement a succession plan. This plan could set out more substantive details of supervisory board succession, including the expertise, experience and diversity required within the supervisory board. It is advisable to provide insight into these criteria to facilitate the recruitment of new supervisory board members. Also start the necessary preparations on time.
• Set up an appointment committee to handle the preparations for the appointment of supervisory board (and management board) members. The appointment committee can prepare and monitor the rotation schedule and the succession plan, while also considering the management board's role in that regard. Involve the management board members in the supervisory board selection procedure to an appropriate extent.