Legislative proposal for digital general meeting

In January 2024, a legislative proposal was submitted to the Dutch parliament introducing several important changes for general meetings of legal entities. The proposal aims to (i) enable fully digital general meetings, (ii) provide additional safeguards for digital participants with voting and meeting rights, and (iii) modernise the digital convening of general meetings.

The main drivers behind this proposal are to simplify and increase participation in general meetings, reduce CO2 emissions, save costs and time, improve the Dutch business climate, and respond to practical needs observed in the market.

The proposal essentially contains three measures:

1. Facilitation of fully digital general meetings of NV's, BV's, associations, cooperatives and mutual insurance associations

The possibility to have such meetings take place partially digitally (hybrid) already exists. In that case, the meeting takes place physically, and is also broadcast digitally at the same time. The new proposal goes a step further by making it possible to hold general meetings digitally only, without the meeting taking place physically. This means that all participants can join the meeting electronically, using a two-way audiovisual communication tool. The requirement for such a tool will also apply to hybrid meetings.

It is up to the legal entity itself to make a choice regarding the form of the general meeting: (i) physical, (ii) hybrid or (iii) fully digital.

2. Additional conditions for the use of electronic means of communication at a general meeting

Additional conditions are imposed on the use of electronic means of communication at a general meeting. This should ensure that (i) there is sufficient support at the general meeting for holding a fully digital or hybrid meeting, (ii) a digital meeting reflects a physical meeting as closely as possible and (iii) participants can fully participate in a general meeting digitally.

• Approval of the majority of members or shareholders

The starting point is that the general meeting of members or shareholders must agree to the possibility of holding a digital meeting. The legislative proposal assumes that there must be support from the majority of members or shareholders for holding a fully digital meeting.

• Statutory basis

A statutory basis is prescribed for most legal entities (NVs, BVs, cooperatives and mutual insurance associations). The requirement for a statutory basis is in line with the current statutory regulation for the hybrid general meeting. Associations and VvEs are not required to have statutory anchoring, but it is stipulated that the general meeting of members can grant authorisation to the association's board to hold a hybrid or fully digital meeting. The association's articles of association may provide otherwise.

The legal entity itself determines the content of the statutory provision(s). For example, it can be included that the board decides whether (and if so, under what conditions) the general meeting will take place entirely digitally, whether authorisation from the general meeting is required for this, or that the possibility of entirely digital meetings is excluded for certain decisions. Delegation to a regulation or, for example, to the body that convenes the meeting is also possible. The legislative proposal does not (mandatorily) prescribe decision-making with an increased majority with regard to including the possibility of an entirely digital general meeting in the articles of association.

• Two-way audiovisual communication tool

Shareholders must be able to fully participate in the digital meeting, as if they were present at the meeting. They must be able to ask questions to the board members or address them about the policy that has been and will be implemented. To this end, it is stipulated that members and shareholders must be able to (i) participate directly in the meeting with image and sound, (ii) speak, (iii) vote online and (iv) be identified via electronic means of communication. The rules for hybrid meetings and fully digital meetings are being harmonised. This means that – for both a fully digital and a hybrid meeting – it is no longer (sufficient) to broadcast a live stream.

3. Simplification of convening general meetings electronically

• No more consent required for electronic convening

Under current law, all legal entities can already convene meetings by electronic means, unless the articles of association provide otherwise. This requires (i) a legible and reproducible message to the address that has been made known to the legal entity for this purpose, such as an e-mail or another type of electronic message box and (ii) that the shareholder/meeting-entitled person/delegate or the member to whom this message is sent has agreed to receive digital notices. This second requirement (the consent requirement) will be abolished.

• No more national newspaper announcement required

For non-listed NVs, it will no longer be necessary to publish a notice in a national newspaper if electronic convening is not possible. Instead, a public announcement made electronically, which is directly and permanently accessible until the meeting, will suffice. For example, a notice on the NV's website.

• Notice must include information on digital participation and voting procedures

The notice must now contain information about the procedure for participating in the general meeting and exercising voting rights electronically. This includes, for example, information about which application or website is used and how to vote. If necessary, reference can be made to a website or other medium where further information can be found about the procedure for participation.

Current status

On 4 March 2024, the Standing Committee for Justice and Security (vaste commissie voor Justitie en Veiligheid) submitted questions about the legislative proposal. In particular, questions are raised about the absence of a reinforced majority requirement for amending the articles of association to allow fully digital general meetings.