Under Dutch law (section 114a of book 2 of the Dutch Civil Code), shareholders have the right to put items on the agenda of the general meeting. The question arises as to whether shareholders also have the right to force an (informal) vote in the general meeting on subjects which are not within their powers. A judgment of the Dutch Supreme Court of 20 April 2018 between Boskalis and Fugro focused on this question.
Fugro is a listed company operating in the field of soil surveys in a number of countries. Depositary receipts had been issued for shares and they had been listed. At the relevant time, Boskalis held an interest of over 28% in Fugro. Fugro, like two-thirds of all listed companies in the Netherlands, had protective measures in place. At the time, Fugro had three protective measures in place. Boskalis objected to one of the protective measures at the level of two of Fugro's subsidiaries in Curacao (the so-called Antillean protective measure).
Boskalis and Fugro agreed that the resolution to dismantle the Antillean protective measure was not within the powers of the general meeting, but it could be discussed in the general meeting. They did not agree on whether Boskalis could force a vote on the dismantlement of the Antillean protective measure at the general meeting, even though such vote was only a recommendation and not legally binding. Fugro refused to put this voting item (in the form of a non-binding recommendation) on the agenda. Boskalis applied to the court.
In preliminary relief proceedings, both the judge and the Court of Appeal decided – in short – that Fugro could not be forced to put the vote on the dismantlement of the Antillean protective measure on the agenda. The Supreme Court agreed with the judgments and provided the following explanation.
The Supreme Court reiterated the rule of law that the management board, under the supervision of the supervisory board, is responsible for determining the policy and strategy of the company and its business. The general meeting can express its opinions in this regard by exercising its powers as prescribed by law or the articles of association. The management board is accountable to the general meeting for its policy, but is not obliged – except for statutory provisions or provisions in the articles of association to the contrary – to involve the general meeting in its decision-making in advance or consult the general meeting.
In light of the above, shareholders and depositary receipt holders as referred to in section 114a of book 2 of the Dutch Civil Code cannot force the company to put voting items on the agenda in respect of matters which are within the powers of the management board. It does not matter whether such a vote has a legal effect or how such vote is phrased (i.e. as an informal vote or not). The Supreme Court concluded in this case that the Shareholders' Rights Directive does not lead to a different conclusion.
This means that Boskalis, as a depositary receipt holder, may request Fugro's management board to put the Antillean protective measure or another matter that is within the management board's powers on the agenda as a point of discussion, but the management board is not obliged to put this to the vote. It does not make a difference whether such request is phrased as an informal vote, recommendation, motion or poll. Otherwise Boskalis, as a depositary receipt holder, would become active in Fugro's policy and strategy, which is the responsibility of Fugro's management board.