[No. 216] Dividends & Law Reform: Parliament Votes in Favor of Board Approval

In post 205 and 193 Bastiaan and I expressed our concerns with the proposed regulation for dividend payments in private companies. We both argued that the second amendment of the proposal - that abolished the boards’ right to approve a distribution - was a mistake and incoherent with the general duty that Dutch law imposes on directors. Today the Dutch parliament voted on an amendment of a member of parliament, that takes the regulation of dividend payments back to square one; back to the requirement of formal board approval. The good news is that (according to the results published on its website) the parliament voted in favor of the amendment. This means the requirement of board approval is part of the proposal again. In my opinion, this is a huge step in the right direction.