Stakeholders

In continental Europe, the way the company and its associated enterprise are organised is based on the “stakeholder model”, also known as the “Rhineland model”. This model views the company and its business as a community of interests in which the factors of labour and capital work together in harmony as far as possible. It follows from this model that directors must carefully consider the interests of all stakeholders involved in the company and its affiliated enterprise, which was confirmed in the Dutch Supreme Court’s Cancun decision.

Who or what are stakeholders?

Stakeholders, according to the Corporate Governance Code, are individuals or groups that (in-)directly influence, or can be influenced by, the achievement of the company’s objectives. Examples of stakeholders are:

employees
shareholders
other capital providers
suppliers
customers
other interested parties

Stakeholders and the law

The powers and rights of certain stakeholders, such as shareholders and employees, with which they can exercise power over (the management of) the company are regulated by law.

Thus, the relationship between the company and its employees (representatives) in terms of employee participation is governed, among other things, by the Works Councils Act ( WOR). Therein, for example, the works council is granted an advisory right in certain cases.

For individual shareholders, the relationship between the company and them as such is largely governed by the Civil Code Book 2 – Legal Entities. These include the right to institute certain proceedings (e.g. the annual accounts procedure/dispute settlement procedure), various information rights, various financial rights and control rights.

Stakeholders and the corporate governance code

Not only in law, but also in the Corporate Governance Code, certain stakeholders are addressed. For example, for employees (representatives) at listed companies, in addition to the WOR, a number of additional provisions of the Corporate Governance Code apply to culture and contacts between the supervisory board and the employee participation body, cf. e.g. article 2.5.2 Corporate Governance Code and article 2.5.3 Corporate Governance Code.

The Corporate Governance Code also provides that the listed company shall outline a policy for an effective dialogue with relevant stakeholders on the sustainability aspects of the company’s strategy (Article 1.1.5. Corporate Governance Code). Furthermore, the Corporate Governance Code provides that the management board of a listed company, under the supervision of the supervisory board, shall focus on the long-term value creation of the company and its affiliated enterprise and weighs the relevant interests of stakeholders to this end (principle 1.1 Corporate Governance Code). Such weighing of interests may result in the management board disregarding certain stakeholders, but not necessarily: the Corporate Governance Code does not prescribe what the outcome of the weighing of interests and the consequences to be attached thereto should be in concrete cases.

Wieringa Advocaten

Are you curious about what rights you have as a stakeholder? Or are you a director of a company and wondering to what extent you need to take certain stakeholders into account when making decisions? If so, feel free to contact us. We will be happy to advise you.

Questions?