Dismissal of directors: the “at will” rule becomes supplementary
The former general rule that directors can be dismissed at will (i.e. at any time, without cause and without indemnity) becomes supplementary. Shareholders are now free to provide for notice periods and indemnities in case of termination of a director’s mandate, whether in an SRL/BV, an SA/NV or a cooperative.
However, in the case of good causes, the general meeting may terminate the mandate of a director without indemnity or a notice period (irrespective of the bylaw provisions).
When directors are namely appointed in the bylaws, their dismissal requires an amendment to them.
Directors may voluntary resign at any time upon mere notification to the board. Upon request of the company, they must however remain on the board until their replacement has been appointed.
In an SRL/BV, directors can be appointed for a limited or unlimited period of time, whereas they are appointed in an SA/NV for a six-year period (renewable).
Directors’ mandate is remunerated
The new rule is that a director’s mandate (irrespective of the corporate form being used) is paid, unless otherwise provided.
Daily management for all corporate forms
The appointment of a person in charge of the daily management of the company is now possible for all corporate forms. The definition of what constitutes “daily management” is now broader and includes day-to-day decisions, minor decisions and urgent decisions.
Directors’ liability is capped
Directors’ liability in all corporate forms is now capped at a maximum amount of between EUR 125,000 and EUR 12 million, depending on the size the company. Such liability cap will however not apply in several cases, such as director fraud, serious misconduct, minor misconduct of a recurrent nature or tax-related liability.
Directors’ liability is joint
Directors’ liability is now joint, even if the directors do not act as a board. A director may however avoid being held liable for another director’s misconduct if he/she was not involved in such misconduct and if he/she has reported it immediately to the relevant corporate body.
Governance structure of an SRL/BV and cooperatives largely unchanged
Cooperatives and SRL/BVs may still be managed by one director or several directors, whether or not forming a board. There are no significant changes in the structure.
More options for organizing governance of an SA/NV
The reform introduces three options for organizing governance of an SA/NV:
- One-tier system, with the “classical” board of directors. Competences and working processes are generally the same as in the former regime.
- Two-tier system, with two corporate bodies, namely the supervisory board (conseil de surveillance / raad van toezicht) and the executive board (conseil de direction / directieraad). Each body is separate from the other and has distinctive powers, the first being in charge of general business policy matters, while the other is responsible for all matters not specifically reserved for the supervisory board, mainly the operational management of the business. Each body comprises at least three members, who cannot be the same person.
- Sole directorship, with a single director in charge of everything except the matters reserved for the shareholders’ meeting. The sole director may be an individual or a legal entity, except in listed companies, where it has to be an SA/NV with a board. The sole directorship option is a welcome introduction for an SA/NV, especially as it is possible to strongly protect the director against his/her dismissal, by granting him/her, for instance, a veto right against his/her own dismissal (except, of course, if the dismissal is for cause). The sole director may even be appointed in the bylaws, which was possible before for an SPRL/BVBA and cooperatives only.
Conflict of interest rules change
In an SRL/ BV, the conflict of interest rules are modified as follows:
- When there are several directors, the conflicted director (meaning the one with a direct or indirect financial interest conflicting with the company’s interest) may not participate in the vote.
- If there is only one director or if all directors are conflicted, the decision is taken directly at the shareholders’ meeting for resolutions.
- If the sole director is also the sole shareholder of the SRL/BV, he/she can resolve the conflicted matter.
In an SA/NV, the rules are essentially the same, except for necessary changes to the governance structure. In particular, if a conflict of interest occurs at the level of the “supervisory board”, the concerned director may not vote. However, if the conflict occurs at the “executive board” level, the decision on the conflicted matter is taken directly by the supervisory board (even if only one director is conflicted).
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