Diversity and gender balance in the Netherlands

From 1 January 2022, a new law (the Balancing the Ratio of Men and Women in the Management and Supervisory Boards of Large Public and Private Companies Act) came into effect which introduces an obligation for large Dutch companies to set an appropriate and ambitious target figure for the supervisory boards, management boards and sub top management levels of large Dutch companies. We outline below the obligations applying to large (non-listed) companies only and do not apply to listed companies, they must comply with other statutory requirements that are not covered in this update.

Large companies

Dutch companies (public and private limited companies) meeting at least two of the following requirements on two consecutive balance sheets dates shall qualify as large companies as referred to in the act:

1. The value of the assets according to the balance sheet with explanatory notes amounts, on the basis of acquisition and manufacturing price, to more than €20m.

2. The net turnover for the financial year is more than €40m.

3. The average number of employees during the financial year is 250 or more.

Steps you need to take

Firstly, the company is required to set appropriate and ambitious targets in the form of a target figure in order to achieve a more balanced ratio between men and women. The target should at least apply to the management board and the supervisory board. Furthermore, the company itself should determine for which other management levels it will set targets (this should be a category of employees in managerial positions).
Secondly, a plan needs to be drawn up to achieve the targets set, for which a supporting infrastructure will be developed by the Dutch Social Economic Council (the SER).

Finally, according to the transparency obligation:

1. A management report must include the progress regarding the targets and the plans to achieve them; and

2. The SER has to be reported annually according to a template format.

Deadline

For large Dutch companies, the appropriate and ambitious target figures and a plan to achieve the set targets should be implemented from 1 January 2022 onwards.

Sanctions for non-compliance

The act does not include any sanction for non-compliance with the above-mentioned obligations.

Please do contact our Netherlands team if more detailed information on this new Act is required.