1. Written resolutions
The possibility of written resolutions allows a simplified process of decision-making by the board of directors. The directors do not have to meet physically or by tele- or videoconference to deliberate, but decide by signing a written document describing the decision(s) and/or transaction(s) to be taken.
This does not require all directors to sign the same document. The bundling of several documents, each with the signature of one or more directors, showing unanimous consent is sufficient.
Written resolutions are possible for all decisions and transactions to be taken by the board of directors, except for those for which the articles of association and the law exclude this possibility. Contrary to what applied under the old Code of Companies, the possibility of written resolutions is thus no longer limited to exceptional cases where urgent necessity and the legal entity’s interests require this procedure.
With regard to written resolutions, the following should be taken into account:
- It is required that all directors agree with the decision(s) and/or transaction(s) to be taken and sign the written document, in short: without unanimity of the directors, no written resolutions;
- Decision(s) and/or transaction(s) that were passed by written resolutions although the articles of association expressly exclude written resolutions for the matter concerned are internally voidable and could give rise to directors’ liability for violation of the articles of association.
2. Conflict of interest-procedure
If, in relation to a decision or transaction to be taken by the board of directors, it appears that a director or a permanent representative of a director-legal entity has a direct or indirect interest of a patrimonial nature that conflicts with the legal entity’s interest, the conflict of interest-procedure prescribed by the Code of Companies and Associations (hereinafter: “CCA”) applies.
A director has an interest of a patrimonial nature when his assets are negatively or positively affected by a decision or transaction that is considered by the board of directors. This interest is direct when the director himself is the counterparty of the legal entity (e.g.: the sale of an asset from the director’s assets to the legal entity) and this interest is indirect when a person or entity, with whom/which the director is connected in such a way that he benefits from the decision or transaction, is the counterparty of the legal entity (e.g.: a transaction with a company of which one of the directors is a shareholder).
The CCA prescribes that in this case, the conflicted director (i) must inform the other directors of the conflict of interest and (ii) may not participate in the deliberation and voting with regard to the decision or transaction to be taken.
If all directors have a conflict of interest, they must submit the decision or transaction to the general meeting. If the general meeting agrees to the proposed decision or transaction, the board of directors may execute it.
3. Reconcilability?
The unanimity requirement for written resolutions raises the question whether written resolutions are possible in the case of a conflicted director. After all, how can unanimity be achieved if not all directors are allowed to vote?
The CCA does not provide expressly that written resolutions are excluded in case of a conflicted director. The legal doctrine therefore resolves this question by stating that in the case of (a) conflicted director(s), unanimity is only required between the non-conflicted directors.
This means that the written resolutions must mention the conflict of interest and must be signed by all directors, including the conflicted director(s). With regard to the decision or transaction for which there is a conflict of interest on the part of one or more directors, the signature of the conflicted director(s) serves merely as acknowledgement of the conflict of interest and not as consent to the decision or transaction to be taken.
If all directors have a conflict of interest, they may submit the decision or transaction to be taken to the general meeting via written resolutions. The written resolutions then state (i) the decision or transaction to be taken, (ii) the conflict of interest and (iii) the decision to submit the decision or transaction to be taken to the general meeting. If the general meeting agrees to the proposed decision and/or transaction, the board of directors may execute it.
