The STAK: binding valuable employees without influencing the decision-making process

In practice, we increasingly see business owners placing part of their activities in a foundation. This may be for R&D reasons or in connection with a social purpose, but especially, in the context of employee participations (through a so-called STAK). Since July 1, 2021, the Law on Management and Supervision of Legal Persons has come into force. That change in the law brings changes for foundations, and thus also for a STAK. The law change regulates important matters and changes rules in the field of supervision and directors' liability of foundation directors.  

A start-up or scale-up business owner would therefore do well to seek proper advice on this before placing its activities in a foundation.

Employee participation

An important reason for business owners to include a foundation in their corporate structure is to allow employees to participate in their company. Especially in scale-ups, where retaining the right employees is crucial, employee participation can be interesting. This is done through a so-called Stichting Administratiekantoor (STAK). The STAK can separate the voting right from the profit right by holding the shares and then giving the employees certificates. Through these certificates, the employees are entitled to a portion of the profits, but have no voting rights; the voting rights remain with (the board of) the STAK. In this way, valuable employees can be attached to an organization without unnecessarily complicating decision-making.  

The WBTR

However, the use of an STAK is subject to rules. The advent of the WBTR has brought in further rules specific to the foundation, association, cooperative and mutual insurance company. If you make use of an STAK in a scale-up, it is important to keep a sharp eye on these. We have listed the most important changes for you:

• The WBTR creates a legal basis for a supervisory body and an (optional) monistic management system (also called: one tier board) in the case of the aforementioned legal entities such as a supervisory board (often called a supervisory board in the case of foundations and associations);
• The WBTR regulates how the duties and powers of the board of directors and supervisory board should be carried out, and the consequences of improper management (or supervision);
• The WBTR unifies for all legal entities in Book 2 of the Civil Code the conflict of interest rules and the rules for supervisory director and director liability (in case of bankruptcy);
• The WBTR creates a restriction on multiple voting rights for directors and supervisory directors;
• The WBTR modernizes the criteria for dismissal of foundation directors and supervisory board members;
• Under the WBTR, it becomes mandatory to include a provision in the articles of association regarding the absence and inability to act of directors and supervisory directors

You can find more about these changes in this long read. Do you have questions about the implications of the WBTR for your foundation or association? Please feel free to get in touch.