Supreme Court clarifies procedure in cases of (potential) conflict of interest

In its judgment of 10 April 2026 (ECLI:NL:HR:2026:592), the Supreme Court provided further guidance on the conflict of interest regime, specifically the procedure applicable to the notification and determination of a conflict of interest, and in doing so formulated important rules for practice.

The conflict of interest rules

Section 2:239(5) of the Dutch Civil Code stipulates that directors must act in the interests of the company and its business. Paragraph 6 adds that a director who has a direct or indirect personal interest that conflicts with the company’s interests may not participate in the deliberations and decision-making. The criterion here is whether there can reasonably be doubted whether the director is guided exclusively by the company’s interests. If the entire management board is in a conflict of interest, the authority shifts to the supervisory board or, in the absence thereof, to the general meeting (unless the articles of association provide otherwise).

The provision safeguards the integrity of the decision-making process and aims to prevent a director from prioritising his personal interests over those of the company. A board resolution adopted in contravention of Section 2:239(6) of the Dutch Civil Code is voidable under Section 2:15(1)(a) of the Dutch Civil Code (or, if the entire board was in a conflict of interest, void under Section 2:14(1) of the Dutch Civil Code). Furthermore, disregard of the conflict of interest rules may give rise to the initiation of an inquiry procedure and/or the holding of the director with a conflict of interest liable for improper performance of duties (Article 2:9 of the Dutch Civil Code) and/or unlawful acts (Article 6:162 of the Dutch Civil Code).

However, the law does not provide an answer to the question of who determines whether a conflict of interest exists. In the aforementioned judgment, which was based on a difference of opinion between the director with a conflict of interest and his fellow directors, the Supreme Court answered this question – in line with parliamentary history and legal literature – with regard to companies with a multi-member management board without a supervisory board.

Director’s duty to disclose; decision by fellow directors

Firstly, a director must disclose any potential conflict of interest to his fellow directors and must do so in a transparent manner. In the event of a difference of opinion between the director concerned and the fellow directors, it is then not for the director concerned to decide, but for the fellow directors – and this also applies if the director concerned has not made a disclosure – to decide whether there is in fact a conflict of interest and whether the director concerned should therefore be excluded from the deliberations and decision-making. If the fellow directors judge that there is indeed a conflict of interest, they must also ensure that the director is actually excluded from deliberations and decision-making on the matter in question.

Implications for practice

The Supreme Court’s judgment demonstrates that all directors bear a responsibility: the director with a (potential) conflict of interest must proactively and promptly disclose this to his fellow directors, and the fellow directors must decide and enforce the exclusion. It is also advisable to record the considerations regarding whether or not to exclude the director in question from deliberations and decision-making in writing in the minutes of the board meeting.

Further information?

Please feel free to contact the Corporate / M&A team for further information.