Statutory directors

A statutory director manages a legal entity

A statutory director manages a legal entity, such as a public limited company (NV) or a private limited company (BV). A statutory director is usually appointed by the general meeting of shareholders. The appointment of a statutory director is done by means of a valid appointment resolution. In addition, the statutory director must have accepted that position. The person who is a statutory director must be registered with the Chamber of Commerce.

(Often) also employees

Statutory directors are often also employees of the company they manage. Therefore, the statutory director has an employment contract with the company: the director is not only an employee but also represents the company. This means that a statutory director has both an employment law and a corporate law relationship with the company in which he or she works. This plays an important role in the dismissal of a statutory director.


A statutory director may be dismissed by the body competent to appoint the director. This is usually the general meeting of shareholders and is done by means of a dismissal resolution. The director must be heard beforehand and the director has an advisory vote. In general, this automatically ends both the position of statutory director and the position of employee. The employment contract of the statutory director ends then.

If there is a ban on termination – for example because the statutory director is incapacitated for work – or if other agreements have been made about ending this position, the statutory director remains an employee.

A statutory director who has been dismissed and whose employment contract has also been terminated is entitled to the statutory transition fee, just like an ‘ordinary’ employee. The statutory director can also go to court to challenge the dismissal decision and to try to obtain fair compensation.

Chain regulations

Employees who are not statutory directors may obtain a maximum of three fixed-term employment contracts within a period of three years. If the period of three years or the number of three employment contracts is exceeded, the employment contract becomes for an indefinite period of time. This is the so-called chain regulation. A different regulation applies to statutory directors. Although they may only be granted three fixed-term employment contracts, together these may last longer than three years.

Statutory director of a listed company

A statutory director of a listed company is appointed by the supervisory board. The supervisory board may also dismiss the statutory director. A statutory director of a listed company cannot be an employee of the company he manages. In that case there is no contract of employment but a service contract (management contract).

If a statutory director with a management contract is dismissed, he or she is not entitled to a transition fee. Nor is it possible to ask the court for fair compensation. However, the statutory director can contest the dismissal decision.

Other statutory directors?

A foundation and an association also have one or more statutory directors. In this case, different rules apply to the manner of appointment and dismissal. For example, the director of a foundation can only be dismissed via the UWV or the cantonal court, for the time being.

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