walslaw, Amsterdam boutique law firm
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Governance and decision-making

Governance determines how a joint venture operates in practice once the documents have been signed. The architecture has to give the venture room to operate decisively while preserving the protections each partner negotiated for. We design and draft JV governance for greenfield ventures, established alliances and post-transaction restructurings, on Dutch and cross-border mandates alike. The work is grounded in Book 2 of the Dutch Civil Code, the Dutch Corporate Governance Code where it applies, and practical experience of the arrangements that cause joint ventures to lose momentum.

When clients call us

  • You are negotiating the governance section of a JV agreement
  • Existing governance is creating friction and needs reset
  • A minority partner needs protections that actually work
  • An escalation path needs to be added without inviting deadlock
  • Articles and shareholders' agreement have drifted out of alignment

Key legal & commercial issues

I.

Decision-making layers

  • Day-to-day management board (or managing directors)
  • Supervisory or non-executive layer where appropriate
  • Reserved matters requiring shareholder approval
  • Quorum and voting thresholds at each layer
  • Information, audit and observer rights
  • Escalation routes when consensus fails
II.

Designing reserved matters lists

Reserved matters lists are frequently more extensive than the venture requires. The list works best where it reflects what each partner genuinely needs to control, typically the budget and business plan, leverage above a threshold, new lines of business, related-party transactions, key hires, distributions, equity issuances and exit decisions. A longer list makes the venture harder to run and refers every disagreement back to the partners.

We calibrate thresholds (simple majority, supermajority, unanimity) by reference to the consequence of the decision rather than by applying a standard formula. We also distinguish 'reserved matters' (requiring approval) from 'consent rights' (a negative veto) and 'information rights' (visibility without a veto).

III.

Dutch-law backdrop

The articles of association and the shareholders' agreement operate together. Governance arrangements that need corporate effect should be reflected in the articles, for example transfer restrictions, share classes and the appointment regime for directors. A shareholders' agreement remains important for the contractual arrangements between its parties. We design the two documents as a single coherent system.

What we advise on

What we advise on

  • Board composition and appointment and nomination rights
  • Reserved-matter design and threshold calibration
  • Quorum, voting and deadlock-adjacent mechanics
  • Veto rights, consent rights and information rights
  • Articles of association aligned to the shareholders' agreement
  • Board rules, committee charters and conflict-of-interest procedures
  • Director nomination, appointment and removal mechanics
  • Governance refresh after a capital round or change of control

Typical documents and deliverables

Typical documents and deliverables

  • Shareholders' or JV agreement (governance section)
  • Articles of association
  • Board rules and (where applicable) supervisory board rules
  • Reserved-matter schedule with thresholds
  • Committee charters (audit, remuneration, nomination)
  • Director appointment letters and conflict-of-interest policy

How we support the process

How we support the process

  1. 1

    A mapping of decision rights against how the venture will actually be run

  2. 2

    Calibration of the reserved matters list and the voting thresholds with the partners

  3. 3

    Drafting of the governance section and the articles as a single aligned system

  4. 4

    Stress-testing against the scenarios that test governance: capital expenditure, key hires, disputes and exit

  5. 5

    Board procedures implemented and documented once the venture begins operating

Questions clients ask before instructing us

Questions clients ask before instructing us

How long should a reserved-matters list be?
A reserved-matters list should be long enough to protect what the minority cannot afford to lose and short enough that the business can be run. In practice that is usually 12 to 20 items, not the 40 or 50 that appear in first drafts. The list works best confined to decisions that change the fundamental bargain: amendments to the articles, issue or transfer of shares, changes to the business, disposals and acquisitions above a threshold, incurring debt above a threshold, related-party transactions, distributions, appointment and removal of directors, entering into or terminating material contracts, and liquidation. Everything below that is operational. A longer list usually gives a minority little additional protection, and it creates more occasions on which the business waits for consent.
Supermajority or unanimity for the most sensitive decisions?
We recommend a supermajority in nearly all cases. Unanimity converts every listed matter into a veto, and in a two-party joint venture there is little practical difference between a veto and a deadlock. Unanimity, or a class consent right, is reserved for the genuinely existential items: amendment of the articles in a way that affects class rights, change to the JV's core purpose, liquidation, and dilution of a partner below a defined threshold. For everything else, a supermajority calibrated to the shareholding, for example 75 per cent where one partner holds 60 per cent, delivers protection without giving either side a permanent power to halt the business. Whichever threshold applies, it is combined with a workable escalation and deadlock mechanism.
Can we give a minority a veto over the budget?
A budget veto can be given, and minorities usually ask for one, but an unqualified budget veto is one of the most reliable causes of joint venture deadlock. The business needs an approved budget in order to operate, and a partner who can withhold approval can block everything else. The workable compromise is a veto over the annual budget coupled with a fallback: if no budget is approved by a defined date, the previous year's budget applies, adjusted for inflation and contracted commitments, until agreement is reached. That preserves the minority's leverage on genuine strategy while removing its ability to stop the business by inaction. We combine it with a deviation threshold, so that material overspend still requires consent.
Do reserved matters in the agreement bind the directors?
Reserved matters do not bind the directors directly, and the distinction is an important one. Directors must act in the interests of the company and its connected enterprise under article 2:239(5) Dutch Civil Code, rather than solely for the shareholder who nominated them. A reserved matters list in a shareholders' agreement binds its parties as a matter of contract. A shareholder that has undertaken to procure a particular outcome may be in breach of that agreement, but a board decision taken without the contractual approval is not for that reason alone invalid. Corporate-level instructions require a basis in the articles. Even then, the directors must not follow an instruction that conflicts with the interests of the company and its connected enterprise; board rules can set out the procedure.
What governance levers only work if they are in the articles?
The levers that need corporate effect belong in the articles. These include class rights and differentiated voting and profit rights, the power of a meeting of holders of shares of a particular class to appoint a director, share transfer restrictions and offer procedures under the blocking clause regime, approval requirements for management board decisions, quorum and majority requirements for general meetings, and mandatory transfer or offer obligations on defined events. A shareholders' agreement binds its parties contractually; the articles regulate the corporate relationship. Important protections should, where applicable, appear in both.
How often should JV governance be reviewed?
We advise a formal review every two to three years, and in every case on a trigger: a change in shareholding, a new partner, a significant change in the JV's activities, a funding round that alters the balance, a change of control at a partner, or the first serious disagreement. Joint ventures are usually documented for the business the partners are starting rather than the business they end up running, and reserved matters lists calibrated to a start-up can become obstructive at scale. A short review of whether the thresholds still make sense, whether the list is still the right list and whether the deadlock mechanism still fits the parties' relative size is usually far cheaper than renegotiating under pressure.

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