Voting rights for ‘stakeholders’ proposal floated at Dutch De Volksbank

State-owned bank not ready for privatisation but IPO remains an option

Dutch Finance Minister, Wopke Hoekstra, says he would like to explore granting voting rights to the stakeholders of a future privatised De Volksbank, among a number of corporate governance options to emphasise the “social character” of the currently state-owned bank.

On the back of its privatisation, De Volksbank (formerly SNS Bank, rescued in 2013) had already suggested the idea of empowering stakeholders, such as employees and customers, by creating an AGM where they can vote on a par with shareholders.

Hoekstra wrote last week to the Dutch Parliament in a letter agreeing with the privatisation progress report of NL Financial Investments (NLFI, the shareholder of De Volksbank on behalf of the State), which said that at least one year is needed to decide on the future of the bank.

NLFI has suggested four options for its privatisation: a private placement, an IPO, a cooperative, and a merger or takeover by a strategic partner.

The Dutch Parliament previously adopted the so-called Van Hijum-Nijboer motion (named after two MPs), which established that the “social character” of the bank should be maintained in the event of a flotation or privatisation.

In his letter to Parliament the Minister said the social role could be safeguarded by exploring four corporate governance options:

First, to include this social role in the articles of association of De Volksbank. 

Second, issuing depositary receipts instead of ordinary shares or setting up an anti-takeover foundation to protect the bank’s identity and continuity. 

Third, active involvement of stakeholders in the decision-making of the bank.

And fourth, granting voting rights to stakeholders at the AGM. Rients Abma, Executive Director of Eumedion, Eumedion, the governance forum of major Dutch and international investors, told RI that a combination of the first two options would be more acceptable for institutional investors.

“We have to wait for the final decision of the Minister, whether an IPO is the outcome and then the bank enters the public shares market. We have some concerns with granting voting rights to other stakeholders. Options one and two are more preferable than the last one.”

Abma said that ABN Amro and Dutch insurance company ASR have already included similar social provisions in their articles of association. 

Regarding the anti-taker over foundation, Abma said it is relatively common in the Dutch market and more accepted by foreign investors as a temporary anti-takeover device in the event of a hostile bid.

NLFI will issue another progress report in the autumn of 2020.