# What changed: conflicted-director decisions after recent judgments
Recent Dutch case law has shifted the test for a decision taken by a director with a personal conflict of interest. The question used to be formal: did the conflicted director take part in the vote. Under the position now emerging, courts look at whether the conflict actually shaped the outcome and whether the company was harmed. Boards with an interlocking director, a parent-company appointee, or a related-party transaction on the table should reassess how such decisions are reached and recorded before the next one is taken.
Why this arises here
This surfaces wherever a board decision touches a director's own interest: a loan to a director, a service contract with a company the director also controls, or a transaction with a parent that shares directors with the subsidiary. It sits inside corporate law and governance because the exposure is structural, not incidental: a decision found invalid can be unwound, and a director who acted despite a known conflict carries personal liability risk that survives the transaction itself. The same pattern recurs in groups with a foreign parent, including in cross-border conversion structures, where the parent's appointee sits on the Dutch board.
The mechanics in short
The Dutch rule on directors' conflicts operates on two separate layers, and the recent judgments only move one of them. Under the applicable Dutch rules, a director with a direct or indirect personal interest conflicting with the company's interest, known in Dutch as tegenstrijdig belang (conflict of interest), does not take part in the deliberation and decision on that matter, unless the articles of association provide otherwise. If no director remains competent to decide, competence can shift to the supervisory board or the general meeting, again subject to the articles. That layer governs whether the decision is valid inside the company.
A second layer protects third parties. A decision taken in breach of the conflict rule does not, on its own, strip the director of the power to represent the company towards a counterparty who neither knew nor could reasonably have known of the conflict. The judgments we are tracking concentrate on this second layer: what a counterparty is taken to have known, and how much diligence is expected of it before a Dutch court will treat that counterparty as protected.
This distinction also shapes how private equity structures with overlapping board appointments are reviewed, a pattern set out separately for PE structures and Dutch substance.
Before and after
| Aspect | Position before | Position now |
|---|---|---|
| Test applied to the decision | Formal: did the conflicted director abstain from the vote | Substantive: did the conflict shape the outcome |
| Effect on third parties | Representation generally preserved once the director signed | Courts examine what the counterparty knew or should have known |
| Ratification by unconflicted directors | Rarely weighed on its own | Weighed as a cure, or as an aggravating fact if skipped |
| Who is expected to act | The conflicted director stepping aside was often enough | The full board, and the general meeting where the articles require it |
What we are tracking
This page belongs to a set we keep current as the case law on directors' conflicts of interest develops. We are not attaching case citations here because the underlying entries have not cleared our confirmation process as of the last review below; the direction of travel is described without a number, a date, or a court reference. Before the recent judgments, the question was largely binary: had the conflicted director abstained. The pattern we are tracking now adds a materiality filter: a technical lapse with no real influence on the outcome and no benefit to the conflicted director is treated differently from a lapse that produced a personal gain. Where the confirmed detail is not yet in our registry, treat this as the direction of travel and check the current position before relying on it for a specific decision.
What to check
- Whether the articles of association contain a conflict-of-interest clause and how the board actually applied it on the decision in question.
- Whether the board, once the conflicted director stepped aside, remained validly composed to decide at all.
- Whether the counterparty knew, or on the facts should have known, that a conflict existed.
- Whether unconflicted directors or the general meeting later ratified the decision, and whether that ratification was documented.
- Whether the group's structure creates a standing conflict, for example a director appointed by a parent or a sponsor, that needs a written protocol rather than a case-by-case fix. Where that structure needs mapping, a structure report sets out the ownership chain and the appointments inside it; an ownership chain report is one example of how that is scoped.
What this does not cover
- It does not cover criminal liability of directors, which follows a separate track under Dutch law.
- It does not cover conflicts of interest at supervisory board level, which are governed by an adjacent rule.
- It does not cover a specific case citation, article number, or effective date: none is confirmed in our registry as of the last review.
- It does not cover situations where a parent instructs a decision that harms creditors rather than the company itself; that scenario is addressed separately for a PE sponsor's instructed decision.
- It does not cover sector-specific conflict rules, for example for regulated financial entities.
Questions
Does this reach decisions taken before the recent judgments?
Dutch courts apply the substantive test going forward, but a pending dispute over an older decision can be reassessed under the current reading. No retroactive statutory change is confirmed in our registry; check the current position for any decision already in dispute before a Dutch court.
Who has to act, and by when?
Boards and their advisers should review existing conflict-of-interest protocols and any pending decision where a director has a personal interest, before that decision is finalised. No statutory deadline for this review is confirmed; the trigger is the next decision on the table, not a calendar date.
Author
Eva Kuipers, Governance and the Enterprise Chamber. Eva advises on board composition, conflicts of interest and proceedings before the Enterprise Chamber, and tracks Dutch case law affecting directors' decision-making in the Netherlands.
Related reading
Adjacent material on group structures and director conflicts: cross-border conversions under the Mobility Directive, private equity structures and Dutch substance, an ownership chain report, and the parent-instructed decision that harmed creditors.
Closing
This note sits inside corporate law and governance, which covers board composition, decision-making and related-party rules for Dutch entities. Where you need this applied to a specific board decision rather than the general position, route it as a note request with the facts of that decision. Where the structure behind the decision, including who appointed whom, needs to be established rather than assumed, that is what a structure report is built to show.
Last legal review: 2026-09-15