New law WBTR: what should associations and foundations do?

On July 1, 2021, the Law on Governance and Supervision of Legal Entities, abbreviated as WBTR, will come into effect. This applies to all foundations and associations, except for owners’ associations. What should the board of a foundation or association arrange? Vrijwilligers Centrale Amsterdam has delved into this and contacted various organizations that can provide information and advice on this matter.The new law aims to prevent mismanagement, irresponsible financial management, abuse of position, and other undesirable activities within boards. The law is designed to prevent headlines such as ‘The treasurer of association X’s board has disappeared with the cash’ in the future. It is important for a board to discuss what ‘governing with integrity’ entails and how to then document agreements about it together. It is also important to critically assess whether it is necessary for the association or foundation to take further steps.

Main points of the new law

• Execution and supervision must be separated (monistic governance: executive and non-executive directors);
• Multiple voting rights are changing. If a certain director can cast more votes than all others combined, this can last a maximum of 5 years. As soon as the articles of association change, this rule also changes.
• Include in the articles of association what happens in case of incapacity or absence of a director/commissioner; (incapacity or absence means in case of absence due to illness, suspension, dismissal, or death)
• Articles do not need to be changed immediately. The law supersedes the articles in certain aspects;
• Regulation on conflicting interests. A director with a personal interest may not participate in the decision-making process on the relevant subject.

What do you need to do before July 1st?

Before the law comes into effect on July 1, 2021, the board of the association or foundation must have discussed what ‘governing with integrity’ means according to you, and how you subsequently formalize the agreements about it together. You then have 5 years to actually amend the articles of association.

Checklist

NOV has created a checklist for boards to see what they need to comply with under the new law.View the checklist.

Step-by-step plan

IVBB (Institute for Associations, Sectors, and Professions) has developed a WBTR step-by-step plan. This online plan provides information about the new obligations and offers the possibility to document how the association/foundation complies with them. There is also a legal helpdesk available.

VCA is affiliated with IVBB as an umbrella organization, allowing associations and foundations from Amsterdam to go through the plan with a 50% discount and to benefit from the legal helpdesk.The costs amount to 120 euros per year including discount.Use the discount code VCA50 for a discount on the step-by-step plan.Go to the VCA landing page at IVBB.Want to learn more about the content of the action plan first?Go to the IVBB website.

Webinars

On April 16 and 20, VCA in collaboration with IVBB is organizing two free webinars on the WBTR where you can ask your questions.Sign up via the agenda.Do these dates not fit?More webinars are offered via IVBB.

Questions?

Do you have any questions about the new law, the action plan, and what your board should do?Marijke AltenburgofSimone Timmerwe are happy to help you further.