Leiden Law Blog

The Evolution of the Regulation of Government Undertakings

Posted on by Jelle Nijland in Private Law
The Evolution of the Regulation of Government Undertakings

A recent study on the influence of government bodies in Dutch public limited companies

Companies can provide services that are of public interest. Although the primary responsibility of the management of these companies lies with the company, the government may want a say in these companies to safeguard public interests.

Inspired by the ideal of privatisation, the popularity of government bodies exercising influence in undertakings via Dutch company law instruments was waning. Aversion to government ownership led to the selling of shares owned by government bodies and the abolition of provisions that specifically facilitated government influence within private legal law bodies. However, the view on the role of government in private law bodies with a public interest is changing. This reflects upon the use by government bodies of Dutch company law to look after public interests. The use of Dutch company law instruments is no longer frowned upon and thus deservedly receives more attention as a viable and desirable option for government bodies to uphold public interests. Dutch company law could benefit from a study on how it can accommodate government influence to better ensure public interests.

In a recent study I focus  on private companies in which government bodies have the possibility to exert a dominant level of influence in the management of these companies that provide services with public interests: the Government Undertaking. I discuss the legal corporate instruments that the Dutch government may apply to intervene in such private companies to safeguard public interests. The position of the State or other government authorities as shareholder, the relationship between different private companies with public interests and also the relationship between different layers of government within the institutional set-up of these companies are discussed by examining Dutch case studies on Government Undertakings (Nederlandse Spoorwegen, Luchthaven Schiphol and TenneT) and a study on comparable legal entities in German, Belgian, French and English company law. Recommendations for the institutional set-up of the Government Undertaking are made and the establishment of a new legal form to specifically house Government Undertakings is suggested.

J. Nijland, De overheidsonderneming (Ars Notariatus 154), Deventer: Kluwer 2013, with summary in English.

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