Article 2:391 DCC: what the management report must contain

The short answer

Article 2:391 DCC provides what the management report contains: a balanced analysis of position, development and results, the principal risks and uncertainties, the expected course of business and research and development. Only medium-sized and large entities prepare it; micro and small are exempt. Medium-sized entities may omit non-financial performance indicators.

Updated 30 October 2026

Key facts

What article 2:391 governs, and for whom

The annual accounts give figures. The management report explains what is behind them: how the year went, where the risks lie and what the board expects. It is not part of the annual accounts and the general meeting does not adopt it. It does belong to the documents that the board makes available for inspection within the preparation period (art. 2:210(1) DCC for the BV) and that the auditor tests (art. 2:393(3) DCC).

It is mandatory only for medium-sized and large entities. An entity is small and therefore exempt as long as on two consecutive balance sheet dates it meets two of these three requirements: assets ≤ € 7,5 mln, net turnover ≤ € 15 mln and < 50 employees. Whoever exceeds those two years in a row must prepare a management report from the second year. How that transition works exactly is set out at article 2:398 DCC.

Section 7 of Title 9 has two articles. Article 2:391 gives the content. Article 2:391a lets the government set additional requirements by order in council; among other things the Besluit inhoud bestuursverslag (Management Report Content Decree) rests on it, with the corporate governance statement for listed companies and the reporting on targets for the male/female ratio at large BVs and NVs (art. 2:166 and 2:276 DCC).

The four paragraphs and what they ask

Paragraph 1: a true and fair view, risks and the language

The management report gives a true and fair view of the position at the balance sheet date, the development during the financial year and the results of the legal entity and of the group companies whose financial data are included in its annual accounts. The management report contains, in accordance with the size and complexity of the legal entity and group companies, a balanced and complete analysis of the position at the balance sheet date, the development during the financial year and the results. If necessary for a good understanding of the development, the results or the position of the legal entity and group companies, the analysis includes both financial and non-financial performance indicators, including environmental and employee matters. The management report also gives a description of the principal risks and uncertainties with which the legal entity is confronted. The management report is drawn up in the Dutch language, unless the general meeting has decided to use another language.

The report describes the position at the balance sheet date, what happened during the year and the result, for the entity and for the group companies included in its annual accounts. Balanced means: setbacks get as much room as successes. Non-financial indicators (absenteeism, staff turnover, energy consumption) belong in it if without those figures a good understanding is not possible. A medium-sized entity may omit them (art. 2:397(8) DCC). The language is Dutch, unless the general meeting chooses another language.

Paragraph 2: the expected course of business and research and development

The management report contains statements on the expected course of business; in doing so, insofar as weighty interests do not oppose it, particular attention is paid to investments, financing and staffing and to the circumstances on which the development of turnover and profitability depends. Statements are made on the activities in the field of research and development. It is stated how special events that need not be taken into account in the annual accounts have influenced the expectations. The public limited company (naamloze vennootschap) to which article 383b applies also makes a statement on the company's policy on the remuneration of its directors and supervisory directors and the way in which this policy was put into practice in the reporting year.

The board looks ahead and in doing so becomes concrete about investments, financing and staff, and about what determines turnover and return. Only weighty interests, such as a negotiation that must still stay secret, justify restraint. On research and development the report always says something, even if that is that the entity does none. An event after the balance sheet date that does not change the figures themselves but does change the outlook, the board describes here. The last sentence applies only to an NV to which art. 2:383b DCC applies: it describes its remuneration policy for directors and supervisory directors.

Until 1 July 2026 this paragraph also stated that an NV reports what art. 2:82(3) to (9) DCC provides on the conversion of bearer shares. That sentence lapsed on 1 July 2026, seven years after the entry into force of the Wet omzetting aandelen aan toonder (Bearer Shares Conversion Act) (Stb. 2019, 107, art. III and V). A management report prepared after that date need no longer say anything about it.

Paragraph 3: financial instruments and risk management

With regard to the use of financial instruments by the legal entity and insofar as this is of significance for the assessment of its assets, liabilities, financial position and result, the objectives and policy of the legal entity on risk management are stated. In doing so, attention is paid to the policy on hedging the risks associated with all major types of intended transactions. Attention is also paid to the price, credit, liquidity and cash flow risks run by the legal entity.

If the entity has loans, interest rate derivatives, forward currency contracts or large debtor positions that matter, the report describes the purpose and policy of risk management: which risk is hedged and how. It also names the price, credit, liquidity and cash flow risks the entity runs. A BV with only a current account at the bank can be brief here.

Paragraph 4: no contradiction with the annual accounts

The management report may not conflict with the annual accounts. If providing the overview referred to in paragraph 1 requires it, the management report contains references to and additional explanation of items in the annual accounts.

Every number in the report must be found in, or be derivable from, the annual accounts. Where the report explains an item, it refers to the notes instead of repeating them. If the report states higher turnover growth than the profit and loss account shows, that is a contradiction that the auditor reports.

Article 2:391a(1): further rules

Further provisions on the content of the management report may be laid down by order in council.

Paragraph 2 of article 2:391a lets the government give rules implementing European directives, such as on separate reports and statements. The bill that must transpose the European directive on sustainability reporting (CSRD), Kamerstukken 36678, amends art. 2:391a among other things. On 27 October 2026 that bill is still being considered in the Tweede Kamer (House of Representatives) and so is not in force.

Management report per size class

RJ 400 elaborates the content in a fixed series of subjects, from policy and structure to future expectations (RJ 400.1001). For medium-sized entities RJ 400.0003 gives the additional part for large entities only for consideration. The framework for societal aspects in RJ 400.2014 to 400.2019 is a recommendation for large entities, not a duty. See RJ 400 and 405.

Case: the first management report of an installer that became medium-sized

Klimaattechniek Rijnmond BV (fictional) installs heat pumps. At the end of 2023 it was still small. On 31 December 2024 and on 31 December 2025 it exceeded all three limits for small; at the end of 2025 it had a balance sheet total of € 14,8 mln, a net turnover of € 31,2 mln and on average 132 employees. Financial year 2025 is thus its first year as a medium-sized entity, with a management report and audit.

The board writes per paragraph:

• Paragraph 1. Turnover growth of 13,0% due to demand for heat pumps; a lower margin due to higher purchase prices of copper; a solvency of 35,1%. As principal risks it names the shortage of certified fitters and the dependence on a subsidy scheme with which customers pay for their installation.
• Paragraph 2. For 2026 the board expects equal turnover. It invests € 1,1 mln in electric company vans from own funds and recruits fifteen fitters. The BV does no research and development of its own, and that is stated. In February 2026 a storage hall burned down. The 2025 figures do not change as a result, but the delivery times in the first half of 2026 do, and the board describes that.
• Paragraph 3. The BV has a loan of € 4 mln with a variable interest rate fixed with an interest rate swap. The report names the purpose (certainty about interest expenses) and the credit risk on large business customers.
• Paragraph 4. A first version said 'turnover growth of more than 15%'. That does not agree with the profit and loss account and was changed to 13,0%.

Non-financial indicators such as absenteeism or the CO2 emissions of the vehicle fleet, this BV may omit as a medium-sized entity. Had it been large, those figures would have had to be in, insofar as needed to understand the development.

Where a management report falls short in practice

• Copying the notes. The explanation of individual balance sheet items belongs in the notes. RJ 400.1042 says so firmly: the report may not replace those notes.
• Vague outlook. 'We look to the future with confidence' is not a statement about investments, financing and staff. RJ 400.1004 points out that paragraph 2 precisely wants to prevent such general sentences.
• No sentence on research and development. A trading company without R&D says so too.
• A risk list without choice. It concerns the principal risks, with what the board does about them, not twenty risks that apply to every business.
• English without a resolution. A report in English requires a resolution of the general meeting. Record that resolution.
• Forgetting last year. RJ 400.1014 asks to look back at what the previous report expected. Whoever announced a new branch last year explains what became of it.

Connection with other articles and financial years 2025 to 2027

• Article 2:393 DCC: the auditor checks whether the report has been prepared in accordance with Title 9, is consistent with the annual accounts and contains no material misstatements.
• Article 2:394 DCC paragraph 4: the report is filed together with the annual accounts, or kept available for inspection at the office with a statement to the Business Register.
• Article 2:392 DCC: the other information may not conflict with the report.
• Article 2:403 DCC: a group company that applies the group exemption prepares no report of its own.

For financial years 2025, 2026 and 2027 the same four paragraphs apply. The only difference lies in the lapsed sentence on bearer shares: that now counts only for a report prepared before 1 July 2026. RJ 400 is in force for financial years from 1 January 2025 and is unchanged in the 2027 edition. Outlook: from 10 January 2028 there will be an article 2:394a for entities that must publish sustainability reporting (Stb. 2026, 217). For most medium-sized BVs nothing changes as a result.

How it works at Jaarrekening.io

For a medium-sized or large entity, Jaarrekening.io makes an editable draft of the management report per part of article 2:391, with the key figures from the annual accounts. Non-financial indicators are a mandatory part only for large; the lapsed statement on bearer shares no longer appears in the report. If you choose to keep the report available for inspection (paragraph 4 of article 2:394), it stays out of the publication version only once you have recorded the statement to the Business Register. The text and the judgements in it remain the board's.

Sources

• Art. 2:391 BW: content of the management report (wetten.overheid.nl, text in force from 1 July 2026)
• Art. 2:391a BW: further rules by order in council
• Art. 2:397 BW: exemption for non-financial indicators for medium-sized entities (paragraph 8)
• Art. 2:394 BW: publication of the management report and other information (paragraph 4)
• Stb. 2019, 107: Wet omzetting aandelen aan toonder, art. III (lapse of the sentence in paragraph 2 on 1 July 2026)
• Bill 36678 Wet implementatie richtlijn duurzaamheidsrapportering (eerstekamer.nl)
• rjnet.nl: the RJ bundle with chapter 400 Management report

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