This section provides an overview of the responsibilities and governance of the Supervisory Board of AkzoNobel. For an understanding of the activities of the Supervisory Board over the past year, please refer to the Chairman’s statement and the Report of the Supervisory Board. The responsibility of the Supervisory Board is to supervise the policies adopted by the Board of Management and the Executive Committee and to oversee the general conduct of the business of the company. In practice, this means supervising the corporate strategy, the achievement of the company’s operational and financial objectives, the design and effectiveness of the internal risk management and control systems, the main financial parameters, compliance with applicable laws and regulations and risk factors. The Supervisory Board advises the Board of Management and Executive Committee, while taking into account the interests of AkzoNobel and its stakeholders. Major investments, acquisitions and functional initiatives are subject to Supervisory Board approval.
The Chairman of the Supervisory Board determines the agenda, chairs Supervisory Board meetings and the Annual General Meeting of shareholders, monitors the proper functioning of the Supervisory Board and its committees, arranges for the adequate provision of information to its members and acts on behalf of the Supervisory Board as the main contact for the Board of Management and Executive Committee. He initiates the evaluation of the functioning of the Supervisory Board, its committees, its individual members and the functioning of the Board of Management. Throughout the year, the Chairman of the Supervisory Board ensures that regular updates on AkzoNobel’s businesses, legal matters, social and corporate governance, environmental, accounting, investor relations, compliance, risk management and internal controls are provided to the Supervisory Board.
The Supervisory Board is governed by its Rules of Procedure, which are available on the company’s corporate website. The Rules of Procedure include the profile and the Charters of the Committees and set out the tasks and responsibilities of the Supervisory Board, as well as its operational processes.
The list of Supervisory Board members, including their biographies, can be found in the Leadership section. The Supervisory Board is constituted in a balanced manner to reflect the nature and variety of the company’s businesses, their international spread and expertise in fields such as finance, economic, Information Technology (IT), societal, environmental and legal aspects of business, government and public administration. Consequently, the current members have a diverse and appropriate mix of expertise and experience of the markets in which AkzoNobel operates, as well as knowledge of different markets and non-operational areas.
According to the Dutch Civil Code, a supervisory board of a large Dutch public company has a balanced composition if it consists of at least 30 percent female and at least 30 percent male members. The current composition of the Supervisory Board is such that two of its seven members are female, resulting in a composition of 28.6 percent female members. However, in compliance with provision III.3.1 of the Code, the Supervisory Board’s composition reflects both society at large and the markets in which the company operates – by ensuring that at least three members meet the diversity criteria of either gender (female) and/or nationality (outside of the European Union). AkzoNobel acknowledges that gender is one part of diversity and Supervisory Board members will continue to be selected on the basis of their wide-ranging experience, background, skills, knowledge and insight. Our Supervisory Board represents five nationalities, all of whom bring experience from a diverse range of international business, professional and non-profit organization backgrounds. When nominating and selecting new candidates for the Supervisory Board in future, the requirements of the Act on Management and Supervision, as well as provision III 3.1 of the Code, will continue to be taken into account.
Members of the Supervisory Board are nominated, appointed and dismissed in accordance with procedures identical to those previously outlined for the members of the Board of Management. In accordance with the Code, members of the Supervisory Board are eligible for re-election only twice, each time for a period not exceeding four years. Terms of appointment are based on a rotation schedule, available on our corporate website. In 2015, one appointment and one reappointment to the Supervisory Board were proposed to and approved by the AGM. For 2016, two reappointments are currently scheduled for proposal to the AGM. Reference is made to the Notice of meeting.
Induction and training
Following appointment to the Supervisory Board, new members receive a comprehensive induction tailored to their individual needs. This includes extensive briefings about all major business and functional aspects of the company and its corporate governance and compliance requirements. The induction includes meetings with the CEO, the CFO, all other Executive Committee members and relevant members of staff. This enables new Supervisory Board members to build up an understanding of AkzoNobel’s businesses and strategy, as well as the key risks and issues the company faces. In addition, the Chairman ensures the Supervisory Board is provided with regular updates and that the Supervisory Board undertakes training, for example in the area of compliance and ethics.
Independence of the Supervisory Board
Supervisory Board members are required to act critically and independently of one another, the Board of Management and the Executive Committee and the company’s stakeholders. Each member of the Supervisory Board meets the independence requirements as stated in the Code provisions III.2.1 and III.2.2 and has completed the annual independence questionnaire addressing the relevant requirements for independence.
To this end, the company takes steps to verify that:
- There are no cross ties between Supervisory Board members and members of the Board of Management
- There have been no employment relationships between Supervisory Board members and AkzoNobel during the five years preceding their last appointment
- No personal financial compensation has been paid, other than in relation to work as a Supervisory Board member
- No Supervisory Board member has had important business relationships with the company in the year prior to their last appointment
- There are no significant shareholding ties (amounting to more than 10 percent of the share capital of the company) between Supervisory Board members and the company
Conflict of interest
Members of the Supervisory Board shall not participate in the discussions and decision-making on a subject or transaction in relation to which they have a conflict of interest with the company. Decisions to enter into transactions under which Supervisory Board members have conflicts of interest that are of material significance to the company, and to the relevant Supervisory Board member, require the approval of the Supervisory Board. Any such decisions will be recorded in the annual report for the relevant year, with reference to the conflict of interests and a declaration that the relevant best practice provisions of the Code have been complied with. During 2015, no transactions were reported under which a member had a conflict of interest which was of material significance to the company.
Supervisory Board members receive a fixed annual remuneration and attendance fee, which is determined by the AGM. More information on the remuneration of the members of the Supervisory Board can be found in Note 21 of the Consolidated financial statements.
Annual General Meeting of shareholders.