Supervisory Board activities

Supervisory Board activities 2021

Q1

  • Review Q4 2020 financials and performance
  • Review 2020 annual report, financial statements and profit allocation
  • Final 2020 dividend
  • Assurance report sustainability statements 2020
  • 2020 external audit report
  • Share buyback program
  • Grow & Deliver update
  • Business updates
  • M&A strategy update
  • Risk management: Risk session outcomes
  • HSE full-year report
  • Operating model review
  • Remuneration policies Board of Management and Supervisory Board

Q2

  • Review Q1 2021 financials and performance
  • Investor Relations update
  • Grow & Deliver update
  • Business updates
  • M&A strategy update
  • HSE and safety update
  • Compliance training
  • Innovation strategy update
  • Human Resources 2021-2023 Plan (incl. organizational health score)
  • Global Process Organization update
  • Global Business Services update

Q3

  • Review Q2 2021 financials and performance
  • Investor Relations update
  • Business updates
  • Grow & Deliver update
  • Enterprise risk management update
  • M&A strategy update
  • Integrated Supply Chain strategy update
  • Research and Development update
  • Manufacturing strategy update
  • HSE and safety update
  • Sustainability strategy update

Q4

  • Review Q3 2021 financials and performance
  • Interim dividend 2021
  • Share buyback program
  • M&A strategy update
  • Information Management strategy update
  • Grow & Deliver update
  • HSE and safety update
  • Functional and business strategy review
  • Budget 2022
  • Investor Relations update
  • Business updates
  • Long-term strategy discussion

Meetings and attendance

The Supervisory Board values the attendance of its meetings by all members. If Supervisory Board members are unable to attend a Supervisory Board or committee meeting, they inform the relevant Chair of their reasons. Supervisory Board members always receive the materials for each specific meeting, allowing them to offer input and discuss any agenda items with the relevant Chair and provide a proxy to act on their behalf. In 2021, the Board of Management attended all regular and all additional meetings. The Executive Committee attended the majority of the meetings. Almost all plenary sessions of the Supervisory Board were preceded or succeeded by executive sessions of the Supervisory Board, with or without the CEO in attendance. The Chair had regular one-on-one calls with all Supervisory Board members to discuss individual impressions on the functioning of the Supervisory Board and items covered.

The Supervisory Board aims for all (regular) meetings to be held physically. However, during 2021, most meetings were virtual due to COVID-19 related measures. The virtual meetings were held with video conference capabilities, enabling Supervisory Board members to perform their role appropriately.

Supervisory Board attendance record

 

Regular SB

Additional SB

AC

RC

NC

Nils Smedegaard Andersen

8/8

7/7

 

7/7

4/4

Jolanda Poots-Bijl

8/8

7/7

6/7

 

 

Sue Clark1

3/3

4/6

 

3/3

1/1

Byron Grote

8/8

5/7

7/7

 

 

Michiel Jaski1

3/3

5/6

2/2

 

 

Pamela Kirby

8/8

7/7

 

7/7

4/4

Dick Sluimers

8/8

7/7

 

7/7

4/4

Patrick Thomas

8/8

7/7

7/7

 

 

The table indicates the meeting attendance for the Supervisory Board (SB), the Audit Committee (AC), the Remuneration Committee (RC) and the Nomination Committee (NC) for regular and additional meetings. Additional meetings were scheduled ad-hoc when needed to ensure the Supervisory Board was sufficiently informed and could make considered decisions regarding (potential) acquisitions and the remuneration policies. As some of the additional meetings were scheduled at short notice, it impacted the ability of members of the Supervisory Board to attend all additional meetings.

1

Retired on April 22, 2021, after completing a four-year term.

Strategy reviews

During 2021, the Supervisory Board continued to allocate adequate time to discuss strategic activities, including detailed business analyses and portfolio reviews. It received regular updates on the roll-out and progress of the new Grow & Deliver strategy by the Executive Committee. The Supervisory Board also reviewed and advised on the changes made to the operational model. In December, the Supervisory Board and Board of Management, together with the other members of the Executive Committee, held a two-day strategy meeting, when the Supervisory Board performed an in-depth review of the progress made towards the ambitions as part of Grow & Deliver and the Financial Plan 2021-2023. Additionally, and with a focus on long-term value creation, several strategic opportunities were reviewed and discussed, also taking various external views into consideration. The Supervisory Board also reviewed and discussed functional updates, including Finance, Information Management, Integrated Supply Chain, Human Resources, Innovation, and Health, Safety, Environment and Security. The Supervisory Board received comprehensive market updates and advised on, reviewed and approved the business continuity and contingency plans.

Sustainability

The Supervisory Board views sustainability as an intrinsic value driver in the work of all businesses and functions. During 2021, the Supervisory Board continued to assess sustainability as part of strategy and targets. During the semi-annual progress updates on sustainability, the Supervisory Board reviewed and advised on the ambitions set out by the company’s People. Planet. Paint. strategy, as well as the internal sustainability governance and external reporting frameworks. The Supervisory Board reviewed the company’s response to climate change, focusing on efforts to reduce emissions across the whole value chain (including Scope 1, 2 and 3) to achieve the announced science-based targets. Other topics discussed included the further strengthening of our sustainability governance by introducing the NextGen Sustainability Council. The company’s People. Planet. Paint. ambitions and progress are further considered as part of the functional updates and as part of the Supervisory Board’s review of the company’s innovation efforts and programs. Further details are included in the Sustainability statements.

Performance and management planning

Individual Board of Management and Executive Committee performance was addressed in Supervisory Board meetings, following recommendations from the Remuneration Committee. For more details, see the report of the Remuneration Committee.

Discussions on corporate performance were held at each regular Supervisory Board meeting and included business reviews and performance updates from corporate functions. Forward looking targets were also addressed in light of these reviews, and both the proposed budget and operating plan for 2022 were diligently reviewed by the Supervisory Board in Q4, taking into account the supply chain situation and other prevailing market conditions. Following this assessment, the Supervisory Board has approved the proposed budget and operating plan for 2022.

During the year, the Supervisory Board was pleased to see the company continuing to benefit from management’s strategic initiatives, including its focus on strong margin management when facing significant raw material cost inflation. The nature of this performance and the company’s capital allocation priorities were all considered in the Supervisory Board’s approval of the dividend proposal (further details on the 2021 dividend proposal can be found in the Financial information).

The Supervisory Board was pleased to see the company continuing to benefit from management’s strategic initiatives, including cost savings.

Risk management

The Supervisory Board views risk management as an essential mechanism to safeguard the business and assets of the company, and to secure long-term performance and value creation. As the Supervisory Board sought to assure itself of the robustness of the company’s risk mitigation and internal controls, it received multiple risk management updates during the year.

The Board of Management and Executive Committee maintain the risk management framework and system of internal controls. The Supervisory Board and the Audit Committee monitor the implementation of risk mitigating measures for the key risks, as identified by the Board of Management and the Executive Committee during the year by means of risk updates and reviews. Further details are included in the Risk management chapter.

Corporate governance

The Supervisory Board continuously reviews the company’s corporate governance and its compliance with the Dutch Corporate Governance Code. The Supervisory Board received updates on legislative developments such as the Bill on Gender Diversity to take into account in its composition and succession planning.

Talent management and succession planning

In 2021, the Supervisory Board – after discussing its own composition and succession plans – proposed the reappointment of Patrick Thomas as member of the Supervisory Board. The reappointment was approved at the held on April 22, 2021. Following the retirement of Sue Clark and Michiel Jaski as members of the Supervisory Board, the number of members of the Supervisory Board was reduced to six as of April 22, 2021.

The requirements of the Dutch Corporate Governance Code and the skills matrix, updated further upon recommendation by the Nomination Committee, were considered throughout the process.

During 2021, the Supervisory Board discussed the composition of the Board of Management. Upon nomination by the Supervisory Board, the reappointment of Thierry Vanlancker as member of the Board of Management for a two-year term was approved at the AGM held on April 22, 2021.

The Supervisory Board further discussed and supported the CEO’s appointments of other members of the Executive Committee. With the split of Integrated Supply Chain in February 2021 into two focus areas, Supply Chain and Manufacturing, David Prinselaar took on the new role of Chief Manufacturing Officer. As per September 1, 2021, Karen-Marie Katholm was appointed Chief Supply Chain Officer. In the interim, the role of Chief Supply Chain Officer was filled by an external consultant with a standing invitation to all meetings of the Executive Committee. Michael Friede was appointed as Chief Commercial Officer – Performance Coatings per July 1, 2021, with the CEO continuing to represent all commercial aspects of Decorative Paints in the Executive Committee. With Isabelle Deschamps stepping down as General Counsel, her responsibilities were taken over by members of the AkzoNobel Legal Group on an ad interim basis, until the appointment of Hilka Schneider as the new General Counsel per January 1, 2022.

Independence of the Supervisory Board

Supervisory Board members are required to act critically and independently of one another, the Board of Management, the Executive Committee and the company’s stakeholders. Each member of the Supervisory Board meets the independence requirements of the Corporate Governance Code and completed the annual independence questionnaire addressing the relevant requirements for independence.

Supervisory Board evaluation

To assess its effectiveness, the Supervisory Board carried out an internal performance evaluation of itself, its individual members, its Audit, Remuneration and Nomination Committees, the Chair, as well as the relationship with the Board of Management and the Executive Committee. The process consisted of Supervisory Board members completing a confidential questionnaire.

The Chair had one-on-one calls with all Supervisory Board members to discuss individual impressions on the functioning of the Supervisory Board and items covered in 2021. In a separate meeting without the Board of Management, the Supervisory Board discussed the results of the evaluation questionnaires. The Supervisory Board also discussed the functioning of the Board of Management, the performance of its individual members and reflected on the improvement areas agreed during last year’s evaluation.

The Supervisory Board is pleased to confirm the evaluation concluded that the Supervisory Board and its committees continue to operate proficiently. There’s a dynamic and open atmosphere between the Supervisory Board and the Executive Committee. Sufficient time was allocated to discuss the topics that reflected the future strategic priorities for the company. Adequate time was spent on the different business units and (virtually) meeting with AkzoNobel’s people around the world. The impact of COVID-19 again meant that most of the interaction had to take place virtually in 2021. As soon as restrictions allow, spending more time in person will be prioritized. The Supervisory Board agreed that executive succession planning will remain a key area of focus going forward.

Financial statements and profit allocation

The Board of Management submitted the report and financial statements, including the report of the Board of Management, to the Supervisory Board for review and approval. The financial statements of Akzo Nobel N.V. for the financial year 2021 were audited by PricewaterhouseCoopers Accountants N.V. (PwC).

The financial statements and the report were extensively discussed by the Audit Committee with the external auditors, in the presence of the CFO, and by the full Supervisory Board with the Board of Management and the Executive Committee. Based on these discussions, the Supervisory Board is of the opinion that the 2021 financial statements of Akzo Nobel N.\/. form an adequate basis to account for the supervision provided (see the Financial information). The Audit Committee monitors the follow-up by management on the recommendations made by the external auditors. The Supervisory Board recommends that the AGM adopts the financial statements as presented in this Report 2021 and, as proposed by the Board of Management, the proposed total dividend for 2021 of €1.98 (2020: €1.95), including a final dividend of €1.54 per share. An interim dividend of €0.44 (2020: €0.43) per share was paid in November 2021. This reflects the continued commitment to providing a stable to rising dividend. The dividend will be paid in cash.

In addition, it is requested that the AGM discharges the members of the Board of Management from their responsibility for the conduct of business in 2021 and the members of the Supervisory Board for their supervision in 2021.

Committees of the Supervisory Board

 

Audit Committee

Remuneration Committee

Nomination Committee

Nils Smedegaard Andersen (Chair)

 

Member

Chair

Byron Grote (Deputy Chair)

Chair

 

 

Sue Clark

 

Member*

Member*

Michiel Jaski

Member*

 

 

Pamela Kirby

 

Member

Member

Jolanda Poots-Bijl

Member

 

 

Dick Sluimers

 

Chair

Member

Patrick Thomas

Member

 

 

*

Until retirement in April 2021

AGM or EGM

Annual General Meeting of shareholders; Extraordinary General Meeting of shareholders.