Supervisory Board activities

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. In 2022, 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 and 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 2022, some meetings were held virtually due to COVID-19 related measures. The virtual meetings were held with video conference capabilities, enabling Supervisory Board members to perform their role appropriately.

Strategy updates

During 2022, the Supervisory Board continued to allocate adequate time to discuss strategic activities. It received regular updates from the Executive Committee on the progress made towards the ambitions of the Grow & Deliver strategy, as well as on the underlying programs supporting the strategy. The Supervisory Board continued the discussion and advised on the strategic action items that were defined in the two-day strategy meeting held in December 2021. These discussions included reviews of the growth plans for Decorative Paints and Performance Coatings and deep dives on other strategic opportunities. The Supervisory Board further reviewed and advised on AkzoNobel’s acquisition of the African paints and coatings activities from Kansai Paint. With a focus on long-term value creation, the Supervisory Board also reviewed and advised on the internal Focus 2 initiatives that were launched mid-year to mitigate the macro-economic uncertainty.

Russia/Ukraine

Regular updates were also received regarding the situation in Ukraine and Russia and the impact on AkzoNobel and its employees. The Supervisory Board reviewed the actions taken to implement the EU sanctions, including the suspension of the majority of the coatings business in Russia, as well as the localization of the residual Russian business.

Functional updates

Throughout the year, the Supervisory Board reviewed and discussed functional updates, including Finance, Integrated Supply Chain, Human Resources, Innovation, and Health, Safety, Environment and Security. The Supervisory Board received comprehensive market updates and advised on contingency plans. Additionally, the Supervisory Board reviewed the outcomes and developments of the Organization Health Index survey.

Sustainability

The Supervisory Board views sustainability as an intrinsic value driver in the work of all businesses and functions. During 2022, the Supervisory Board continued to assess sustainability as part of strategy and targets and advised on further embedding related considerations in the decision-making. During the semi-annual progress updates on sustainability, the Supervisory Board reviewed and advised on the progress made towards the company’s sustainability ambitions. 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). It received updates on the multiple programs initiated, as well as on the company’s efforts to further strengthen sustainability governance internally.

The company’s sustainability 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 2023 were diligently reviewed by the Supervisory Board in Q4, taking into account the macro-economic uncertainty. Following this assessment, the Supervisory Board has approved the proposed budget and operating plan for 2023.

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 continued 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 share buyback program and the dividend proposal (further details on the 2022 dividend proposal can be found in the Financial information).

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.

Talent management and succession planning

Succession planning was an important topic for the Supervisory Board in 2022. With Thierry Vanlancker’s second term as CEO coming to an end at the AGM in 2023, the Supervisory Board initiated a thorough internal and external search to find a successor. The search and selection process was led by the Nomination Committee, with the assistance of an independent and renowned search firm.

On the recommendation of the Nomination Committee, the Supervisory Board nominated Greg Poux-Guillaume to be appointed as member of the Board of Management and CEO with effect from November 1, 2022, for an extended four-year term, which was approved at the EGM held on September 6, 2022. Further information can be found in the report of the Nomination Committee.

During 2022, the Supervisory Board also nominated Maarten de Vries to be reappointed as member of the Board of Management for a second four-year term, which was approved at the AGM held on April 22, 2022.

The Supervisory Board also took the time to discuss its own composition and succession plan in order to ensure its continued effectiveness. These discussions led to the nominations of Ester Baiget and Hans Van Bylen to be appointed as additional members of the Supervisory Board, following a search and selection process managed by the Nomination Committee, and with the assistance of an independent and renowned search firm.

The Supervisory Board further nominated Nils Smedegaard Andersen and Byron Grote to be reappointed as members of the Supervisory Board. Byron Grote was initially appointed as a member of the Supervisory Board in 2014, and reappointed for a second four-year term in 2018. He has been Chair of the Audit Committee since April 2015 and Deputy Chair of the Supervisory Board since October 2016. Given his extensive experience with AkzoNobel – and to ensure the continuity and effectiveness of the Supervisory Board and the Audit Committee while allowing for appropriate succession planning – the Supervisory Board nominated Byron Grote to be reappointed as a member of the Supervisory Board for a third term of two years. Nils Smedegaard Andersen and Byron Grote did not take part in the deliberations and voting regarding their own reappointments. The aforementioned appointments and reappointments were approved at the AGM held on April 22, 2022.

With Nils Smedegaard Andersen stepping down after the 2023 AGM, the Supervisory Board further announced the nomination of Ben Noteboom to be appointed as member of the Supervisory Board for a four-year term as of the 2023 AGM, with the intention to subsequently elect him as Chair. A thorough search and selection process was conducted by the Nomination Committee, led by Deputy Chair Byron Grote, with the assistance of an independent and renowned search firm. Nils Smedegaard Andersen did not take part in the deliberation and decision-making regarding his succession. Byron Grote, as Deputy Chair, acted as Chair during these meetings.

The requirements of the Dutch Corporate Governance Code, the Supervisory Board’s profile and the skills matrix were considered throughout these processes. Further information can be found in the report of the Nomination Committee.

The Supervisory Board further discussed and supported changes to the composition of the Executive Committee. With David Prinselaar stepping down as Chief Manufacturing Officer per March 1, 2022, Karen-Marie Katholm took on the role for both the Supply Chain and Manufacturing Operations under the title of Chief Integrated Supply Chain Officer.

The Supervisory Board also discussed an update to the organizational structure taking effect in 2023. With Michael Friede stepping down as Chief Commercial Officer – Performance Coatings as of March 1, 2023, Jan-Piet van Kesteren and Daniel Campos were appointed to the Executive Committee to jointly represent the Decorative Paints businesses, and Simon Parker and Patrick Bourguignon were appointed to the Executive Committee to jointly represent the Performance Coatings businesses. Their appointments to the Executive Committee took effect per February 1, 2023.

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 2022. 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 evaluation concluded that the Supervisory Board and its committees continue to operate proficiently. The search and selection processes relating to the Board of Management and Supervisory Board succession matters were professionally organized, with positive outcomes and close involvement of all Supervisory Board members. Sufficient time was allocated to discuss the topics that reflected the future strategic priorities for the company. Focus items going forward included the transition to a new Chair in 2023, as well as continued attention for executive succession planning and talent management.

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 2022 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 2022 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 2022 and, as proposed by the Board of Management, the proposed total dividend for 2022 of €1.98 (2021: €1.98), including a final dividend of €1.54 per share. An interim dividend of €0.44 (2021: €0.44) per share was paid in November 2022. 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 2022 and the members of the Supervisory Board for their supervision in 2022.

Supervisory Board activities 2022

Q1

• Review Q4 2021 financials and performance
• 2021 financial statements, annual report and profit allocation
• Assurance report sustainability statements 2021
• 2021 external audit report
• Final 2021 dividend
• Share buyback program
• Investor Relations update
• Grow & Deliver update
• Business updates
• M&A strategy update
• Risk management: Risk session outcomes
• HSE full-year report
• Review Remuneration Policy for Board of Management
• Supervisory Board succession planning
• CEO succession planning
• CFO reappointment

Q2

• Review Q1 2022 financials and performance
• Share buyback program
• Investor Relations update
• Grow & Deliver update
• Growth plan (Paints)
• Business updates
• M&A strategy update
• HSE and security update
• Russia/Ukraine update
• Commercial excellence update
• Sustainability strategy/ESG update
• Human Resources update (incl. Operational Health Index)
• CEO succession planning

Q3

• Review Q2 2022 financials and performance
• Investor Relations update
• Grow & Deliver update
• Growth plan (Coatings)
• Business updates
• M&A strategy update
• Integrated Supply Chain strategy update
• Innovation/Research and Development update
• HSE and security update

Q4

• Review Q3 2022 financials and performance
• Interim dividend 2022
• Dividend policy
• Review capital allocation priorities
• Budget 2023
• Investor Relations update
• Grow & Deliver update
• Business updates
• M&A strategy update
• HSE and security update
• Sustainability strategy/ESG update
• Supervisory Board succession planning