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9.1
Board Rules
DP Eurasia N.V.
3 July 2017
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TABLE OF CONTENTS
Table of Contents ................................................................................................................. 2
1. Introduction ................................................................................................................... 5
1.1. Board Rules ......................................................................................................... 5
1.2. Effective date ....................................................................................................... 5
1.3. Definitions ........................................................................................................... 5
1.4. Schedules ............................................................................................................ 5
1.5. Dutch Code and UK Code .................................................................................... 5
2. Responsibilities of the Board ......................................................................................... 6
2.1. General ............................................................................................................. 6
2.2. Responsibilities of the full Board .......................................................................... 6
2.3. Responsibilities of Executive Board members ...................................................... 7
2.4. Responsibilities of Non-Executive Board members .............................................. 9
3. Duties of the Board ..................................................................................................... 14
3.1. Long term strategy ............................................................................................. 14
3.2. Risk management .............................................................................................. 14
3.3. Information safeguards ...................................................................................... 15
3.4. Culture ........................................................................................................... 15
3.5. Code of Ethics and Business Conduct ............................................................... 16
3.6. Accountability .................................................................................................... 16
3.7. Private bids........................................................................................................ 16
4. Composition of the Board ............................................................................................ 17
4.1. Appointment ...................................................................................................... 17
4.2. Designation right Nominating Shareholder ......................................................... 18
4.3. Composition and profile ..................................................................................... 19
4.4. Board positions .................................................................................................. 20
4.5. Retirement schedule and retirement .................................................................. 20
4.6. Suspension and dismissal .................................................................................. 21
5. Board Committees ...................................................................................................... 22
5.1. Committees ....................................................................................................... 22
5.2. Number of members .......................................................................................... 22
5.3. Regulations ....................................................................................................... 22
5.4. Report on deliberations and findings .................................................................. 22
6. Remuneration ............................................................................................................. 23
6.1. Remuneration Policy .......................................................................................... 23
6.2. Executive Board members ................................................................................. 23
6.3. Claw-back .......................................................................................................... 23
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6.4. Non-Executive Board members .......................................................................... 23
6.5. Loans and guarantees ....................................................................................... 23
6.6. Remuneration report .......................................................................................... 23
7. Independence and other positions ............................................................................... 25
7.1. Independence .................................................................................................... 25
7.2. Other positions .................................................................................................. 25
8. Training and evaluation ............................................................................................... 26
8.1. Induction programme ......................................................................................... 26
8.2. Ongoing training and education ......................................................................... 26
8.3. Evaluation ......................................................................................................... 26
9. Board meetings ........................................................................................................... 28
9.1. Number of meetings and location ....................................................................... 28
9.2. Convocation ...................................................................................................... 28
9.3. Agenda ........................................................................................................... 28
9.4. Electronic means ............................................................................................... 29
9.5. Chair ........................................................................................................... 29
9.6. Attendance ........................................................................................................ 29
10. Decision-making and conflicts of interest ..................................................................... 30
10.1. Decision-making ................................................................................................ 30
10.2. Conflicts of interests .......................................................................................... 30
11. Misconduct and irregularities ....................................................................................... 32
11.1. Whistleblower Policy .......................................................................................... 32
11.2. Informing the Chairman ..................................................................................... 32
11.3. Notification by External Auditor .......................................................................... 32
11.4. Oversight by Non-Executive Board members ..................................................... 32
12. Internal Audit Function ................................................................................................ 33
12.1. Appointment and dismissal ................................................................................ 33
12.2. Assessment of the internal audit function ........................................................... 33
12.3. Internal audit plan .............................................................................................. 33
12.4. Performance of work .......................................................................................... 33
12.5. Report of findings .............................................................................................. 33
12.6. Absence of internal audit department ................................................................. 34
13. External Auditor .......................................................................................................... 35
14. The General Meeting ................................................................................................... 36
14.1. Meetings ........................................................................................................... 36
14.2. Chair ........................................................................................................... 36
14.3. Agenda ........................................................................................................... 36
14.4. Policy on bilateral contacts with shareholders .................................................... 38
15. Holding and trading securities ..................................................................................... 39
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15.1. Securities in the Company ................................................................................. 39
15.2. Other securities ................................................................................................. 39
16. Meetings and presentations ........................................................................................ 39
17. Miscellaneous ............................................................................................................. 40
17.1. Confidentiality .................................................................................................... 40
17.2. Amendment and non-compliance ....................................................................... 40
17.3. Governing law and jurisdiction ........................................................................... 40
Schedule 1 List of Definitions ........................................................................................... 41
Schedule 2 Information to be placed on the Company's website ...................................... 45
Schedule 3 Information required to be included by the Dutch Code and the UK Code in
the Annual Report ......................................................................................... 46
Schedule 4 Information required by the Dutch Code to be included in the Non-Executive
Report ........................................................................................................... 50
Schedule 5 Board Profile ................................................................................................. 51
Schedule 6 Retirement Schedule ..................................................................................... 55
Schedule 7 Audit Committee Rules .................................................................................. 56
Schedule 8 Remuneration Committee Rules .................................................................... 65
Schedule 9 Selection and Appointment Committee Rules ................................................ 71
Schedule 10 Board reserved matters ................................................................................. 75
Schedule 11 Role, Duties and Reporting Lines of the Company Secretary ......................... 80
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1. Introduction
1.1. Board Rules
These rules (the "Board Rules") are the rules of the board (the "Board") of
DP Eurasia N.V. (the "Company"). The Board deems it useful that its tasks and
responsibilities be further regulated by these Board Rules. These Board Rules are
established pursuant to article 15.12 of the Articles of Association and are
complementary to the rules and regulations (from time to time) applicable to the
Board under Dutch and English law or the Articles of Association.
1.2. Effective date
These Board Rules were adopted by the Board by a unanimous vote of all Board
members with effect as of 3 July 2017.
1.3. Definitions
Capitalised terms used herein have the meaning set forth in the list of definitions
attached as Schedule 1.
1.4. Schedules
The attached schedules form an integral part of these Board Rules.
1.5. Dutch Code and UK Code
These Board Rules are based upon the Dutch Code and the UK Code. The Dutch
Code and the UK Code contain best practice provisions that apply to the Company’s
corporate governance structure.
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2. Responsibilities of the Board
2.1. General
2.1.1. The Board members are collectively responsible for the Company’s management and
the general affairs of the Company’s business and the general affairs of the Group.
2.1.2. The Board members divide their tasks by mutual consultation, provided that the day-
to-day management of the Company is entrusted to the Executive Board members
and the task to supervise the Board members' performance of their duties cannot be
taken away from the Non-Executive Board members. If an Executive Board member
is absent, his/her duties and powers will be carried out by another Executive Board
member designated by the Executive Board members. In case of a long-term
absence of an Executive Board member, the Non-Executive Board members are
notified of that designation.
2.1.3. Each Board member is accountable to the Board for the fulfilment of his/her duties
and must therefore report to the Board on a regular basis and in such a manner as to
give the Board a proper insight in the performance of his/her duties, the foregoing
also in view of the Board’s collective responsibility.
2.1.4. The Board focuses on long-term value creation for the Group and takes into account
the stakeholder interests that are relevant in this context.
2.1.5. In fulfilling their responsibilities, the Board members act in the interest of the Group
and give specific attention to the relevant interests of the Company's employees,
shareholders, lenders, customers, suppliers and other stakeholders of the Group.
2.1.6. The Company should arrange appropriate insurance cover in respect of legal action
against its Board members.
2.2. Responsibilities of the full Board
2.2.1. The responsibilities of the full Board include:
a. setting the Company's management agenda;
b. developing a view on long-term value creation by the Group;
c. enhancing the performance of the Group and ensuring any corrective action is
taken where required;
d. developing a strategy, taking into account sub b. above;
e. identifying, analysing and managing the risks associated with the Company's
strategy and activities;
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f. discussing the draft audit plan with the External Auditor before the presentation
of the plan to the Audit Committee;
g. establishing and implementing internal procedures which safeguard that all
relevant information is known to the Board members in a timely manner;
h. reviewing, at least annually, the functioning of the Board and each Board
member and review those aspects which merit further training or education;
structuring and managing systems of internal business controls;
i. compliance by the Group with applicable laws and regulations;
j. compliance with and maintaining the corporate governance structure of the
Group;
k. the publication by the Company of any information required by applicable laws
and regulations;
l. stimulating openness and accountability within the Board, and between the
different corporate bodies within the Company; and
m. preparing the Company's Annual Accounts, the annual budget and a list of
significant capital expenditures;
n. ensure that Board members, especially Non-Executive Board members, have
access to independent professional advice at the Company's expense where
they judge it necessary to discharge their responsibilities as Board members1;
and
o. the appointment and removal of the Company Secretary2.
2.3. Responsibilities of Executive Board members
2.3.1. The Executive Board members are responsible for the day-to-day management of
the Company, including:
a. executing the decisions of the Board;
b. preparing proposals to the Board concerning the appointment and evaluation of
the members of the Company’s management team;
c. preparing proposals to the Remuneration Committee concerning the
remuneration of the members of the Company’s management team;
d. managing the members of the Company’s management team as they discharge
their individual responsibilities; and
1 UK Code B.5.1 2 UK Code B.5.2
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e. determining the objectives to be achieved by the Company’s management.
CEO
2.3.2. In addition the CEO must enable the Board and the Chairman to exercise their
responsibilities as Board members. The CEO must therefore:
a. prepare proposals on topics for which decision-making is the preserve of the
Board;
b. meet the Chairman at regular intervals, consult him/her and involve him/her in
strategic projects from the outset;
c. provide the Board with all the possible relevant information required to exercise
its powers;
d. be responsible for the operational management of the Company;
e. be responsible for the profit of the Group;
f. manage the business performance of the Group;
g. examine, analyse and propose to the Board strategic business opportunities that
can contribute to the further growth of the Group;
h. set up, chair and lead the Company’s management team;
i. communicate with the Company’s bondholders, relevant stakeholders, the media
and the public;
j. provide input to the Board's agenda from himself and the other members of the
management team;
k. ensure that the Company’s management team gives appropriate priority to
providing reports to the Board which contain accurate, timely and clear
information;
l. ensure, in consultation with the Chairman and with the assistance of the
Company Secretary, that he and the Company’s management team comply with
the approved procedures, including the schedule of matters reserved to the
Board;
m. ensure that the Chairman is alerted to forthcoming complex, contentious or
sensitive issues affecting the Group;
n. provide information and advice on succession planning to the Chairman and the
Selection and Appointment Committee and other Board members, particularly
with respect to Executive Board members;
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o. comment on induction programmes for new Board members and ensure that
appropriate executive management time is made available for such
programmes;
p. ensure that the development needs of the Executive Board members and other
senior management reporting to him are identified and met;
q. ensure that performance reviews are carried out once a year for each of the
Executive Board members. Provide input to the wider Board evaluation process;
and
r. promote and conduct the affairs of the Group with the highest standards of
integrity, probity and corporate governance.
Company Secretary
2.3.3. The Company Secretary:
a. ensures that the proper procedures are followed and that the statutory
obligations and obligations under the articles of association are complied with;
b. facilitates the provision of information of the Board; and
c. supports the Chairman in the organisation of the affairs of the Board, including
the provision of information, meeting agendas, evaluations and training
programmes.
2.3.4. In particular, the Company Secretary has the duties set out in Schedule 11.
2.3.5. If the Company Secretary notes that the interests of the Executive Board members
and the non-Executive Board members diverge, as a result of which it is unclear
which interests the Company Secretary should represent, the Company Secretary
should report this to the Chairman3.
2.4. Responsibilities of Non-Executive Board members
2.4.1. As Board members, the Non-Executive Board members share full responsibility for
the execution of the Board’s duties. Within this broad responsibility the role of the
Non-Executive Board members is, essentially, a supervisory one, having the
following key elements:
a. regularly discussing the strategy, the implementation of the strategy and the
principal risks associated with it4;
3 Dutch Code 2.3.10 4 Dutch Code 1.1.3
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b. supervising the manner in which the Board implements the long-term value
creation strategy5;
c. focusing on the effectiveness of the Company’s internal risk management and
control systems and the integrity and quality of the financial reporting 6;
d. determining appropriate levels of remuneration of Executive Board members;
e. ensuring that the Company has a sound plan in place for the succession of
Board members that is aimed at retaining the balance in the requisite expertise,
experience and diversity with due regard to the Board Profile7;
f. drawing up the Diversity Policy8;
g. giving the External Auditor a general idea of the content of the reports relating to
their functioning9;
h. supervising the relations with shareholders (see for example, paragraphs
2.4.7.k, 2.4.10.b and 2.4.10.c)10;
i. communicating to the General Meeting the main conclusions of the Non-
Executive Board members regarding the External Auditor’s nomination and the
outcomes of the External Auditor selection process11;
j. scrutinising the performance of management in meeting agreed goals and
objectives and monitor the reporting of performance12; and
k. having a prime role in appointing and, where necessary, removing Executive
Board members13.
2.4.2. The terms and conditions of appointment of Non-Executive Board members should
be made available for inspection. The letter of appointment should set out the
expected time commitment. Non-Executive Board members should undertake that
they will have sufficient time to meet what is expected of them14.
5 Dutch Code 1.1.3 6 Dutch Code 1.5 7 Dutch Code 2.2.4 8 Dutch Code 2.1.5 9 Dutch Code 1.6.2 10 Dutch Code 4.1.1 11 Dutch Code 1.6.4 12 UK Code A.4 13 UK Code A.4 14 UK Code: B.3.2
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Chairman
2.4.3. The Chairman is responsible for leadership of the Board and ensuring its
effectiveness on all aspects of its role15.
2.4.4. For the appointment of the Chairman, the Selection and Appointment Committee
should prepare a job specification, including an assessment of time commitment
expected. A Chairman's other significant commitments should be disclosed to the
Board before appointment and included in the Annual Report. Changes to such
commitments should be reported to the Board as they arise16.
2.4.5. The Chairman chairs the meetings of the Board and ensures that the Board as a
collective, as well as the Committees, have a balanced composition and function
properly17.
2.4.6. The Chairman acts on behalf of the Board as the main contact for the Board
members and shareholders regarding the functioning of the Board members 18.
2.4.7. The Chairman ensures that:
a. the Board has proper contact the employee participation body (if any) and the
General Meeting;
b. the Board elects a Vice-Chairman;
c. there is sufficient time for deliberation and decision-making by the Board;
d. the Board members receive all information that is necessary for the proper
performance of their duties in a timely fashion;
e. the Board and the Committees function properly;
f. the functioning of individual Board members is assessed at least annually;
g. the Board members follow their induction programme and in particular that new
Board members receive a full, formal and tailored induction on joining the Board;
h. the Board members follow their education or training programme and that each
Board member's training and development needs are regularly reviewed;
i. the Board performs activities in respect of culture;
15 UK Code A.3 16 UK Code B.3.1 17 Dutch Code 5.1.2 18 Dutch Code 2.4.3, part 1/2
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j. the Board recognises signs from the enterprise affiliated with the Company and
ensures that any (suspicion of) material misconduct and irregularities are
reported to the Board without delay;
k. the General Meeting proceeds in an orderly and efficient manner and: a
meaningful discussion at the meeting is promoted19;
l. effective communication with shareholders is assured; and
m. the Non-Executive Board members are involved closely, and at an early stage,
in any merger or takeover processes20.
Vice-Chairman
2.4.8. The Vice-Chairman deputises for the Chairman when the occasion arises, and
assumes the powers and duties of the Chairman in the latter’s absence. The Vice-
Chairman, or, if no Vice-Chairman is appointed, any other Non-Executive Board
member (other than the Chairman) in office, shall act as contact for individual Board
members concerning the functioning of the Chairman21.
2.4.9. The Vice-Chairman acts as contact for the Board members regarding the functioning
of the Chairman22.
Senior Independent Director
2.4.10. The role of the Senior Independent Director is to:
a. provide a sounding board for the Chairman and to serve as an intermediary for
the other Board members when necessary23;
b. be available to shareholders if they have concerns which contact through the
normal channels of the Chairman, CEO or other Executive Board members has
failed to resolve or for which such conduct is inappropriate24;
c. attend sufficient meetings with a range of major shareholders to listen to their
views in order to help develop a balanced understanding of the issues and
concerns of major shareholders25; and
19 Dutch Code 4.1.2 20 Dutch Code 2.3.6/UK Code B.4.1 and B.4.2 21 Dutch Code 2.3.7 22 Dutch Code 2.4.3, part 2/2 23 UK Code A.4.1 24 UK Code A.4.1 25 UK Code E.1.2
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d. meet with Non-Executive Board members without the Chairman present at least
annually to appraise the Chairman's performance and on such other occasions
as are deemed appropriate26.
26 UK Code A.4.2
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3. Duties of the Board
3.1. Long term strategy
The Board develops a view on long-term value creation by the Group and formulates
a strategy in line with this. Depending on market dynamics, it may be necessary to
make short-term adjustments to the strategy. When developing the strategy,
attention is, in any event, paid to the following:
a. the strategy’s implementation and feasibility;
b. the business model applied by the Company and the market in which the Group
operates;
c. opportunities and risks for the Company;
d. the Company’s operational and financial goals and their impact on its future
position in relevant markets;
e. the interests of the stakeholders; and
f. any other aspects relevant to the Group, such as the environment, social and
employee-related matters, the chain within which the enterprise operates,
respect for human rights, and fighting corruption and bribery27.
3.2. Risk management
3.2.1. The Board identifies and analyses the risks associated with the strategy and
activities of the Group. It is responsible for establishing the risk appetite, and also the
measures that are put in place in order to counter the risks being taken28.
3.2.2. Based on the risk assessment, the Board designs, implements and maintains
adequate internal risk management and control systems. To the extent relevant,
these systems are integrated into the work processes within the Group, and are
familiar to those whose work they are relevant to29.
3.2.3. The Board monitors the operation of the internal risk management and control
systems and carries out a systematic assessment of their design and effectiveness
at least once a year. This monitoring covers all material control measures relating to
strategic, operational, compliance and reporting risks. Attention is given to observed
weaknesses, instances of misconduct and irregularities, indications from
whistleblowers, lessons learned and findings from the internal audit function and the
27 Dutch Code 1.1.1 28 Dutch Code 1.2.1 29 Dutch Code 1.2.2
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External Auditor. Where necessary, improvements are made to internal risk
management and control systems30.
3.2.4. The Board discusses the effectiveness of the design and operation of the internal
risk management and control systems referred to in best practice provisions 1.2.1 to
1.2.3 of the Dutch Code inclusive with the Audit Committee31.
3.3. Information safeguards
3.3.1. The Board ensures that internal procedures are established and maintained which
safeguard that all relevant information is known to the Board in a timely f ashion. The
Non-Executive Board members supervise the establishment and implementation of
these procedures32.
3.3.2. Each Board member shall have the right to receive from other Board members and
from employees any information about matters which such member may deem useful
or appropriate in connection with his/her collective responsibility for the Company’s
management. Each member must consult with the other Board members if the
implementation of his/her duties affects the implementation of the duties of the other
Board members or if the significance of the matter requires consultation with the
other Board members.
3.3.3. The Non-Executive Board members have their own responsibility for obtaining the
information from the internal audit function, the External Auditor and the employee
participation body (if any) that the Board needs in order to be able to carry out its
duties as a supervisory organ properly33.
3.3.4. If the Board considers it necessary, it may obtain information from officers and
external advisers of the Company. The Company provides the necessary means to
this end. The Board may require that certain officers and external advisers attend its
meetings34.
3.4. Culture
3.4.1. The Board adopts values for the Group that contribute to a culture focused on long -
term value creation. The Board is responsible for the incorporation and maintenance
of the values within the Group. Attention is paid to the following, among other things:
a. the strategy and the business model;
30 Dutch Code 1.2.3/UK Code C.2.3 31 Dutch Code 1.4.1 32 Dutch Code 2.4.7 33 Dutch Code 2.4.8 34 Dutch Code 2.4.9
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b. the environment in which the enterprise operates; and
c. the existing culture within the enterprise, and whether it is desirable to
implement any changes in this35.
3.4.2. The Board encourages behaviour that is in keeping with the values, and propagates
these values through leading by example36.
3.5. Code of Ethics and Business Conduct
The Board draws up a Code of Ethics and Business Conduct and monitor its
effectiveness and compliance with this code, both on the part of itself and of the
employees of the Company. The Code of Ethics and Business Conduct is published
on the Company's website37.
3.6. Accountability
3.6.1. The Board attaches to the Annual Accounts a management report on the work
undertaken by it (the "Management Report"). The Management Report, in any
event, contains the information referred to in Schedule 3 and any information
required by law and pursuant to the Dutch Code and the UK Code. In addition, the
Board reports on the sensitivity of the Company's results to external factors and
variables.
3.6.2. The Non-Executive Board members prepare and publish a report on their functioning
and activities and of the Committees during the preceding financial year (the "Non-
Executive Report"). The minimum information required by the Dutch Code and the
UK Code to be included in the Non-Executive Report is set out in Schedule 4.
3.7. Private bids
If a private bid for a business unit or a participating interest has been made public,
where the value of the bid exceeds the threshold referred to in Section 2:107a(1)(c)
of the Dutch Civil Code, the Board will make public its position on the bid and the
reasons for this position as soon as possible.38
35 Dutch Code 2.5.1, part 1/2 36 Dutch Code 2.5.1, part 2/2 37 Dutch Code 2.5.2 38 Dutch Code 2.8.3
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4. Composition of the Board
4.1. Appointment
4.1.1. The Selection and Appointment Committee leads the process for Board
appointments and makes recommendations to the Board39 (see Schedule 9).
4.1.2. Board members are subject to appointment by the General Meeting, and to re-
appointment thereafter at intervals of no more than three years. Non-Executive
Board members who have served longer than nine years should be subject to annual
re-appointment. In the event of a reappointment after an eight-year period, reasons
will be given in the Non-Executive Report. In any appointment or reappointment, the
Board Profile is observed and the Diversity Policy is considered in the preparation of
the appointment or reappointment40.
4.1.3. Unless a Board member resigns earlier, his/her appointment period ends
immediately after the AGM that will be held in the third calendar year after the date of
his or her appointment.
4.1.4. Where the Company has a controlling shareholder (for the purposes of UK Listing
Rules) the election or re-election of any independent Board member by shareholders
must be approved by:
a. the shareholders of the Company; and
b. the independent shareholders of the Company41.
4.1.5. Where paragraph 4.1.4 applies, if the election or re-election of an independent Board
member is not approved by both the shareholders and the independent shareholders
of the Company, but the Company wishes to propose that person for election or re-
election as an independent Board member, the Company must propose a further
resolution to elect or re-elect the proposed independent Board member which:
a. must not be voted on within a period of 90 days from the date of the original
vote;
b. must be voted on within a period of 30 days from the end of the period set out
above; and
c. must be approved by the shareholders of the Company42.
39 UK Code B.2.1 40 Dutch Code 2.2.1, 2.2.2/UK Code B.7.1 41 UK Listing Rule 9.2.2E 42 UK Listing Rule 9.2.2F
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4.1.6. The main elements of the agreement of a Board member with the Company should
be published on the Company’s website in a transparent overview after the
agreement has been concluded, and in any event no later than the date of the notice
calling the General Meeting where the appointment of the Board member will be
proposed43.
4.2. Designation right Nominating Shareholder
4.2.1. The Nominating Shareholder has the right to designate three individuals for
nomination as Non-Executive Board members.
4.2.2. The Nominating Shareholder shall only designate individuals that cause the Non-
Executive Board members to be composed in accordance with the Board Profile.
Such individuals will not need to be "independent" within the meaning of the Dutch
Code and the UK Code and, subject to paragraph 4.1.2, may be re-appointed upon
expiry of their term.
4.2.3. If a Non-Executive Board member appointed upon designation by the Nominating
Shareholder must be replaced, the Company shall convene a General Meeting for
the appointment of a replacement, as soon as practicable after the Nominating
Shareholder has designated a qualifying individual in writing to the Board. The Board
will nominate such qualifying individual for appointment by the General Meeting and
shall determine that the relevant designated individual will temporarily occupy the
vacant seat pursuant to the Articles of Association until the appointment by the
General Meeting.
4.2.4. The designation right of the Nominating Shareholder will expire depending on its
percentage shareholding in the Company, as follows:
a. if the Nominating Shareholder, directly or indirectly, holds less than 30%, but
20% or more of the Shares, the Nominating Shareholder will have the right to
designate only two Non-Executive Board members;
b. if the Nominating Shareholder, directly or indirectly, holds less than 20% but
10% or more of the Shares, the Nominating Shareholder will have the right to
designate only one Non-Executive Board member; and
c. if the Nominating Shareholder holds less than 10% of the Shares, the right of the
Shareholder to designate a Non-Executive Board member will expire.
4.2.5. The Shareholder shall inform the Chairman in writing within five Business Days after
its shareholding in the Company falls below the thresholds set out in paragraph
43 Dutch Code 3.4.2
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4.2.4. The Chairman and the other independent Non-Executive Board members will
then resolve either to nominate an independent candidate to fill the vacancy, or not
to fill the vacancy but to propose to the full Board to decrease the total number of
Non-Executive Board members.
4.2.6. The Nominating Shareholder shall procure that the Non-Executive Board member
appointed pursuant to its expired designation right offers his/her resignation effective
upon the earlier of:
a. the date as determined by the Chairman and the other independent Non-
Executive Board member(s); and
b. the date determined by the Nominating Shareholder.
4.2.7. Any designation right that expires shall not revive, regardless of any subsequent
increase of the Nominating Shareholder's shareholding in the Company.
4.3. Composition and profile
4.3.1. The Board and its Committees has the appropriate balance of skills, experience,
independence and knowledge of the Company to enable them to discharge their
respective duties and responsibilities effectively44.
4.3.2. Each Board member has the specific expertise required for the fulfilment of his/her
duties. Each Non-Executive Board member is capable of assessing the broad outline
of the overall management45.
4.3.3. The Non-Executive Board members prepare a profile (the "Board Profile"), taking
account of the nature and the activities of the enterprise affiliated with the Company.
The profile addresses:
a. the desired expertise and background of the Non-Executive Board members;
b. the desired diverse composition of the Non-Executive Board members as set out
in the Diversity Policy, referred to in the Diversity Policy;
c. the number of the Non-Executive Board members; and
d. the independence of the Non-Executive Board members46.
4.3.4. The Non-Executive Board members draw up a diversity policy (the "Diversity
Policy") for the composition of the Board. This policy addresses the concrete targets
44 UK Code B.1 45 Dutch Code 2.1.4 46 Dutch Code 2.1.1/UK Code B.1.1
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relating to diversity and the diversity aspects relevant to the Company, such as
nationality, age, gender, and education and work background47.
4.4. Board positions
4.4.1. The Board appoints an independent Non-Executive Board member to be Chairman.
The Chairman is not a former Executive Board member and is independent within the
meaning of the Dutch Code and the UK Code48.
4.4.2. The Board appoints a Non-Executive Board member to be Vice-Chairman.
4.4.3. The Non-Executive Board members elect one of their members as their spokesman,
referred to as the Senior Independent Director, or SID.
4.4.4. The Board appoints an Executive Board member as CEO.
4.4.5. The Board appoints an Executive Board member as Company Secretary.
4.5. Retirement schedule and retirement
4.5.1. The Non-Executive Board members ensure that the Company has a sound plan in
place for the succession of Non-Executive Board members that is aimed at retaining
the balance in the requisite expertise, experience and diversity. Due regard is given
to the Board Profile in drawing up the plan for Non-Executive Board members. The
Non-Executive Board members also draw up a retirement schedule in order to avoid,
as much as possible, Non-Executive Board members retiring simultaneously. The
retirement schedule is published on the Company's website49.
4.5.2. Without prejudice to article 17.3 of the Articles of Association, Board members will
retire early in the event of inadequate functioning, structural incompatibility of
interests, and in other instances in which this is deemed necessary by the Non-
Executive Board members. In the event of the early retirement of a Board member,
the Company will issue a press release mentioning the reasons for the departure 50.
4.5.3. A Non-Executive Board member who temporarily takes on the management of the
Company where the Executive Board members are absent or unable to fulfil their
duties will resign as a Non-Executive Board member51.
47 Dutch Code 2.1.5 48 Dutch Code 2.1.19/UK Code B.1.1 49 Dutch Code 2.2.4 50 Dutch Code 2.2.3 51 Dutch Code 2.3.9
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4.6. Suspension and dismissal
The Board members are suspended and dismissed in the manner as provided in the
Articles of Association.
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5. Board Committees
5.1. Committees
The Board shall appoint an Audit Committee, a Remuneration Committee and a
Selection and Appointment Committee. The Board shall receive from each of the
Committees a report of its deliberations and findings. The Board shall remain
collectively responsible for decisions prepared by Committees appointed from among
its Non-Executive Board members.
5.2. Number of members
The Board determines the number of members of each Committee.
5.3. Regulations
The Board shall draw up regulations for each Committee which may be amended by
the Board at any time. The present regulations of the Audit Committee,
Remuneration Committee and the Selection and Appointment Committee are
attached as Schedule 7, Schedule 8, and Schedule 9.
5.4. Report on deliberations and findings
The Board receives from each Committee a report of its deliberations and findings.
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6. Remuneration
6.1. Remuneration Policy
The Company must establish a remuneration policy in respect of the remuneration of
the Board (the "Remuneration Policy"). The Remuneration Policy is adopted by the
General Meeting upon the proposal of the Board.
6.2. Executive Board members
The remuneration of the Executive Board members shall be determined by the Non-
Executive Board members with due observance of the Remuneration Policy.
6.3. Claw-back
The Non-Executive Board members may recover from the Executive Board members
any variable remuneration awarded on the basis of incorrect financial or other data.
6.4. Non-Executive Board members
The remuneration of the Non-Executive Board members shall be determined by the
General Meeting upon a proposal by the Board with due observance of the
Remuneration Policy. Non-Executive Board members may not receive Shares and/or
options or similar rights to acquire Shares as part of their remuneration52.
6.5. Loans and guarantees
The Company does not grant Board members personal loans, guarantees or the like
unless in the normal course of business and on terms applicable to the personnel as
a whole, and after approval of the Board. Remission of loans shall not be granted 53.
6.6. Remuneration report
The Remuneration Committee prepares the remuneration report. This report will in
any event describe, in a transparent manner, in addition to the matters required by
law:
a. how the Remuneration Policy has been implemented in the past financial
year;
b. how the implementation of the Remuneration Policy contributes to long-
term value creation;
c. that scenario analyses have been taken into consideration;
52 Dutch Code 3.3.2 53 Dutch Code 2.7.6
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d. the pay ratios within the Company and its affiliated enterprise and, if
applicable, any changes in these ratios in comparison with the previous
year;
e. in the event that a Board member receives variable remuneration, how this
remuneration contributes to long-term value creation, the measurable
performance criteria determined in advance upon which the variable
remuneration depends, and the relationship between the remuneration and
performance; and
f. in the event that a current or former Board member receives a severance
payment, the reason for this payment54.
6.6.2. The remuneration report will be posted on the Company’s website.
54 Dutch Code 3.4.1
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7. Independence and other positions
7.1. Independence
7.1.1. The Board shall function independently from any instructions by third parties outside
the Company.
7.1.2. The composition and functioning of the Board shall be such that proper and
independent supervision by the Non-Executive Board members is assured.
7.1.3. The Board members comply with the provisions in the Articles of Association relating
to conflicts of interest (tegenstrijdig belang) and the Related Party and Conflict
Policy.
7.1.4. The Chairman, or in his/her absence, the Vice-Chairman presides over such
meetings.
7.1.5. The Non-Executive Board members can ask members of management of the Group
and external professional advisers to attend those meetings. The Company
Secretary assists them with the support they need.
7.2. Other positions
7.2.1. Board members report any other positions they may have to the Board in advance
and, at least annually, the other positions are discussed at the Board meeting. The
acceptance of membership of a non-executive/supervisory board position by an
Executive Board member requires the approval of the Board55.
7.2.2. In due observance to Section 2:132a DCC, the number of an Executive Board
member's supervisory positions in listed or non-listed companies as referred to in the
Section 2:132a DCC is limited to a maximum of two. An Executive Board member
may not be the chairperson of a supervisory board or a one-tier board of another
listed or non-listed company as referred to in Section 2:132a DCC.
7.2.3. In due observance to Section 2:142a DCC, the number of supervisory positions of
listed or non-listed companies as referred to in Section 2:142a DCC of which a Non-
Executive Board member is limited to a maximum of five, for which purpose the
chairpersonship of a supervisory board or of a one-tier board counts twice.
7.2.4. The Board should not agree to a full time Executive Board member taking on more
than one non-executive board membership in a FTSE 100 company nor
chairpersonship of such a company56.
55 Dutch Code 2.4.2 56 UK Code B.3.3
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8. Training and evaluation
8.1. Induction programme
All Non-Executive Board members follow an induction programme geared to their
role. The induction programme covers, in any event, general financial, social and
legal affairs, financial reporting by the Company, any specific aspects that are unique
to the Company and its business activities, the company culture and the relationship
with the employee participation body (if any), and the responsibilities of a Non-
Executive Board member57.
8.2. Ongoing training and education
The Board conducts an annual review for the Board to identify any aspects with
regard to which the Board members require training or education58.
8.3. Evaluation
8.3.1. At least once per year, outside the presence of the Executive Board members, the
Non-Executive Board members evaluate their own functioning, the functioning of the
various Committees and that of the individual Non-Executive Board members, and
discuss the conclusions that are attached to the evaluation. In doing so, attention is
paid to:
a. substantive aspects, the mutual interaction and the interaction with the
Executive Board members;
b. events that occurred in practice from which lessons may be learned; and
c. the desired profile, composition, competencies and expertise of the Non-
Executive Board members59.
8.3.2. At least once per year, outside the presence of the Executive Board members, the
Non-Executive Board members evaluate both the functioning of full the Board and
that of the individual Executive Board members, and discuss the conclusions that
must be attached to the evaluation, such also in light of the succession of Executive
Board members60.
8.3.3. At least once annually, the Executive Board members, too, evaluate their own
functioning as a whole and that of the individual Executive Board members61.
57 Dutch Code 2.4.5 58 Dutch Code 2.4.6 59 Dutch Code 2.2.6 60 Dutch Code 2.2.7 61 Dutch Code 2.2.7
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8.3.4. Led by the Senior Independent Director, the Non-Executive Board members are
responsible for the performance evaluation of the Chairman, taking into account the
views of Executive Board members62.
62 UK Code B.6.3
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9. Board meetings
9.1. Number of meetings and location
9.1.1. The Board shall hold meetings on a regular basis at a time to be determined by the
Board, but in any case not less than 6 times per year. The meetings shall generally
be held at the offices of the Company, but may also take place elsewhere.
9.1.2. Non-Executive Board members meet independently at least once a year to consider
agenda items set by them.
9.1.3. The Chairman should hold meetings with the Non-Executive Board members without
the Executive Board members present at least twice a year, possibly immediately
before or after Board meetings.
9.2. Convocation
9.2.1. Meetings of the Board may be called at any time, either by (a) the Chairman, (b) the
Vice-Chairman, (c) any two Board members jointly or (d) the Company Secretary, on
instruction of the persons mentioned under (a), (b) and (c) of this paragraph 9.2.1.
9.2.2. The meetings shall be convened in writing (including the agenda of the meeting and
relevant meeting materials) at least eight days in advance of the date set for such
meeting, except in the case of an emergency, in which case the nature of such
circumstances shall be set out in the notice.
9.3. Agenda
9.3.1. The agenda of each meeting shall be determined by the Board member(s) convening
the meeting in accordance with paragraph 9.2. Each other Board member may
submit to the Chairman or the Vice-Chairman items to be discussed in the meeting.
An item to be discussed which has not been submitted in time or is not supported by
sufficient documentation shall not be placed on the agenda. The agenda should list
the matters to be discussed and specify whether they are for information, for
deliberation or for decision- making purposes. The standing agenda items shall
include:
a. CEO report;
b. CFO report;
c. Committee reports; and
d. items requiring decision beyond authority delegated the Committees.
9.3.2. After convocation of a meeting, amendments to the agenda can only be resolved
upon by unanimous votes of all Board members in office. Matters not included on the
agenda of the meeting can only be validly resolved upon by the Board if all Board
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members are present or represented at the meeting and agree to deliberate and
resolve on such matter.
9.3.3. At the request of a Board member and with the agreement of the majority of the other
Board members, urgent matters may be discussed immediately. However,
resolutions in respect of such matters first require an amendment to the agenda in
accordance with paragraph 9.3.2 and shall only be adopted with due observance of
the applicable majority and quorum requirements.
9.4. Electronic means
Board meetings may be held by telephone, videoconference, or other electronic
means, provided that all participants can hear each other simultaneously.
9.5. Chair
The Chairman, and in his/her absence or if he/she is unwilling to take the chair, the
Vice-Chairman, shall chair the meeting, or if the latter is absent or unwilling to take
the chair, the meeting shall appoint one of the Non-Executive Board members or, in
the event all Non-Executive Board members in office are absent, one of the
Executive Board members, as chairperson of the meeting.
9.6. Attendance
9.6.1. The Board members must attend the meetings of the Board and of the Committees of
which they are a part. Where they are unable to attend and the minutes require
explanation, the chairperson of the meeting shall inform the absent Board member
about the resolutions passed and the discussions held in the meeting in question.
Non-Executive Board members who are frequently absent during meetings of the
Board shall be asked by the Chairman to explain their absence. The Non-Executive
Report states the absenteeism rate from Board and Committee meetings of each
Non-Executive Board member63.
9.6.2. A Board member may be represented by another Board member authorised in
writing.
63 Dutch Code 2.4.4
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10. Decision-making and conflicts of interest
10.1. Decision-making
10.1.1. Board resolutions may at all times be adopted outside of a meeting, in writing or
otherwise, provided that the proposal concerned is submitted to all Board members
then in office and none of them objects to this manner of adopting resolutions.
10.1.2. Each Board member shall be entitled to one vote.
10.1.3. Unless the law, the Articles of Association or these Board Rules provide otherwise,
resolutions of the Board shall be adopted by an absolute majority of the votes cast .
10.1.4. The matters listed in:
a. Part 1 of Schedule 10 shall be adopted by the full Board;
b. Part 2 of Schedule 10 shall be adopted by the Non-Executive Board members,
as a group; and
c. Part 3 of Schedule 10 shall be adopted by the Executive Board members, as a
group,
unless these matters are expressly and specifically included in the Company's
business plan or budget as previously approved by the Board, the Non-Executive
Board members or the Executive Board members respectively.
10.1.5. The minutes of meetings of the Board shall be kept by the Company Secretary. The
minutes shall be adopted by the Board at the same meeting or at a subsequent
meeting and as evidence thereof signed by the Chairman, or in his absence the Vice-
Chairman, and the Company Secretary. If the Board has adopted resolutions without
holding a meeting, the Company Secretary shall keep a record of each resolution
adopted without holding a meeting. Such record shall be signed by the Chairman and
the Company Secretary. The Company Secretary may also sign together with any
Executive Board member an extract of such minutes.
10.1.6. The External Auditor shall be requested to attend each Board meeting at which the
examination, adoption and, if applicable, approval of the Annual Accounts are
discussed.
10.2. Conflicts of interests
10.2.1. A Board member shall not participate in the discussions and/or decision-taking
process on a subject or transaction in relation to which he/she has a conflict of
interests with the Company as set out in the Related Party and Conflict Policy. Such
transaction is approved and concluded in accordance Related Party and Conflict
Policy.
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10.2.2. The Chairman shall procure that these transactions will be referred to in the
Management Report, together with a statement of the conflict and a declaration that
the provisions in the Dutch Code have been complied with64.
64 Dutch Code 2.7.4. in part
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11. Misconduct and irregularities
11.1. Whistleblower Policy
11.1.1. The Board establishes a procedure for reporting actual or suspected irregularities
within the Group (the "Whistleblower Policy"). The Whistleblower Policy is
published on the Company's website. The Board ensures that employees have the
opportunity to file a report without jeopardising their legal position 65.
11.1.2. The Audit Committee shall review the Company's arrangements for its employees to
raise concerns, in confidence, about possible wrongdoing in financial reporting or
other matters. The Audit Committee shall ensure that these arrangements allow
proportionate and independent investigation of such matters and appropriate follow
up action.
11.2. Informing the Chairman
The Board informs the Chairman without delay of any signs of actual or suspected
material misconduct or irregularities within the Group. If the actual or suspected
misconduct or irregularity pertains to the functioning of a Board member, employees
can report this directly to the Chairman66.
11.3. Notification by External Auditor
The External Auditor informs the chairperson of the Audit Committee without delay if,
during the performance of his/her duties, he/she discovers or suspects an instance of
misconduct or irregularity. If the actual or suspected misconduct or irregularity
pertains to the functioning of an Executive Board member, the external auditor
reports this directly to the Chairman67.
11.4. Oversight by Non-Executive Board members
The Non-Executive Board members monitor the operation of the procedure for
reporting actual or suspected misconduct or irregularities, appropriate and
independent investigations into signs of misconduct or irregularities, and, if an
instance of misconduct or irregularity has been discovered, an adequate follow-up of
any recommendations for remedial actions. In order to safeguard the independence
of the investigation in cases where the Board itself is involved, the Non-Executive
Board members have the option of initiating its own investigation into any
irregularities that have been discovered and to coordinate this investigation68.
65 Dutch Code 2.6.1 66 Dutch Code 2.6.2 67 Dutch Code 2.6.3 68 Dutch Code 2.6.4
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12. Internal Audit Function
12.1. Appointment and dismissal
The Board appoints and dismisses the Internal Auditor. The appointment and
dismissal of the Internal Auditor is submitted to the Non-Executives for approval,
along with the recommendation issued by the Audit Committee69.
12.2. Assessment of the internal audit function
The Board assesses the way in which the internal audit function fulfils its
responsibility annually, taking into account the Audit Committee’s opinion70.
12.3. Internal audit plan
The internal audit function draws up an audit plan, involving the Board, the Audit
Committee and the External Auditor in this process. The audit plan is submitted to
the Board for approval. In this internal audit plan, attention is paid to the interaction
with the external auditor71.
12.4. Performance of work
The internal audit function has sufficient resources to execute the internal audit plan
and has access to information that is important for the performance of its work. The
internal audit function has direct access to the Audit Committee and the External
Auditor. Records are kept of how the Audit Committee is informed by the internal
audit function72.
12.5. Report of findings
The internal audit function reports its audit results to the Board and the essence of its
audit results to the Audit Committee and informs the external auditor. The research
findings of the internal audit function include, at least, the following:
a. any flaws in the effectiveness of the internal risk management and control
systems;
b. any findings and observations with a material impact on the risk profile of the
Group; and
c. any failings in the follow-up of recommendations made by the internal audit
function73.
69 Dutch Code 1.3.1 70 Dutch Code 1.3.2 71 Dutch Code 1.3.3 72 Dutch Code 1.3.4 73 Dutch Code 1.3.5
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12.6. Absence of internal audit department
If there is no separate department for the internal audit function, the Non-Executive
Board members annually assess whether adequate alternative measures have been
taken, partly on the basis of a recommendation issued by the Audit Committee, and
consider whether it is necessary to establish an internal audit department. The Non-
Executive Board members include these conclusions, along with any resulting
recommendations and alternative measures, in the Non-Executive Report74.
74 Dutch Code 1.3.6/UK Code C.3.6
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13. External Auditor
13.1.1. The Board ensures that the External Auditor receives all information that is
necessary for the performance of his or her work in a timely fashion. The Board gives
the External Auditor the opportunity to respond to the information that has been
provided75.
13.1.2. The Company will publish a press release in the event of the early termination of the
relationship with the external audit firm. The press release will explain the reasons
for this early termination76.
13.1.3. The External Auditor attends the meeting of the Non-Executive members at which
the report of the External Auditor on the audit of the financial statements is
discussed77.
13.1.4. If the Company qualifies as an organisation of public interest within the meaning of
Section 1, paragraph l of the Auditors Organisations Supervision Act (Wet toezicht
accountantsorganisaties), the Company shall inform the AFM (Stichting Autoriteit
Financiële Markten) which auditor or auditors firm will be proposed to be appointed
as External Auditor, ultimately at the time of the convocation of the General Meeting
at which the proposal to appoint the External Auditor is resolved upon. If the
instructions to the External Auditor are withdrawn by the Company or terminated
prior to the end of the term by the External Auditor, the Board shall notify the AFM
without delay of such withdrawal or termination stating their conclusive justification
therefor.
75 Dutch Code 1.7.1 76 Dutch Code 1.6.5 77 Dutch Code 1.7.6
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14. The General Meeting
14.1. Meetings
In accordance with the Articles of Association, General Meetings are called by the
Board.
14.2. Chair
The Board members attend the General Meetings, unless they are prevented from
attending on serious grounds. In conformity with the Articles of Association, the
Chairman, as a general rule, chairs General Meetings. The ruling pronounced by the
Chairman in respect of the outcome of a vote in a General Meeting is decisive
subject to the provisions of Section 2:13 DCC.
14.3. Agenda
14.3.1. The agenda of the General Meeting lists items that are up for discussion and which
items are to be voted on. In particular, the following items are dealt with as separate
agenda items:
a. material changes to the Articles of Association;
b. proposals relating to the appointment of Board members;
c. the policy of the Company on additions to reserves and on dividends (the level
and purpose of the addition to reserves, the amount of the dividend and the type
of dividend);
d. any proposal to pay out dividend;
e. resolutions to approve the supervision exercised by the Non-Executive Board
members (discharge from liability to Non-Executive Board members for their
duties conducted in the past year);
f. resolutions to approve the management conducted by the Board (discharge from
liability to the Executive Board members for their duties conduction in the past
year);
g. each substantial change in the corporate governance structure of the Company
and in the compliance with the Dutch Code and the UK Code; and
h. the appointment of the External Auditor78.
14.3.2. At any General Meeting, the Company should propose a separate resolution on each
substantially separate issue, and should, in particular, propose a resolution at the
78 Dutch Code 4.1.3
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AGM relating to the Annual Accounts. For each resolution, proxy appointment forms
should provide shareholders with the option to direct their proxy to vote either for or
against the resolution or to withhold their vote. The proxy form and any
announcement of the results of a vote should make it clear that a ’vote withheld’ is
not a vote in law and will not be counted in the calculation of the proportion of the
votes for and against the resolution79.
14.3.3. The Company should ensure that all valid proxy appointments received for General
Meetings are properly recorded and counted. For each resolution, where a vote has
been taken on a show of hands, the Company should ensure that the following
information is given at the General Meetings and made available as soon as
reasonably practicable on a website which is maintained by or on behalf of the
Company:
a. the number of Shares in respect of which proxy appointments have been validly
made;
b. the number of votes for the resolution;
c. the number of votes against the resolution; and
d. the number of Shares in respect of which the vote was directed to be withheld80.
14.3.4. When, in the opinion of the Board, a significant proportion of votes have been cast
against a resolution at any General Meeting, the Company should explain when
announcing the results of voting what actions it intends to take to understand the
reasons behind the vote result.
14.3.5. The Chairman should arrange for the chairpersons of the Audit Committee, the
Remuneration Committee and the Selection and Appointment Committee to be
available to answer questions at the AGM and for all Board members to attend81.
14.3.6. The Company should arrange for the notice of the AGM and related papers to be made
available on its website at least 42 days before the meeting.
14.3.7. A proposal for approval or authorisation by the General Meeting should be explained in
writing. In its explanation the Board should deal with all facts and circumstances relevant
to the approval or authorisation to be granted. The notes to the agenda should be posted
on the Company’s website82.
79 UK Code E.2.1 80 UK Code E.2.2 81 UK Code E.2.3 82 Dutch Code 4.1.4
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14.4. Policy on bilateral contacts with shareholders
The Board shall adopt a policy in respect of bilateral contacts with the Company’s
shareholders and should post this policy on its website83.
83 Dutch Code 4.2.2
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15. Holding and trading securities
15.1. Securities in the Company
With respect to securities in the Company, the Board members are bound by the
Company’s policy on inside information and securities trading (including, the Group
Wide Dealing Policy, the Securities Dealing Code and the Dealings Procedures
Manual) and must at all times comply with all Dutch and foreign statutory provisions
and regulations, including applicable notification requirements, applicable to the
ownership of, and transactions related to, securities in the Company and securities in
other companies.
15.2. Other securities
The Company draws up regulations governing ownership of, and transactions in,
securities by Board members, other than securities issued, by the Company84.
16. Meetings and presentations
Analyst meetings, analyst presentations, presentations to institutional or other
investors and press conferences should be announced in advance on the Company’s
website and by means of press releases. Analysts’ meetings and presentations to
investors should not take place shortly before the publication of the regular financial
information. All shareholders should be able to follow these meetings and
presentations in real time, by means of webcasting, telephone or otherwise. After the
meetings, the presentations should be posted on the Company’s website85.
84 Dutch Code 2.7.2. 85 Dutch Code 4.2.3
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17. Miscellaneous
17.1. Confidentiality
Each Board member shall treat all information and documentation acquired within the
framework of their position as Board member with the necessary discretion and, in
the case of classified information, with the appropriate secrecy. Classified
information shall not be disclosed outside the Board, made public or otherwise made
available to third parties, even after resignation from the Board, unless it has been
made public by the Company or it has been established that the information is
already in the public domain.
17.2. Amendment and non-compliance
17.2.1. The Board may amend these Board Rules.
17.2.2. Without prejudice to the provisions in the Articles of Association, the Board may
occasionally decide at its sole discretion not to comply with and adhere to these
Board Rules. Such resolution shall be referred to in the Management Report.
17.2.3. Where these Board Rules are inconsistent with Dutch law or the Articles of
Association, the latter shall prevail. Where these Board Rules conform to the Ar ticles
of Association but are inconsistent with Dutch law, the latter shall prevail.
17.2.4. The invalidity of one or more provisions of these Board Rules shall not affect the
validity of the remaining provisions. The Board may replace the invalid provisions by
provisions which are valid, and the effect of which, given the contents and purpose of
these Board Rules is, to the greatest extent possible, similar to that of the invalid
provisions.
17.3. Governing law and jurisdiction
These Board Rules shall be governed by and construed in accordance with the laws
of the Netherlands. The courts of Amsterdam, the Netherlands, shall have exclusive
jurisdiction to settle any dispute arising from or in connection with these Board Rules
(including any dispute regarding the existence, validity or termination of these Board
Rules).
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SCHEDULE 1 LIST OF DEFINITIONS
In these Board Rules, the following terms have the following meanings:
ADBP the Company's annual and deferred bonus plan;
AGM the General Meeting held for the purpose of adopting the
Annual Accounts;
AFM the Dutch Authority for the Financial Markets (Stichting
Autoriteit Financiële Markten)
Annual Accounts the annual accounts of the Company as referred to in
Section 2:101 DCC;
Annual Report the annual report of the Company, consisting of the
Management Report, the Non-Executive Report, the Annual
Accounts and other information required by Dutch law
Articles of Association the articles of association of the Company;
Audit Committee the audit committee of the Board;
Audit Committee Rules the rules of the Audit Committee;
Board (bestuur) the body of the Company (orgaan) charged with the
management of the Company;
Board member an Executive or Non-Executive member of the Board, as the
case may be;
Board Profile has the meaning attributed thereto in paragraph 4.3.3;
Board Rules these rules of the Board;
Business Day means any day (other than a Saturday, Sunday or public
holiday) on which banks are open for business in London and
Amsterdam;
CEO the Executive Board member appointed as chief executive
officer of the Company in accordance with paragraph 4.4.4;
Chairman the independent Non-Executive Board member appointed by
the Board as chairperson of the Company in accordance with
paragraph 4.4.1;
Code of Conduct the Group's code of ethics and business conduct established
by the Board, as amended from time to time;
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Committee a committee of the Board, as established by the Board from
time to time;
Company DP Eurasia N.V.;
Company Secretary the Executive Board member appointed by the Board as
company secretary in accordance with to paragraph 4.4.4;
Core Duties the core duties of the Corporate Secretary set out in
paragraph 3.1 of Schedule 11;
DCC the Dutch civil code;
Delegated Powers the powers of the Executive Board members delegated to
them by Board;
Diversity Policy the diversity policy for the composition of the Board drawn up
by the Non-Executive Board members, which addresses the
concrete targets relating to diversity and the diversity aspects
relevant to the Company, such as nationality, age, gender,
and education and work background, as amended from time
to time;
Dutch Code the Dutch corporate governance code dated 8 December
2016, as amended from time to time;
Executive Board member a Board member who is appointed as an executive member
of the Board in accordance with article 17.1 of the Articles of
Association;
External Auditor a qualified accountant (registeraccountant) or other expert as
referred to in section 2:393, subsection 1 of the Dutch Civil
Code or an organisation in which such experts work together;
General Meeting the general meeting of shareholders of the Company;
Group the Company, its subsidiaries, and its and their undertakings;
Group Company a subsidiary of the Company;
Group Wide Dealing Policy the Group's wide dealing policy established by the Board, as
amended from time to time;
Securities Dealing Code the Group's securities dealing code established by the
Board, as amended from time to time;
Dealings Procedures
Manual
the Group's dealings procedures manual established by the
Board, as amended from time to time;
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Internal Auditor the Company's senior internal auditor;
LTIIP the Company's long term incentive plan;
Management Report the management report of the Company, drawn up by the
Board, as referred to in Section 2:391 DCC and as defined in
paragraph 3.6.1;
Nominating Shareholder Turkish Private Equity Fund II L.P.;
Non-Executive Board
member
a Board member who is appointed as a non-executive
member of the Board in accordance with article 17.1 of the
Articles of Association;
Non-Executive Report the report prepared and published by the Non-Executive
Board members on their functioning and activities and of the
Committees during the preceding financial year;
Related Party and Conflict
Policy
the Group's related party and conflict policy dated [●], as
amended from time to time;
Remuneration Committee the remuneration committee of the Board;
Remuneration Committee
Rules
the rules of the Remuneration Committee;
Remuneration Policy the remuneration policy in respect of the remuneration of the
Board;
Selection and Appointment
Committee
the selection and appointment committee of the Board;
Selection and Appointment
Committee Rules
the rules of the Selection and Appointment Committee;
Senior Independent
Director or SID
the Non-Executive Board member from time to time elected
by the Board to such position pursuant to paragraph 4.4.3;
Shares the shares in the capital of the Company;
Shareholder Board Member
a Non-Executive Board member appointed upon designation
by the Nominating Shareholder in accordance with paragraph
4.2;
UK Code the UK Corporate Governance Code, April 2016, as
amended from time to time;
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UK Listing Rules the set of regulations applicable to companies listed on the
London Stock Exchange and which are made by the
Financial Conduct Authority for the purposes of Part VI of the
Financial Services and Markets Act 2000 and published in
the book entitled "The Listing Rules", as amended from time
to time;
Vice-Chairman the Non-Executive Board member from time to time elected
by the Board to such position pursuant to paragraph 4.4.2;
and
Whistleblower Policy the procedure for reporting actual or suspected irregularities
within the Group established by the Board, as amended from
time to time;
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SCHEDULE 2 Information to be placed on the Company's website
The following is published on the Company's website pursuant to the Dutch Code and the UK
Code.
Dutch Code Information Check
2.1.1 Board Profile
2.2.4 Retirement schedule
2.3.1 Board Rules
2.5.2 Code of Conduct
2.6.1 Whistleblower Policy
3.4.1 Remuneration report
3.4.2 Main elements management agreement Board
4.1.4 Notes to the General Meeting's agenda
4.2.2 Policy on bilateral contacts with shareholders
4.2.3 Meetings and presentations of analysts
UK Code
B.2.1, C.3.3
and D.2.1
The terms of reference of the Selection and Appointment Committee,
Audit Committee and Remuneration Committee, explaining their role
and the authority delegated to them by the Board.
B.3.2 The terms and conditions of appointment of Non-Executive Board
members.
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SCHEDULE 3 Information required to be included by the Dutch Code and the UK
Code in the Annual Report
UK Code Information to be included in the Annual Report Check
A.1.1 A statement of how the Board operates, including a high level
statement of which types of decisions are to be taken by the Board
and which are to be delegated to management.
A.1.2 The names of the Chairman, the Vice-Chairman, the CEO, the
Senior Independent Director and the chairpersons and members of
the Committees.
A.1.2 The number of meetings of the Board and those committees and
individual attendance by Board members.
A.3.1 Where a chief executive is appointed Chairman, the reasons for his
or her appointment (this only needs to be done in the Annual Report
following the appointment).
B.1.1 The names of the Non-Executive Board members whom the Board
determines to be independent within the meaning of the UK Code,
with reasons where necessary.
B.2.4 A separate section describing the work of the Selection and
Appointment Committee, including the process it has used in relation
to Board appointments; a description of the Board’s policy on
diversity, including gender; any measurable objectives that it has set
for implementing the policy, and progress on achieving the
objectives. An explanation should be given if neither external search
consultancy nor open advertising has been used in the appointment
of the Chairman or a Non-Executive Board member. Where an
external search consultancy has been used it should be identified
and a statement made as to whether it has any other connection with
the Company.
B.3.1 The impact of any changes to the other significant commitments of
the Chairman during the year should be explained.
B.6.1 A statement of how performance evaluation of the Board, the
Committees and Board members has been conducted.
C.1.1 An explanation from the Board members of their responsibility for
preparing the accounts and a statement that they consider that the
Annual Report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s position and performance,
business model and strategy. There should also be a statement by
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the External Auditor about their reporting responsibilities.
C.1.2 An explanation from the Board members of the basis on which the
Company generates or preserves value over the longer term (the
business model) and the strategy for delivering the objectives of the
Company.
C.1.3 A statement from the Board members whether they considered it
appropriate to adopt the going concern basis of accounting in
preparing them, and identify any material uncertainties to the
Company’s ability to continue to do so over a period of at least
twelve months from the date of approval of the financial statements .
C.2.1 Confirmation by the Board members that they have carried out a
robust assessment of the principal risks facing the Company,
including those that would threaten its business model, future
performance, solvency or liquidity. The Board members should
describe the risks and explain how they are being managed or
mitigated.
C.2.2 A statement from the Board members explaining how they have
assessed the prospects of the Company (taking account of the
Company’s current position and principal risks), over what period
they have done so and why they consider that period to be
appropriate. The Board members should state whether they have a
reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period of
their assessment, drawing attention to any qualifications or
assumptions as necessary.
C.2.3 A report on the Board’s review of the effectiveness of the Company’s
risk management and internal controls systems
C.3.6 Where there is no internal audit function, the reasons for the
absence of such a function.
C.3.7 Where the Board does not accept the Audit Committee’s
recommendation on the appointment, reappointment or removal of
the External Auditor, a statement from the Audit Committee
explaining the recommendation and the reasons why the Board has
taken a different position.
C.3.8 A separate section describing the work of the Audit Committee in
discharging its responsibilities, including: the significant issues that it
considered in relation to the financial statements, and how these
issues were addressed; an explanation of how it has assessed the
effectiveness of the external audit process and the approach taken to
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the appointment or reappointment of the External Auditor, including
the length of tenure of the current audit firm, when a tender was last
conducted and advance notice of any retendering plans; and, if the
External Auditor provides non-audit services, an explanation of how
auditor objectivity and independence is safeguarded.
D.1.2 A description of the work of the Remuneration Committee as
required under the Large and Medium-Sized Companies and Groups
(Accounts and Reports) Regulations 2013, including, where an
Executive Board member serves as a non-executive director
elsewhere, whether or not the Board member will retain such
earnings and, if so, what the remuneration is.
D.2.1 Where remuneration consultants are appointed they should be
identified and a statement made as to whether they have any other
connection with the Company.
E.1.2 The steps the Board has taken to ensure that Board members, and
in particular the Non-Executive Board members, develop an
understanding of the views of major shareholders about their
company.
Dutch Code Information to be included in the Annual Report Check
1.1.4 A detailed explanation of its view on long-term value creation and the
strategy for its realisation, as well as describes which contributions
were made to long-term value creation in the past financial year,
including both the short-term and long-term developments.
1.4.2 An account of:
(i) the execution of the risk assessment, with a description of the
principal risks (for example, the strategic, operational,
compliance and reporting risks) facing the Company in relation
to its risk appetite;
(ii) the design and operation of the internal risk management and
control systems during the past financial year;
(iii) any major failings in the internal risk management and control
systems which have been observed in the financial year, any
significant changes made to these systems and any major
improvements planned, along with a confirmation that these
issues have been discussed with the Audit Committee and the
Non-Executive Board members; and
(iv) the sensitivity of the results of the Company to material changes
in external factors.
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1.4.3 Declarations with clear substantiation that:
(i) the report provides sufficient insights into any failings in the
effectiveness of the internal risk management and control
systems;
(ii) the aforementioned systems provide reasonable assurance that
the financial reporting does not contain any material
inaccuracies;
(iii) based on the current state of affairs, it is justified that the
financial reporting is prepared on a going concern basis; and
(iv) the material risks and uncertainties that are relevant to the
expectation of the Company’s continuity for the period of twelve
months after the preparation of the report.
2.7.4 All transactions in which there are conflicts of interest with Board
members, together with a statement of the conflict of interest and a
declaration that best practice provisions 2.7.3 and 2.7.4 of the Dutch
Code have been complied with.
2.7.5 All transactions between the Company and legal or natural persons
who hold at least ten percent of the shares in the Company, together
with a declaration that best practice provision 2.7.5 of the Dutch
Code has been complied with.
2.5.4 An explanation of (i) the values regarding culture and the way in
which they are incorporated in the Group and (ii) the effectiveness
of, and compliance with, the Code of Conduct.
2.1.6 The corporate governance statement explains the diversity policy
and the way that it is implemented in practice, addressing:
a. the policy objectives;
b. how the policy has been implemented; and
c. the results of the policy in the past financial year.
If the composition of the Board diverges from the targets stipulated in
the Company’s diversity policy and/or the statutory target for the
male/female ratio, if and to the extent that this is provided under or
pursuant to the law, the current state of affairs will be outlined in the
corporate governance statement, along with an explanation as to
which measures are being taken to attain the intended target, and by
when this is likely to be achieved.
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SCHEDULE 4 Information required by the Dutch Code to be included in the Non-
Executive Report
Dutch Code Information Check
1.1.3 An account of their involvement in the establishment of the strategy,
and the way in which they monitors its implementation.
1.3.6 Whether adequate alternative measures have been taken, partly on
the basis of a recommendation issued by the Audit Committee, and
whether it is necessary to establish an internal audit department. The
Non-Executive Board members include these conclusions, along with
any resulting recommendations and alternative measures.
2.1.2 The following information about each Non-Executive Board member:
(i) gender;
(ii) age;
(iii) nationality;
(iv) principal position;
(v) other positions, in so far as they are relevant to the performance
of the duties of the Non-Executive Board member;
(vi) date of initial appointment; and
(vii) current term of office.
2.1.10 The declaration as to whether, in the opinion of the Non-Executive
Board members, the independence requirements referred to in best
practice provisions 2.1.7 to 2.1.9 of the Dutch Code inclusive have
been fulfilled and, if applicable, states which Non-Executive Board
members, if any, it does not consider to be independent.
2.2.8 Statements as to:
(i) how the evaluation of the functioning of the Non-Executive
Board members as a whole, the various committees and the
individual Non-Executive Board members has been carried out;
(ii) how the evaluation of the Board and the individual Executive
Board members has been carried out; and
(iii) what has been or will be done with the conclusions from the
evaluations.
2.3.5 A statement as to how the duties of the Committees were carried out
in the financial year, including the composition of the Committees,
the number of Committee meetings and the main items discussed at
the meetings are mentioned.
2.4.4 The absenteeism rate from Board and Committee meetings of each
Non-Executive Board member.
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SCHEDULE 5 BOARD PROFILE
1. General
1.1. The basic principle underlying the drawing-up of the Profile is that account should be
taken of the nature, activities, scope and complexity of the undertaking and the
desired competences, experience and independence of the Non-Executive Board
members. This Profile also deals with aspects of diversity, including gender and age,
relevant to the Group.
1.2. The Non-Executive Board members shall be capable of complying with its obligations
to the Group, taking account of the efforts to achieve complementarily, collegial
decision-making and an optimal blend of experience, expertise, diversity and
independence, as well as familiarity with the socioeconomic and political cu lture and
the social environment of the main markets in which the Group operates, in keeping
with the competence criteria included in this Profile.
1.3. The Non-Executive Board members shall have the requisite expertise, background,
competencies and independence to carry out their duties properly.
1.4. The Non-Executive Board members shall have sufficient expertise to identify
opportunities and risks that may be associated with the business, innovations in
business models and technologies in a timely manner.
1.5. Each Non-Executive Board member shall have the specific expertise required for the
fulfilment of his or her duties. Each Non-Executive Board member should be capable
of assessing the broad outline of the overall management.
1.6. Each Non-Executive Board member shall have sufficient time available for the proper
performance of his or her duties.
1.7. The powers of the Board pursuant to the Articles of Association and applicable laws
and regulations are vested in the Board as a body and are exercised under collective
responsibility.
1.8. Terms capitalised in this Profile have the meaning given to them in the Board Rules.
2. Composition
2.1. The effectiveness of the Board is determined by its composition, with the size,
expertise, diversity and independence of the Board being decisive factors. When
appointing or reappointing Board members, a critical assessment will be made as to
whether the required knowledge and expertise are represented within the Board.
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2.2. At least one Non-Executive Board member has competence in financial reporting or
auditing of the financial statements and the Board should have substantial
experience, knowledge and/or understanding of the fast-food business and
entrepreneurship.
2.3. The Board shall have at least one or more Executive Board members and one or
more Non-Executive Board members. Board members are subject to appointment by
the General Meeting, and to re-appointment thereafter at intervals of no more than
three years. Non-Executive Board members who have served longer than nine years
should be subject to annual re-appointment. In the event of a reappointment after an
eight-year period, reasons will be given in the Non-Executive Report.
2.4. Any Non-Executive Board member shall be prepared to participate in a Board
committee (e.g. the Audit Committee, the Remuneration Committee and the
Selection and Appointment Committee).
2.5. In so far as its actual composition differs from this Profile, the Board will account for
this in the Non-Executive Report and will also indicate within what period it expects
to be able to comply with the Profile.
3. Diversity
In the selection of Board members, the Company is striving for a balance in
nationality, age, gender, work background and education with due regard to the
Group's diversity policy and/or the statutory target for the male/female ratio. In
addition, there will be a balance in the experience and affinity with the nature and
culture of the business of the Group.
4. Independence
4.1. The composition of the Board shall be such that the members are able to operate
independently and critically vis-à-vis one another and any particular interests
involved.
4.2. In order to safeguard the independence of the Non-Executive Board members, the
Board takes into account the independence criteria listed in the Dutch Code and the
UK Code, subject to the provisions of the Relationship Agreement.
4.3. The Chairman shall not be a former Executive Board member of the Board and shall
be independent within the meaning of the Dutch Code and the UK Code.
4.4. The Non-Executive Report shall state whether or not, in the opinion of the Non-
Executive Board members, the independence requirements referred to in the Dutch
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Code and the UK Code have been fulfilled and shall also state which Non-Executive
Board members it does not consider to be independent.
5. Competence
5.1. In view of the wide variety of subjects with which the Group must deal in conducting
its business, the Non-Executive Board members should have collective knowledge
and/or experience and/or understanding of the following matters:
a. management of (international) enterprises;
b. entrepreneurship;
c. broad (international) network;
d. central and local governments and political processes;
e. international economic, regulatory and public policy issues;
f. labour and social relations within companies;
g. integral (international) projects and related risks;
h. audit, finance and control;
i. risk management;
j. mergers and acquisitions;
k. legal and fiscal affairs and corporate governance;
l. corporate integrity;
m. innovation;
n. information technology;
o. sustainability and corporate social responsibility;
p. human resources and management development; and
q. marketing.
5.2. Each Non-Executive Board member shall qualify for at least two of the
abovementioned matters.
5.3. Each Non-Executive Board member should have the following qualities, skills and
competencies:
a. ability to convey the core values of the Group;
b. analytical insight;
c. constructive and critical attitude;
d. good communication skills;
e. independent and impartial supervision (at a distance);
f. integrity and stewardship;
g. decisive; and
h. team player and the ability to work together.
5.4. At least one Non-Executive Board member should also have qualities that are
necessary to act as a chairman of the Board and the General Meeting.
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5.5. Each Non-Executive Board member should participate in the introductory programme
and lifelong learning programme developed by the Group. In addition, each Non-
Executive Board member should continue to develop his or her individual expertise.
6. Miscellaneous
6.1. This Profile (including the composition, competencies and expertise of the Board)
shall be evaluated on a yearly basis on the initiative of the Board.
6.2. The Board shall adopt the Profile, taking into account the nature of the undertaking of
the Group, its activities and the required expertise and background of the Non-
Executive Board members. The Board shall discuss the Profile at the General
Meeting, first when it is adopted and subsequently at each change.
6.3. This Profile shall be published on the Company's website
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SCHEDULE 6 RETIREMENT SCHEDULE
Board member Position Date of last
reappointment
Date of
upcoming
reappointment
(end of AGM in
year)
Mr Peter Williams Chairman (Independent
Non-Executive)
N/A 2018
Mr Aslan Saranga Executive (CEO) N/A 2018
Ms Frederieke
Slot
Executive (Company
Secretary)
N/A 2018
Mr Thomas
Singer
Senior Independent Non-
Executive
N/A 2018
Mr Seymur Tarı Non-Executive N/A 2018
Mr Izzet Talu Non-Executive N/A 2018
Ms Aksel Şahin Non-Executive N/A 2018
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SCHEDULE 7 Audit Committee Rules
Introduction
The Board appointed an Audit Committee, such in accordance with section 5 of the Board
Rules.
Capitalised terms used in these Audit Committee rules (the "Audit Committee Rules") have
the meaning set forth in the list of definitions as attached to the Board Rules.
The Audit Committee Rules, including its role and the authority delegated to it by the Board,
should be made available86.
1. Role and responsibilities
1.1 The Audit Committee undertakes preparatory work for the Board's decision-making
regarding the supervision of the integrity and quality of the Company's financial
reporting and the effectiveness of the Company's internal risk management and
control systems. The Audit Committee as a whole shall have competence relevant to
the sector in which the Company operates87.
1.2 Where requested by the Board, the Audit Committee should provide advice on
whether the Annual Report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess
the Company's position and performance, business model and strategy88.
1.2 Among other things, the Audit Committee focuses on:
(a) monitoring the Board with regard to:
(i) relations with, and compliance with recommendations and following up
of comments by, the Internal Auditor and External Auditors;
(ii) the funding of the Company;
(iii) the application of information and communication technology by the
Company, including risks relating to cyber-security; and
(iv) the Company's tax policy89.
(b) informing the Board of the outcome of the statutory audit, including an
explanation of the manner in which the statutory audit has contributed to the
86 UK Code C.3.3 87 Dutch Code 1.5.1 part 1/2/UK Code C.3.1 88 UK Code C.3.4 89 Dutch Code 1.5.1 part 1/2/UK Code C.3.2
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integrity of financial reporting and the role of the Audit Committee in that
process;
(c) monitoring the financial reporting process and any formal announcements
relating to the Company's financial performance and making proposals to
ensure the integrity of the process;
(d) monitoring the effectiveness of the internal control system, the internal audit
system (if any) and the risk management system in relation to the financial
reporting of the Company;
(e) monitoring the statutory audit of the Annual Accounts and the consolidated
accounts, in particular the performance of the audit taking into account the
assessment of the Netherlands Authority for the Financial Markets (Stichting
Autoriteit Financiële Markten) in accordance with article 26, paragraph 6 of
Regulation (EU) No 537/2014 of the European Parliament and of the Council
of 16 April 2014 on specific requirements regarding statutory audit of public-
interest entities;
(f) reviewing and monitoring the independence of the External Auditors or the
audit firm, in particular the provision of additional services to the Company90;
(g) determining the procedure for the selection of the External Auditors, taking
into account relevant ethical guidance regarding the provision of non-audit
services by the external audit firm91 , or the audit form and the nomination of
the performed statutory audits;
(h) reporting to the Board on how it has discharged its responsibilities and
identifying any matters in respect of which it considers that action or
improvement is needed and making recommendations as to the steps to be
taken92;
(i) reviewing arrangements by which staff of the Company may, in confidence,
raise concerns about possible improprieties in matters of financial reporting or
other matters; the Audit Committee's objective should be to ensure that
arrangements are in place for the proportionate and independent
investigation of such matters and for appropriate follow-up action93; and
(j) reviewing the annual financial statements of the Group's pension funds where
not reviewed by the Board as a whole.
90 UK Code C.3.2 91 UK Code C.3.2 92 UK Code C.3.2 93 UK Code C.3.5
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1.3 The Audit Committee reviews and discusses the Company's annual and interim
financial statements to be disclosed, including related press releases and the Non-
Executive Report. The Audit Committee reports its findings to the Board before these
documents are signed by the Board or issued by the Company, unless decided
otherwise by the Board. In performing these reviews the Audit Committee devotes
special attention to:
(a) any changes in accounting policies and practices;
(b) adjustment resulting from the internal and external audit, as the case may be,
and any difficulties encountered during the audits;
(c) the going concern assumption;
(d) compliance with applicable accounting standards and consideration of
announcements by professional accounting industry associations;
(e) compliance with statutory and legal requirements and regulations in particular
in the financial domain;
(f) detection of fraud, defalcation and illegal acts;
(g) significant financial exposures in the area of treasury (such as currency risks,
interest rate risks, derivatives and any other hedging strategies);
(h) significant judgmental areas, including the level and adequacy of provisions;
(i) complex or unusual transactions, including important M&A transactions, and
"off balance sheet" arrangements;
(j) significant deviations between actual performance and planned performance;
(k) the overall quality of the earnings;
(l) alternative accounting policies and treatments discussed with the External
Auditor;
(m) significant changes in financial statement presentation;
(n) development of relevant financial ratios, changes in the Company's ratings;
(o) reports of rating agencies;
(p) significant operational risks;
(q) the Company's policy on tax planning;
(r) the applications of information and communication technology; and
(s) compliance with recommendations and observations of internal and external
auditors.
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Internal audit
1.4 With regard to the internal audit, the Audit Committee:
(a) provides the Board with recommendations on any proposal regarding the
appointment or dismissal of the Internal Auditor by the Board94;
(b) provides the Board annually with its opinion as to the way in which the
internal audit function fulfils its responsibility95;
(c) assists the internal audit function with drawing up the Company's audit plan96;
(d) keeps records of how it is informed by the internal audit function;
(e) reviews the essence of the audit results of the internal audit function reported
by it;
(f) meets the Internal Auditor at least once a year, without management being
present, to discuss their remit and any issues arising from the internal audits
carried out. In addition, the Internal Auditor shall be given the right of direct
access to the Chairman and to the Audit Committee; and
(g) considers and approves the remit of the internal audit function and ensures it
has adequate resources and appropriate access to information to enable it to
perform its function effectively and in accordance with relevant professional
standards. The Audit Committee shall also ensure the function has adequate
standing and is free from management or other restrictions.
External audit
1.5 With regard to the external audit, the Audit Committee:
(a) reports annually to the Board on the functioning of, and the development in,
the relationship with the external auditor97;
(b) advises the Board, for the Board to put to the shareholders for their approval
in the General Meeting, regarding the External Auditor's nomination for
(re)appointment or dismissal and prepares the proposed remuneration and
terms of engagement of the External Auditor98;
94 Dutch Code 1.3.1 95 Dutch Code 1.3.2/UK Code C.3.2 96 Dutch Code 1.3.3 97 Dutch Code 1.6.1, part 1/3 98 Dutch Code 1.6.1, part 2/3/UK Code C.3.2: Note: the addition of engagement here is duplicative of (d) below.
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(c) gives due consideration to the Board's observations when reporting and
advising on the issues listed under (a) and (b) above99;
(d) submits a proposal to the Board for the External Auditor's engagement to
audit the financial statements. In formulating the terms of engagement,
attention will be paid to the scope of the audit, the materiality to be used and
remuneration for the audit100;
(e) discusses annually with the External Auditor (i) the scope and materiality of
the audit plan and the principal risks of the annual reporting identified by the
External Auditor in the audit plan and (ii) based also on the documents from
which the audit plan was developed, the findings and outcomes of the audit
work on the financial statements and the management letter101;
(f) determines whether and, if so, how the External Auditor should be involved in
the content and publication of financial reports other than the financial
statements102;
(g) meets with the External Auditor as often as it considers necessary, but at
least once per year, outside the presence of the Executive Board members103;
(h) shall oversee the tender process whereby the Company shall put the external
audit contract out to tender at least every ten years;
(i) approves the terms of engagement of the External Auditor, including any
engagement letter issued at the start of each audit and the scope of the audit;
(j) satisfies itself that there are no relationships (such as family, employment,
investment, financial or business) between the External Auditor and the
Company (other than in the ordinary course of business);
(k) shall monitor the External Auditor's compliance with the relevant ethical and
professional guidance on the rotation of audit partners, the level of fees paid
by the Company compared to the overall fee income of the firm, office and
partner and other related requirements;
(l) assesses annually their qualifications, expertise and resource and the
effectiveness of the audit process which shall include a report from the
External Auditor on their own internal quality procedures;
99 Dutch Code 1.6.1, part 3/3 100 Dutch Code 1.6.3 101 Dutch Code 1.7.2, in part 102 Dutch Code 1.7.3 103 Dutch Code 1.7.4
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(m) reviews the findings of the audit with the External Auditor. This shall include
but not be limited to, the following:
(i) a discussion of any major issues which arose during the audit;
(ii) any accounting and audit judgments;
(iii) levels of errors identified during the audit; and
(iv) the effectiveness of the audit;
(n) reviews any representation letter requested by the External Auditor before it
is signed by the Executive Board members and review the management letter
and management's response to the External Auditor's findings and
recommendations; and
(o) develops and implements a policy on the supply of non-audit services by the
External Auditor, taking into account any relevant ethical guidance.
1.6 The External Auditor shall receive the financial information underlying the adoption of
the quarterly or half yearly accounts and other interim financial reports and shall be
given the opportunity to respond to all information.
1.7 The Audit Committee shall provide the Board with a report of its deliberations and
findings104.
2 Internal Controls and Risk Management Systems
The Audit Committee shall review the Company's internal financial controls, the
Company's internal controls and risk management systems and the statements to be
made in the Annual Report concerning internal controls and risk management
systems, and in particular shall review:
(a) the policies and overall process for identifying and assessing business risk
and managing their impact on the Company;
(b) regular assurance reports from management, internal audit, external audit
and others on matters related to risk control; and
(c) the timeliness of, and reports on, the effectiveness of corrective ac tions taken
by management.
104 Dutch Code 2.3.5 part 1/2
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3 Other matters
The Audit Committee shall:
(a) have access to sufficient resources in order to carry out its duties, including
access to the Company secretariat as required;
(b) be provided with appropriate training, both in the form of an induction
programme for new members and on an ongoing basis for all members;
(c) oversee any investigation of activities which are within its remit; and
(d) at least once a year, review its own performance, constitution and rules to
ensure it is operating at maximum effectiveness and recommend any
changes it considers necessary to the Board for approval.
4 Composition and size of the Audit Committee
4.1 The Audit Committee shall consist of no less than two (2) and no more than three (3)
members all of whom shall be independent within the meaning of the Dutch Code and
the UK Code.
4.2 All members of the Audit Committee must be Non-Executive Board members105.
4.3 The Board shall appoint the members of the Audit Committee. The Board may
substitute the members of the Audit Committee at any time.
4.4 At least one member of the Audit Committee shall be a financial expert within the
meaning of the Dutch Code and the UK Code.
4.5 The Audit Committee may not be chaired by the Chairman or a former Executive
Board member. The chairperson of the Audit Committee shall be designated by the
Board. The chairperson of the Audit Committee shall be independent within the
meaning of the Dutch Code and the UK Code106.
4.6 Appointments to the Committee shall be for a period of two years, which may be
extended for two further three year periods, provided the relevant Board member
shall meet the criteria for independence.
4.7 The Company Secretary acts as the secretary to the Audit Committee, unless the
Audit Committee appoints another secretary.
5 Meetings of the Audit Committee
5.1 The Audit Committee shall hold at least four meetings per year and whenever one or
more of its members have requested a meeting. The meetings shal l generally be held
105 Dutch Code 5.1.4, part 1/2: 106 Dutch Code 5.1.4, part 2/2
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at the office of the Company, but may also take place elsewhere or by means of a
conference call, videoconference, or other electronic means, provided that all
members of the Audit Committee participating in the meeting can hear each other
simultaneously and none of them has objected to this way of decision-making. The
quorum of any meeting shall be two members.
5.2 The Audit Committee shall meet with the External Auditor as often as it considers
necessary, but at least once a year, without Executive Board members being
present107. The Audit Committee annually discusses with the External Auditor:
(a) the scope and materiality of the audit plan and the principal risks of the
Annual Reporting identified by the External Auditor in the audit plan; and
(b) based also on the documents from which the audit plan was developed, the
findings and outcomes of the audit work on the financial statements and the
management letter108.
5.3 The chief financial officer, Internal Auditor and External Auditor attend the Audit
Committee meetings, unless the Audit Committee determines otherwise. The Audit
Committee decides whether and, if so, when the Chairman should attend its
meetings109.
5.4 The convocation notices of an Audit Committee meeting shall be given by e-mail, fax
or mail, at such time that all the members of the Audit Committee are given
opportunity to participate in and prepare themselves for the meeting ultimately eight
days in advance. In urgent cases, the chairperson of the Audit Committee may
determine that the meeting shall be convened upon shorter notice. Any notice of the
Audit Committee meeting shall contain the agenda for the meeting. The agenda
stating the matters for decision, shall be drawn up by the chairperson of the Audit
Committee and shall include, in any event:
(a) internal control and risk management;
(b) whistleblowing;
(c) external audit;
(d) internal audit;
(e) financial reporting; and
(f) results reporting.
107 Dutch Code 1.7.4 108 Dutch Code 1.7.2, in part 109 Dutch Code 1.5.2
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The other information and decision material for the meeting shall be circulated as
soon as possible.
5.5 The secretary of the Audit Committee as referred to in paragraph 2.7 of these Audit
Committee Rules shall take minutes of the meeting. The minutes shall be adopted in
the same meeting or in the next meeting of the Audit Committee, and shall be signed
by the chairperson and secretary. A copy of the minutes will be sent to the Chairman.
5.6 If and when required, the chairperson of the Audit Committee shall provide further
information to the Board during the Board's meetings on the results of the Audit
Committee’s discussions.
5.7 The Non-Executive Report comments on how the duties of the Audit Committee were
carried out in the financial year. In this report, the composition of the Audit
Committee, the number of committee meetings and the main items discussed at the
meetings are mentioned110.
6 Amendment
The Board may amend these Audit Committee Rules and/or revoke any powers
granted by it to the Audit Committee.
7 Regulations mutatis mutandis applicable
The relevant sections and paragraphs of the Board Rules shall apply mutatis
mutandis to these Audit Committee Rules.
110 Dutch Code 2.3.5 part 2.2
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SCHEDULE 8 Remuneration Committee Rules
Introduction
The Board appointed a Remuneration Committee, such in accordance with section 5 of the
Board Rules.
Capitalised terms used in these Remuneration Committee rules (the "Remuneration
Committee Rules") have the meaning set forth in the list of definitions as attached to the
Board Rules.
The Remuneration Committee should make available the Remuneration Committee Rules,
explaining its role and the authority delegated to it by the Board 111.
1 General role and responsibilities
1.1 The Remuneration Committee advises the Board in relation to its responsibilities and
shall prepare resolutions of the Board in relation thereto.
1.2 The Remuneration Committee shall, in any event, have the following duties:
(a) submitting a clear and understandable proposal to the Board concerning the
remuneration policy to be pursued112;
(b) submitting a proposal to the Non-Executive Board members for the
remuneration of the individual Executive Board members, for adoption by the
General Meeting; such proposal is drawn up in accordance with the
Remuneration Policy and will, in any event, cover: (i) the remuneration
structure, (ii) the amount of the fixed and variable remuneration components,
(iii) the performance criteria used, (iv) the scenario analyses that are carried
out and (v) the pay ratios within the Group113;
(c) reviewing the ongoing appropriateness and relevance of the Remuneration
Policy;
(d) delegating responsibility for setting remuneration for all Executive Board
members and the Chairman, including pension rights and any compensation
payments; the Remuneration Committee should also recommend and monitor
the level and structure of remuneration for senior management; the definition
of ‘senior management’ for this purpose should be determined by the Board
111 UK Code D.2.1 112 Dutch Code 3.1.1 113 Dutch Code 3.2.1
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but should normally include the first layer of management below Board
level114;
(e) determining the policy for, and scope of, pension arrangements for each
Executive Board member and other members of the Company's management
team;
(f) reviewing and noting annually the remuneration trends across the Company
or Group;
(g) overseeing any major changes in employee benefits structures throughout the
Company or Group;
(h) agreeing the policy for authorising claims for expenses from the CEO, the
Chairman and the Board members;
(i) being responsible for establishing selection criteria, selecting , appointing and
setting the terms of reference for any remuneration, including pensions, are
fulfilled;
(j) obtaining reliable, up-to-date information about remuneration in other
companies; the Remuneration Committee shall have full authority to
commission reports or surveys which it deems necessary to help it to fulfil its
obligations;
(k) at least once a year, reviewing its own performance, constitution and rules to
ensure it is operating at maximum effectiveness and recommend any
changes it considers necessary to the Board for approval;
(l) ensuring disclosure obligations are fulfilled; and
(m) preparing the remuneration report, which describes in a transparent manner,
in addition to the matters required by law:
(i) how the Remuneration Policy has been implemented in the past
financial year;
(ii) how the implementation of the remuneration policy contributes to
long-term value creation;
(iii) that scenario analyses have been taken into consideration;
114 UK Code D.2.2 The remuneration of Non-Executive Board members shall be a matter for the Chairman and the
executive Board members.
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(iv) the pay ratios within the Company and its affiliated enterprise and, if
applicable, any changes in these ratios in comparison with the
previous financial year;
(v) in the event that an Executive Board member receives variable
remuneration, how this remuneration contributes to long-term value
creation, the measurable performance criteria determined in advance
upon which the variable remuneration depends, and the relationship
between the remuneration and performance; and
(vi) in the event that a current or former Executive Board member
receives a severance payment, the reason for this payment115.
1.3 The following aspects should, in any event, be taken into consideration when
formulating the remuneration policy116:
(a) the requirements set out in section 2:383C to 2:383e (inclusive) DCC for the
strategy for the implementation of long-term value creation within the
meaning of best practice provision 1.1.1. of the Dutch Code;
(b) the scenario analyses carried out in advance;
(c) the pay ratios within the Company and its affiliated enterprise;
(d) the development of the market price of the shares;
(e) an appropriate ratio between the variable and fixed remuneration
components. The variable remuneration component is linked to measurable
performance criteria determined in advance, which are predominantly long-
term in character;
(f) if Shares are being awarded, the terms and conditions governing this; Shares
should be held for at least five years after they are awarded;
(g) if Share options are being awarded, the terms and conditions governing this
and the terms and conditions subject to which the share options can be
exercised. Share options cannot be exercised during the first three years after
they are awarded;
(h) in designing schemes of performance related remuneration for Executive
Board members, the Remuneration Committee shall follow the provisions
suggested by the UK Code (see Schedule A of the UK Code)117;
115 Dutch Code 3.4.1 116 Dutch Code 3.1.2 (for a-g) 117 UK Code D.1.1
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(i) levels of remuneration for Non-Executive Board members should reflect the
time commitment and responsibilities of the role. Remuneration for Non-
Executive Board members should not include share options or other
performance-related elements. If, exceptionally, options are granted,
shareholder approval should be sought in advance and any Shares acquired
by exercise of the options should be held until at least one year after the Non-
Executive Board member leaves the Board. Holding of Share options could
be relevant to the determination of a Non-Executive Board member’s
independence118;
(j) the Remuneration Committee should carefully consider what compensation
commitments (including pension contributions and all other elements) their
Board members' terms of appointment would entail in the event of early
termination. The aim should be to avoid rewarding poor performance. They
should take a robust line on reducing compensation to reflect departing Board
members' obligations to mitigate loss119;
(k) notice or contract periods should be set at one year or less. If it is necessary
to offer longer notice or contract periods to new Board members recruited
from outside, such periods should reduce to one year or less after the initial
period120;
(l) where a company releases an Executive Board member to serve as a non-
executive board member elsewhere, the remuneration report should include a
statement as to whether or not the Board member will retain such earnings
and, if so, what the remuneration is121; and
(m) shareholders should be invited specifically to approve all new long-term
incentive schemes (as defined in the UK Listing Rules) and significant
changes to existing schemes, save in the circumstances permitted by the UK
Listing Rules122.
1.4 When drafting the proposal for the remuneration of Executive Board members, the
Remuneration Committee takes note of the individual Executive Board members'
views with regard to the amount and structure of their own remuneration. The
118 UK Code D.1.3: 119 UK Code D.1.4 120 UK Code D.1.5 121 UK Code D.1.2 122 UK Code D.2.4
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Remuneration Committee asks the Executive Board members to pay attention to the
aspects referred to in best practice provision 3.1.2 of the Dutch Code123.
1.5 The Remuneration Committee shall provide the Board with a report of its
deliberations and findings124.
2 Composition and size of the Remuneration Committee
2.1 The Remuneration Committee shall consist of not less than two (2) and not more
than three (3) members all of whom shall be independent within the Dutch Code and
the UK Code.
2.2 All members of the Remuneration Committee must be Non-Executive Board
members125.
2.3 The Board shall appoint the members of the Remuneration Committee. The Board
may substitute the members of the Remuneration Committee at any time.
2.4 The Remuneration Committee shall not be chaired by the Chairman or by a former
Executive Board member. The chairperson of the Remuneration Committee shall be
designated by the Board126.
2.5 Appointments to the Remuneration Committee shall be for a period of up to two
years, which may be extended for two further two-year periods, provided that the
relevant Board member still meets the criteria for independence.
3 Meetings of the Remuneration Committee
3.1 The Remuneration Committee shall hold at least two meetings per year and
whenever one or more of its members have requested a meeting. The meetings shall
generally be held at the office of the Company, but may also take place elsewhere or
by means of a conference call, video-conference, or similar communications
equipment provided that all members of the Remuneration Committee participating in
the meeting can hear each other and none of them has objected to this way of
decision-making. The quorum of any meeting shall be two members.
3.2 The convocation notices of a Remuneration Committee meeting shall be given by e -
mail, fax or mail, at such time that all the members of the Remuneration Committee
are given opportunity to participate in and prepare themselves for the meeting
ultimately eight days in advance. In urgent cases, the chairperson of the
Remuneration Committee may determine that the meeting shall be convened upon
123 Dutch Code 3.2.2 124 Dutch Code 2.3.5 part 1/2 125 Dutch Code 5.1.4, part 1/2 126 Dutch Code 5.1.4 part 2/2, in part (the Chairman shall be independent is no longer included).
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shorter notice. Any notice of the Remuneration Committee meeting shall contain the
agenda for the meeting. The agenda stating the matters for decision, shall be drawn
up by the chairperson of the Remuneration Committee. The other information and
decision material for the meeting shall be circulated as soon as possible.
3.3 The secretary of the Remuneration Committee shall take minutes of the meeting. The
minutes shall be adopted in the same meeting or in the next meeting of the
Remuneration Committee, and shall be signed by the chairperson and the secretary
of the Remuneration Committee. A copy of the minutes will be sent to the Chairman.
3.4 If and when required, the chairperson of the Remuneration Committee shall provide
further information to the Board during its meetings on the results of the
Remuneration Committee’s discussions.
3.5 The Non-Executive Report comments on how the duties of the Remuneration
Committee were carried out in the financial year. In this report, the composition of the
Remuneration Committee, the number of committee meetings and the main items
discussed at the meetings are mentioned127.
4 Amendment
The Board may amend these Remuneration Committee Rules and/or revoke any
powers granted by it to the Remuneration Committee.
5 Regulations mutatis mutandis applicable
The relevant sections and paragraphs of the Board Rules shall apply mutatis
mutandis to these Remuneration Committee Rules.
127 Dutch Code 2.3.5 part 2/2
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Schedule 9 Selection and Appointment Committee Rules
Introduction
The Board appointed a Selection and Appointment Committee, such in accordance with
section 5 of the Board Rules.
Capitalised terms used in these Selection and Appointment Committee rules (the "Selection
and Appointment Committee Rules") have the meaning set forth in the list of definitions as
attached to the Board Rules.
The Selection and Appointment Committee should make available the Selection and
Appointment Committee Rules, explaining its role and the authority delegated to it by the
Board128.
1. Role and responsibilities
1.1 The Selection and Appointment Committee prepares the Board's decision-making on
selections and appointments and reports to the Board on its deliberations and
findings129.
1.2 The Selection and Appointment Committee in any event focuses on130:
(a) drawing up selection criteria and appointment procedures for Board
members;
(b) periodically assessing the size and composition of the Board, and making a
proposal for a profile of the Board;
(c) periodically assessing the functioning of the individual Board members and,
and reporting on this to the Non-Executive Board members;
(d) drawing up a plan for the succession of Board members;
(e) making proposals for appointments and reappointments, including for key
roles such as the Chairman, the CEO and the Senior Independent Director,
thereby observing the Diversity Policy and the profile of the Non-Executive
Board members;
(f) supervising the policy of the Board regarding the selection criteria and
appointment procedures for senior management;
128 UK Code B.2.1 129 Dutch Code 2.2.5, part 1/2/UK Code B.2.1 130 Dutch Code 2.2.5, part 2/2 (a-f)
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(g) reviewing the structure, size and composition (including the skills, knowledge
and experience) required of the Board compared to its current posi tion and
make recommendations to the Board with regard to any changes;
(h) being responsible for identifying and nominating for the approval of the Board,
candidates to fill Board vacancies as and when they arise. In identifying
suitable candidates the Selection and Appointment Committee shall:
(i) use open advertising or the services of external advisers to facilitate
the search;
(ii) consider candidates from a wide range of backgrounds;
(iii) consider candidates on merit and against objective criteria, taking care
that appointees have enough time available to devote to the position;
and
(iv) give due regard to the benefits of diversity on the Board, including
gender.
(i) keeping under review the leadership needs of the Company and the Group,
both Executive and Non-Executive Board members, with a view to ensuring
the continued ability of the Group to compete effectively in the market place;
(j) keeping up to date and fully informed about strategic issues and commercial
changes affecting the Company and the market in which it operates;
(k) reviewing annually the time required from Non-Executive Board members;
performance evaluation should be used to assess whether the Non-Executive
Board members are spending enough time to fulfil their duties;
(l) ensuring that on appointment to the Board, Non-Executive Board members
receive a formal letter of appointment setting out clearly what is expected of
them in terms of time commitment, committee service and involvement
outside Board meetings;
(m) making recommendations to the Board concerning:
(i) membership of the Audit Committee and Remuneration Committee, in
consultation with the chairperson of those Committees; and
(ii) any matters relating to the continuation in office of any Board member
at any time including the suspension or termination of service of an
Executive Board member as an employee of the Company subject to
provisions of law and their service contracts.
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(n) preparing a statement for the Annual Report about its activities, the process
used to make appointments and, if external advertising or advice has not
been used, giving reasons as to why not.
1.3 The Selection and Appointment Committee shall provide the Board with a report of its
deliberations and findings131.
2 Composition and size of the Selection and Appointment Committee
2.1 The Selection and Appointment Committee shall consist of no less than two (2) and
no more than three (3) members. More than half the members of Selection and
Appointment Committee are independent within the meaning of the Dutch Code and
the UK Code.
2.2 All members of the Selection and Appointment Committee must be Non-Executive
Board members.
2.3 The Board shall appoint the members of the Selection and Appointment Committee.
The Board may substitute the members of the Selection and Appointment Committee
at any time.
2.4 Appointments to the Selection and Appointment Committee shall be for a period of up
to two years, which may be extended for a further three-year periods, provided that
the relevant Board member still meets the criteria for independence.
2.5 The Company Secretary shall act as the secretary to the Selection and Appointment
Committee, unless the Selection and Appointment Committee appoints another
secretary.
3. Meetings of the Selection and Appointment Committee
3.1 The Selection and Appointment Committee shall hold at least two meetings per year
and whenever one or more of its members have requested a meeting. The meetings
shall generally be held at the office of the Company, but may also take place
elsewhere or by means of a conference call, video- conference, or similar
communications equipment provided that all members of the Selection and
Appointment Committee participating in the meeting can hear each other
simultaneously and none of them has objected to this way of decision-making.
The quorum of any Selection and Appointment Committee meeting shall be two
members.
3.2 The convocation notices of an Selection and Appointment Committee meeting shall
be given by e-mail, fax or mail, at such time that all the members of the Selection and
131 Dutch Code 2.3.5 part 1/2
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Appointment Committee are given opportunity to participate in and prepare
themselves for the meeting ultimately eight days in advance. In urgent cases, the
chairperson of the Selection and Appointment Committee may determine that the
meeting shall be convened upon shorter notice. Any notice of the Selection and
Appointment Committee meeting shall contain the agenda for the meeting. The
agenda stating the matters for decision, shall be drawn up by the chairperson of the
Selection and Appointment Committee. The other information and decision material
for the meeting shall be circulated as soon as possible.
3.3 The secretary of the Selection and Appointment Committee as referred to in
paragraph 2.5 of the Selection and Appointment Committee Rules shall take minutes
of the meeting. The minutes shall be adopted in the same meeting or in the next
meeting of the Selection and Appointment Committee, and shall be signed by the
chairperson and secretary. A copy of the minutes will be sent to the Chairman.
3.4 If and when required, the chairperson of Selection and Appointment Committee shall
provide further information to the Board during its meetings on the results of the
Selection and Appointment Committee's discussions.
3.5 The Non-Executive Report comments on how the duties of the Selection and
Appointment Committee were carried out in the financial year. In this report, the
composition of the Selection and Appointment Committee, the number of committee
meetings and the main items discussed at the meetings are mentioned132.
4 Amendment
The Board may amend these Selection and Appointment Committee Rules and/or
revoke any powers granted by it to the Selection and Appointment Committee.
5 Regulations mutatis mutandis applicable
The relevant sections and paragraphs of the Board shall apply mutatis mutandis to
these Selection and Appointment Committee Rules.
132 Dutch Code 2.3.5 part 2/2
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SCHEDULE 10 BOARD RESERVED MATTERS
Part 1
Matters reserved for the full Board
1. Structural and constitutional matters
1.1. any proposal to the General Meeting to amend the Articles of Association;
1.2. any alteration in the capital of the Company including without limitation the purchase,
disposal, allotment, re-issue, share split or cancellation of share capital whether
issued or not and in any event subject to the authorities of the General Meeting;
2. Governance
2.1. the convening of meetings of the General Meeting and the setting of the agenda
thereof and generally ensuring that a satisfactory dialogue with shareholders of the
Company takes place;
2.2. the Management Report and Annual Accounts for adoption by the shareholders of
the Company;
2.3. nominations for Board appointments, including Board succession planning and the
appointment of the Senior Independent Director;
2.4. the appointment or removal of the Company Secretary;
2.5. the review of the functioning of the Board and Committees;
2.6. the appointment or removal of senior managers of the Group;
2.7. establishing or amending any employee equity incentive plan, including the LTIP and
ADBP and the grant of any awards under such plans, including the terms thereof;
2.8. the grant of personal loans, guarantees or the like to senior managers of the Group,
unless in the normal course of business and on terms applicable to the personnel as
a whole;
2.9. the remits and membership of Committees and deciding upon any issues arising
from its receipt and review of reports from the same;
2.10. conflicts of interest involving Board members or significant (holders of 10% or more)
shareholders;
2.11. appointing or dismissing a board member of a Group Company;
2.12. appointing/authorising individuals who will represent the Company or a Group
Company at the shareholders meeting of a Group Company;
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2.13. granting or revoking of procuration and powers of attorney, except for procuration
and powers of attorney granting an authority to enter into arrangements, transactions
or agreements with a value of €25,000 or less;
2.14. overall responsibility for compliance with all relevant legislation and regulations
2.15. setting the Company's values and standards and ensuring that its obligations to
shareholders are understood and met;
3. Dividends
with due observance of the provisions of article 28.2 of the Articles of Association,
the General Meeting, on a proposal of the Board, may adopt a resolution for
distributions to the charge of the Company's reserves that do not need to be kept
pursuant to the Articles of Association or the law;
4. Strategy and managing the corporate portfolio
4.1. the strategies for the shaping of the portfolio and direction of the Group and priorities
in corporate resource allocation;
4.2. adopting the Group's business plan and budget or making any amendments thereto;
4.3. the quarterly business performance reports for quarter 2 and quarter 4 and the
annual results announcement so that, taken as a whole, they are fair, balanced and
understandable;
4.4. a Group Company’s entry by means of direct investment into or exit from any
country;
4.5. any material extensions of the Group's activities into new business or geographic
areas;
4.6. approving any change to the registered office and corporate headquarters of the
Company;
4.7. major changes to the Group's corporate and capital structure, including to the
Company's listing;
4.8. approving the issuance of Shares (subject to having been granted the appropriate
authority by shareholders);
4.9. approval of the half-yearly report, quarterly report, interim management reports and
any preliminary announcement of the final results;
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5. Mergers, acquisitions, joint ventures and disposals
5.1. any merger, acquisition, joint venture or disposal where the value of consideration
paid or received, or of the assets contributed by the Group or by other parties,
exceeds €1,000,000;
5.2. any decision to cease to operate all or any material part of the Group's business;
6. Capital expenditure
any capital expenditure project which has a value exceeding €1,000,000;
7. Contracts
7.1. matters in relation to master franchise agreements or any other agreement with a
franchisor, which include but are not limited to: amendments, the entering into of new
agreements and any disputes which may arise in relation to them;
7.2. any other agreement or contract for goods or services which has a value exceeding
€1,000,000;
8. Litigation
the initiation or settlement of any litigation or claim with a value in excess of
€1,000,000;
9. Financial
9.1. any single long-term borrowing in each case with a maturity of more than one year,
where the value exceeds €1,000,000 (and for this purpose any issues of debt
instruments (and any tranche thereof) whether or not made under a debt issuance
programme, shall qualify as a single borrowing);
9.2. capital injections into the Group, capital reductions of the Group, intra-Group
transfers of shares or assets or mergers with a value of €1,000,000 or more;
9.3. approving policies in respect of the hedging of net instrument exposures, the hedging
(or leaving unhedged) of net equity balance sheet exposures of up to (or exceeding)
€1,000,000 per currency or any other financial derivative exposure;
9.4. granting security including the effecting of transfers by way of security, and the
granting of a guarantee to a third party by the Company or any Group Company or
otherwise granting an encumbrance on any material asset or property of the Group,
except for any guarantees provided in the ordinary course of business on behalf of
any Group Company not exceeding an amount of €1,000,000 (alone or per series of
related guarantees);
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10. Pensions
10.1. any changes to benefits provided under Group Company pension (and similar)
arrangements which increase the value of the liabilities (as measured under IFRS) by
more than €1,000,000.
Part 2
Matters reserved for the Non-Executive Board members
1. Remuneration
1.1. reviewing and approving proposals from the Remuneration Committee;
1.2. proposals to the General Meeting on the Board remuneration policy and deciding on
the individual remuneration packages of the Board members, within the authority set
by the General Meeting; and
1.3. conflicts of interest involving Board members or significant (holders of 10% or more)
shareholders;
2. Internal Auditor
The Non-Executive Board members resolve on the engagement of External
Auditor133.
3. Internal Auditor
The Board appoints and dismisses the Internal Auditor. The appointment and
dismissal of the Internal Auditor is submitted to the Non-Executives for approval,
along with the recommendation issued by the Audit Committee134.
133 Dutch Code 1.6.3 134 Dutch Code 1.3.1
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Part 3
Matters reserved for the Executive Board members
All matters not reserved in Part 1 and Part 2 above shall be solely within the remit of the
Executive Board members.
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Schedule 11 Role, Duties and Reporting Lines of the Company Secretary
1. Role
The Company Secretary's role encompasses responsibilities to the Board, the
Company and shareholders.
1.1 Board
The Company Secretary's role in relation to the Board is to:
(a) ensure that the procedure for the appointment of Board members is properly
carried out and assist in the proper induction of Board members, including
assessing the specific training needs of Board members and executive
management;
(b) provide practical support and guidance to Board members both as individuals
and as a collective with particular emphasis on supporting the Non-Executive
Board members;
(c) facilitate the communication of information to all Board and Committee
members so that they can maximise their ability to contribute to Board
meetings, discussions etc; and
(d) assist in the compilation of Board papers and filter them to ensure compliance
with the required standards of good governance and to raise matters which
may warrant the particular attention of the Board.
1.2 Company
The Company Secretary's role in relation to the Company is to:
(a) ensure compliance with all relevant statutory and regulatory requirements and
that due regard is paid to the specific business interests of the Company;
(b) assist in the implementation of corporate strategies by ensuring that the
Board's decisions and instructions are properly carried out and
communicated; and
(c) provide a central source of guidance and advice within the Company on
matters of business ethics and good governance.
1.3 Shareholders
The Company Secretary's role in relation to shareholders is to:
(a) communicate with the shareholders as appropriate and to ensure that due
regard is paid to their interests; and
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(b) act as a primary point of contact for institutional and other shareholders,
especially with regard to matters of corporate governance.
2. Core Duties of the Company Secretary
The Company Secretary will need to fulfil the following core duties as part of his or
her responsibilities to the Board:
2.1 Board meetings
(a) facilitating the smooth operation of the Company's formal decision making
and reporting machinery;
(b) organising meetings of the Board and its Committees;
(c) formulating meeting agendas in consultation with the Chairman and the CEO
and advising management on the content and organisation of memoranda or
presentations for Board and its Committee meetings;
(d) advising the Board on Board procedures and ensuring that the Board follows
them;
(e) collecting, organising and distributing such information, documents or other
papers required for meetings;
(f) acting as a primary point of contact and source of advice and guidance,
particularly for Non-Executive Board members, as regards the Company and
its activities to support the decision-making process; and
(g) ensuring that all meetings are minuted and that the minute books are
maintained and that all Board committees are properly constituted and
provided with clear terms of reference.
2.2 General Meetings
(a) ensuring that an AGM is held in accordance with the requirements of the
Companies Act 2006 (as amended) and the Articles of Association;
(b) obtaining internal and external agreement to all documentation for circulation
to shareholders;
(c) establishing, with the Board's agreement, the items to be considered at each
AGM, particularly resolutions relating to governance matters;
(d) preparing and issuing notices of meetings, and distributing proxy forms;
(e) preparing Board members for any shareholder questions and helping them
create briefing materials;
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(f) overseeing the preparations for security arrangements;
(g) ensuring that proxy forms are correctly processed and that the voting is
carried out accurately; and
(h) co-ordinating the administration and minuting of meetings.
2.3 Listing requirements and corporate governance
(a) monitoring and ensuring compliance with the Company's obligations as a
listed Company;
(b) supervising the implementation of the Company's share dealing code(s) for
dealing in the Company's securities;
(c) managing relations with the London Stock Exchange (through the Company's
brokers), and the Financial Conduct Authority (or any successor authority)
and the AFM and other relevant regulatory authorities;
(d) protecting the Company's interests by ensuring the effectiveness of all
documentation;
(e) ensuring that due diligence disclosures enable proper commercial evaluation
prior to completion of a transaction;
(f) ensuring that the correct authority is in place to allow timely execution of
documentation;
(g) ensuring that proper disclosure is made of Board members' and persons
discharging managerial function ("PDMRs") dealings and of changes in the
voting rights of major shareholders;
(h) managing the release of information to the market and ensuring the security
of unreleased inside information;
(i) making applications for listing of additional issues of Shares;
(j) ensuring that the standards and disclosures required by the Dutch Code and
the UK Code are observed and, where required, reflected in the Management
Report;
(k) continually monitoring and implementing developments in corporate
governance, including corporate social responsibility;
(l) facilitating the proper induction of Board members into their role;
(m) advising and assisting the Board members with respect to their duties and
responsibilities, in particular compliance with company law and, if applicable,
stock exchange and listing requirements; and
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(n) acting as a channel of communication and information for Non-Executive
Board members,
2.4 Shareholder communications
(a) managing formal (e.g. through circulars) and informal communications with
the Company's shareholders;
(b) managing relations with investors, particularly institutional investors, with
regard to corporate governance issues and the Board's practices in relation to
corporate governance;
(c) arranging payment of dividends and interest;
(d) issuing documentation regarding rights issues and capitalisation issues;
(e) maintaining good general shareholder relations; and
(f) maintaining good relations with institutional shareholders and their investment
committees.
2.5 Share and capital issues and restructuring
(a) liaising with external advisers to implement properly authorised changes in
the structure of the Company's share and loan capital; and
(b) liaising with the Company's HR officers and external advisers to devise,
implement and administer Board members' and employees' Share-based
incentive schemes.
2.6 M&A activities
(a) participating as a member of the Company team established to implement
significant corporate acquisitions, disposals and mergers;
(b) protecting the Company's interests by ensuring the effectiveness of all
documentation;
(c) ensuring that due diligence disclosures enable proper commercial evaluation
prior to completion of a transaction; and
(d) ensuring that the correct authority is in place to allow timely execution of
documentation.
2.7 Articles of Association
Ensuring that the Company and Board members comply with the Articles of
Association and drafting and incorporating amendments in accordance with correct
procedures.
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2.8 Statutory registers, returns and filings registered office
(a) liaising with the Company's registrars regarding the maintenance of the
Company's statutory registers (shareholders, Board members, Board
members' interests);
(b) in respect of the Company's shareholders' register, liaising with the share
registrar to oversee the management of transfers and other matters affecting
shareholdings and dealing with queries and requests from shareholders;
(c) ensuring that appropriate filings are made (and where necessary liaising with
the Company's counsel regarding such filings) with the AFM and the Dutch
chamber of commerce to report changes and comply with requirements for
periodic filing;
(d) co-ordinating the publication and distribution of the Annual Report and
accounts and interim statements, in consultation with the Company's internal
and external advisers, in particular, when preparing the Board members'
report and the report of the corporate governance committees;
(e) monitoring movements on the Company's shareholders' register to identify
any apparent 'stake-building' in the Shares by potential takeover bidders and
making appropriate inquiries of members as to beneficial ownership of
holdings;
(f) establishing and administering the Company's registered office;
(g) attending to the receipt, co-ordination and distribution of official
correspondence received by the Company, sent to its registered of fice; and
(h) ensuring the provision of facilities for the public inspection of Company
documents.
2.9 Group Companies
(a) ensuring that procedures are in place for the correct administration of the
Group Companies and that correct information is given to the Company;
(b) maintaining a record of the Group's structure.
2.10 General compliance and document retention
(a) monitoring and laying in place procedures which allow for compliance with
relevant regulatory and legal requirements on retention of documents;
(b) retaining records required for commercial reasons; and
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(c) ensuring that procedures are in place to allow adequate historical archive to
be maintained.
3. Executive Duties
3.1 The professional background, previous work experience and general personal
capabilities of the Company Secretary will generally dictate the nature and scope of
these additional responsibilities. For example, a lawyer is more likely to specialise in
legal matters and an accountant is more likely to manage a treasury func tion. In
contrast with the core duties described in section 2 (above) (the "Core Duties"), the
duties which company secretaries commonly undertake in executive areas such as
legal affairs, accounting, property, pensions and insurance management will not be
considered to be Core Duties. However, these duties will frequently take up a
substantial proportion of the Company Secretary's time and their importance should
not be underestimated.
3.2 The Company Secretary will generally be involved, depending on his or her particular
skills and professional experience, in some (although not all) of the following
activities, for which he will report to the Board member or officer to whom
responsibility for the relevant function has been delegated by the Board:
(a) Legal
(i) commercial law;
(ii) contract negotiation, drafting and vetting;
(iii) property and Intellectual Property law;
(iv) litigation; and
(v) pensions.
(b) Accounting
(i) payroll;
(ii) taxation;
(iii) financial and management accounting;
(iv) internal audit;
(v) financial management and treasury;
(vi) project and corporate finance; and
(vii) credit control.
(c) HR and employee
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(i) employment law;
(ii) personnel administration;
(iii) executive and employee Share option and performance-related pay
schemes;
(iv) other employee benefits; and
(v) pensions administration and trusteeship.
(d) General administration and management
(i) insurance administration and risk management;
(ii) facilities, premises and offices administration and management;
(iii) information and computer systems;
(iv) charitable and political donations;
(v) strategic and corporate planning;
(vi) Board memberships of Group companies; and
(vii) liaising with professional advisers.
4. Reporting Lines
4.1 The Company Secretary is responsible to the Board and should be accountable to
the Board through the Chairman on all matters relating to his or her Core Duties as
an officer of the Company. The appointment, evaluation and removal of the Company
Secretary is a matter for the Board as a whole.
4.2 In addition to the Core Duties described in section 2 (above), to the extent that the
Company Secretary has other executive or administrative duties, he or she should
report to the CEO or such other Board member or officer to whom responsibility for
that matter has been delegated by the Board. The Company Secretary should not
report to a Board member (except the Chairman) on any matter unless responsibility
for that matter has been delegated to that Board member by the Board.
4.3 The Company Secretary's salary, share options and benefits should be settled (or at
least noted) by the Board or the Remuneration Committee on the recommendation of
the Chairman or the CEO. A Board member who is authorised unilaterally to fix the
Company Secretary's remuneration and benefits could gain undue influence.
Decisions on remuneration and benefits will therefore be taken (or at least noted) by
the Board as a whole or the relevant committee thereof.
