Philips 2007 Annual Report Download - page 110

Philips Annual Report 2007116
General
The supervision of the policies and actions of the
executive management (the ‘Board of Management’)
of Koninklijke Philips Electronics N.V. (the ‘Company’)
is entrusted to the Supervisory Board, which, in
the two-tier corporate structure under Dutch law, is
a separate body and fully independent of the Board
of Management. This independence is also reected in
the requirement that members of the Supervisory Board
be neither a member of the Board of Management nor
an employee of the Company. The Supervisory Board
considers all its members to be independent under
the applicable US standards and pursuant to the Dutch
Corporate Governance Code of December 9, 2003 (the
‘Dutch Corporate Governance Code’). The Supervisory
Board, acting in the interests of the Company and the
Philips Group, supervises and advises the Board of
Management in performing its management tasks and
setting the direction of the Philips Group’s business.
It is empowered to recommend to the General Meeting
of Shareholders persons to be appointed as members
of the Supervisory Board or the Board of Management.
Major management decisions, including the Philips Group
strategy, require the approval of the Supervisory Board.
The Supervisory Board further supervises the structure
and management of systems of internal business controls
and the nancial reporting process. It determines the
remuneration of the individual members of the Board
of Management within the remuneration policy adopted
by the General Meeting of Shareholders. While retaining
overall responsibility, the Supervisory Board assigns
certain of its tasks to three permanent committees:
the Corporate Governance and Nomination & Selection
Committee, the Remuneration Committee and the Audit
Committee. The separate reports of these committees
are part of this report and are published below.
As in previous years, Philips addresses its overall
corporate governance structure in the chapter
Corporate governance that begins on page 250 of
this Annual Report.
Meetings and activities of the Supervisory Board
The Supervisory Board met 10 times in the course
of 2007, including meetings by telephone conference;
none of its members who were in ofce during the full
year were frequently absent in these meetings. The
members of the Board of Management were present at
the meetings of the Supervisory Board except when they
discussed the composition and functioning of the Board
of Management and the Group Management Committee,
as well as the remuneration and performance of individual
members of the Board of Management and the Group
Management Committee. Extensive evaluation of the
functioning of the Supervisory Board and its members
has taken place, resulting in several suggestions, which
will be given further consideration. Furthermore, the
training program for members of the Supervisory
Board was continued and members of the Supervisory
Board visited (head) ofces of four divisions to further
familiarize themselves with the business and the respective
management teams. The Supervisory Board also spent two
days in Shanghai where it discussed the Philips business
in China and visited, amongst other locations, a lighting
factory, shops where Philips products are sold and the
Philips research center. An evaluation of the Board of
Management and its members has also taken place,
resulting in several suggestions. In addition to the
scheduled meetings, the Chairman and other members
of the Supervisory Board had regular contact with the
President/Chief Executive Ofcer and other members of
the Board of Management as well as senior executives
of the Company throughout the year.
During the year the Supervisory Board again devoted
considerable time to discussing the Company’s strategy.
In particular the integration of CE and DAP into
the Consumer Lifestyle Sector and the growth targets
for 2010 (Vision 2010) were discussed extensively.
Report of the Supervisory Board
8 Financial highlights 10 Message from the President 16 The Philips Group 62 The Philips sectors