Philips 2008 Annual Report Download - page 114

Supervisory
Board report
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 reflected 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').
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. The members (of the committees)
of the Supervisory Board are listed in the chapter Our
leadership that begins on page 110 of this Annual Report.
For further information on the Company's corporate
governance structure and a more detailed description
of the duties and functioning of the Supervisory Board
see the chapter Corporate governance that begins on
page 254 of this Annual Report.
Activities of the Supervisory Board
During 2008 the Supervisory Board devoted considerable
time to discussing the Company’s strategy.
In particular
the performance and integration of recent acquisitions,
such as Genlyte and Respironics, and the economic
situation and impact thereof on Philips and
Vision 2010
were discussed extensively. The Supervisory
Board also
discussed the capital and financing structure of the
Philips Group and approved the sale of some or all of the
Company's remaining shares in TSMC and LG Display.
In June the strategy of the Company and the sectors,
including various risks and opportunities scenarios,
were discussed during a one and a half day meeting.
Other discussion topics included:
financial performance of the Philips Group and the sectors•
status of merger and acquisition projects•
rebranding of products of acquired companies•
management agenda of the Board of Management •
and especially the steps taken to deal with the
unsatisfactory EBITA margins in the TV business
remuneration policy•
management development and succession planning•
•
evaluation of the Board of Management and its members
geographic performance and growth opportunities •
in Emerging Markets and particularly the shift of
resources from mature to emerging markets
the shift of R&D spend from existing product •
categories to new product categories
the situation and improvement measures at some •
businesses that did not perform according to plan
•
the results of the Employee Engagement Score and the
implementation and impact of the Net Promoter Score
financial scenarios for 2009•
•
the situation at Philips Pension Fund in the Netherlands
restructuring in various sectors•
the system of internal business controls and •
risk management
the investigations into possible anticompetitive •
activities in the CRT industry.
The Supervisory Board visited Lighting and Healthcare
to further familiarize itself with the business and the
respective management teams. Also, the yearly Corporate
Research Exhibition was visited, at which event the latest
technological projects and inventions of the Company
are presented. The members spent two days in Boston/
Andover where they discussed the Philips businesses in
the United States of America and visited, amongst others,
the head office of Healthcare and attended presentations
of various businesses, including the recently acquired
business of Respironics, Colour Kinetics, Genlyte,
Emergin and VISICU. Finally, several members of the
Supervisory Board also attended external training
programs, which are often dedicated to specific topics.
Philips Annual Report 2008114
42
Our group performance
18
We care about...
8
Message from
the President
6
Performance highlights
14
Who we are