Philips 2009 Annual Report Download - page 134

9Supervisory Board report
9.1 Introduction
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 pursuant to the Dutch
Corporate Governance Code of December 2008 (the
‘Dutch Corporate Governance Code’) and under the
applicable US standards.
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 section 8.3, Supervisory
Board, 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
chapter 10, Corporate governance, of this Annual Report.
Activities of the Supervisory Board
Six regular meetings were held in 2009. All members were
frequently present at the regular meetings of the
Supervisory Board. In 2009 one meeting took place by
means of a conference call to discuss a specific matter.
The Audit Committee and the Corporate Governance
and Nomination & Selection Committee met four times.
The Remuneration Committee met five times at four
regular meetings and one meeting with the full
Supervisory Board to discuss subjects and developments
with respect to remuneration.
During 2009 the Supervisory Board devoted considerable
time to discussing the Company’s strategy and discussed
the performance and strategy of the three sectors in detail
with the respective management teams, especially during a
half day business update meeting with each sector. In
particular, the Supervisory Board discussed the
performance and integration of recent acquisitions, such
as Saeco, Genlyte and Respironics, the economic situation
and impact thereof on Philips and the cost reduction and
efficiency improvement measures taken to confront the
recession, as well as the capital and financing structure of
the Philips Group extensively throughout the year.
In January the Supervisory Board discussed the financial
performance of the Philips Group in 2008. The
management agenda 2009 of the Board of Management
was discussed, especially the steps taken to deal with the
unsatisfactory EBITA margins in the Television business.
The agenda for the 2009 General Meeting of Shareholders
was discussed, including the proposed dividend to
shareholders, the dividend policy and the composition of
and proposed candidates for the Supervisory Board.
Moreover, the charter and the evaluation of the
functioning of the Supervisory Board and its members
were discussed.
In February the Supervisory Board discussed the report of
the auditors of the Company and approved the Annual
Report 2008. The annual incentive targets 2009 were
discussed.
In March the results of the Net Promoter Score 2008
were discussed. The Supervisory Board together with the
Chief Technology Officer discussed innovation themes
and the shift of R&D spend from existing product
categories to new product categories. The Remuneration
Committee gave an update to the full Supervisory Board
on remuneration topics.
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.
In August the Supervisory Board discussed a financial
update including an assessment of the major risks for the
company and ways to mitigate these. It received an update
with respect to ongoing legal proceedings. Further, the
members of the Supervisory Board spent two days at the
High Tech Campus in Eindhoven where they discussed
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134 Philips Annual Report 2009