Philips 2013 Annual Report Download - page 107

9 Supervisory Board report 9 - 9
Annual Report 2013 107
9Supervisory Board report
Introduction
We as members of the Supervisory Board are fully
committed to our role and responsibility in respect of
the proper functioning of the corporate governance of
Philips. The Supervisory Board supervises and advises
the Board of Management and Executive Committee in
performing their management tasks and setting the
direction of the business of the Philips group. The
Supervisory Board acts, and we as individual members
of the Board act in the interests of Koninklijke Philips
N.V., its business and all its stakeholders. This report
includes a more specific description of the Supervisory
Board’s activities during the financial year 2013 and
other relevant information on its functioning.
Activities of the Supervisory Board
The full scope and details of the discussions within the
Supervisory Board are confidential, (inter alia) given the
business sensitive nature of the matters discussed.
Nevertheless, the overview below indicates a number
of matters that we discussed during meetings
throughout 2013:
• Philips’ performance and financial headroom
• Philips’ strategy and the new mid-term targets that
were announced during the Capital Markets Day in
September 2013. In particular, the Supervisory Board
focused on the nature of the Group, the portfolio of
approximately 40 businesses across various strategic
domains, the company’s geographic footprint and
the roadmap to unlock the company’s full potential
over the coming years with emphasis on the Philips
Business System
• Philips’ annual management commitment for 2013
• The review of the integration of large acquisitions
• The change in (the funding of) the pension
obligations in the Netherlands
• Philips’ progression towards becoming a more digital
company
• The enterprise risk management (which included the
annual risk assessment and discussion of the
changing nature of the risks faced by Philips and the
possible impact of such risks). For instance, the
Supervisory Board discussed the impact of changing
macro-economic conditions and the risks posed by
information security
• Quality and regulatory matters, and
• The divestment of the Audio, Video, Multimedia and
Accessories business (including the termination of
the Funai agreement).
The Supervisory Board conducted so-called “deep
dives” on a range of topics, such as: the strategy of
Consumer Lifestyle; the operations of the Lighting
Sector in North America and reviews of the company’s
activities in Latin America.
The Supervisory Board also conducted a number of
reviews of the company’s operations in markets,
including in China, Middle-East and Turkey, and Africa.
Moreover, the North American Market (including the
activities of the Sectors and key functions in that
geography) was discussed by the Supervisory Board
and we provided feedback on the new brand identity,
which was launched in November 2013. Additionally,
we received updates on sustainability and the share
buy-back program and the impact of currency
headwinds.
On multiple occasions, we were briefed on the various
aspects of the Accelerate! program, This included the
transformation of the Finance and IT functions and also
the progress made in transforming the culture within
Philips and simplifying its operating model.
The Supervisory Board also reviewed Philips’ annual
and interim financial statements, including non-
financial information, prior to publication thereof.
Supervisory Board meetings and attendance
In 2013, the Supervisory Board convened for seven
regular meetings. Moreover, we collectively and
individually interacted with members of the Executive
Committee and with senior management outside the
formal Supervisory Board meetings. The Chairman of
the Supervisory Board and the CEO met regularly for
bilateral discussions about the progress of the
company on a variety of matters.
The Supervisory Board meetings were well attended in
2013. The attendance percentage of the meetings -
including the committee meetings- was high (in excess
of 95%). The Supervisory Board committees also
convened regularly (see the separate reports of the
committees below) and all of the committees regularly
reported back on their activities to the full Supervisory