Philips 2013 Annual Report Download - page 108

9 Supervisory Board report 9 - 9
108 Annual Report 2013
Board. We as members of the Board devoted sufficient
time to engage (proactively if the circumstances so
required) in our supervisory responsibilities.
Composition, diversity and self-evaluation by
the Supervisory Board
The Supervisory Board is a separate corporate body
that is independent of the Board of Management (and
the Executive Committee). Its independence is also
reflected in the requirement that members of the
Supervisory Board can neither be a member of the
Board of Management, member of the Executive
Committee nor an employee of Philips. The Supervisory
Board furthermore considers all its members to be
independent pursuant to the Dutch Corporate
Governance Code. We will continue to pay close
attention to applicable independence criteria.
The Supervisory Board currently consists of eight
members. The agenda for the upcoming 2014 Annual
General Meeting of Shareholders includes the proposal
to appoint Ms. Orit Gadiesh as an additional member to
the Supervisory Board, bringing the total to nine
members.
The profile of the Supervisory Board aims for an
appropriate combination of knowledge and experience
among its members encompassing marketing,
manufacturing, technology, financial, economic, social
and legal aspects of international business,
government and public administration in relation to the
global and multi-product character of Philips’
businesses. The Supervisory Board pays great value to
diversity in its composition. More particular it aims for
having members with an European and a non-
European background (nationality, working experience
or otherwise) and one or more members with an
executive or similar position in business or society no
longer than five years ago.
In addition, we support the Philips’ policy to appoint a
well-balanced mix of women and men to its Board of
Management, Executive Committee and Supervisory
Board. New Dutch legislation, eective per January 1,
2013, requires companies to pursue a policy of having at
least 30% of the seats on the Board of Management and
the Supervisory Board held by women and at least 30%
of the seats held by men.
We believe we are making good progress in
implementing this policy. The appointment of Orit
Gadiesh, as currently proposed to the General Meeting
of Shareholders, will bring the Supervisory Board’s
gender diversity within the statutory criteria. There were
no other vacancies to fulfil in 2013. In addition, we note
that there may be various other pragmatic reasons –
such as the other relevant selection criteria and the
availability of suitable candidates within Philips – that
could play a complicating role in fully achieving the
gender targets in the short term.
In 2013, the members of the Supervisory Board
completed a questionnaire to verify compliance in 2013
with applicable corporate governance rules and its
Rules of Procedure. The outcome of this survey was
satisfactory.
In addition, we each submitted to the Chairman
responses to a questionnaire designed to self-evaluate
the functioning of the Supervisory Board. The
questionnaire covered topics such as the composition
and competence of the Supervisory Board (for
example, the Board’s size and the education and
training requirements of its members), access to
information, the frequency and quality of the meetings,
quality and timeliness of the meeting materials, the
nature of the topics discussed during
meetings and the functioning of the Supervisory
Board’s committees.
The responses to the questionnaire were aggregated
into a report, which was discussed by the Supervisory
Board in a private meeting. Certain areas were
identified that could be improved and it was decided
that the Chairman would follow-up with individual
members to address specific issues. Summarizing, the
responses provided by the Supervisory Board members
indicated that the Board is a well-functioning team and
we believe a diversity of experience and skills is
presented on the Board. The functioning of the
Supervisory Board committees was considered to be
commendable (or better) and specific feedback will be
addressed by the chairman of each committee with its
members. The evaluation lead to certain practical steps
to improve the accessibility of the large quantity of
materials provided to Supervisory Board members.
In 2013, the use of an external evaluator to measure the
functioning of the Supervisory Board was considered;
however, it was decided to continue self-evaluation for
the time being. We will reconsider the use of an external
evaluator as circumstances require.
Supervisory Board committees
The Supervisory Board has assigned certain of its tasks
to three permanent committees: the Corporate
Governance and Nomination & Selection Committee,
the Remuneration Committee and the Audit