Philips 2014 Annual Report Download - page 81

Supervisory Board report 10
Annual Report 2014 81
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 a member of the
Supervisory Board cannot be a member of the Board of
Management, of the Executive Committee or 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.
We were deeply saddened in 2014 by the passing of
James Schiro, shortly after he stepped down from the
Supervisory Board. James became a member of Philips’
Supervisory Board in 2005 and he was appointed for
three consecutive terms. In 2012, James became the
Vice-Chairman of the Supervisory Board, the Chairman
of the Remuneration Committee and a member of the
Nomination & Selection Committee; he also served on
the Audit Committee from 2005 until 2011. James was
instrumental in the introduction of the new
Remuneration Policy and Long-term Incentive Plan
that was approved by shareholders in 2013. James was
an excellent Supervisory Board member and a loyal
friend, he was full of integrity, modest and humble: truly
a ne man. Philips and we as members of the
Supervisory Board will miss him dearly.
Ms Orit Gadiesh was appointed as a member of the
Supervisory Board at the 2014 Annual General Meeting
of Shareholders. The agenda for the upcoming 2015
Annual General Meeting of Shareholders includes a
proposal to reappoint Mr Heino von Prondzynski and
Mr Jackson Tai to the Supervisory Board for an
additional term of four years. The Supervisory Board
will also recommend to the General Meeting of
Shareholders to re-appoint Mr Kees van Lede for an
additional term of two years. The re-appointment
would represent Kees fourth term on the Supervisory
Board. The Board proposes to re-appoint Mr van Lede
because his past experience and strong knowledge of
corporate governance will be of particular benet as the
company goes through a period of transition.
In 2014, there were also a number of changes to the
chairmanships and memberships within the Board.
Christine Poon was appointed as Vice-Chairman of the
Supervisory Board and Heino von Prondzynski was
appointed as Chairman of the Remuneration
Committee. Mr von Prondzynski also joined the
Corporate Governance and Nomination & Selection
Committee. Orit Gadiesh joined the Audit Committee.
The profile of the Supervisory Board remains
unchanged and 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 both European and non-European
backgrounds (nationality, working experience or
otherwise) and one or more members who have held
an executive or similar position in business or society.
In addition, we support Philips’ policy to appoint a well-
balanced mix of women and men to its Board of
Management, Executive Committee and Supervisory
Board, including the requirement under Dutch
legislation for 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 brought the Supervisory Board’s gender
diversity within the statutory criteria. We note that there
may be various pragmatic reasons – such as other
relevant selection criteria and the availability of suitable
candidates within Philips – that could play a role in the
achievement of our diversity targets.
In 2014, the members of the Supervisory Board again
completed a questionnaire to verify compliance in 2014
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. As in previous
years, 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. The Chairman was evaluated by
the Vice-Chairman. The responses provided by the
Supervisory Board members indicated that the Board
continues to be a well-functioning team and we believe
a diversity of experience and skills is represented on the
Board. The Board has spent time throughout 2014