Philips 2014 Annual Report Download - page 96

Corporate governance 11.2
96 Annual Report 2014
Executive Committee attend meetings of the
Supervisory Board except in matters such as the
desired profile, composition and competence of the
Supervisory Board and the Executive Committee, as
well as the remuneration and performance of individual
members of the Executive Committee and the
conclusions that must be drawn on the basis thereof. In
addition to these items, the Supervisory Board, being
responsible for the quality of its own performance,
discusses, at least once a year on its own, without the
members of the Executive Committee being present, (i)
both its own functioning and that of the individual
members, and the conclusions that must be drawn on
the basis thereof, as well as (ii) both the functioning of
the Board of Management and that of the individual
members, and the conclusions that must be drawn on
the basis thereof. The President/CEO and other
members of the Executive Committee have regular
contacts with the Chairman and other members of the
Supervisory Board. The Executive Committee is
required to keep the Supervisory Board informed of all
facts and developments concerning Philips that the
Supervisory Board may need in order to function as
required and to properly carry out its duties, to consult
it on important matters and to submit certain important
decisions to it for its prior approval. The Supervisory
Board and its individual members each have their own
responsibility to request from the Executive Committee
and the external auditor all information that the
Supervisory Board needs in order to be able to carry out
its duties properly as a supervisory body. If the
Supervisory Board considers it necessary, it may obtain
information from officers and external advisers of the
Company. The Company provides the necessary means
for this purpose. The Supervisory Board may also
require that certain officers and external advisers
attend its meetings.
The Chairman of the Supervisory Board
The Supervisory Board’s Chairman will see to it that: (a)
the members of the Supervisory Board follow their
introductory program, (b) the members of the
Supervisory Board receive in good time all information
which is necessary for the proper performance of their
duties, (c) there is sufficient time for consultation and
decision-making by the Supervisory Board, (d) the
committees of the Supervisory Board function properly,
(e) the performance of the Executive Committee
members and Supervisory Board members is assessed
at least once a year, and (f) the Supervisory Board elects
a Vice-Chairman. The Vice-Chairman of the
Supervisory Board shall deputize for the Chairman
when the occasion arises. The Vice- Chairman shall act
as contact of individual members of the Supervisory
Board or the Board of Management concerning the
functioning of the Chairman of the Supervisory Board.
Remuneration of the Supervisory Board and
share ownership
The remuneration of the individual members of the
Supervisory Board, as well as the additional
remuneration for its Chairman and the members of its
committees is determined by the General Meeting of
Shareholders. The remuneration of a Supervisory Board
member is not dependent on the results of the
Company. Further details are published in the
Supervisory Board report.
Shares or rights to shares shall not be granted to a
Supervisory Board member. In accordance with the
Rules of Procedure of the Supervisory Board, any
shares in the Company held by a Supervisory Board
member are long-term investments. The Supervisory
Board has adopted a policy on ownership of and
transactions in non-Philips securities by members of
the Supervisory Board. This policy is included in the
Rules of Procedure of the Supervisory Board.
The Corporate Governance and Nomination &
Selection Committee
The Corporate Governance and Nomination & Selection
Committee consists of at least the Chairman and Vice-
Chairman of the Supervisory Board. The Committee
reviews the corporate governance principles applicable
to the Company at least once a year, and advises the
Supervisory Board on any changes to these principles
as it deems appropriate. It also (a) draws up selection
criteria and appointment procedures for members of
the Supervisory Board, the Board of Management and
the Executive Committee; (b) periodically assesses the
size and composition of the Supervisory Board, the
Board of Management and the Executive Committee,
and makes the proposals for a composition profile of
the Supervisory Board, if appropriate; (c) periodically
assesses the functioning of individual members of the
Supervisory Board, the Board of Management and the
Executive Committee, and reports on this to the
Supervisory Board. The Committee also consults with
the President/CEO and the Executive Committee on
candidates to fill vacancies on the Supervisory Board,
the Executive Committee, and advises the Supervisory
Board on the candidates for appointment. It further
supervises the policy of the Executive Committee on
the selection criteria and appointment procedures for
Philips Executives.
The Remuneration Committee
The Remuneration Committee meets at least twice a
year and is responsible for preparing decisions of the
Supervisory Board on the remuneration of individual
members of the Board of Management and the
Executive Committee.
The Remuneration Committee prepares an annual
remuneration report. The remuneration report contains
an account of the manner in which the remuneration
policy has been implemented in the past financial year,
as well as an overview of the implementation of the
remuneration policy planned by the Supervisory Board
for the next year(s). The Supervisory Board aims to have
appropriate experience available within the
Remuneration Committee. No more than one member
of the Remuneration Committee shall be an executive
board member of another Dutch listed company.