Philips 2015 Annual Report Download - page 79

Supervisory Board report 10
Annual Report 2015 79
addition to the formal meetings of the Board and its
Committees, the Board members also held private
meetings. 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 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 nine
members, after the appointment of Mr David Pyott at
the 2015 Annual General Meeting.
The agenda for the upcoming 2016 Annual General
Meeting of Shareholders will include a proposal to
reappoint Mrs Neelam Dhawan to the Supervisory
Board for an additional term of four years. The current
term of appointment of Mr Ewald Kist will expire at the
end of such meeting, after serving three consecutive
terms on the Board. We are grateful to Ewald for his
years of service, which included him being Chairman of
the Audit Committee, for his dedication and the wisdom
that he brought to Supervisory Board discussions and
decisions.
In 2015, there were also a number of changes to the
chairmanships and memberships within the Board.
David Pyott was appointed as member of the
Supervisory Board and became a member of the Audit
Committee. Jackson Tai, Heino von Prondzynski and
Kees van Lede were re-appointed as members of the
Supervisory Board. Kees van Lede and Heino von
Prondzynski stepped down from the Audit Committee.
In 2015, we also established two new Supervisory Board
Committees: the Separation Committee and the Quality
& Regulatory Committee. Please refer to the description
of the activities of such committees below in this
Supervisory Board report.
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,
quality & regulatory 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 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.
Currently, the Supervisory Board’s gender diversity is
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 2015, the members of the Supervisory Board again
completed a questionnaire to verify compliance in 2015
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. This resulted in a number of
suggestions to improve the quality of the discussion in
Board meetings, which will be implemented in 2016. All
members of the Supervisory Board had a ‘one to one’
discussion with the Chairman, and 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 2015 considering its composition and it will
continue to devote attention to this topic during 2016.
The functioning of the Supervisory Board committees
was considered to be commendable (or better) and
specific feedback was addressed by the Chairman of
each committee with its members.
The use of an external evaluator to measure the
functioning of the Supervisory Board may be
considered in the future.