Philips 2015 Annual Report Download - page 93

Corporate governance 11.1
Annual Report 2015 93
with section 404 is set forth in section 12.1,
Management’s report on internal control, of this Annual
Report.
Next to the Philips General Business Principles (GBP),
the Company has a Financial Code of Ethics which
additionally applies to designated senior executives,
including the CEO and the CFO, and employees working
in the Finance and Accounting departments. The GBP
and the Financial Code of Ethics have been published
on the Company’s website.
The Company, through the Supervisory Board’s Audit
Committee, also has appropriate procedures in place
for the receipt, retention and treatment of complaints
received by the Company regarding accounting,
internal accounting controls or auditing matters and the
confidential, anonymous submission by employees of
concerns regarding questionable accounting or
auditing matters. The Company’s whistleblower
mechanisms furthermore allow employees and, since
May 2015, external parties to condentially and
anonymously report grievances to the Company, also
on other topics than those that relate to questionable
accounting or auditing matters. The Company does not
tolerate retaliation against (internal) whistleblowers
that report a concern in good faith. More information on
GBP governance and our whistleblower procedures can
be found in chapter 14, Sustainability statements, of this
Annual Report and chapter 7, Risk management, of this
Annual Report.
In view of the requirements under the US Securities
Exchange Act, procedures are in place to enable the
CEO and the CFO to provide certifications with respect
to the Annual Report on Form 20-F.
A Disclosure Committee is in place, which advises the
various officers and departments involved, including
the CEO and the CFO, on the timely review, publication
and filing of periodic and current (financial) reports. In
addition to the certification by the CEO and the CFO
under US law, each individual member of the Board of
Management and the Supervisory Board must under
Dutch law, sign the Group and Company financial
statements being disclosed and submitted to the
General Meeting of Shareholders for adoption. If one or
more of their signatures is missing, this shall be stated,
and the reasons given for this. The members of the
Board of Management issue the responsibility
statement as referred to in chapter 12, Group nancial
statements, of this Annual Report, as required by
applicable Dutch company law and securities law.
11.2 Supervisory Board
Introduction
The Supervisory Board supervises the policies of the
Board of Management and Executive Committee and
the general course of aairs of Philips and advises the
executive management thereon. The Supervisory
Board, in the two-tier corporate structure under Dutch
law, is a separate body that is independent of the Board
of Management. Its independent character is also
reflected in the requirement that members of the
Supervisory Board can be neither a member of the
Board of Management nor an employee of the
Company. The Supervisory Board considers all its
members to be independent pursuant to the Dutch
Corporate Governance Code and under the applicable
US Securities and Exchange Commission standards.
The Supervisory Board, acting in the interests of the
Company and the Group and taking into account the
relevant interest of the Company’s stakeholders,
supervises and advises the Board of Management and
Executive Committee in performing its management
tasks and setting the direction of the Group’s business,
including (a) the Group’s performance, (b) the Group’s
general strategy and the risks connected to its business
activities, (c) the operational and financial objectives,
(d) the parameters to be approved in relation to the
strategy, (e) corporate social responsibility issues (f) the
structure and management of the systems of internal
business controls, (g) the financial reporting process, (h)
the compliance with applicable laws and regulations, (i)
the company-shareholders relationship, and (j) the
corporate governance structure of the Company. The
Group’s strategy and major management decisions are
discussed with and approved by the Supervisory Board.
For a description of further responsibilities and tasks of
the Supervisory Board please refer to the Supervisory
Board’s Rules of Procedure which are published on the
Company’s website.
In its report, the Supervisory Board describes the
composition and functioning of the Supervisory Board
and its committees, the activities of the board and its
committees in the financial year 2015, the number of
committee meetings and the main items discussed.
Rules of Procedure of the Supervisory Board
The Supervisory Board’s Rules of Procedure set forth its
own governance rules (including meetings, items to be
discussed, resolutions, appointment and re-election,
committees, conflicts of interests, trading in securities,
profile of the Supervisory Board). Its composition
follows the profile, which aims for an appropriate
combination of knowledge and experience among its
members encompassing marketing, technological,
manufacturing, financial, economic, social and legal
aspects of international business and government and
public administration in relation to the global and multi-
product character of the Group’s businesses. The
Supervisory Board attaches great importance to
diversity in its composition. More particularly, it aims at
having members with a 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
5 years ago.