Philips 2015 Annual Report Download - page 94

Corporate governance 11.2
94 Annual Report 2015
Since 2013, Dutch legislation on board diversity
provided that the Company must pursue a policy of
having at least 30% of the seats on the Supervisory
Board held by men and at least 30% of the seats held
by women. The relevant rule ceased to have eect on
January 1, 2016, but a bill aimed at reintroducing the rule
was announced in November 2015. For more details on
board diversity please be referred to section 10.1,
Report of the Corporate Governance and Nomination &
Selection Committee, of this Annual Report.
The Rules of Procedure of the Supervisory Board are
published on the Company’s website. They include the
charters of its committees as mentioned in the Dutch
Corporate Governance Code, to which the plenary
Supervisory Board, while retaining overall
responsibility, has assigned certain tasks: the Corporate
Governance and Nomination & Selection Committee,
the Audit Committee and the Remuneration
Committee. Each committee reports, and submits its
minutes for information, to the Supervisory Board.
In 2015, the Supervisory Board additionally established
the Separation Committee and the Quality &
Regulatory Committee. Please refer to chapter 10,
Supervisory Board report, of this Annual Report for
more information on the composition and activities of
these committees.
In line with US and Dutch best practices, the Chairman
of the Supervisory Board must be independent
pursuant to the Dutch Corporate Governance Code and
under the applicable US standards. Furthermore, the
Dutch Corporate Governance Code allows a maximum
of one member of each Supervisory Board committee
not to be independent (as defined by the Code). As
mentioned in the introduction of this section 11.2 above,
the Supervisory Board considers all its members to be
independent.
The Supervisory Board is assisted by the General
Secretary of the Company. The General Secretary sees
to it that correct procedures are followed and that the
Supervisory Board acts in accordance with its statutory
obligations and its obligations under the Articles of
Association. Furthermore the General Secretary assists
the Chairman of the Supervisory Board in the actual
organization of the aairs of the Supervisory Board
(information, agenda, evaluation, introductory
program) and is the contact person for interested
parties who want to make concerns known to the
Supervisory Board. The General Secretary shall, either
on the recommendation of the Supervisory Board or
otherwise, be appointed and may be dismissed by the
Board of Management, after the approval of the
Supervisory Board has been obtained.
(Term of) Appointment, individual data and
conicts of interests
The Supervisory Board consists of at least five members
(currently nine), including a Chairman, Vice-Chairman
and Secretary. The Dutch ‘large company regime’ does
not apply to the Company itself. Members are currently
appointed by the General Meeting of Shareholders for
fixed terms of four years, upon a binding
recommendation from the Supervisory Board.
According to the Company’s Articles of Association, this
binding recommendation may be overruled by a
resolution of the General Meeting of Shareholders
adopted by a simple majority of the votes cast and
representing at least one-third of the issued share
capital. If a simple majority of the votes cast is in favor
of the resolution to overrule the binding
recommendation, but such majority does not represent
at least one-third of the issued share capital, a new
meeting may be convened at which the resolution may
be passed by a simple majority of the votes cast,
regardless of the portion of the issued share capital
represented by such majority. In the event a binding
recommendation has been overruled, a new binding
recommendation shall be submitted to the General
Meeting of Shareholders. If such second binding
recommendation has been overruled, the General
Meeting of Shareholders shall be free to appoint a
board member.
There is no age limit applicable, and members are
eligible for re-election twice (unless the Supervisory
Board resolves to deviate in a specic case). The date
of expiration of the terms of Supervisory Board
members is published on the Company’s website.
Individual data on the members of the Supervisory
Board are published in the Annual Report, and updated
on the Company’s website. Members may be
suspended and dismissed by the General Meeting of
Shareholders. In the event of inadequate performance,
structural incompatibility of interests, and in other
instances in which resignation is deemed necessary in
the opinion of the Supervisory Board, the Supervisory
Board shall submit to the General Meeting of
Shareholders a proposal to dismiss the respective
member of the Supervisory Board.
After their appointment, all members of the Supervisory
Board shall follow an introductory program, which
covers general financial and legal aairs, financial
reporting by the Company, any specific aspects that are
unique to the Company and its business activities, and
the responsibilities of a Supervisory Board member.
Any need for further training or education of members
will be reviewed annually, also on the basis of an annual
evaluation survey.
Under the Dutch Corporate Governance Code, no
member of the Supervisory Board shall hold more than
five supervisory board memberships of Dutch listed
companies, the chairmanship of a supervisory board
counting as two regular memberships. In addition,
Dutch legislation provides that no member of the
Supervisory Board shall hold more than five Non-
Executive Directorships at ‘large’ companies or