Philips 2015 Annual Report Download - page 95

Corporate governance 11.2
Annual Report 2015 95
foundations as defined under Dutch law (see section
11.1, Board of Management, of this Annual Report), with
a position as chairman counting for two. During the
financial year 2015 all members of the Supervisory
Board complied with the limitations on Non-Executive
Directorships described above.
Dutch legislation on conflicts of interests provides that
a member of the Supervisory Board may not participate
in the adoption of resolutions if he or she has a direct
or indirect personal conflict of interest with the
Company or related enterprise. If all members of the
Supervisory Board have a conflict, the resolution
concerned will be adopted by the General Meeting of
Shareholders. The Company’s corporate governance
includes rules to specify situations in which a (potential)
conflict may exist, to avoid (potential) conflicts of
interests as much as possible, and to deal with such
conflicts should they arise.
Relevant matters relating to conflicts of interests, if any,
shall be mentioned in the Annual Report for the
financial year in question. No decisions to enter into
material transactions in which there are conflicts of
interest with members of the Supervisory Board were
taken during the financial year 2015.
Meetings of the Supervisory Board
The Supervisory Board meets at least six times per year,
including a meeting on strategy. The Supervisory Board,
on the advice of its Audit Committee, also discusses, in
any event at least once a year, the main risks of the
business, and the result of the assessment of the
structure and operation of the internal risk
management and control systems, as well as any
significant changes thereto. The members of the
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 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