The Supervisory Board has two committees, namely an Audit Committee and a Selection, Appointment and Remuneration Committee. These committees advise and prepare the decision-making of the Supervisory Board within their respective areas of expertise. The discussions and findings of both committees are reported verbally in the full meetings of the Supervisory Board. The minutes of the Committees' meetings are made available to all members of the Supervisory Board.
In 2015, the Audit Committee consisted f Mr Van Winkelen (chairman), Ms Van der Linde and Ms Van der Veer-Vergeer. The last-mentioned member qualifies as a ‘financial expert’ within the meaning of best practice provision III.3.2 of the Dutch Corporate Governance Code (the Code). The composition of the committee remained unchanged.
The committee met five times in 2015, according to the fixed schedule. Apart from the Committee members, all meetings were also attended by the CFO, the Internal Audit Director, the Corporate Control Manager, the Governance, Risk & Compliance Manager and the external auditor. In addition, the Committee held one meeting with the external auditor – without the Management Board – and reported to the Supervisory Board on the relationship with the external auditor. This relationship is good in the Audit Committee's perception. In addition, the Audit Committee held separate consultations with the CFO, the Internal Audit Director and the General Affairs Director (in connection with compliance). The points that emerged from these discussions were put to the full Supervisory Board.
The Audit Committee assessed and discussed all relevant financial matters that were presented to the Supervisory Board, including the annual report 2014 and the financial statements for that year, the quarterly and half-yearly figures 2015, the reports of the internal and external auditor, the operational year plan 2016, the investment budget 2016 and the business plan 2016-2020. The Audit Committee also spoke at length about the financial aspects of the network exchange transaction with Enexis. Furthermore, the Audit Committee addressed several other subjects within its area of responsibility, more specifically the risk reports, the financial policy and the financing activities 2015-2017, the internal controls, tax issues, the IT risk management, impairment testing, position papers (including about the possible impacts of the proposed STROOM legislation), the IFRS regulatory developments and the financial results of the participations and activities in new markets.
In view of the mandatory rotation of the external auditor, the selection procedure for appointing the new auditor also received considerable attention. A European procurement procedure was carried out for this purpose. The extensive selection procedure took place under the direction of the Audit Committee, in cooperation with the CFO and the management. Based on the received proposals, the presentations of potential teams, obtained references and the proposed transition plans, the Audit Committee and the Management Board arrived at the conclusion that Deloitte would be the most suitable candidate to carry out the audit tasks effective from 2016.
Selection, Appointment and Remuneration Committee
From 1 January to 1 August 2015, the chairman of the Supervisory Board, Mr d’Hondt, acted as temporary chairman of the Selection, Appointment and Remuneration Committee on account of the premature departure of two members of the Supervisory Board who were also, respectively, chairman and member of the Selection, Appointment and Remuneration Committee. This chairmanship represented a departure from best practice provision III.5.11 of the Code. Mr Roetert was appointed as a member of the Supervisory Board effective from 20 February 2015. On 8 April 2015, he was appointed as a member of the Selection, Appointment and Remuneration Committee; on 1 August 2015, he took up the role of chairman of the Selection, Appointment and Remuneration Committee. As a result, this departure from the Code has now been resolved. In addition, Ms Van der Veer-Vergeer acted as a deputy member in 2015.
In 2015, the committee held three scheduled and two unscheduled meetings, partly in the presence of the chairman of the Management Board. The HRM Director also attended all meetings. In 2015, the Committee dealt with diverse matters, including the objectives for the short- and long-term variable remuneration and the award of the short- and long-term variable remuneration. The Committee also prepared the Remuneration Report.
In addition, attention was devoted to the adjustment of the pension provision for the members of the Management Board in response to changes to tax legislation. Furthermore, the Committee was informed of the outcomes of the Internal Audit Department's audit of the Management Board's expense claims.
The consequences of the WNT were also discussed at length. The Committee had a meeting with the regulator who supervises compliance with the WNT and consulted with the Committee of Shareholders about this issue.
In view of the existing Supervisory Board vacancies, the Committee also dealt at length with the composition of the Supervisory Board. The Committee discussed these vacancies several times with the Committee of Shareholders and the Central Works Council and held interviews with the candidates for the vacant posts.
Finally, the Committee conducted individual appraisal interviews with the members of the Management Board as part of the assessment of the Management Board's performance in 2015.