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Corporate governance
Introduction
The Supervisory Board and the Board of Management acknowledge their responsibility for Vedior’s corporate governance and for compliance with the Dutch corporate governance code. Both Boards strongly believe that good corporate governance is essential to all those involved in Vedior. Good corporate governance and adequate supervision are important prerequisites for trust in Vedior and its management. Corporate transparency and clear and timely communication are indispensable, and decisions taken on corporate governance must be seen in the context of an ongoing process. National and international developments continue to be monitored both from social and political perspectives. The international dimension is of vital importance in this respect. Vedior is now operating in 37 countries world wide with 93% of turnover produced outside the Netherlands. Two-thirds of the members of the Board of Management and half of the members of the Supervisory Board are non-Dutch nationals. It is estimated that more than 85% of the depositary receipts for ordinary shares are held by institutional investors from outside the Netherlands.
Vedior is in compliance with the Dutch corporate governance code (‘the Code’), except as specifically stated in this report regarding the following provisions of the Code:
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Provision II.2.3 – Shares obtained without financial consideration by members of the Board of Management should be retained for at least five years. The Supervisory Board believes that share sales should be allowed after three years to the extent necessary to settle related tax liabilities. |
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Provision II.2.8 – The Company should not grant any personal loans to directors. The Supervisory Board endorses this provision in principle. However, as part of the incentive share plans Vedior has in previous years granted certain members of the Board of Management interest free loans to purchase ordinary shares in Vedior as an alternative to granting options or restricted shares. These loans may be fully or partially forgiven depending on the achievement of specific performance targets, but otherwise have to be repaid.
As from 2004, the Company no longer grants such loans. |
Each change to Vedior’s corporate governance structure and each change in the compliance with the Code will be submitted to the Annual General Meeting of shareholders for discussion as a separate agenda item. In 2004, Vedior’s corporate governance was extensively discussed with shareholders during the Annual General Meeting on 7 May, which meeting also approved the amendments to the Company’s articles of association in order to align them with the Code.
Corporate governance structure
Pursuant to Vedior’s articles of association and internal regulations, the Board of Management is charged with the management of the Company’s business and operations. Important responsibilities of the Board of Management include setting and achieving the Company’s objectives, strategy and policies, as well as delivering results. The Board of Management is also responsible for compliance with all relevant laws and regulations, risk management and arranging adequate financing. The task of the Supervisory Board is to supervise the policies pursued by the Board of Management and the general state of affairs within the Company. The Supervisory Board reviews the strategy developed by the Board of Management on a regular basis. The Supervisory Board – and in some cases one of its Committees – reviews and advises on important issues such as development of financial and operational results, the risks related to business activities, structure and operation of in-house risk management and control systems, compliance with rules and regulations, business development, including acquisitions and divestments, the Company’s financial position and capital structure. Decisions of the Board of Management which require the approval of the Supervisory Board are included in the Company’s articles of association and annex A of the Supervisory Board regulations.
Both Boards have their own unique responsibilities, which focus on the Company’s general interests and take into account the interests of all stakeholders. Both boards are accountable to the shareholders, who must also approve the proposed (re)appointment of members of both Boards. Shareholders should at all times be provided with a clear view on corporate decisions and the decision-making process.
Both Boards have their own regulations, which set rules with regard to the affairs of each Board and the relationship between them. These rules must be observed by both Boards and their members. During 2004, the Supervisory Board reviewed its own regulations in detail and amended them after consultation with the Board of Management. The Board of Management also spent a considerable amount of time drafting its own regulations, which have subsequently been approved by the Supervisory Board. |
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