Committees of the Supervisory Board
As indicated in the regulations of the Supervisory Board (hereinafter: the ‘Board’), the Board has the following three committees: an audit committee, a remuneration committee and a selection and appointment committee. These committees are composed by the Board from among its members. The Board remains responsible for decisions, even if they were prepared by one of its committees. The Board has prepared regulations for each committee. During the year under review, the Board received reports from each of its committees on their deliberations and findings. The composition of the committees, the number of committee meetings, the most important meeting items and the performance of duties by the committees are outlined below.
In 2017 the Audit committee consisted of Mrs Sandra Addink-Berendsen (Chair) and Mr Cees van Rijn (member). As established in the Audit committee Regulations, this committee supports the Board in its supervisory duties and responsibilities in the area of (i) external financial reporting, audit and compliance with legislation and regulations for financial reporting, (ii) appointment and performance of the external auditor, (iii) quality and effectiveness of internal, financial and management reporting as well as internal control and risk management systems, and (iv) compliance with internal procedures, legislation and regulations and codes of conduct.
In 2017, the Audit committee met five times. The external auditor was present during all of these meetings. In addition, the CFO, the internal auditor and the Corporate Secretary were present during all of these meetings. The CEO and the director of Reporting, Tax & Risk Management were each absent during one meeting. The committee has held extensive discussions with (representatives of) the Executive Board—as well as with the external auditor—on the 2016 annual accounts, the 2016 annual report, the 2017 half-yearly results, the trading updates and the press releases pertaining thereto, the Management Letter, and the internal and external audit plan for 2017. Other matters that came up for discussion included follow-up of the internal auditor’s and external auditor’s recommendations, risks and risk management and control systems, staffing of the finance department, enforcement of the accounts receivable policy, ICT (including risks in the area of cybersecurity and data protection), tax planning and status of the tax declarations in the relevant countries, and the progress on the implementation of the new IFRS rules. As regards ICT, the Audit Committee contemplated the question of what would be a suitable level of protection for ForFarmers. As regards the staffing of the finance department, the committee asked for consideration to be given to achieving a good balance between workload and cost control. During the year, several members of the senior management team were invited to provide further information on a range of subjects. Aside from the agenda, the members of the Audit committee also always received an overview of (pending and/or potential) legal claims, as well as an overview of incident notifications. After each meeting, the Audit committee spoke with the external auditor, always without the presence of (representatives of) the Executive Board, and shared its findings with the Board on relations with the external auditor. In formulating the role of the external auditor, attention was paid to the scope of the audit report, the materiality principle to be applied and the audit fees. The committee is of the opinion that relations with the external auditor are satisfactory and supports the proposal to appoint KPMG Accountants N.V. as auditor for the 2018 financial year. The Audit committee has discussed the effectiveness of the design and performance of the internal risk management and control systems as referred to in best practice provision 1.2.1 to 1.2.3 of the Dutch Corporate Governance Code (hereinafter: the ‘Code’) with the Board and has established that the risks relating to the Company strategy have been identified and that the system for controlling risks, based on strategic, operational, compliance and reporting risks, have been implemented. The Audit committee has reported to the Board on the subjects as referred to in best practice provision 1.5.3 of the Code and has been involved in the work plan set up by the internal auditor. In addition, an assessment interview took place with the internal auditor.
Selection and appointment committee
Since 26 April 2017, the Selection and appointment committee is formed by Erwin Wunnekink (Chairman) and Vincent Hulshof (member). As established in the Regulations of the Selection and appointment committee, this committee, among other things, submits proposals to the Board regarding the selection criteria and appointment procedures, and regarding the scope, composition, appointments, reappointments, and performance appraisal of the Board and the Executive Board.
In 2017 the Selection and nomination committee met three times. The committee has drawn up an individual profile for the vacancy that opens in 2018 as a result of Jan Eggink leaving. This profile has been approved by the Board and established in its informal meeting on 6 July 2017. In connection with the succession of Jan Eggink, the appointment committee performed the necessary preparations and conducted interviews with candidates at the beginning of 2017. In the preparations, the diversity policy and the right of recommendation that Coöperatie FromFarmers U.A has as priority shareholder were taken into consideration as much as possible. Mr Roger Gerritzen was put forward to the Board at the recommendation of Coöperatie FromFarmers U.A. because of his knowledge of the agricultural sector and his financial and organisational experience. The committee considers that the individual profile is thereby adhered to. The appointment committee has also prepared the re-election of Mrs Sandra Addink-Berendsen and Mr Vincent Hulshof as member of the Board. In this respect, the talks with Mr Vincent Hulshof on the subject were conducted by the committee chairman, along with Mr Jan Eggink. It was proposed that both would be nominated for reappointment. The Board has subsequently nominated Mr Roger Gerritzen to be appointed and Mrs Sandra Addink-Berendsen and Mr Vincent Hulshof to be reappointed as members of the Board by the General Meeting of Shareholders to be held on 26 April 2018. Yoram Knoop is also nominated to be reappointed as member of the Executive Board for a term of four years at the proposal of the appointment committee. Mr Yoram Knoop will continue to fulfil the role of CEO upon reappointment. Finally, the committee held assessment interviews, without guidance from an external advisor, with the individual members of the Board, and advised the Board on the performance of the Board as a whole. As regards the performance of the Executive Board and the Executive Committee, the committee discussed the outcome of the interviews that were held by the members of the Board with all individual members of the Executive Committee.
Mr Cees van Rijn (chairman) and Mr Cees de Jong have formed the Remuneration committee since 26 April 2017. As established in the Regulation of the Remuneration committee, this committee, among other things, submits proposals to the Board regarding the remuneration policy to be pursued and the remuneration of the individual members of the Executive Board. The remuneration policy was determined by the General Meeting of 26 April 2017 and approval was granted to the regulations as regard rights for acquiring depositary receipts of ordinary shares for members of the Executive Board.
The Remuneration committee met four times in 2017. The CEO was always present during these meetings. The committee performed preparatory activities, among other things, during the formulation of the remuneration policy for the Executive Board, the remuneration report and the mandate of Mr Yoram Knoop (CEO). In addition, the Remuneration committee held discussions with the CEO and made a proposal to the Board regarding the variable bonus targets for the Executive Committee for 2017. This also applies to the long-term variable bonus targets for the Executive Committee (LTI 2017-2019). The plans were subsequently discussed and approved by the plenary Board. For the formulation of the proposal for the remuneration of the Board, the Remuneration committee ascertained the individual directors’ vision as to the level and structure of their own remuneration as referred to in best practice provision 3.2.2. of the Code. The Remuneration committee discussed the realisation of the Executive Committee’s objectives stipulated in 2016, and the variable remuneration (STI and LTI 2015-2017) was determined. For this, the Remuneration committee relied on the report of the auditor in which the accuracy of the calculation of the variable remuneration relating to the financial objectives was confirmed. The Board then approved the proposed bonus amounts. Partly as part of the preparation of the remuneration report, discussions were held as to the progress with the realisation of the short- and long-term objectives and pay ratios within the Company. The 2017 employee participation plans were approved by the Board pursuant to the advice of the Remuneration committee. The main aspects of the contracts with members of the Executive Board are published on the Company’s website.
During the General Meeting of Shareholders of 26 April 2017, the remuneration of the Board was established for a period of three years.
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|Name||Audit committee||Selection and nomination committee||Remuneration committee|
|J.W. Eggink||Chairman (until 26 April)|
|V.A.M. Hulshof||Member (from 26 April)|
|C. de Jong||Member (from 26 April)|
|H. Mulder||Member (until 26 April)|
|C.J.M. van Rijn||Member||Chairman|
|W.M. Wunnekink||Chairman (from 26 April)|