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, integrity 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 44 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 80% 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 earlier 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 ceased granting 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 2005, Vedior’s corporate governance was again extensively discussed with shareholders during the Annual General Meeting on 29 April.
Corporate governance structure Vedior operates a two-tier board structure. The Supervisory Board comprises the non-executive directors, while the Board of Management comprises the executive directors of the Company. 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, the quality and completeness of publicly disclosed financial reports, risk management and arranging adequate financing. The task of the Supervisory Board is to supervise and advise on 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 the development of financial and operational results, the risks related to business activities, structure and operation of risk management and control systems, compliance with rules and regulations, business development, including acquisitions and divestments and 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. Appointment and composition of the Board of Management The responsibility for the management of Vedior is vested collectively in the Board of Management. The Board of Management currently consists of six members: the Chief Executive, the Chief Financial Officer and four other members, who are each responsible for the day-to-day management of the business, divided into geographic zones. As from 2004, members of the Board of Management are appointed for a maximum term of four years. Members of the Board of Management shall retire periodically in accordance with a schedule drawn up by the Supervisory Board, in order to avoid a situation where more than two members retire at the same time. The Board of Management determines the division of its tasks subject to the approval of the Supervisory Board. The Supervisory Board determines the candidates for the position of Chief Executive and Chief Financial Officer. Individual members of the Board of Management may be charged with specific managerial tasks, although the Board of Management remains collectively responsible. An individual member of the Board of Management may only exercise such powers as are explicitly delegated to him. Any conflict of interest between the Company and a member of its Board of Management should be avoided. A (potential) conflict of interest must immediately be reported to the other members of the Board of Management and to the Chairman of the Supervisory Board. A member of the Board of Management may not accept any board position at another company without the prior approval of the Supervisory Board. In any event, a member of the Board of Management may not be a member of the supervisory board of more than two listed companies or serve as chairman of the supervisory board of another listed company.
Board of Management remuneration and shareholdings Detailed information concerning the remuneration of the Board of Management has been included in the 2005 remuneration report, which can be found on pages 43-48 of this annual report. The remuneration report has also been published on the corporate website www.vedior.com. The Company’s remuneration policy has already been adopted by the Annual General Meeting of shareholders held on 7 May 2004. Any shareholdings in the Company held by members of the Board of Management must be for the purpose of long-term investment, excepting shares awarded pursuant to the Company’s share plans which may be sold earlier to the extent necessary to settle related tax liabilities. Members of the Board of Management must at all times comply with the provisions contained in the ‘Vedior insider dealing rules and regulations concerning the purchase and sale of Vedior securities and other dealings in shares or securities’. These regulations were adopted by the Board of Management on 1 February 2006 after approval by the Supervisory Board and replaced the Vedior N.V. rules concerning inside information. The rules have been amended to comply with the revised Securities Trade Supervision Act 1995 and the Market Abuse Decree. The new rules also include amongst others the institution of a policy that Vedior share and option dealing by members of the Board of Management, zone managers and senior corporate staff should normally be restricted to the month following publication of (quarterly) financial results. Members of the Board of Management, zone managers and senior corporate staff should also obtain the approval of the Chief Executive before proceeding with the purchase or sale of Vedior shares or exercise of options. The Chief Executive requires such approval in respect of his own share dealings or option exercises from the Chairman of the Supervisory Board.
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