Grontmij N.V. is committed to sound corporate governance. In 2007 it adjusted its corporate governance structure to refl ect the increasing internationalisation of the organisation. Grontmij has taken note of the revised Dutch corporate governance code published by the Corporate Governance Code Monitoring Committee on 10 December 2008 (the “revised Code”). Although the revised Code only becomes eff ective as of 2009, Grontmij is already reporting on its compliance with the principles and best practice guidelines of the revised Code.
G O V E R N A N C E S T R U C T U R E
Grontmij’s governance is structured eff ectively. This organisational structure, supported by our core values and Code of Conduct, facilitates transparent reporting throughout the Group to both the Supervisory Board and the Executive Board. In turn, both Supervisory Board and Executive Board report to the Annual General Meeting of Shareholders.
The Annual General Meeting of Shareholders, Supervisory Board and Executive Board each have specifi c powers and responsibilities; these are described comprehensively in the Articles of Association and separate charters that are available on our website: www.grontmij.com/investorrelations/corporategovernance
The role of the Annual General Meeting of Shareholders
An Annual General Meeting of Shareholders is organised within six months of the end of the fi nancial year. Further sharehol- ders’ meetings may be held at the request of the Executive or Supervisory Boards, subject to the provisions of Sections 110–112 of the Dutch Civil Code. Shareholders or holders of depositary receipts who, on their own or together, represent no less than 1% of the company’s issued share capital or whose shares or depositary receipts have a market value of at least € 2 million, are entitled to request the Executive or Supervisory Boards to put items on the agenda of a general meeting of shareholders.
The Annual General Meeting of Shareholders appoints, suspends and dismisses members of both the Supervisory and Executive Boards, usually following a non-binding recommendation from the Supervisory Board. If no such recommendation has been submitted or if the Annual General Meeting of Shareholders wishes to deviate from such recommendation, the decision must be taken by an absolute majority of the votes cast, representing at least one-third of the Grontmij’s issued share capital. When appointing a member of the Executive Board, a ballot may only include candidates whose names are stated in the agenda.
The Annual General Meeting of Shareholders may only decide to amend the company’s Articles of Association based on a proposal presented by the Executive Board that has been approved by the Supervisory Board. Amendments require an absolute majority.
The procedure for appointing and replacing members of the Executive and Supervisory Boards, and the rules governing amendments to the Articles of Association, are set out in Grontmij’s Articles of Association, which can be found on www.grontmij.com/investorrelations/corporategovernance/structure
The role of the Supervisory Board
Grontmij’s Supervisory Board has the duty to oversee all our activities and provide guidance and advice to the Executive Board. Supervision focuses on the realisation of strategy, proper execution of internal risk management and control structures, adequate fi nancial reporting and legal and regulatory compliance. In pursuing these tasks, the Supervisory Board takes the interest of all stakeholders into account. The Supervisory Board has two permanent committees that report directly to it, the Audit and the Appointment and Remuneration Committees. For a detailed description of the tasks and responsibilities see our website: www.grontmij.com/investorrelations/corporategovernance/Supervisory Board
The role of the Executive Board
The Executive Board is responsible for managing the company. Among other things, this means the Executive Board is in charge of determining and realising the Group’s objectives, strategy, fi nancing and policy, and its results. The Executive Board bears collective responsibility for managing the company. The specifi c roles and responsibilities of the CEO and CFO are laid down in the Executive Board charter which can be found on our website: www.grontmij.com/investorrelations/corporate- governance/executiveboard
During the Annual General Meeting of Shareholders held on 15 May 2008, the Executive Board was authorised to issue shares, grant rights to acquire shares, and to limit or exclude pre-emptive rights pertaining to the issue of shares. During the same Annual General Meeting of Shareholders, the Executive Board was given the power to decide to acquire shares in Grontmij N.V. or depositary receipts for such shares. These decisions were recorded in the minutes of this meeting and have been published on the website: www.grontmij.com/investorrelations/corporategovernance/annualgeneralmeeting
T H E C O D E
Grontmij applies the principles and best practices guidelines of the revised Code, except for the following principles and best practice guidelines below that are not or not fully applied.
o II.1.1: Mrs B.W. Nørgaard was appointed for a four year period in August 2006. Members of the Executive Board appointed
before 2004 all have a contract for an indefi nite term. Future contracts will be made for a period of four years;
o II.2.10 & II.2.11: The Supervisory Board retains the option of a so-called fairness review only on the variable remuneration
related to individual targets. All other parts of the remuneration are fi xed or related to predetermined and assessable targets and based on Dutch labour law and the applicable labour contracts not subject to a discretionary review.
The Supervisory Board does not have the power, other than by law, to recover from the members of the Executive Board variable remuneration awarded on the basis of incorrect fi nancial or other data. Future contracts will allow for such power;
o II.2.13f.: Individual targets are not disclosed. Similarly to some of the performance-related targets, these could contain
competition sensitive information or information of an otherwise confi dential nature that Grontmij does not want to disclose;
o III.3.1 The profi le of the Supervisory Board does not address the aspect of diversity nor does it contain a specifi c objective in
this respect. We will review the profi le in 2009 and, if considered necessary, propose a revised profi le at the 2010 shareholders’ meeting;
o III.5.11 The chairman of the Appointment and Remuneration Committee also chairs the Supervisory Board. Usually the
chairman of the Supervisory Board is also chairman of the appointment committee. At Grontmij the appointment committee is combined with the remuneration committee. Given the leading role of the chairman of the appointment
committee in the selection and nomination process of members of the Executive and Supervisory Boards, it is decided that the chairman of the Supervisory Board also chairs the combined Appointment and Remuneration Committee.
In 2009, we will review the above deviations and determine, also in view of general market practice, whether any changes need to be made.
L A R G E C O M P A N I E S R E G I M E
In 2007, Grontmij changed its corporate governance structure to refl ect the Group’s international character. As an internationally active holding company with the majority of its employees working outside the Netherlands, Grontmij N.V. is exempt from the large companies regime (structuurregime). A separate holding company has been established for the Dutch entities.
The mitigated large companies regime (verzwakt structuurregime) has been introduced into Grontmij Nederland Holding B.V. in accordance with Sections 153(3)(b) and 155 of the Dutch Civil Code, Vol. 2. As a result, the Dutch entities are managed by a Dutch Management Board and supervised by a Dutch Supervisory Board. A Dutch Works’ Council is active for Grontmij Nederland Holding B.V. while representation at Group level is organised in the form of a European Works’ Council. A covenant entered into between the European Works’ Council and the Executive Board describes the role, responsibility and powers of the European Works’ Council.
D E V E L O P M E N T S D U R I N G 2 0 0 8
As stated in the Supervisory Board’s report, the Supervisory Board regularly reviews (elements) of Grontmij’s corporate governance structure. Any material changes to the structure will be proposed for approval at the Annual General Meeting of Shareholders. During the year, no changes were made or proposed to Grontmij’s corporate governance structure.
D E P O S I T A R Y R E C E I P T S F O R S H A R E S
As of 29 May 2006, issuing depositary receipts for ordinary shares no longer constitutes an anti-takeover measure. In accordance with the Code, Stichting Administratiekantoor van Aandelen Grontmij N.V. will provide depositary receipt holders with a proxy to vote in all circumstances. Grontmij N.V. and Stichting Administratiekantoor van Aandelen Grontmij N.V. make it easy for depositary receipt holders to exercise their right to vote at shareholders’ meetings. Any depositary receipt holder who provides timely notice of their depositary receipts before a shareholders’ meeting, subject to relevant stipulations in the Group’s Articles of Association, is also deemed to have submitted an application for a proxy to vote. Consequently, the receipt-holder is no longer required to pursue a separate procedure to obtain a proxy. There are no restrictions for the transfer of - or votings rights on - shares or depositary receipts for shares
P R E V E N T I O N O F I N S I D E R T R A D I N G
Grontmij has regulations for the prevention of insider trading. These regulations were approved by the Supervisory Board and were distributed to supervisory and managing directors, the managers of the various business units and other staff who have access to confi dential information. Our insider trading rules comply with the relevant provisions of the Wet op het fi nancieel toezicht.
A N T I T A K E O V E R M E A S U R E S
Grontmij’s Articles of Association provide for the option of issuing preference shares. Stichting Preferente Aandelen Grontmij (the Foundation) has been established to safeguard the interests of Grontmij, its associated companies and all stakeholders. It is possible to safeguard these interests by acquiring preference shares and exercising the rights associated with them. The option to issue preference shares must be deemed to constitute a protective measure.
This measure is of a temporary nature and will enable Grontmij to assess the merits of any potentially undesirable hostile takeover bid or concentration of voting rights. No preference shares had been issued as at 31 December 2008.
Grontmij and the Foundation have entered into agreements to enable Grontmij preference shares to be issued to the Foundation, which would then purchase them. Through these agreements, Grontmij has acquired a put option to issue a number of preference shares equivalent to no more than 100% of its issued share capital in the form of ordinary shares, less one. The Foundation has a call option to buy a number of preference shares for no more than 100% of the company’s issued share capital in the form of ordinary shares, less one.
The Foundation has a credit facility to enable it to pay the issue price. This price will amount to 25% of the nominal value of the preference shares issued.
Both the put and call option agreements were renewed on 30 May 2006 following the amendment of Grontmij’s Articles of Association on 29 May 2006. The reasons for renewing the call option agreement were explained during the Annual General Meeting of Shareholders held on 17 May 2006. Grontmij is of the opinion that the period during which preference shares are issued should not be longer than strictly necessary. Therefore, the period within which a shareholders’ meeting whose agenda includes a proposal for the redemption of preference shares should be held, was reduced from 24 to 12 months following the initial issue of such preference shares. These amendments have been incorporated into the Articles of Association currently applicable.