and Appointments Committee
Dick van Well
The Supervisory Board has two committees: the Audit Committee as well as the combined Selection, Remuneration and Appointments Committee (SRA Committee). The committees prepare decision-making for the Supervisory Board in the area of responsibility concerned and advise the Supervisory Board. Decision-making takes place in a Supervisory Board meeting in which all members are present. All members of the Supervisory Board have access to the documents of the committees and the draft minutes of committee meetings are distributed in the next Supervisory Board meeting to be held, where they are discussed orally by the chair of the committee.
The Audit Committee held four regular meetings in 2019. Those meetings are always attended by the CFO, the Internal Audit manager and the external auditor. The Compliance Officer attends as a guest at least twice a year. In addition to the regular topics, specific attention was devoted to long-term financing and treasury, the internal control framework and various internal audits.
On two occasions (in September and November 2019), the Audit Committee discussed the Internal Control Framework that Stedin is establishing. The Audit Committee welcomes the fact that this project has been initiated. It monitored this project during the year and saw that good progress was achieved. This topic will continue to require significant attention in 2020 as well.
Selection, Remuneration and Appointments Committee
The Selection, Remuneration and Appointments Committee held three live meetings in 2019 and one meeting by telephone. There were five formal moments of consultation with the delegation of shareholders, which concerned the amendment of the remuneration policy as well as the recruitment and selection of a new member of the Supervisory Board, who would also be the intended chair of the Supervisory Board. The remuneration of the Board of Management members and Supervisory Board members for 2019, which is in accordance with the adopted remuneration policy and which respects the limits of the Executive Pay (Standards) Act (Wet normering topinkomens, WNT), is described in the Remuneration report for 2019 section.
A new member of the Supervisory Board
The chair of the Supervisory Board was reappointed for one year, until 1 February 2020, in the General Meeting of Shareholders of 6 February 2019. With a view to the end of that period, the search commenced for a new member of the Supervisory Board, who would also take on the role of chair. This was done in consultation with the Works Council and – in accordance with the shareholders covenant – with a delegation from the shareholders' committee. The meetings with the shareholders' committee delegation were led by Supervisory Board member Dick van Well (who also chairs the Selection, Remuneration and Appointments Committee), assisted by the HR Director and the Administrative Affairs department. The composition of the Supervisory Board, also with regard to expertise and diversity, was emphatically considered in this recruitment process. In the person of Doede Vierstra, we believe to have found a worthy successor to Pieter Trienekens. Mr Vierstra was appointed in the Extraordinary Meeting of Shareholders on 20 September 2019, following which the Supervisory Board temporarily (until 1 February 2020) consisted of six members.
Self-assessment and education
The self-assessment of the Supervisory Board that took place at the end of 2018 with the support of an external consultant was a specific topic of discussion in 2019. The outcome of the self-assessment was discussed among the members of the Supervisory Board before the meeting of 6 February 2019. While the overall trend was positive, it was agreed to step up the focus on risk management and its follow-up as well as to tighten the focus in the company's strategy. Points requiring attention were also identified for individual Supervisory Board members, and a number of areas for improvement were designated that relate to the communication between the Supervisory Board and the Board of Management. Explanatory information on the outcome was provided to the Board of Management. Additionally, the members of the Supervisory Board and the Board of Management engaged in extensive discussions on various topics in the in-depth session at the end of June, assisted by the HR Director. The Supervisory Board would like to take this opportunity to express its appreciation for the process that was followed and the in-depth insights to which it led.
The new member of the Supervisory Board, Doede Vierstra, followed an induction programme after his appointment. In that connection, he spoke with various line managers and support department managers, and was given a tour of the Network Operations Centre (NOC). In an in-depth session, the Supervisory Board (also see above) was extensively updated on the future of the gas grid and Stedin Group's role. In addition, various Supervisory Board members individually engaged in walkabouts and/or held talks with employees in the organisation.
Independence of members of the Supervisory Board
The articles of association and the terms of reference of the Supervisory Board include provisions on the independence of Supervisory Board members.
The composition of the Supervisory Board is such that its members are able to operate independently and critically vis-à-vis one another, the Board of Management and any particular interests involved. With one exception, the members of the Supervisory Board are independent within the meaning of the Electricity Act and the Gas Act. This means that they have no direct or indirect ties with any producer, supplier or trader of electricity or gas. This does not apply to Annie Krist, who also serves as the CEO of GasTerra. Including this exception, Stedin therefore complies with the legal requirements under the Gas Act and the Electricity Act. With effect from 1 February 2020, all Supervisory Board members are independent under the provisions of the Corporate Governance Code; an exception used to be made for the chair (see the section Corporate Governance).
Ancillary positions are reported to the chair and the secretary of the Supervisory Board. None of the Supervisory Board members exceeds the maximum number of supervisory positions at large Dutch companies or major foundations. The topic of ‘ancillary positions’ was discussed last year in the Supervisory Board meeting on 20 September 2019.
No material transactions occurred in 2019 that involved potential conflicts of interests between the company and Supervisory Board members.
Contacts with shareholders
The good contacts with the shareholders were continued in 2019. Four meetings of shareholders, including extraordinary meetings, were held in 2019; room was deliberately made for informal contacts in connection with those meetings. Those meetings were always well attended by the members of the Supervisory Board. In June, Stedin organised a meeting in Rozenburg on hydrogen; again, this meeting was attended both by shareholders and by a delegation of the Supervisory Board. A detailed information meeting for shareholders about the energy transition took place in December 2019. At this meeting, Stedin Group provided insight into such matters as the challenges that it needs to coordinate with a view to the energy transition and the topic ‘Stedin in 2025’. This meeting was also attended by a delegation from the Supervisory Board.
The Supervisory Board welcomes the continuation of the good relationship and constructive cooperation with the shareholders in the past year, for which a sound basis had already been created in 2017 and 2018.
Contacts with the Works Council
We set great store by a good relationship with the Works Council, as this helps us remainin touch with current developments and concerns within the organisation. To that end, the Supervisory Board, the Board of Management and the Works Council met twice in 2019 in what is known as the tripartite consultation. At the meeting in June, various new members of the Works Council (including its new chair) were introduced and Stedin Group's Vision for 2025 was jointly considered. The meeting in December focused on good leadership and the employee motivation survey. In addition, one meeting of the Works Council is attended by a Supervisory Board member each year. Furthermore, one of the members of the Supervisory Board also played a part in the external training programme for new members of the Works Council.
The Supervisory Board wishes to thank the employees, management, the Works Council as well as the Board of Management for their considerable involvement and commitment. Each and every day, our organisation is working on one of the most reliable grids in the world. Customer satisfaction continued to increase and the strategy of Stedin Group is increasingly taking shape, which are important indicators for the future.
Rotterdam, 23 March 2020
The Supervisory Board
Doede Vierstra (chair)
Dick van Well