Corporate governance
VolkerWessels is an unlisted Dutch limited company to which the so-called 'structure regulation' applies. This means that certain rights, which in smaller companies fall to the general meeting of shareholders, at VolkerWessels fall to the Supervisory Board. The Corporate Governance structure of VolkerWessels is based on Dutch law, jurisprudence and the Dutch Corporate Governance Code (hereinafter called: `the Code).
As VolkerWessels is not a listed company, there is no legal requirement to apply the Code. The Board of Management, the Supervisory Board and the General Meeting of Shareholders subscribe to the most important main points that underpin the Code. For that reason a large part of the Code is applied, on voluntary basis, to VolkerWessels. Of course, it follows from being unlisted that a number of principles and best practices of the Code do not apply, or that application does not contribute to the intended objectives of the Code. Within the context of the `apply or explain' principle, where the code is not followed or is not followed in full in the text below at a number of points, this is indicated.
The principles and best practices from the Code that is applied by VolkerWessels are apparent from the current annual report, the statutes and the regulations that apply to the Board of Management or to the Supervisory Board and or to the committees thereof. The most important governance-related documents are published on the website.
Board of Management
The Board of Management is charged with the management of VolkerWessels and is responsible among other matters for the realisation of the objectives, the strategy with the associated risk profile, the results evolution and the social aspects relevant to the Group.The Board of Management reports on this to the Supervisory Board and the General Meeting of Shareholders. The Board of Management focuses in the fulfilment of its task on the interests of VolkerWessels and the company associated with it and takes account of the relevant interests of parties involved with VolkerWessels. The Board of Management consists as of 6 February 2012 of five members, who are appointed for an indefinite period of time. Given the nature of the company activities, with many long-term projects and investments, an appointment for a maximum period of four years is not considered in the interest of the company. The Board of Management has divided the tasks involved in exercising its management remit as an executive board among its members. Any change to this division of tasks requires the approval of the Supervisory Board. Notwithstanding the responsibility of each member of the Board of Management for the task allocated to him or her, the entire Board of Management is collectively responsible.
As an unlisted company, VolkerWessels does not have any separate regulations relating to private investments and share dealing in relation to insider trading. However, VolkerWessels does have a general code of conduct for all employees, aimed at ensuring they act with integrity. Additionally, in pursuance of the law, in combination with regulations that apply to them, it is that case that the members of the Board of Management and the members of the Supervisory Board are not permitted to use insider knowledge to deal in shares and or to deal in shares and must avoid all semblance of such. Members of the Board of Management have, together with approximately 150 executive board members from the group, a minority shareholding in the holding company Storm Investments BV, which indirectly holds all the shares in VolkerWessels. This shareholding has the character of a long-term investment.
Remuneration of Board of Management
The Supervisory Board following a proposal from the Remuneration, Selection- and Appointments Committee determines the remuneration of the members of the Board of Management. The remuneration policy for the members of the Board of Management is aimed at attracting and retaining qualified and expert directors and serves the interests of VolkerWessels in the medium and long term.
For the determination of the remuneration level of the members of the Board of Management, the remuneration level of members of the Board of Management of other Dutch and European construction firms and companies of similar scale in other sectors are used as a reference, whereby complexity, scope and risk profile are considered. When determining the remuneration level of the chairman and the other members of the Board of Management, their specific responsibilities are taken into account.
The remuneration policy of the members of the Board of Management was decided during the General Meeting of Shareholders held in May 2005. The Remuneration, Selection- and Appointments Committee reviews the remuneration level annually, in which - if necessary or desirable - use is made of external advice for weighting the relevant criteria and the general salary trend in the sector is also taken into account. The remuneration of the members of the Board of Management consists of the following components:
1 - Fixed basic salary
This relates to the fixed part of the income.
2 - Performance-related bonuses
The variable bonus enjoyed by the members of the Board of Management is set annually by the Supervisory Board and is related to a number of measurable, predefined, financial objectives (currently: improvement of operational working capital and EBITDA) and personal objectives that contribute to the realisation of the long-term strategy of VolkerWessels.
The Supervisory Board has the authority to maximise the variable bonuses.
3 - Pension scheme
The members of the Board of Management participate in a pension scheme. This pension scheme relates to a collective available-premium system with a pensionable age of 65 years and an accrual percentage of 2.25% per year of the pensionable salary on the basis of average salary.
The aim thereby is to achieve a level of financing such that retirement at the age of 62 is feasible. Individual board members can renounce accrual of pension entitlements.
4 - Expenses reimbursements and benefits in kind
The members of the Board of Management receive a general expenses allowance for costs that they have to incur on account of their job. Benefits in kind are a company car and participation in a collective health care insurance facility, both made available by the company.
5 - Severance pay
In all contracts that started as from 1 January 2009, the possible severance pay for the members of the Board of Management has been maximised at one times the fixed basic annual salary increased by half of the average realised short-term bonus in the three preceding years.
Supervisory Board
The Supervisory Board supervises the policies and management of the Board of Management and the general affairs in VolkerWessels and the companies associated with it. The Supervisory Board acts, in the fulfilment of its task, in the interests of VolkerWessels and the company associated with it and takes account of the relevant interests of parties involved with VolkerWessels. In doing this, the social aspects of doing business that are relevant to the company are also taken into account. The Supervisory Board has rules of procedure, in which its composition, tasks and working method, as well as its dealings with the Board of Management are set out. In connection with the shareholder structure that has existed since May 2007, all supervisory directors are appointed from the ranks of (indirect) major shareholders of the Company. Mr. D. Wessels was a member of the Board of Management prior to his appointment as a member of the Supervisory Board.The remuneration of the Supervisory Board is fixed and independent of the results of the group. The General Meeting of Shareholders sets the remuneration. The remuneration amounts to €40,000 per year for the chairman and €30,000 per year for the other members. Members of the Supervisory Board also receive a fixed expense allowance for costs (chairman €2,740 per year and other members €2,270 per year).
Committees of the Supervisory Board
The Supervisory Board has established two committees. These committees report their findings to the full Supervisory Board.
The Audit Committee has a (preparatory) supervisory role in respect of the integrity and quality of VolkerWessels' internal and external financial reports and the functioning of the internal risk management- and control systems. This committee also advises the full Supervisory Board on the appointment and dismissal of the external accountant and the contents and range of the audit task. The Audit Committee also monitors the independence of the external accountant and the nature and scope of the other activities that are performed by (the office of) the external accountant for VolkerWessels. For a more detailed overview of the tasks and working method of the Audit Committee, please see the Rules of Procedure that are published on our website.
The duties of the Remuneration-, Selection and Appointments Committee include advising the Board of Management on the size and composition and the functioning of the Board of Management and the remuneration of its individual members. The members of the Remuneration-, Selection and Appointments Committee must preferably have a broad administrative background with experience in the field of remuneration and governance issues in a 'corporate' environment. The Remuneration-, Selection and Appointments Committee consists as of 31 December 2011 of: R.L.J. van Rappard and D. Wessels.
Given the position of VolkerWessels as an unlisted company and the structure of our group, the main principles of the remuneration policy are published. For a more detailed overview of the tasks and working method of the Remuneration-, Selection and Appointments Committee, please see the Rules of Procedure that are published on our website.
Audit of the annual accounts - external accountant
The General Meeting of Shareholders makes the appointment of the external accountant and gives the commission to audit the annual accounts drawn up by the Board of Management. KPMG was reappointed during the General Meeting of Shareholders on 12 May 2011 as the external accountant for a period of three years.The Supervisory Board and the Board of Management in consultation with the external accountant have taken the necessary measures to ensure the objectivity and the independence of the external accountant. The main measures are:
- in the audit commission as great a separation as possible has been made between tax advice and the audit work relating to the annual accounts;
- the external accountant mainly carries out services related to the audit of the annual accounts for efficiency reasons. Activities in the field of acquisitions or divestments can be only be conducted on the basis of tenders offered in advance (not exclusively) by the external accountant. Where, in the judgement of VolkerWessels, there may possibly be a conflict of interests, other professional service providers are used;
- the external accountant is engaged to a limited extent for general advisory tasks.
The external accountant's fee that is not related to the audit of the annual accounts amounts to approximately 21% of the audit costs in the reporting year.
The Supervisory Board, the Board of Management and the Audit Committee periodically reviews the implementation of the aforesaid measures. The external accountant submits a report to the Board of Management and the Supervisory Board about the measures that are and will be taken to continue to meet the professional and legal requirements regarding ensuring the independent position with respect to the group. This included the periodic replacement of the responsible accountants/partners.
External relations
VolkerWessels is, as a large company and as a major employer, a party that is actively involved in society and has a large social involvement. Sustainability and 'Corporate Responsibility' take a prominent place in our operational management.It is therefore appropriate that VolkerWessels connects with and keeps connected to society and also publishes the financial results and the most important events within the group in various ways including press bulletins and publications on the website. Moreover VolkerWessels continues to communicate actively, just like all its associated companies, with all relevant stakeholders, which certainly also include the local residents of the locations where (construction) operations are being carried out.