Executive Board
The Executive Board’s responsibilities include the policy and business progress within the Company and with this the achievement of the goals, strategy, profit development and the social aspects of doing business that are relevant for the Company.
The Executive Board is also responsible for the compliance with legislation and regulations, the management of the risks coupled with the company’s activities and the financing of the Company.
In discharging its duties the Executive Board is led by the interests of the Company and its affiliated enterprise. The Executive Board is accountable to the Supervisory Board and the General Meeting of Shareholders for its policy. The members of the Executive Board are appointed by the Supervisory Board for an indefinite period. The Executive Board comprises six members (in 2011, the year under review, five members), including a Chief Executive Officer (CEO), a Chief Financial Officer (CFO) and four Chief Operating Officers (COOs).
Tasks and responsibilities
The Executive Board, which on the grounds of the Articles of Association comprises a minimum of two members, is charged with the management of the Company. This means that the Executive Board’s responsibilities include the policy and business progress within the Company and with this the achievement of the goals, strategy, profit development and the social aspects of doing business that are relevant for the Company. The Executive Board is also responsible for the compliance with legislation and regulations, the management of the risks coupled with the company’s activities and the financing of the Company. The Executive Board discusses the internal risk management and control systems with the Supervisory Board and the Audit Committee. In discharging its duties the Executive Board is led by the interests of the Company and its affiliated enterprise. The Executive Board is accountable to the Supervisory Board and the General Meeting of Shareholders for its policy.
Appointment
The members of the Executive Board are appointed by the Supervisory Board for an indefinite period. The basis for noncompliance with the recommendation of the Code (appointment for a maximum term of four years) rests in the principles of the statutory two-tier rules whereby the members of the Executive Board are appointed by the Supervisory Board. In addition, the Cooperative is oriented towards the long term. The Supervisory Board notifies the General Meeting of Shareholders of an intended appointment and does not dismiss members of the Executive Board, or not until after the General Meeting of Shareholders has expressed its opinion.
Remuneration of Executive Board members
All the relevant recommendations of the Code are applied in the remuneration policy. The remuneration policy is not made public because the Company is legally exempt from publication. The remuneration policy is proposed by the Supervisory Board and approved by the General Meeting of Shareholders and is accounted for every year in the meeting of the Members' Council. Important changes in the remuneration policy are submitted to the General Meeting of Shareholders for approval. FrieslandCampina is accountable to the General Meeting of Shareholders and the Members' Council.
Supervisory Board
The Supervisory Board supervises the policy of the Executive Board and the general business progress of the Company and its associated companies and advises the Executive Board. The Supervisory Board discusses with the Executive Board the strategy and main risks related to the Company’s operations as well as the organisation and functioning of and any significant changes to the risk management and control systems. The Supervisory Board also has the authorities and powers specified in the provisions of Book 2 of the Dutch Civil Code in respect of statutory two-tier companies. These powers include, in particular, the appointment of the Executive Board members, the determination of the number of members of the Executive Board and the approval of a number of other decisions of the Executive Board as specified in legislation. The Supervisory Board also has the authority to approve certain decisions of the Executive Board as stipulated in the Articles of Association. In the performance of its duties the members of the Supervisory Board are led by the interests of the Company and its affiliated enterprise and takes into account the interests of all the Company’s stakeholders and all the aspects of social responsibility relevant to the Company.
Composition, independence and appointment
A covenant has been signed with the CWC that includes agreements regarding the composition of the Supervisory Board, the required profile of the members of the Supervisory Board, the strengthened rights of the CWC in respect of the appointment of Supervisory Board members and the way in which the CWC exercises these rights. The profile sketch has been published on the Company’s website as an appendix to the Supervisory Board Regulations. On the basis of the Covenant the Supervisory Board is composed properly if two-thirds of its members are members of the Cooperative Board (the ‘internal members’) and one-third of its members are recruited from outside (external members). The chosen composition reflects the two-thirds to one-third dominance of internal members in a Supervisory Board permitted by the Law for large cooperatives. This dominance by internal members is carried through to the Company level. This stipulation deviates from the Code’s best practice provision which states that all Supervisory Board members, with the exception of a maximum of one member, must be independent. All the external Board members are independent in the sense of the Code. The external Supervisory Board members are selected on the basis of the criteria laid down in the profile sketch. At least one Supervisory Board member is a so-called financial expert, which means he or she has acquired relevant expertise and experience in the field of financial administration/accounting with a large legal entity. The membership of other Supervisory Boards and the holding of other positions by both Supervisory Board members and Executive Board members is evaluated by the Supervisory Board on a case by case basis, taking into consideration the nature of the membership or position and the demands it would place on the time of the member concerned. Every member of the Supervisory Board and the Executive Board must ensure he or she devotes sufficient time and attention to the Company to guarantee his or her duties are fulfilled properly. Supervisory Board members are appointed by the Supervisory Board for a term of four years and may be reappointed a maximum of twice. An exception to this is applicable for the incumbent Chairman who may be appointed for a fourth term in connection with the fact that the Company wants to be able to appoint a Supervisory Board member for this function who has a lot of experience of the day to day business of the Company and the Cooperative. The term of office of a Supervisory Board member who is also a member of the Cooperative Board always ends upon the termination of the Cooperative Board membership. Information concerning the dates of (re)appointment and current terms of the Supervisory Board members can be found in the appointment and resignation roster on page 78.
Remuneration
The General Meeting of Shareholders fixes the remuneration of the Supervisory Board members each year on the recommendation of the Supervisory Board and is accountable to the Members' Council for its decisions. The remuneration is not dependent on the Company’s results.