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6.3 Governance & Compliance

 
Corporate Governance


Accell Group finds good corporate governance very important. The Board of Directors and Supervisory Board are responsible for the corporate governance structure of Accell Group and for compliance with the Dutch Corporate Governance Code.

This section of the annual report first describes the corporate governance structure of Accell Group and subsequently explains where and why Accell Group deviates from the principles and best practice provisions of the Code.
 

Corporate governance structure


General
Accell Group is a statutory two-tier company. The corporate governance structure of Accell Group is partly laid down in the company’s articles of association and partly in the legal rules of the Dutch two-tier company regime. The full text of the articles of association can be found on Accell group’s corporate website (www.accell.com) in the ‘Corporate Governance/Articles of Association’ section.


Board of Directors
The Board of Directors is responsible for managing Accell Group and thus for ensuring that the company achieves its goals, for the strategy and accompanying risk profile, the result development and the social aspects of entrepreneurship relevant to Accell Group. The Board of Directors is accountable to the Supervisory Board and the Annual General Meeting (‘General Meeting’) of Shareholders on these issues. In the performance of its duties, the Board of Directors focuses on the interests of the company and its associated enterprise and in doing so weighs the relevant interests of the parties involved in the company. The Board of Directors provides the Supervisory Board with all the information that the Supervisory Board may need to fulfil its duties.

The Board of Directors is responsible for compliance with all relevant laws and regulations, for the management of the risks associated with the company’s business operations and for the financing of the company. The Board of Directors reports on same and discusses the internal risk management and control system with the Supervisory Board. One of the risk management tools Accell Group uses is the Code of Conduct posted on the website (under ‘Corporate Governance’). This annual report includes a chapter titled ‘Risks and Risk Management’ (page 99 and beyond), which describes the internal risk management and internal control systems in more detail.

Certain important decisions of the Board of Directors require the approval of the Supervisory Board, such as decisions on important investments, share issues and the establishment and/or termination of long-term alliances between Accell Group and other companies. The General Meeting of Shareholders’ approval is required for decisions of the Board of Directors regarding significant changes to the identity or character of the company or the enterprise.

On 23 April 2015, the General Meeting granted the Board of Directors a mandate to acquire shares in the company’s own capital. The mandate was granted under the following conditions:

  • the mandate would remain in effect for 18 months (1 November 2016);
  • the Supervisory Board’s approval would be required for the acquisition of shares in the company’s own capital;
  • the number of shares would not exceed 10% of the issued share capital; and
  • the acquisition price would not exceed 110% of the average price on the preceding five trading days.

The agenda for the General Meeting of 26 April 2016 includes a proposal to again grant the Board of Directors a mandate to acquire shares in the company’s own capital under the same conditions as those set out above (on the understanding that the mandate applies till 1 November 2017).

Decisions to issue shares are taken by the General Meeting, insofar as and as long as it has not appointed another company body to do so. The preferential right can be limited or excluded by the company body authorised to pass resolutions on issuing shares, provided that said right is assigned expressly to that company body.

A resolution of the General Meeting of 23 April 2015 has extended the period in which the Board of Directors is empowered with the approval of the Supervisory Board to:

  • issue ordinary shares up to a maximum of 10% of the outstanding share capital; and
  • limit or exclude the preferential right upon the issuance of ordinary shares;
  • extended to 1 November 2016.

The agenda for the Annual General Meeting of Shareholders of 26 April 2016 includes a motion to extend this term to 1 November 2017.

The Board of Directors represents the company insofar as the law does not stipulate otherwise. Each member of the Board of Directors has the authority to represent the company.

The Supervisory Board determines the number of the members of the Board of Directors and appoints and dismisses the members of the Board of Directors. The Board of Directors currently comprises four members. The Supervisory Board has appointed one of the members as chairman of the Board of Directors.

The Supervisory Board determines the remuneration of the individual members of the Board of Directors, using the policy adopted by the General Meeting most recently on 22 April 2010. The Supervisory Board also compiles an annual remuneration report, which contains an explanation of the remuneration of the individual members of the Board of Directors.

The main point of the remuneration report of the Supervisory Board in 2015 are included in the ‘Report of the Supervisory Board’ in this annual report.

Supervisory Board
It is the responsibility of the Supervisory Board to supervise the policy of the Board of Directors and the general developments in Accell Group and its affiliates. In addition, the Supervisory Board provides the Board of Directors with advice and support. In the fulfilment of its duties, the Supervisory Board is guided by the interests of Accell Group and its affiliates. Accordingly, it takes into account the interests of all those involved in Accell Group, as well as the social aspects of entrepreneurship that are relevant to Accell Group. The Supervisory Board receives all the information required for the performance of its duties from the Board of Directors in a timely manner.

The Supervisory Board has drawn up regulations which include the distribution of its tasks and its operating methods. The regulations include a section on its interaction with the Board of Directors and the General Meeting of Shareholders. The regulations were most recently amended in a decision of the Supervisory Board dated 4 March 2015. The regulations can be found on the Accell Group website (under ‘Corporate Governance/Supervisory Board’).

The Supervisory Board comprises at least three members (currently four). The General Meeting appoints the members of the Supervisory Board based on nominations submitted by the Supervisory Board. The General Meeting can reject the nomination with an absolute majority of the votes cast, these representing at least one-third of the issued and paid-up capital. If the nomination is rejected, the Supervisory Board shall draw up a new nomination. In the event that the General Meeting fails to appoint the nominated person and also fails to reject the nomination, the Supervisory Board shall appoint the nominated person. The Supervisory Board announces the recommendations simultaneously to the General Meeting and the Works Council of Accell Nederland B.V. The General Meeting and the Works Council are entitled to recommend candidates for membership of the Supervisory Board. The Supervisory Board will fill the nominations for one-third of the positions on the Supervisory Board with persons recommended by the Works Council, unless the Supervisory Board objects to said recommendation and provides grounds for same.

A member of the Supervisory Board shall retire no later than the date of the first Annual General Meeting held four years after his or her initial appointment to that position and in such instance immediately at the end of said meeting. Members of the Supervisory Board may be appointed to the Supervisory Board for a maximum of three four-year terms. The members of the Supervisory Board receive a remuneration to be determined by the General Meeting.

The Supervisory Board has drawn up a retirement schedule, which is published on the Accell Group website (under ‘Corporate Governance/Supervisory Board’).

The Supervisory Board has appointed from its midst an audit committee comprising Mr. J. Van den Belt (chairman) and Mr. P.B. Ernsting, and a selection/remuneration committee, comprising Mr. A. Kuiper (chairman) and Mr. A.J. Pasman.

These committees are charged with preparatory activities as part of the decision-making process of the Supervisory Board. In a decision dated 21 July 2011, the Supervisory Board established regulations for the audit committee and the selection/remuneration committee. These regulations can be found on the website (under ‘Corporate Governance/Supervisory Board’).

The Supervisory Board has drawn up a profile of its size and composition, taking into account the nature and operations of Accell Group and the desired expertise and background of the members of the Supervisory Board. The profile was most recently revised in a Supervisory Board decision dated 21 July 2011 and is available on the Accell Group website under ‘Corporate Governance/Supervisory Board’. The Supervisory Board elects a chairman and a deputy chairman from among its members. The Supervisory Board aims to attune the experience and expertise of its members effectively to the nature, activities and strategy of Accell Group. The Supervisory Board’s composition is such that the members are able to operate independently and critically, vis-à-vis each other, the Board of Directors and any company interest whatsoever.

Composition of the Board of Directors and the Supervisory Board
Although the Supervisory Board strives for a balanced distribution of seats on the Board of Directors and the Supervisory Board between women and men, it has proven difficult to find suitable female candidates for open vacancies. In one case, the company initially succeeded in finding a suitable woman, but it turned out that this candidate was ultimately not available. In any future appointments of directors, Accell Group will continue to strive for a balanced composition of the Board of Directors. Accell Group will also continue to aim for a mixed composition of the Supervisory Board in terms of age and gender, as is laid down in the profile outline for the Supervisory Board.


General Meeting of Shareholders
Key authorisations reside with the General Meeting, such as powers regarding decisions to amend the articles of association and rules and regulations, legal mergers and spin-offs, and the adoption of the financial statements. In addition, the General Meeting determines the remuneration policy for the members of the Board of Directors. A General Meeting is convened at least once a year.

The General Meeting is chaired by the chairman of the Supervisory Board. All matters discussed and resolved in the General Meeting are recorded in the official minutes of the meeting. Accell Group considers it important that as many shareholders as possible participate in the decision-making processes of the General Meeting.

Shareholders and others entitled to vote are therefore given the opportunity to appoint proxies or to extend voting instructions ahead of the General Meeting of Shareholders. The Board of Directors is pleased with the high level of attendance at the shareholder meetings in recent years. For instance, at the General Meeting of Shareholders held on 23 April 2015, 64.9% of the total number of outstanding share capital was either present or represented.


External auditor
The General Meeting appoints the external auditor. The external auditor reports their findings with respect to the audit of the annual accounts simultaneously to the Board of Directors and the Supervisory Board and records the results of their findings in a statement. The General Meeting may question the external auditor about their statements regarding the accuracy of the annual accounts and the external auditor attends said meeting and is authorised to speak at same for that reason. The Supervisory Board did not put forward the company’s current auditor, Deloitte Accountants B.V., for reappointment due to the mandatory auditor rotation. The Supervisory Board proposes to appoint KPMG Accountants N.V. as external auditor for the auditing of the financial statements for the financial year 2016. The appointment of the external auditor is on the agenda for the General Meeting of Shareholders of 26 April 2016.


Code of conduct
The Board of Directors has drawn up an internal code of conduct incorporating the basic principles that apply to the way in which employees of Accell Group and all of its group companies should conduct themselves. The complete text of this internal code of conduct is available on the Accell Group website (under ‘Corporate Governance’).

Accell Group has laid down its requirements for parties involved in the production and sourcing process in a code of conduct for suppliers. These requirements relate to issues including the prohibition of child labour, involuntary labour and discrimination, safety requirements, environmental requirements and labour conditions. The code of conduct for suppliers is available via the Accell Group website (under ‘Corporate Governance’).


Whistleblower policy
The Board of Directors has laid down a whistleblower regulation and published same on the Accell Group website (under ‘Corporate Governance’), so employees are able to report on alleged irregularities within Accell Group and its associated companies without harming their legal position.


Insider trading regulation
The Insider Trading Regulation established by the Board of Directors aims to provide rules to support the legal stipulations to prevent insider trading. The basic premise of the Insider Trading Regulation is that people should not enter into or recommend transactions in Accell Group shares and other financial instruments within the meaning of the Law on financial supervision if they have insider knowledge. Under the Insider Trading Regulation, members of the Board of Directors, Supervisory Board and so-called designated persons at Accell Group are subject to various closed trading periods, announced by the Board of Directors or the compliance officer, in which they are not allowed to conduct any transactions, regardless of whether they have insider knowledge or not. In line with the Insider Trading Regulation, people with a reporting obligation must report transactions they have conducted to the compliance officer. The members of the Board of Directors and the Supervisory Board also have to report their transactions to the Dutch Financial Markets Authority AFM.

On 12 December 2014, the Supervisory Board introduced a regulation in the sense of best practice provision III.6.5 of the Dutch Corporate Governance Code. This regulation includes a number of provisions related to the possession of and transactions in securities by members of the Board of Directors and of the Supervisory Board, other than those issued by their ‘own’ company.


Protective measures
To protect the interest of Accell Group and its stakeholders, in May 2015 Accell Group entered into an option agreement with Stichting Preferente Aandelen Accell Group. This agreement replaced the previous agreement dating from December 1998, which was later amended in April 2009.

Pursuant to the option agreement, the Stichting Preferente Aandelen Accell Group shall have the right at any time to acquire the number of cumulative preference shares B required to make the Stichting Preferente Aandelen Accell Group, after taking said shares, the holder of one half, less one share, of the (increased) issued and paid up capital. The Stichting Preferente Aandelen Accell Group can avail itself of this right at any time in the event that the foundation believes there is a threat to the independence and/or the identity and/or the continuity of (the strategy of) the company, the companies affiliated with same and any parties involved in same. The option can be exercised, among other things, to 1) prevent or delay (the threat of) a public bid on the shares in the capital of the company that may be deemed hostile, and/or 2) to prevent or oppose an unwanted concentration of voting rights in the General Meeting of Shareholders, and/or 3) to resist any unwanted influence or pressure from shareholders that wish to change the strategy of the Board of Directors. In these cases, the issuance of cumulative preference shares B enables the company and its Board of Directors and Supervisory Board to determine their standpoint vis-a-vis the bidder/hostile shareholder and any plans they may have, to investigate alternatives and to defend the interests of the company and those of its stakeholders. Within 6 months after a possible issue of cumulative preference shares B the Board of Directors shall convene a General Meeting to inform the shareholders about the state of affairs.

Pursuant to the new option agreement, the Stichting Preferente Aandelen Accell Group has been granted the right to submit a request for an inquiry (as meant in article 2:345 of the Dutch Civil Code) to the Corporate Chamber of the Amsterdam district court.

The main aim of the Stichting Preferente Aandelen Accell Group, which has its registered offices in Heerenveen, is to represent the interests of Accell Group and its associated enterprise, such including enterprises which are maintained by the companies with which it is affiliated in a group and all parties involved in same. In doing so, the Stichting Preferente Aandelen Accell Group safeguards to the greatest possible extent the interests of Accell Group and its associated enterprise and all parties involved in same, while at the same time resisting as much as possible any influences which may affect the independence and/or continuity and/or identity of the company and its associated enterprise in conflict with those interests. The board of the Stichting Preferente Aandelen Accell Group consists of three board members, namely Mr. M.P. Nieuwe Weme, Mr. B. van der Meer, and Mr. A.J.M.van der Ven. In the opinion of the company and in the opinion of the Stichting Preferente Aandelen Accell Group, the Stichting Preferente Aandelen Accell Group is independent from the company within the meaning of Section 5:71, paragraph 1c of the Financial Supervision Act.


Compliance with the Code
Accell Group has in the past complied with and currently complies with most of the principles and best practice provisions of the Dutch Corporate Governance Code, insofar as these are applicable to the company. In view of the nature, size and character of the Accell Group organisation, the company believes that it is in its own best interest to deviate from the best practice provisions listed below. The following explains why and to what extent Accell Group deviates from said provisions:

Best practice provision II.1.1

This provision includes a system that stipulates terms of appointment for board members of a maximum of four years. However, three of the current members of the Board of Directors were appointed – before 2005 – for an unlimited period. Accell Group has decided to respect the contractual status quo of the current members of the Board of Directors. The appointment of the new member of the Board of Directors – Mr. J.J. Both – will be for a term of four years.

Best practice provision II.2.5

The regulation for share options stipulates a three-year reference period before the unconditional allocation of shares. Following definitive allocation, the shares must be held for at least two years. Although formally the period between conditional and unconditional allocation is two years, the reference period for allocation is three years and the Supervisory Board believes the term stipulated by the entire arrangement is sufficient to secure the commitment of the members of the Board of Directors to the company and its interests.

Best practice provision III.4.3

Accell Group has a secretary to the Board of Directors. His role is limited to supporting the Board of Directors. The tasks of the secretary as outlined in the Best practice provision III.4.3 are performed by the deputy chairman of the Supervisory Board.

Best practice provision IV.3.1

Best practice provision IV.3.1 requires that analyst meetings, analyst presentations, presentations to investors and press conferences be externally accessible via webcasting, telephone lines or other means. In view of the organisation entailed by the aforementioned types of broadcasts and the current size of the company, Accell Group has decided not to comply with this provision for the time being. Share price sensitive information is published on the website www.accell-group.com and presentations given during analyst and press meetings are published afterwards on the website.

Best practice provision IV.3.13

Accell Group has not so far outlined a policy in principle with respect to bilateral contacts with shareholders. The company plans to develop and lay down such a policy this year.


Transactions involving conflicts of interest
There were no transactions involving a conflict of interest as stipulated in best practice provision II.3.4, III.6.3 and III.6.4 of the Code in the 2015 financial year. The regulations for the Supervisory Board include rules on how to deal with (potential) conflicts of interest involving the members of the Board of Directors, the Supervisory Board and the external auditor in relation to Accell Group and stipulate which transactions require the approval of the Supervisory Board.





Regulation article 10 of the Takeover Directive
The following is an overview of the information required under article 1 of the Regulation article 10 of the Takeover Directive:

a. The company’s share capital is € 1,200,000 divided into 120,000,000 ordinary shares with a nominal value of € 0.01 each, divided into 55,000,000 ordinary shares, 5,000,000 cumulative preference shares F, and 60,000,000 cumulative preference shares B. The agenda for the Annual General Meeting of 21 April 2015 includes a motion to amend the articles of association; this amendment includes an increase in the company’s share capital. As per 5 January 2016, the issued and paid-up capital of Accell Group amounts to € 252,703.27 divided into 25,270,327 ordinary shares with a nominal value of € 0.01 each.

b. The company has no statutory or contractual limitation on the transfer of shares, with the exception of the statutory blocking provision with respect to the transfer of cumulative preference shares F.

c. An overview of substantial participations in Accell Group is included on page 139 of this annual report.

d. There are no extraordinary voting rights attached to the shares issued by the company.

e. Accell Group does not have a monitoring mechanism for an employee share scheme.

f. There are no limitations on the execution of the voting rights attached to ordinary shares.

g. The company is not aware of any agreements in which a shareholder of the company is involved and which may cause limitations on the transfer of shares or limitation of the voting rights.

h. The provisions for the appointment and dismissal of members of the Board of Directors and the Supervisory Board and changes to the articles of association are incorporated in the articles of association of the company, which can be consulted on the Accell Group website (under ‘Corporate Governance’).

i. The powers of the Board of Directors and in particular their right to issue shares in the company and acquire shares in the company are described on page 164 in this annual report.

j. A number of agreements between the company and its financiers include the provision that the financiers have the right to dissolve the agreements and reclaim the loans issued prematurely in the event of a substantial change to the control over the company following a public bid as meant in article 5:70 of the Financial Supervision Act.

k. The company is not aware of any agreements with directors or employees which provide for a payment in the event of the employment being terminated following a public bid as meant in article 5:70 of the Financial Supervision Act.