N.V. Nederlandse Gasunie (Gasunie) is a public limited company whose sole shareholder is the Dutch State. The shares are held by the Ministry of Finance. The company is subject to a mitigated structure regime. The governance structure is based on Book 2 of the Dutch Civil Code, the company’s articles of association and various internal rules of procedure. Various provisions affecting the governance of the company are also contained in the Dutch Gas Act.
Revised Corporate Governance Code
In December 2016, the revised Corporate Governance Code (the Code) was published; this code is also anchored in law. Although Gasunie is not a listed company, like other state-owned companies Gasunie applies the Code to the extent possible, so will report on the basis of the revised Code for the 2017 financial year. The principles and best-practice provisions have for the most part also been implemented in our articles of association and in various rules of procedure.
The Executive Board consists of four members and is collectively responsible for managing the company, as well as the general affairs of the various subsidiaries. The composition and changes in members during 2017 are described elsewhere in this annual report. Besides the CEO and CFO, both of whom are members of the Executive Board according to the articles of association, the Executive Board consists of the General Director of the Dutch network operator GTS and the General Director of Participations. The latter two appointments have a ‘titular’ character, reflecting the fact that the two directors, based on the legal requirements as included in the Dutch Gas Act, cannot bear collective responsibility for all of Gasunie’s activities.
The composition, appointment terms and activities of the Supervisory Board in 2017 are described elsewhere in this annual report. The members of the Board satisfy the requirements of independence as expressed in best practices 2.1.7 to 2.1.9 of the Code. The Board acts as the employer of Gasunie’s Executive Board members, supervises the management and supports it with advice. In accordance with the Dutch Gas Act and the articles of association, important decisions to be made by Gasunie Transport Services B.V. are also submitted for approval to Gasunie’s Supervisory Board. The Board has two committees: the Audit Committee (which, in particular, supervises the risk management and audit systems, the annual and semi-annual financial reporting, as well as the financing of the company and its pension schemes) and the Remuneration, Selection and Appointment Committee. The meetings of the Committees are discussed at the meetings of the complete Board, on the basis of which decisions are made.
Compliance with the Dutch Corporate Governance Code
We confirm compliance with best-practice provision 2.7.4, which states that transactions in which there is a conflict of interests, carried out by members of the Executive Board or Supervisory Board, must be mentioned in the annual report. No such transactions took place in 2017.
Gasunie deviates from the Code on several points. Given the nature of the company, no specific rules of procedure governing insider trading, holding securities and securities transactions have been adopted (best practice 2.7.2). The prohibition on the use of inside information has been incorporated in the Code of Conduct.
The composition of the Executive Board does not satisfy the target ratio of men to women stipulated in the diversity requirements in the Code (best practices 2.1.5 and 2.1.6). In filling a vacancy on the Executive Board in 2017, a female candidate who adequately satisfied the job profile could unfortunately not be appointed, despite explicit efforts in this respect. The policy is aimed at complying with the diversity requirements mentioned in the law and the Code for future vacancies.
The Supervisory Board does not have an independent Remuneration Committee (best practice 2.3.2). Remuneration is covered by the combined Remuneration, Selection and Appointment Committee. This is justified by the fact that state-owned companies have their own remuneration method whereby the remuneration policy is recalibrated at set intervals. With the recalibration in 2017, the remuneration policy for the coming years is fixed.
A complete ‘apply or explain’ overview in relation to application of the Code has been published on the website.
The following documents are available on the Gasunie website (www.gasunie.nl):
- rules of procedure governing the activities of the Supervisory Board and the committees;
- rules of procedure governing the activities of the Executive Board;
- Whistle-blower scheme (‘Reporting Malpractices’ procedure);
- the code of conduct;
- an ‘apply or explain’ overview in relation to application of the Code.