Corporate governance

Legislative and regulatory developments

On 11 February 2016 the proposal for revision of the Corporate Governance Code was published by the Corporate Governance Code Monitoring Committee. The final version of the revised Corporate Governance Code was published on 8 December 2016 (the ‘Code’). By means of a Decree dated 29 August 2017 the Dutch government has designated the Code as applicable for Dutch companies with a public listing. The Code is based on the comply or explain principle and applies as from the financial year 2017.

Decree with respect to the contents of the integrated report

This chapter reports on the application of the Dutch Corporate Governance Code at Royal BAM Group nv. Together with the information about the Corporate Governance structure and the BAM Corporate Governance Compliance Overview, this comprises the ‘Corporate governance statement’ as specified in section 3 sub 1 of the Decree with respect to the contents of the Executive Board report (‘Besluit inhoud bestuursverslag’). 

Information about compliance with the Corporate Governance Code (clause 3.1 of the Decree) and functioning of the General Meeting and the rights of shareholders (clause 3a sub b of the Decree) can be found on the company’s website under the corporate governance heading. The most important aspects of BAM’s risk and control systems (clause 3a sub a of the Decree) are available in chapter 2.4 of this Integrated report. Information about the composition and functioning of the Executive Board and Supervisory Board (clause 3a sub c of the Decree) is available in chapters 4.2 and 4.5 and the diversity policy for both boards is explained in this paragraph and chapter 4.2. A declaration with regard to the Decree on Article 10 of the Takeover Directive (clause 3d of the Decree) can be found in chapter 4.4. 

Corporate governance review 2017

Following the publication of the revised Code (see www.mccg.nl), the Executive Board and Supervisory Board, assisted by the Company Secretary, have assessed BAM’s corporate governance and the consequences of the new Code for BAM. 

The outcome of the assessment was submitted to and discussed with the Supervisory Board, including an implementation plan, consisting of – among other things – a proposal to amend the rules for the Supervisory Board, the Executive Board, the Supervisory Board committees as well as the profile of the Supervisory Board. In addition the annual meeting schedule for the Supervisory Board and its committees was updated in order to assure that the matters mentioned in the Code are addressed in the regular meetings. The new Code has also been discussed extensively with a number of staff directors on whose functions the new Code has an impact as well as with the external auditor.

The corporate documents mentioned above (rules for the Supervisory Board, the Executive Board, the Supervisory Board committees and profile of the Supervisory Board) were approved by respectively the Executive Board and/or the Supervisory Board in their meetings in November 2017. 

Diversity 

Best practise of the Corporate Governance Code stipulates that the diversity policy for the Executive Board and Supervisory Board should be explained in the Executive Board report as well as the way that it was implemented in practice, addressing (1) the policy objectives, (2) how the policy has been implemented and (3) the results of the policy in the past financial year.

As part of the implementation of the new Corporate Governance Code, the Supervisory Board adopted new rules in November 2017, which included an updated profile for the Supervisory Board. In this profile diversity aspects are included, providing a clear target for gender participation. This target of at least 30 per cent female and at least 30 per cent male members of the Supervisory Board does not differ from the target set in the previous profile. As per the General Meeting in 2017 the composition of the Supervisory Board is in line with this target, given that two out of six members are female. Besides gender, diversity in background, nationality, expertise and experience in the Supervisory Board is equally important in order to provide most value. The international composition of the board was strengthened with the appointment of two non-Dutch members. In addition the available experience and expertise were strengthened, e.g. in the fields of digital innovation, organisational transformation, and construction industry.

When adopting the new rules and profile for the Supervisory Board, the latter resolved that the diversity aspects set in the profile for the Supervisory Board will apply equally to the Executive Board. As far as gender participation is concerned, the composition of the Executive Board was already in line with the target as one out of three members is female. 

CSR responsibility and delegation

The Executive Board is responsible for defining the CSR policy, in consultation with the Director Strategy and Group Director Sustainability and the management of the operating companies.

Meetings with senior management are used to define sustainability issues and reach agreement on prioritising objectives, monitoring activities, and reporting results. Critical concerns are reported to the Executive Board at least in quarterly reports, or whenever more urgency is required. The Executive Board communicates to the Supervisory Board according planned reporting cycles, or whenever more urgency is required. Safety ambitions, the reduction of CO2 emissions, and strict waste management, along with business integrity, apply to all BAM operating companies. In addition, each operating company measures KPIs addressing issues of relevance to its own business.

Each operating company has a management team member who has the responsibility for BAM’s sustainability activity. The operating companies report progress quarterly to the Executive Board, Director Strategy and Group Director Sustainability together with details of actions taken to support the Group’s business objectives. They interpret BAM’s objectives based on their unique operating conditions. CSR is part of how managers and employees do their day-to-day jobs. It is addressed, for example, at regular work discussions and performance reviews. In this way, implementing sustainability is shared across all levels of the Group, from BAM’s Executive Board to its local champions.

Compliance with the Corporate Governance Code

Compliance with the Corporate Governance Code is described in the BAM Corporate Governance Compliance Overview, which is available on the website of BAM (www.bam.com). This is to be read in conjunction with this section and is deemed to be incorporated into this section. In case there is a difference between the content of BAM’s publication and this section, this section will prevail.

BAM fully complies with the principles and best practises of the Code. However, given the late publication of the revised Code in December 2016, it has taken a good part of 2017 to assess the consequences of the new Code and implement any required changes into the Company’s governance. 

In accordance with the Corporate Governance Code the company will submit any substantial changes in the main features of the corporate governance structure to the General Meeting for discussion purposes. The corporate governance structure and the compliance with the Corporate Governance Code as described on the website will be discussed with the shareholders during the Annual General Meeting on 18 April 2018. 

 

 

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