Legislative and regulatory developments
The latest version of the Dutch Corporate Governance Code (‘the Code’) was published on 8 December 2016. By means of a decree dated 29 August 2017, the Dutch government has designated the Code as applicable to 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 Executive Board report
This chapter reports on the application of the Code at Royal BAM Group. Together with the information about the corporate governance structure and the BAM corporate governance compliance overview (see www.bam.com/en/about-bam/corporate-governance), 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 (‘the Decree’).
Information about BAM’s corporate governance structure and compliance with the Code (clause 3.1 of the Decree with respect to the contents of the Executive Board report), functioning of the General Meeting and the rights of shareholders (clause 3a sub b of the Decree with respect to the contents of the Executive Board report) 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 with respect to the contents of the Executive Board report) are available in chapter 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 with respect to the contents of the Executive Board report) is described in paragraphs 5.3 and 6.1 and the diversity policy for both boards is explained in this chapter and paragraph 6.1. A declaration regarding the Decree on Article 10 of the EU Takeover Directive (clause 3d of the Decree with respect to the contents of the Executive Board report) can be found in paragraph 5.2.
Compliance with the Corporate Governance Code
Compliance with the Code is described in the BAM corporate governance compliance overview, which is available on 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 practices of the Code. In accordance with the Code, the Company will submit any substantial changes in the main features of the corporate governance structure to the General Meeting for discussion purposes.
Corporate governance review 2021
The corporate governance structure of the Company was reviewed by the Executive Board and Supervisory Board in January 2021, assisted by the company secretary. The BAM corporate governance compliance overview was updated per 17 February 2021.
Best practice 2.1.6 of the 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.
Since the implementation of the new Code in 2017, the profile for the Supervisory Board holds diversity aspects, including 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. Since the general meeting in 2017, the composition of the Supervisory Board has been in line with this target, with two out of six members being female. Besides gender, diversity in background, nationality, expertise and experience in the Supervisory Board are equally important in order to provide most value. The Supervisory Board meets these diversity requirements.
The Supervisory Board has resolved that the diversity aspects set in the profile for the Supervisory Board will apply equally to the Executive Board and the Executive Committee. However, the composition of the Executive Committee (including the Executive Board) in 2021, has remained without female representation. Where new appointments have been made to reflect the new operating model – existing committee members were assessed to be the most suitable candidates internally. The reduction of the Executive Committee from six to four members also created a challenge in the aspiration to have one third female representation, as the opportunity for new appointments was reduced. The Company’s aspiration still remains, and BAM is seeing an increase in the percentage of women represented in the top and sub top leadership layers, creating a more diverse pipeline for future committee members internally. The Company continues to invest in succession to meet the aspiration in the future at time of a new opening at the Executive Committee.
Proceedings on KPIs in diversity and inclusion are reported in paragraph 3.2.
Sustainability, responsibility and delegation
The Executive Board is responsible for defining the sustainability policy, in consultation with the director for strategy, sustainability and innovation and the management of the operating companies.
Meetings with senior management are used to define sustainability issues, prioritise objectives, monitor activities and report 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 to planned reporting cycles, or whenever more urgency is required. Topics such as the reduction of CO2 emissions and waste, along with business integrity and safety, apply to all BAM operating companies.
Each operating company has a management team member who shares responsibility for BAM’s sustainability activities. The operating companies report progress quarterly to the Executive Board and the director for strategy, sustainability and innovation, together with details of actions taken to support the Company’s business objectives. Progress against targets is reviewed and when necessary, additional actions are taken to ensure BAM’s sustainability targets are pursued and met.
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