Report of the Supervisory Board to shareholders
In February 2021 Royal BAM Group launched its strategic plan for the period 2021-2023, ‘Building a sustainable tomorrow’. The Supervisory Board was closely involved in the development of this strategy and as such it has the Board’s full support. The focus on markets and projects where BAM has proven competitive strengths will create a platform for future growth with increased profitability and continued de-risking. The world in which BAM operates is changing rapidly and it is important for shareholders, employees and other stakeholders, that the Company changes with it. Climate change and changes in society are important drivers for the Group’s operations and future profitability.
The Supervisory Board believes that BAM, through its size, business orientation and geographical position is well established to play a prominent role in decarbonisation. More and more clients will demand solutions the Company can develop and deliver. Others should be convinced to apply more sustainable solutions. A shift to industrialised and process-based construction methods will help the organisation in reaping the full benefits of the scale BAM’s operations have in the Netherlands, United Kingdom and Ireland.
The Supervisory Board is pleased to note that management is delivering on its ambitions. In the year under review a number of activities have been divested (including BAM Swiss and BAM Deutschland and BAM Galère), while some smaller, but relevant activities were acquired (Houtindustrie Stam & Landman and Gevelelementen Noord-Holland in the Netherlands). The divestment of BAM Galère is completed early 2022. The (operational) wind-down of BAM International is nearing completion and the new organisation structure is being aligned with the new strategy, organising the business into two strong divisions, one for the Netherlands and one for the United Kingdom and Ireland. In the Netherlands, BAM has limited the size of single-stage, lump-sum tenders to € 150 million and has withdrawn from tenders with an unbalanced risk/reward profile. The Belgian and German operations will be managed for value. The major restructuring programme announced in 2020 was executed successfully.
Whilst safety remains the prime area of attention, BAM’s commitment to sustainability has increased more and is an integral part of the new strategic plan. Through its newly established Health, Safety and Sustainability Committee, the Supervisory Board supervises and challenges the Company’s actions and programmes and engages regularly with management and staff in these areas. The Supervisory Board considers sustainability as a driver for BAM’s future business and its long-term value creation and looks forward to the dialogue with all BAM’s stakeholders.
It is easy to forget that the implementation of the strategy, the transformation process and the divestment agenda are being executed in a year where Covid-19 was still dictating daily life. At construction sites and in offices BAM had to take precautions in order to ensure that its people can work safely and without the risk of getting infected. It means a lot that colleagues all over the Company did so much to protect themselves and their co-workers. The resilience and dedication of BAM’s employees has filled the Supervisory Board with gratitude.
2021 Financial statements and dividend
This annual report, which is based on the International Integrated Reporting Framework, includes the 2021 financial statements, duly prepared by the Executive Board. The financial statements have been audited by the external auditor, Ernst & Young Accountants LLP; the unqualified independent auditor’s report is included in chapter 8.1.
The Audit Committee discussed the draft financial statements with the Executive Board and the external auditor. The Audit Committee also discussed the auditor’s report and board report, the quality of internal risk management and control systems. The Audit Committee had the discussion with the external auditor without the Executive Board being present. Subsequently, the Supervisory Board discussed this annual report, including the financial statements with the Executive Board in the presence of the external auditor. The Supervisory Board took note of the reporting from the Audit Committee and reviewed the auditor’s report and the quality of internal risk management and control systems. The Supervisory Board concluded to sign the 2021 financial statements.
Taking into account that the Company has the ambition to grow the capital ratio to 20 percent by 2023, the Supervisory Board concur with the proposal of the Executive Board not to distribute a dividend over the year 2021.
The Supervisory Board recommends the Annual General Meeting, to be held on 13 April 2022, to adopt the 2021 financial statements. The Supervisory Board is of the opinion that the financial statements, the report by the Executive Board and the report by the Supervisory Board provide a solid basis on which to hold the Executive Board accountable for the management policies pursued and the Supervisory Board accountable for its supervision on these policies. The members of the Supervisory Board have signed the financial statements in accordance with their statutory obligations under article 2:101, paragraph 2 of the Dutch Civil Code.
Strategy and operational plan
The year 2021 marked the launch of BAM’s strategy for the period 2021-2023, ‘Building a sustainable tomorrow’. Under this plan, the Group will restructure its portfolio of businesses to focus on markets and projects where it can leverage its proven competitive strengths and serve the growing demand for sustainable solutions in the construction sector, while substantially lowering the Company’s projects’ risk profile. Serving all stakeholders – clients, shareholders, employees, partners, suppliers and the communities in which the Company does business – BAM will structurally improve the profitability and predictability of the Company as a client- and service-driven business. This will drive the long-term value growth BAM can realise in the coming years.
During the year under review strategy was on the agenda of each meeting of the Supervisory Board, first leading up to the publication of the new strategy in February and thereafter in order to review the implementation, the transformation of the organisation into the new organisation structure and a number of acquisition and divestment projects. In its iterations with the Executive Board leading to the new strategy, the Supervisory Board paid specific emphasis on topics like sustainability, diversity and inclusion and financial resilience, which among others led to the decision to buy back the convertible bond in June.
While developing the strategy ample time was spent on developing a culture which will support this strategy; not by directing ingenuity and think power towards the most spectacular constructions, but towards those projects which are best for the planet and therefore for the Company’s clients, inviting them to join BAM’s journey to net zero carbon. The Executive Committee developed a bottom-up process, inviting the brainpower in the Company to contribute, which led to encouraging engagement as well as great suggestions that will speed up the development of the Company. This is a multiyear process which will need and receive continuous attention as it will help BAM attract the best talent in the industry as a leading employer.
Based on the new strategy, the operating companies and corporate functions prepared operating plans for 2022, which were consolidated into the operating plan for the Group. The Supervisory Board discussed the outlines and 2022 priorities in its meeting in September after which the operating plan was further discussed in a dedicated meeting in December.
Proper risk management is the key to predictable performance and therefore shareholder value and as such it continued to be high on the Board’s agenda. The strategy underpins the importance of de-risking the portfolio to improve shareholder value. In its meetings the Supervisory Board discussed the risk appetite that fits with the strategic agenda and the related business and project portfolio. The focus on the key growth markets and a robust tender stage gate process continue to play a pivotal role in the early identification of potential risks and taking appropriate measures to mitigate risks at the tendering level. The Supervisory Board fully supported the Executive Committee’s commitment to be critical and selective in the early phases of tendering processes which among others led to BAM’s strategic decision to stop tendering for large, complex projects in a single stage tender and with an unbalanced risk/reward profile.
The discussion on the risk appetite the Company is willing to adopt is one of constant attention. The Executive Committee made it clear to the organisation where the lines will be drawn. This will help the Company to further de-risk the portfolio over the years to come whilst recognising that some big steps have already been made in the year under review. This ongoing de-risking should avoid the unacceptable disappointments BAM had to face too often in the past.
The Supervisory Board reviewed the business and project portfolio, including the projects with a higher risk profile and discussed how these are being managed. Additional comfort and insights were obtained from Internal Audit, which continued with auditing a number of high-exposure projects, resulting in recommendations to improve project control. In addition, the Supervisry Board discussed how the introduction of the new organisation structure will lead to further strengthening the Company’s business control framework and its ability to manage risks properly.
As part of the Supervisory Board’s annual risk management review, the Supervisory Board discussed in its November meeting the outcome of the enterprise risk management assessment in the presence of the director Governance, Risk and Compliance. This annual assessment provides an overview of the highest risks the Company is facing in relation to achieving its objectives, both strategic and operational. The top five risks and related mitigating measures were discussed. The director Governance, Risk and Compliance also informed the Supervisory Board about the status of adherence to the BAM requirements framework, which is used to assess the internal risk management and control system throughout the Group. The Supervisory Board is pleased to note that improvements continue to be made.
The Supervisory Board concluded that the Company has in place internal risk management and control systems, financial reporting manuals and procedures for drawing up financial reports, as well as an established monitoring and reporting system.
Safety and sustainability
The Supervisory Board agrees with the Executive Board that safety has the highest priority for BAM, its people, supply chain employees and societies at large. The Supervisory Board is very pleased that BAM did not have to report any fatalities during 2021.
The (serious) accidents that occurred show that safety requires permanent attention. The incident frequency (IF BAM) decreased from 5.3 in 2020 to 4.6 in 2021. It remains BAM’s overall aspiration to progressively achieve and improve to an average of 3.5 in the short to medium term. Performance varies within the Group, with a relatively high percentage of serious and lost-time accidents taking place in Belgium and Germany. Ongoing focus is required to decrease the incident frequency further.
The Supervisory Board emphasises the importance to continue to learn from accidents, near-accidents and dangerous occurrences, and to increase BAM’s focus on the prevention of serious accidents. The Supervisory Board fully supports the continuous efforts to further increase safety, not only through guidelines and instructions but especially by giving it consistent management attention and emphasising the behavioural aspects. The Supervisory Board took note of the positive feedback on the BAM Safety Day, which aims to increase awareness of the importance of safety. In addition, the Supervisory Board was periodically updated on the impact of Covid-19 on BAM’s operations and employees as well as the measures that were taken to protect the workforce.
The Supervisory Board is delighted that Royal BAM Group was rated on the CDP A-list for the third consecutive year and notice a promising ongoing trend in reducing BAM’s ecological footprint. The Board recommends to focus on the challenges in CO2 measurements and reductions in scope 1, 2 and 3 (emissions up and down the value chain). The Company is committed to reduce the CO2 intensity of its operations by 50 per cent in 2030 compared to the 2015 base year.
In order to further support attention to matters such as safety and sustainability, the Supervisory Board established a committee for Health, Safety and Sustainability (HSS) as per 2021. This is a permanent committee of the Supervisory Board composed of three members with attendance of the COOs and the head of Sustainability and Safety Reporting. The Committee supervises two matters of most importance to the Group, which are the care of BAM’s employees and those (in-)directly involved in its operations on the one hand (health and safety) and sustainability at large, comprising all consequences of BAM’s activities on the environment and the climate on the other hand.
The Supervisory Board highly values an open and regular dialogue with shareholders and investors to explain the Group’s strategy and performance and to receive feedback. The Supervisory Board reviewed BAM’s investor relations activities and shareholder base in all its meetings and were informed on the feedback given by shareholders, investors and analysts. The Supervisory Board also took note of various analysts’ reports regarding the Company.
Together with the Executive Board, the Supervisory Board prepared the virtual Annual General Meeting in April which was evaluated afterwards. The Supervisory Board was pleased to note that all proposals were adopted.
The importance of a satisfactory relationship with the financial markets is high on the Supervisory Board’s agenda, as it realises that the financial performance of BAM over the last years has been disappointing, in particular for shareholders.
Each year, an updated corporate governance compliance overview is published on BAM’s website, providing transparency on how BAM complies with the Code. The Supervisory Board and the Executive Board are of the opinion that the Company’s corporate governance is up to standard. Please refer to the corporate governance statement in paragraph 5.1 in this report for more information.
Discussions with external auditor
During the year under review the external auditor Ernst & Young Accountants LLP reported on its 2020 audit, attended the quarterly meetings with the Audit Committee and Supervisory Board as well as the Annual General Meeting of 14 April 2021.
The Supervisory Board assessed the performance of and relationship with the external auditor, based upon feedback from the Executive Board, the evaluation and recommendation of the Audit Committee and the feedback of the financial leadership team. Based on this assessment, the Supervisory Board’s experience with the external auditor and the external auditor’s expertise with regard to the construction industry in general and Royal BAM Group in particular, the Supervisory Board recommended the General Meeting to re-appoint Ernst & Young Accountants LLP as external auditor responsible for auditing the 2022 financial statements of Royal BAM Group, which the General Meeting subsequently approved.
The assurance plan 2021 was presented to and discussed with the Audit Committee and the full Supervisory Board and subsequently approved. During the review of the 2020 full-year results and the 2021 half-year results, the Supervisory Board met with Ernst & Young Accountants LLP to discuss its reports. In an effective and open relationship, the Supervisory Board established that the external auditor received the financial information on which the financial reports was based in a timely manner and noted that the external auditor had discussed the information provided with the Executive Board and officers of the Company. The Supervisory Board took note of the reports and board reports as prepared by the external auditor and focused upon the follow-up of the identified action points.
The Supervisory Board discussed with the auditor the improvements made on internal control regarding financial closing. The Supervisory Board acknowledges the efforts made by the CFO and all those who contributed to this achievement.
The Supervisory Board discussed with the external auditor and the Executive Board the areas of emphasis related to the annual reporting as identified by the auditor, being: valuation of projects and revenue recognition (including variation orders and claims), sensitivities and estimates with respect to the valuation of goodwill and deferred tax assets, other tax- and assurance-related topics and the financial statement closing process. Several of these topics as well as divestments and manage for value entities were also discussed with the external auditor during the subsequent quarters in 2021. In the August meeting, the Supervisory Board discussed formally and in more depth revenue recognition, project accounting and valuation (including variation orders and claims), sensitivities and estimates with respect to the valuation of goodwill and deferred tax assets, several topics related to accounting and reporting including developments related to non-financial information and sustainability. Also, compliance with laws and regulations as well as information technology were discussed.
Other activities and meetings
In addition to the items mentioned before, in each of its regular meetings, the Supervisory Board discussed with the Executive Committee the state of affairs, the financial performance of BAM and the business lines, development of critical projects, market developments and order intake, working capital and cash flow, the financial condition of the Company as reflected by the balance sheet, investments and divestments and the quarterly press releases. The meetings also featured a report on what had been discussed in meetings of the committees of the Supervisory Board.
Other matters discussed included the annual report and financial statements for 2020, the 2021 half-year report and interim statements, the reserve and dividend policy and the dividend proposal for 2021, as well as compliance reports and material legal proceedings in which the Company is engaged.
The Executive Committee regularly updated the Supervisory Board on the situation regarding a number of critical projects and tenders. Discussions focused mainly on the risks in these projects and how these are managed and/or could be mitigated.
Besides the regular matters to address, the Supervisory Board in 2021 spent ample time on a number of specific topics, which included the execution of the restructuring programme, continuous impact of the Covid-19 pandemic on employees and operations, the repayment of the convertible bond, implementation of the new strategy including transformation process, the divestment of BAM Swiss, BAM Deutschland and BAM Galère and the update of the Supervisory Board rules.
A delegation of the Supervisory Board met with the Central Works Council on several occasions.
The Supervisory Board actively engages with the Executive Committee as well as other senior management in order to ensure the Supervisory Board receives the right information. The chairman of the Supervisory Board had regular contact with the CEO and the chairman of the Audit Committee with the CFO. The chairman and other members met with senior managers in order to be briefed on specific topics such as human resources, finance, corporate governance and internal audit.
In addition to the regular meetings, the Supervisory Board has held a number of periodical educational sessions in order to take deep dives on specific topics relevant for the Company and the construction industry.
The Supervisory Board approved the remuneration report prepared by the Remuneration Committee. The remuneration report is included in paragraph 6.2 of this annual report. The remuneration policy was amended slightly, as the objectives of the long-term incentive for the Executive Board were aligned with the objectives of the new strategy. This change was approved by shareholders in the Annual General Meeting on 14 April 2021.
In 2021, the Supervisory Board met on 11 occasions in the presence of the Executive Board or Executive Committee. The attendance rate of the individual members at the meetings was:
33 - The attendance rate of the individual members at the meetings
|Mr H.Th.E.M. Rottinghuis||100%||n.a.||100%||100%||100%|
|Mr G. Boon||100%||100%||n.a.||n.a.||n.a.|
|Mr B. Elfring||100%||100%||n.a.||n.a.||n.a.|
|Mrs D. Koopmans||100%||n.a.||100%||100%||n.a.|
|Mr M.P. Sheffield||82%||100%||n.a.||n.a.||100%|
|Dr N.M. Skorupska*||91%||n.a.||50%||50%||100%|
|Mrs H. Valentin*||100%||n.a.||67%||67%||n.a.|
*Mrs Valentin stepped down and Dr Skorupska was appointed at the Annual General Meeting on 14 April 2021.
Before each of the seven regular meetings, the Supervisory Board met without the Executive Board being present. Topics discussed in these pre-meetings regarded the preparation of the meeting, the functioning of the Executive Board, the annual self-assessment, key vacancies in the Boards and the remuneration policy and remuneration of the Executive Board, including the determination of the variable portion of their remuneration for 2020 and the targets for 2021.
Supervisory Board’s committees
The Supervisory Board has four permanent committees: the Audit Committee, the Remuneration Committee, the Nomination Committee and the Health, Safety and Sustainability Committee. Three of these committees are mandatory and in line with corporate governance requirements. The Health, Safety and Sustainability Committee was established specifically to underline the Supervisory Board’s focus and emphasis on these topics. It is the task of these committees to support and advise the Supervisory Board concerning items under the committees’ responsibility and to prepare the Supervisory Board’s decisions regarding those items. The Supervisory Board as a whole remains responsible for the way in which it performs its tasks and for the preparatory work carried out by the committees. The committees submitted reports on their meetings to the Supervisory Board.
The Audit Committee
During 2021 the Audit Committee was composed of Gosse Boon (chair), Paul Sheffield and Bob Elfring. The composition is in line with the relevant provisions of the Code. As a guest, the chairman of the Supervisory Board attended some meetings.
The Committee met five times, the four regular meetings where the results were discussed and an additional meeting in December to discuss BAM’s Operating Plan 2022 with the CFO and the director Group Control. The external auditor was present at all regular meetings. The CFO, the director Group Control and the director Internal Audit also attended all regular Audit Committee meetings.
In line with its regular tasks and responsibilities, the Audit Committee addressed many topics, amongst which: the development of the key financial figures, the assurance plan 2021 of the external auditor, the internal audit plan for 2021 and 2022, the impact of new reporting requirements on sustainability (‘CSRD’) and material legal proceedings. In addition, the developments relating to tax, IT (including IT general controls), insurance, treasury, compliance, risk management and pensions as well as the progress on the transformation of the IT and finance functions were monitored and reviewed.
The Audit Committee was briefed by the external auditor on relevant developments in the audit profession, including updated interpretations of the IFRS standards. The Committee met with the external auditor without the Executive Board being present and reported to the Supervisory Board on the performance of and the relationship with the external auditor. Furthermore, the chairman of the Committee regularly communicated on a one-to-one basis with the external auditor and the CFO. The Audit Committee considers the relationship with the external auditor to be effective.
During 2021 the Remuneration Committee was composed of Denise Koopmans (chair), Henk Rottinghuis, Nina Skorupska (per 14 April 2021) and Helle Valentin (until 14 April 2021).
One of the responsibilities of the Remuneration Committee is to make proposals to the Supervisory Board regarding the remuneration policy, the terms of employment of the members of the Executive Board and the remuneration of the members of the Executive Board and the Supervisory Board. The remuneration of members of the Executive Committee, not being member of the Executive Board, is also subject to the approval of the Supervisory Board. In preparation of the Annual General Meeting of 2021, the Remuneration Committee prepared proposals for the adoption of amendments to the remuneration policy for the Executive Board regarding the objectives of the long-term incentive as well as for the adoption of amendments regarding the removal of the TSR circuit breaker and vesting cap from the long-term incentive.
In February 2022, the Remuneration Committee submitted a proposal to the Supervisory Board regarding the short-term incentive for members of the Executive Board, based on the 2021 performance and the applicable criteria. The Committee also prepared a proposal for the vesting of the long-term incentive plan 2019-2021. In addition, the Committee submitted a proposal for the objective setting for the 2022 short-term incentive and the 2022-2024 long-term incentive. Finally, the Committee reviewed the fixed remuneration of the CEO and CFO during the year in light of remuneration increases of other employees and developments in the labour market reference group and submitted a proposal to implement an increase accordingly.
The Remuneration Committee prepared the remuneration report which also explains how the remuneration policy has been implemented in practice. The Committee met six times. The CEO was present during parts of these meetings as were the Chief Human Resources Officer (CHRO) and the director Compensation and Benefits who also acts as secretary to the Committee. The committee members consulted each other a number of times outside the context of a formal meeting.
During 2021 the Nomination Committee was composed of Henk Rottinghuis (chair), Denise Koopmans, Nina Skorupska (per 14 April 2021) and Helle Valentin (until 14 April 2021).
Key responsibility of the Nomination Committee is to make proposals to the Supervisory Board regarding the size and composition of the Supervisory Board and the Executive Board, regarding selection criteria, selection procedures, appointments and reappointments to both Boards as well as regarding assessment of their performance. The committee also monitors the Executive Board’s policy on selection criteria and appointment procedures for senior management and holds annual appraisals with the individual members of the Executive Board. Appointments regarding the Executive Committee, not being Executive Board members, are also subject to approval of the Supervisory Board.
The Nomination Committee met three times and members consulted each other a number of times outside the context of a formal meeting. Items discussed were the composition of the Executive Committee in BAM’s new organisation structure and specifically the appointment of the Chief Operating Officers for the Netherlands division and United Kingdom and Ireland division, the nomination of Nina Skorupska as member of the Supervisory Board as well as the reappointment of Frans den Houter as member of the Executive Board and of Gosse Boon and Paul Sheffield as member of the Supervisory Board. In addition, the Committee, the CEO and the CHRO discussed succession planning for senior management roles, diversity and inclusion and talent development. Finally, the Committee monitored progress on diversity and inclusion and the Executive Board was encouraged to keep this a priority over time.
In 2021 a committee for Health, Safety and Sustainability (HSS) has been established and the terms of reference were developed. During 2021 this committee was composed of Henk Rottinghuis (chair), Paul Sheffield and Nina Skorupska (per 14 April 2021).
The HSS Committee challenges a strong health and safety culture throughout the Company and focuses on sustainability in all layers of the organisation. Responsibilities of the HSS Committee include reviewing and advising on the Company’s Health, Safety and Sustainability policies, management, culture and performance. Other responsibilities are the critical reflection on relevant developments in- and outside the Company supporting the development of an ambitious and well-set sustainability agenda and ensuring a clearly defined roadmap.
The HSS Committee met five times and members consulted each other a number of times outside the context of a formal meeting. Items discussed were the composition and governance of the committee, the appointment of a secretary of the committee , focus areas for 2021 (Covid-19, mental health and the safety performance of the Belgium operations), the development of a new sustainability strategy, the development of safety and sustainability dashboards and roadmaps and CSRD consequences.
Composition and functioning of the Executive Board, Executive Committee and the Supervisory Board
Executive Board and Executive Committee
In the year under review there were no changes in the composition of the Executive Board, which is composed of Ruud Joosten (CEO) and Frans den Houter (CFO). Information about the individual members of the Executive Board is available in paragraph 5.3 of the annual report.
Also, the composition of the Executive Committee did not change in 2021. However, on 26 November BAM announced the implementation a new organisational structure to further improve effectiveness and access to growth opportunities. Effective 1 January 2022 the manage for growth activities are managed in two divisions, one dedicated to the Netherlands and the other to the United Kingdom and Ireland. The activities in Germany and Belgium are managed for value, which means a continued focus on operational improvements and potentially further divestments. This new structure replaces the existing business lines Construction and Property and Civil engineering. The former COO for Construction and Property, Joost Nelis, has become responsible for the activities in the Netherlands per 1 January 2022. John Wilkinson, formerly COO for BAM’s Civil engineering activities, has become responsible for the activities in the United Kingdom and Ireland as per the same date. The manage for value activities will report to CEO Ruud Joosten.
As a result of the new organisational structure, BAM’s Executive Committee per 1 January 2022 consists of Executive Board members Ruud Joosten and Frans den Houter (CFO), as well as Joost Nelis and John Wilkinson. Simon Finnie (Chief Business Excellence Officer/Chief Transformation Office) and Sven Van de Wynkele (Chief Human Resources Officer) have relinquished their position in the Executive Committee as of 31 December 2021. The Supervisory Board is grateful for their efforts and contribution over the past years. Information about the individual members of the Executive Committee is available in paragraph 5.4 of this report.
The Supervisory Board reviewed the performance of the Executive Board and Executive Committee and interviewed the individual members of the Executive Committee and gave feedback to the members of the Executive Board. The Supervisory board felt the Executive Board to be functioning properly. Especially the open-minded discussions and transparent communications between management and the Supervisory Board are seen as a big plus to be sustained in the years to come.
The Supervisory Board established that none of the Executive Board members holds more than two Supervisory Board positions at large organisations or a position as chairman of such a supervisory body. This is in line with the Management and Supervision (Public and Private Companies) Act and the Corporate Governance Code. No conflicts of interest between the Company and members of the Executive Board and/or Executive Committee were established or reported.
At the Annual General Meeting on 14 April 2021, Nina Skorupska was appointed as a member of the Supervisory Board and Gosse Boon and Paul Sheffield were re-appointed for a period of four years. After the meeting Helle Valentin stepped down as a member of the Supervisory Board. The Supervisory Board is grateful for her dedication to BAM.
Information about the individual members of the Supervisory Board is available in paragraph 5.3 of the annual report.
The Supervisory Board meets the requirements of the Code regarding independence. In 2021, the Supervisory Board members did not have any other relationships of a business nature with the Company. None of the Supervisory Board members had more than five memberships of supervisory boards at Dutch listed companies or other large institutions. The Supervisory Board is not aware of any conflicts of interest between the Company and members of the Supervisory Board.
In January 2022, the Supervisory Board performed its annual self-assessment for the year 2021. The self-assessment was based on an extensive questionnaire that was completed by all members prior to the evaluation session. The feedback from the individual members of the Supervisory Board was translated into a report which was subsequently discussed in a dedicated session. In this evaluation session specific attention was given to long-term value creation, culture and behaviour. The Supervisory Board concluded that it is operating well, with open discussions and constructive contributions from all members. The Supervisory Board also assessed the expertise of the individual members and whether the combined expertise is in line with the characteristics of the Company and its business. Several suggestions were made for further improvement. These relate among other things to succession planning, training and education as well as board dynamics.
Diversity and inclusion
The Supervisory Board, the Executive Board and the Executive Committee recognise the benefits and importance of diversity in their composition. The profile for the Supervisory Board includes a minimum 30 per cent target for female and male board members. This target applies mutatis mutandis to the Executive Board and the Executive Committee. The present composition of the Supervisory Board is in line with the targets set.
The composition of the Executive Committee is not yet in line with above targets. In 2021, there were no vacancies in the Executive Board or Executive Committee. As part of the new strategy, diversity and inclusion is a key focus area and as such has had great investment in order to provide clarity to the Company’s current position and accelerate diversity and inclusion as a key business priority and embed it in the operational plans. As BAM builds its new management structure, the Group utilises (external) expertise to guide leadership and challenge practices in order to ensure its people practices and culture attract and retain diverse talent.
BAM is committed to ensuring internal development of talent through stretch assignments to gain diverse experience preparing them for senior roles. Key performance indicators and diversity ratios are applied, extending beyond gender in talent practices (including succession planning) to support the acceleration of diverse talent. The indicators have led to more diverse succession plans in parts of the Group (25 per cent of identified successors for senior leaders positions is women, against a total population of 18 per cent women). In addition, a significant increase in diverse talent in BAM’s early career population was witnessed (examples: 40 per cent of the Group’s graduates are women and in BAM’s early career programmes in the United Kingdom, there are up to four times the industry average employees with an ethnic minority background).
The Supervisory Board is convinced that BAM is in a strong position to perform successfully, as the Group has implemented a clear strategy and the de-risking of the portfolio is on track, both through divestments and selective tendering. The Supervisory Board thanks the Executive Board, the Executive Committee, management and employees for their contributions to make BAM a more resilient company, in the interest of all BAM’s stakeholders.
Bunnik, the Netherlands, 23 February 2022
On behalf of the Supervisory Board,
Henk Rottinghuis, Chairman
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