CORPORATE GOVERNANCE

 


Holland Colours is a publicly listed, limited liability company with common shares listed on Euronext Amsterdam.

The company’s management and supervision are organized under Dutch law in a two-tier structure comprising of a Board of Management and a Supervisory Board.

Holland Colours promotes responsible behavior toward society and the environment, while at the same time taking account of the interests of its various stakeholders: employees, shareholders, other capital providers, customers, and suppliers. The Board of Management and Supervisory Board are ultimately accountable for giving due consideration to the interests of all those involved, focusing on the continuity of the company and long-term value creation for relevant stakeholders, both at present and in the longer term, and are held accountable by the Annual General Meeting of Shareholders for the performance of their duties. The risk management approach and the internal control framework play an important role in this process. For a description of these systems, please refer to the section on Risk Management.

 

 

CORPORATE GOVERNANCE FRAMEWORK

 

Holland Colours is incorporated and based in the Netherlands. As a result, our governance structure is based on the requirements of Dutch legislation and the company’s Articles of Association, complemented by internal policies and procedures. Given the worldwide exposure of our business, we conduct our operations in accordance with internationally accepted principles of good governance. Good corporate governance, long-term value creation, and engagement are key components of the Holland Colours’ culture and way of doing business. They are embedded in our core values. Holland Colours endorses the principles of the Dutch Corporate Governance Code (the “Code”), the content of which is available on www.mccg.nl.

The Code is reflected in the regulations of the Board of Management and the Supervisory Board. In addition, the Diversity Policy and a Policy on Bilateral Contacts with shareholders were updated and the Articles of Association of Holland Colours were aligned with the Code. The updated Articles of Association were approved and adopted in the Extraordinary General Meeting of Shareholders of August 27, 2018.

The statutory responsibility resides with the Board of Management, consisting of the CEO, CFO and CTO, who meet every two weeks with a formal agenda and a list of action items and decisions. The Board of Management has regular meetings with the divisional teams for the monthly business reviews and quarterly updates on major projects. Large product, technology, innovation and capex projects need specific approval by the Board of Management. Cost budgets are approved as part of the annual budget review.

The Board of Management is held accountable by the Supervisory Board for the definition and implementation of the company’s strategy as well as its day-to-day operational management. The members of the Board of Management attend the periodic meetings of the Supervisory Board as well as the monthly update calls. The CEO is the main contact for the Supervisory Board.

 

ANNUAL GENERAL MEETING OF SHAREHOLDERS

The Annual General Meeting of Shareholders (AGM) is an integral part of the governance of the company and its system of checks and balances. The AGM reviews the annual report and decides on the adoption of the financial statements, the dividend proposal and the discharge of the members of the Supervisory Board and the Board of Management of their duties performed.

The AGM is convened by public notice. The agenda, notes to the agenda and the procedure for attendance and voting at the meeting are published in advance and posted on the corporate website. Matters proposed for consideration, approval or adoption are dealt with as separate agenda items and explained in writing in advance of the meeting.

These proposals include, where applicable:

  • Adoption of the financial statements;
  • Dividend proposal;
  • Discharge of the members of the Supervisory Board and the Board of  Management   of   their  liability   for   the duties performed;
  • Appointment and reappointment of members of the Board of Management and the Supervisory Board;
  • Remuneration of the members of the Supervisory Board;
  • Material changes to the remuneration policy of the Board of Management;
  • Appointment of the auditor;
  • Other important matters, such as major acquisitions or the sale or demerger of a substantial part of the company, as required by law or under the Articles of Association;
  • Authorization of the Board of Management to issue new shares;
  • Amendments to the Articles of Association.

The company provides options for voting by proxy to its shareholders. Holding shares in the company on the registration date determines the right to exercise voting rights and other rights relating to the AGM. All resolutions are adopted on the basis of the ‘one share, one vote’ principle and by an absolute majority of votes, unless the law or the company’s Articles of Association stipulate otherwise.

Holders of common shares in aggregate representing at least 1% of the total issued capital may submit proposals for the AGM agenda. Such proposals must be adequately substantiated and must be submitted in writing, or electronically, to the company at least 60 calendar days in advance of the meeting. The draft minutes of the AGM (in Dutch) are made available on the company’s corporate website within three months of the meeting date. The final minutes are available on the corporate website within six months after the meeting date.

 

DIVERSITY POLICY

Holland Colours strongly values diversity and endeavors to reflect this in the composition of its Board of Management and Supervisory Board. The objective of the Diversity Policy is to enrich the Board of Management’s perspective, improve performance, increase member value and enhance the probability of achievement of Holland Colours’ goals and objectives. The aim of the policy is to achieve diversity, including nationality, age, gender, education and professional background. One out of three members of the Board of Management and one out of four members of the Supervisory Board is female. Diversity will be taken into account in succession planning.

Further information about the composition of the Board of Management and the Supervisory Board, including its committees, can be found in the reports of the Board of Management and the Supervisory Board (and its profile).

 

ANTI-TAKEOVER PROVISIONS AND CONTROL

The company has no specific anti-takeover provisions in place. The fact that the company has a majority shareholder, Holland Pigments BV, in which the collective employees have a shareholding of approximately 25%, guarantees that the voice of the employees is heard.

 

BILATERAL CONTACTS

The Company fully endorses the importance of a transparent and equal provision of information to its shareholders and other parties. In accordance with principle 4.2 of the Code, the Company therefore makes every effort to provide such parties equally and simultaneously with information relevant for shareholders, considering the exceptions provided by applicable law. This is laid down in Holland Colours’ policy on bilateral contacts with shareholders. The full text of the policy can be found on www.hollandcolours.com.

 

CODE OF CONDUCT

The Code of Conduct of Holland Colours is a reflection of our core principles on doing business in a fair and ethical way, complying with the local rules and regulations, and treating our employees and business partners with respect. It provides guidelines for avoiding unfair competition and corruption or bribery. It states the conditions for a safe and healthy work environment. Partly through our HP Officials, as appointed by Holland Pigments BV, we maintain our unique employee participation model and culture.

Holland Colours has a global whistle blower policy in place, while adherence to the company core values is part of the annual performance cycles with employees.

 

 

CORPORATE GOVERNANCE CODE

 

The Supervisory Board and the Board of Management endorse the principles of Corporate Governance as established in the principles and best practice provisions that currently apply to internationally operating listed Dutch companies.

The full version of the Corporate Governance rules of Holland Colours, along with explanatory notes, can be found on www.hollandcolours.com. The deviations from the Code relate to the subjects outlined below.

 

BOARD OF MANAGEMENT

The Code states that the main elements in the contracts of Management Board members of the company must be published without delay after the contract is concluded. As we do not want to single out this type of information, Holland Colours has chosen to continue the practice of publishing this information as an integral part of the annual report. The remuneration policy for the Board of Management for the reporting year was formulated by the Remuneration Committee and is further described in note 26 to the financial statements. Since Holland Colours does not offer remuneration in the form of options, the provisions governing options do not apply.

 

SUPERVISORY BOARD MEMBERS

As long as Holland Pigments BV holds an interest of at least one-third of the company’s issued capital, it is entitled to nominate one member of the Supervisory Board.

The Supervisory Board has established a Remuneration Committee and an Audit Committee. In deviation from Article 2.3.4, the chairman of the Supervisory Board is also chairman of the Audit Committee, because of his expertise.

The duties of the Selection and Appointment Committee are performed by the full Supervisory Board. The remuneration of the members of the Supervisory Board is determined by the General Meeting of Shareholders.

 

INTERNAL AUDIT FUNCTION

The internal audit function assesses the design and operation of the internal controls and the risk management system. Due to the size of the company this function is fulfilled, in deviation from Article 1.3, by the Group Controller.

The Supervisory Board will evaluate annually if it is necessary to establish an internal audit department and will include the conclusions in the report of the Supervisory Board.

 

COMPANY SECRETARY

Holland Colours does not have a formal company secretary. This position is fulfilled by the legal and governance function at head office level, in line with the lean and effective organizational structure.

 

CONFLICTS OF INTEREST

As Holland Pigments BV is a majority shareholder in Holland Colours, with all employees of Holland Colours having shares in Holland Pigments, transactions between Holland Pigments and the company that are of material significance are subject to approval by the Supervisory Board.

 

SHAREHOLDER POWERS

For practical reasons and because of the costs involved, the provision stipulating the option for shareholders to follow meetings with investors and analysts and presentations and press conferences in real time is not observed. All relevant information is, of course, immediately published on the company’s website. There have been no substantial changes to the corporate governance structure. The alignment with the Dutch Corporate

Governance Code is published on the company website. Future substantial changes will be submitted to the AGM.

The General Meeting of Shareholders of July 12, 2018 authorized the Board of Management to acquire shares in the company for a period of 18 months, up to January 12, 2020 subject to the approval of the Supervisory Board. The acquisition price must be between the amount equal to the nominal value of the shares and the amount equal to 110% of the share price, whereby the share price will be: the highest average share price on each of the five trading days prior to the acquisition date in accordance with the Daily Official List of Euronext Amsterdam.

All documents related to the implementation of the Dutch Corporate Governance Code can be found in the Investor Relations section in the paragraph on Corporate Governance on our website. This includes the profile, regulation and schedule of retirement by rotation for the Supervisory Board, regulations of the Audit Committee and the Remuneration Committee, the Diversity Policy and the Policy on Bilateral Contacts with shareholders, the company’s Articles of Association, the Whistleblower Policy, Holland Colours’ Insider Dealing Policy, and the minutes of the General Meetings of Shareholders.

 

 

PREVENTION OF INSIDER TRADING

 

In compliance with the Dutch Financial Supervision Act, Holland Colours has adopted internal regulations relating to investments in the company’s shares, share ownership, and preventing the abuse of insider information. Moreover, the duty of disclosure and the relevant best practice provisions of the Corporate Governance Code have been incorporated in these internal regulations as far as applicable.

These internal regulations apply to the Supervisory Board, the Board of Management and local managers and a circle of employees, as well as to a number of advisors. The Compliance Officer maintains a register, supervises compliance with the internal regulations, and maintains contact with the Netherlands Authority for the Financial Markets (AFM).

quote pascalIf we need to arrange something special for the customer – direct shipment or anything else – we can do it. We can arrange everything; the sky is the limit.



Pascal Weulen Kranenbarg |Holland Colours Europe | Planning and Logistics Manager