8.2.4.3 Board committees

Independent supervisory directors are also required in the key board committees of the supervisory board – the audit committee, remuneration committee and selection and appointment committee. Chapter III.5 of the DCGC provides the principle and best practice provisions with respect to these three board committees. These board committees need to be established by the supervisory board if the number of supervisory board members is greater than four, according to principle III.5. Best practice provision III.5.1 provides that the supervisory board shall draw up terms of reference for each committee, which indicate the role and responsibility of the board committee, its composition and the manner in which it discharges its duties. With respect to the composition, the same best practice provision provides that at most one member of each committee is allowed to be non-independent. The chairman position of the audit committee and remuneration committee is subject to two other restrictions. Best practice provisions III.5.6 and III.5.11 provide that the chairmen of these committees may not be the chairman of the supervisory board or a former member of the management board of the company. Best practice provision III.5.11 adds to this requirement that the chairman of the remuneration committee may not be a member of the management board of another listed company. In addition, best practice provision III.5.12 provides that at most one member of the remuneration committee is allowed to be a member of the management board of another listed company.

The composition of the committees in chapter III.5 is primarily focused on dual board structures. However, the DCGC takes account of unitary board structures in chapter III.8. If a company has a unitary board structure, the board of directors shall also apply chapter III.5 of the code. This is provided for in best practice provision III.8.3, which further requires that the members of the three key committees only comprise NEDs.

Table 8-4: Average numbers of board committees, the number of companies with a specific board committee and the number of committee meetings in Dutch listed companies in 2010, calculated using data from Spencer Stuart (2011).

Table 8-4 gives an overview of the number of board committees in Dutch listed companies in 2010. AEX companies have on average 3.5 board committees, which is slightly more than AMX companies: 3.0 board committees. A breakdown of the various committees is provided in the table as well. Audit, remuneration and nomination committees of AEX companies have on average 4.9, 4.7 and 3.3 meetings per year, respectively. Board committees of AMX companies have less meetings per year: 4.3, 4.1 and 1.8, respectively.