Supervisory Board

Task and working method
The task of the Supervisory Board is to supervise the policy of the Management Board and Nuon’s operations in general. In addition, the Supervisory Board functions as the Management Board’s advisory body. The Supervisory Board’s supervision of the Management Board includes the realisation of the company’s objectives, the strategy and risks related to the business activities, the design and operation of the internal risk management and control systems, the financial reporting process and compliance with laws and regulations.

The responsibility of the Supervisory Board for performing its tasks is a collective one. In fulfilling these tasks, the Supervisory Board acts in the interest of Nuon and of the companies forming part of the Nuon group, while taking into account the interests of all parties concerned.

The Supervisory Board has adopted a charter covering, among other things, its membership, committees, tasks and powers, meetings and decision-making.

Appointment and composition
Nuon has a Supervisory Board consisting of at least three and at most eleven natural persons. At the start of the reporting year, the Supervisory Board still consisted of thirteen members. After it transpired that Messrs. Minderhoud and Van der Sande were not available for reappointment, it was decided not to create any vacancies for these positions and to reduce the number of members of the Supervisory Board to eleven. As a consequence, the Supervisory Board consisted of thirteen members until the General Meeting of Shareholders of 24 April 2006 and currently consists of eleven members. The minimum and maximum number of members of the Supervisory Board is set by the General Meeting of Shareholders.

Supervisory Board members are nominated by this board and appointed by the General Meeting of Shareholders. For the purpose of drawing up this nomination, both the General Meeting of Shareholders and the Central Works Council have a right of recommendation. Members of the Supervisory Board are appointed for a maximum of three four-year terms.
The Supervisory Board is made up in such a way that it has at its disposal all the expertise required to ensure a proper performance of its tasks, and that the members are able to operate independently and critically in relation to each other, the Management Board and any partial interest whatsoever.

Members of the Supervisory Board are required to limit the number of supervisory board memberships and any other positions held at listed and unlisted companies and other institutions in order to guarantee the adequate performance of their tasks. A member of Nuon’s Supervisory Board may not hold more than five supervisory board memberships of Dutch listed companies, it being understood that any chairmanship of a supervisory board is equivalent to two memberships.

Remuneration
The General Meeting of Shareholders determines the remuneration of Supervisory Board members. This remuneration does not depend on Nuon’s results. The information on the remuneration of individual members of the Supervisory Board can be found in the board’s Remuneration Report (part of this annual report).

Committees of the Supervisory Board
The Supervisory Board can appoint standing or ad hoc committees consisting of its own members and charge these with tasks defined by the Supervisory Board. The Supervisory Board determines the composition of the committees and appoints its members. The two standing committees are an Audit Committee and a combined Selection, Appointment and Remuneration Committee. In addition, the Supervisory Board set up a Strategy Committee at the start of 2006.

The findings of the committees are discussed in the Supervisory Board’s plenary meetings. A charter has been drawn up for each committee. These describe the task of the committee concerned, its composition and the manner in which it performs its task. The report of the Supervisory Board, which forms part of the annual report, sets out the work and the composition of the individual committees.

Audit committee
The Audit Committee has been put in place by the Supervisory Board to support its supervision of:
  • the operation of the internal risk management and control systems, including monitoring compliance with relevant laws and regulations and monitoring the operation of the codes of conduct;
  • the provision of financial information by the company;
  • compliance with the recommendations and actions taken in response to the recommendations and comments of the Internal Audit department and the external auditor;
  • the in-control statement;
  • the role and functioning of the company’s Internal Audit department;
  • the relationship with the external auditor, including, in particular, the independence, fees and any non-audit work for the company;
  • the financing of the company;
  • the application of information and communication technology.

The Audit Committee consists of at least three members, who must all be members of the Supervisory Board. All members of the Audit Committee should be independent within the meaning referred to in the Rules of the Supervisory Board, with the exception of at most one member. At least one member of the Audit Committee is a financial expert, which means that this person has acquired relevant knowledge and experience in the fields of finance, administration and accounting at listed companies or other large legal entities.

Selection, Appointment and Remuneration Committee
In the field of selections and appointments, the Selection, Appointment and Remuneration Committee’s tasks include the following:
  • to draw up selection criteria and appointment procedures relating to the members of the Supervisory Board and the Management Board;
  • to periodically review the size and composition of the Supervisory Board and the Management Board and where necessary submit proposals concerning the profile of the Supervisory Board;
  • to periodically review the functioning of the individual Supervisory Board and Management Board members and report on this to the Supervisory Board or the individual Management Board members respectively;
  • to submit proposals for appointments or reappointments.
In addition, the Committee has the following tasks in the field of remuneration:
  • to submit proposals to the Supervisory Board on the remuneration policy to be pursued regarding members of the Management Board, which remuneration policy and any material change in it is to be tabled at the General Meeting of Shareholders for adoption;
  • to submit proposals on the remuneration of individual Management Board members;
  • to draw up the Remuneration Report.

The committee consists of three members, all of whom should be Supervisory Board members. The committee is not chaired by the Chairman of the Supervisory Board, or by a former member of the Supervisory Board, or by a member of the Supervisory Board who sits on the board of another listed company.