NV Nederlandse Spoorwegen is a public limited company under Dutch law. Its registered offices are in Utrecht. NV Nederlandse Spoorwegen is the holding company of NS Groep NV. The governance of NS, which is a state participation, is based on the modified two-tier company regime.
NS has a two-tier management structure. NS Groep NV is managed by the Executive Board, which consists of the same people as the Executive Board of NV Nederlandse Spoorwegen. The Executive Board gives an account of the execution of its tasks to both the Annual General Meeting and the Supervisory Board. The Executive Board is supervised by the Supervisory Board. Both the Executive Board and the Supervisory Board render an account of the execution of their tasks to the Annual General Meeting of Shareholders.
The sole shareholder of NV Nederlandse Spoorwegen is the Dutch State. The role of the shareholder is performed by the Ministry of Finance. The General Meeting is held annually, within six months of the close of the financial year.
The matters discussed at the General Meeting include the annual report by the Executive Board. The General Meeting also adopts the financial statements, approves the profit appropriation, discharges the members of the Executive Board from liability for their policy work, discharges the members of the Supervisory Board from liability for their supervision and instructs the auditor to audit the financial statements. Other general meetings can be held as often as is desired by the Executive Board, the Supervisory Board and the shareholder. Resolutions can also be adopted outside meetings.
Corporate Governance Code
As a large corporation with an important public role of great significance in Dutch society, and with the Dutch State as our sole shareholder, NS is keen to stress the importance of openness and transparency. Although not a listed company, NS applies the Dutch Corporate Governance Code 2016 (hereinafter the 'Code'). As NS is not quoted on the stock exchange and does not have a one-tier management structure, some parts of the Code do not apply. NS provides an overview on its website of all the Code stipulations along with information on how NS applies those stipulations.
The following best-practice stipulations are not applicable given that NS is not quoted on the stock exchange and does not have a one-tier management structure: 1.3.6, 2.1.3, 2.3.8, 2.3.9, 2.7.5, 2.8, 2.8.1 to 2.8.3, 3.1.3, 3.3.3, 3.4.2, 4.1.6, 4.1.7, 4.2.2 to 4.2.6, 4.3, 4.3.1 to 4.3.6, 4.4, 4.4.1 to 4.4.8, 5.1, 5.1.1 to 5.1.5.
The Executive Board bears the responsibility for managing the company. It reports to the Supervisory Board and the General Meeting. The Executive Board
draws up the vision and associated mission, strategy and objectives. The Executive Board is responsible for implementing the NS strategy. Implementation is partly handled by the business units and subsidiaries, with the executive directors of the business units and subsidiaries also bearing responsibility for this. Pursuant to the Articles of Association of NV Nederlandse Spoorwegen, the Executive Board rules of procedure and the Supervisory Board rules of procedure, some decisions by the Executive Board are subject to approval by the Supervisory Board and/or the General Meeting. The Executive Board is responsible for managing the business in a transparent way.
Executive Board members are appointed in the General Meeting on the recommendation of the Supervisory Board. The Supervisory Board decides on the number of members for the Executive Board. Members of the Executive Board can be suspended or dismissed in the General Meeting. Members of the Executive Board are appointed or reappointed for a period of four years at most. The Executive Board currently consists of five people with the following functions: Chairman and CEO, Finance Director, Chief Governance, Risk & Compliance Officer, Director of Operations and Director of Commerce & Development.
The Executive Board did not change in 2018. It consisted of the following individuals: Mr Roger (R.M.L.H.) van Boxtel, Chairman and CEO, Mr Bert (H.L.L.) Groenewegen, Finance Director, Ms Susi (S.M.) Zijderveld, Chief Governance, Risk & Compliance Officer, Ms Marjan (M.E.F.) Rintel, Director of Operations, and Mr Tjalling (T.B.) Smit, Director of Commerce & Development. The remuneration and terms and conditions of employment of the Executive Board members are established by the Supervisory Board with due regard to the remuneration policy established by the General Meeting. The employment contracts of the members of the Executive Board include the right to compensation upon dismissal, up to a maximum that has been fixed on the initiative of NS at one year’s basic salary. Both the Executive Board as a whole and each individual Executive Board member are authorised to represent the company. The Executive Board’s responsibilities, tasks and procedures are laid down in the articles of association of NV Nederlandse Spoorwegen and NS Groep NV, and in the rules of procedure of the Executive Board.
The Executive Board aims to achieve the objectives and ensure the continuity of the company and its affiliated enterprises. Based on the NS strategy, the Executive Board focuses on long-term value creation while weighing up the relevant interests of the stakeholders. That means that when making decisions, they take aspects such as safety and our role in providing sustainable mobility into account in addition to financial aspects. In cases where a (potential) direct or indirect personal interest of a member of the Executive Board conflicts with the interests of NS, that member will immediately inform the chairman of the Supervisory Board and other members of the Executive Board. The member will disclose all relevant information, including information about any spouse, registered partner or other companion, foster child and relatives by blood or affinity to the second degree of consanguinity. Members of the Executive Board will not be involved in discussions or decision-making concerning a matter or transaction where their direct or indirect personal interests conflict with the interests of NS. If all members of the Executive Board have a direct or indirect personal interest that conflicts with the interests of NS and therefore no decision can be made by the Board, the decision will be made by the Supervisory Board. The Supervisory Board must give its approval beforehand to decisions made by the Executive Board about such matters as entering into transactions that involve conflicting interests that are of material significance to NS and/or the member in question of the Executive Board. Such transactions are published in the report by the Executive Board, stating the conflicting interest. There were no such transactions in 2018. Transactions involving conflicts of interests of members of the Executive Board or Supervisory Board are agreed with conditions that are in line with the market.
The company Secretary ensures that the proper procedures are followed and that the actions taken comply with the legal and regulatory obligations applicable to the Executive Board. This policy was observed in 2018.
The Supervisory Board
The Supervisory Board’s tasks include supervising the Executive Board’s policies and the general affairs of the company and its affiliated enterprises. It also advises the Executive Board. In performing its duties, the Supervisory Board focuses on long-term value creation for the company and the affiliated enterprises, taking into consideration the interests of the company's stakeholders. The Executive Board provides the Supervisory Board promptly with the information and resources it requires in order to do its work properly. If the Supervisory Board and/or a member of the Supervisory Board considers it necessary, they can obtain information from the Executive Board, NS Audit, the external auditor, the central Works Council and/or other officials and external advisers to NS.
The Supervisory Board did not change in 2018 and consisted of the following individuals: Mr Gerard (G.J.A.) van de Aast (chair), Mr Jeroen (J.J.M.) Kremers, Ms Marike (M.) van Lier Lels, Mr Paul (P.) Rosenmöller (vice-chair), Ms Janet (J.L.) Stuijt and Mr Pim (W.J.) van der Feltz.
The Supervisory Board's responsibilities, tasks and procedures are laid down in the articles of association of NS, the articles of association of NS Groep NV and the rules of procedure of the Executive Board, the Supervisory Board and its committees. The Supervisory Board as a whole is responsible for performing its duties properly and its members may adopt positions independently of the Executive Board. Members of the Supervisory Board perform their duties without a mandate and independently of any personal interest in the company. At least once a year, the Supervisory Board discusses the functioning of the Executive Board as a body and the functioning of the individual members of the Executive Board.
Supervisory Board members are appointed by the General Meeting, on the recommendation of the Supervisory Board and with due observance of the job profile and after consulting the Central Works Council. The Central Works Council has enhanced rights that let it nominate one third of the Supervisory Board members. The Supervisory Board has at least five members and at most nine. The Supervisory Board has drawn up a profile for its size and composition, taking account of the nature and activities of the company, and the desired expertise and backgrounds of the Board’s members. The Supervisory Board aims for a composition that is diverse, with a good mix in terms of gender and age. The profile is evaluated every three years to ensure it is up to date and correct. All of the Supervisory Board members are independent in the sense of the Code.
Supervisory Board members can be appointed for two terms of four years each. After that period, they can be reappointed for a maximum of two terms of two years each. Reappointment after a period of eight years must be justified by the Supervisory Board in its report. In the case of a reappointment, the manner in which the Board member fulfilled their duties in the previous term is taken into account, and they will only be reappointed after careful consideration. The Supervisory Board’s retirement schedule is published on the company's website.
Supervisory Board members must report any potential conflicts of interest relating to NS without delay to the chair of the Supervisory Board. If the chair is concerned, they must report this without delay to the vice-chair. The member in question must disclose all relevant information, including the information relevant for the situation about their spouse, registered partner or other companion, foster child or relatives by blood or marriage to the second degree of consanguinity. Members of the Supervisory Board will not participate in discussions and decision-making about a matter or transaction where their direct or indirect personal interests conflict with the interests of NS.
Committees of the Supervisory Board
In view of the extent, diversity and complexity of the matters it has to handle, the Supervisory Board has set up a Risk and Audit Committee and a combined Remuneration and Appointments Committee. The composition of these committees is determined by the Supervisory Board. The committees advise the Supervisory Board and prepare its decision-making. This allows the committees to assist effective decision-making by the Supervisory Board. The Supervisory Board as a whole remains responsible for the decisions that have been prepared by a committee.
Risk and Audit Committee
The Risk and Audit Committee (RAC) performs its duties in accordance with the rules of procedure as established by the Supervisory Board in accordance with the provisions of the Code. All members of the Risk and Audit Committee are independent in the sense of the Code. The Risk and Audit Committee advises the Supervisory Board and prepares the Supervisory Board's decision-making with respect to monitoring the integrity and quality of NS’s financial reporting and the effectiveness (and assessment thereof) of NS’s internal risk management systems and control systems. The Risk and Audit Committee meets at least twice a year or as often as it deems necessary, and at least once a year with the external auditor, without the Executive Board present. The rules of procedure stipulate that the RAC must have at least three members. All members of the Supervisory Board are also members of the RAC.
Remunerations and Appointments Committee
The combined Remuneration and Appointments Committee performs its duties in accordance with the rules of procedure as established by the Supervisory Board, in accordance with the provisions of the Code. The Remunerations and Appointments Committee consists of three members, all of whom are independent in the sense of the Code. The current members of the Remunerations and Appointments Committee are Mr P. Rosenmöller (chair), Ms J.L. Stuijt and Mr G.J.A. van de Aast.
The Remunerations and Appointments Committee prepares the decision-making of the Supervisory Board in areas such as the appointment of the members of the Executive Board and the Supervisory Board, the functioning of the Executive Board and the Supervisory Board, and the formulation of the remuneration policy for the Executive Board and its implementation.
The Remunerations and Appointments Committee draws up an annual report about the remuneration policy for the members of the Executive Board and the implementation thereof. The Supervisory Board determines the remuneration of individual Executive Board members based on the proposals from the Remunerations and Appointments Committee, within the limits of the remuneration policy adopted by the General Meeting. The remuneration report can be found in the present report.
The Remunerations and Appointments Committee decides the selection criteria and procedures for appointing members of the Supervisory and Executive boards, as well as periodically reviewing the size and composition of the Supervisory Board and proposing a profile for its makeup. It is also responsible for the process for periodic appraisal of the functioning of the individual Supervisory Board members. Furthermore, it presents proposals for the appointment or reappointment of Supervisory Board members.
The external auditor is appointed by the General Meeting. The external auditor reports to the Supervisory Board and Executive Board on its audit. After the examinations and audit, the auditor produces an audit opinion regarding the truth and fairness of the NS financial statements.
The Risk and Audit Committee provides the Supervisory Board with an annual report about the functioning of the external auditor and the developments in the relationship with the said external auditor. The external auditor attends the meetings of the Supervisory Board in which its report on the audit of the financial statements is discussed. The auditor is also available for the General Meeting, in which the adoption of the financial statements is handled. The external auditor also attends the meeting of the Supervisory Board held to discuss the six-monthly figures. In principle, the external auditor attends the meetings of the Risk and Audit Committee, unless that committee determines otherwise. The external auditor immediately informs the chairman of the Risk and Audit Committee if it encounters actual or suspected abuses or irregularities in the course of its audit task. If an actual or suspected abuse or irregularity concerns the functioning of an Executive Board member, the external auditor reports this to the chair of the Supervisory Board. EY has been the external auditor since the financial year 2014.
The NS Audit Director reports directly to the Chief Governance, Risk & Compliance Officer in the Executive Board and discusses the operational affairs of the department. The NS Audit Director also reports to the chair of the RAC. The NS Audit Director has direct access to the NS Chairman and CEO, the chair of the Risk and Audit Committee, the members of the Executive Board and the NS directors according to the articles of association, and the external auditor.
The internal audit function keeps the Executive Board, Risk and Audit Committee and external auditor informed about:
the implementation of the audit year plan;
any deficiencies in the effectiveness of the internal risk management and control systems;
findings and observations that significantly affect the risk profile of NV Nederlandse Spoorwegen and its associated enterprises;
shortcomings in the follow-up of recommendations by the internal audit function.
The external auditor and NS Audit work together with due regard for their specific assigned duties.
Governance and safety
NS has established a Safety Consultation body that is chaired by the Chief Governance, Risk & Compliance Officer. Line managers responsible for the business units, IT and security report to this central body on safety risks. The Chairman and CEO and the NS Risk Director also attend the Safety consultation body meetings. The NS Risk Director makes sure that the chosen risk appetite is reflected properly in the management of the safety risks.
Sustainability of the business practices within NS is safeguarded through a formal organisation consisting of a Council for Sustainable Business Practices, a Working Group for Sustainable Business Practices, a Communications Working Group and a number of temporary task groups. This organisation is supported by the head-office department Sustainable Business Practices. The Council is a body that prepares decisions and policies. The Council consists of directors of business units and head-office departments and is chaired by the Director of Commerce & Development. Proposed resolutions and policies that have to be implemented by the business units and/or corporate staff groups are submitted to the Executive Board for approval. The Working Group for Sustainable Business Practices includes representatives of the business units and NS head-office departments.
Sustainable mobility is one element in the NS strategy. This strategy is translated into plans and KPIs by the business units. The plans deal with the three strategic themes of Climate-neutral, the Circular Economy, and Inclusiveness. Progress and development in sustainability results are monitored and managed through the regular planning, control and reporting cycle. Investment proposals must include assessments of the sustainability impact.
In accordance with the Code, the Executive Board is responsible for the aspects of Corporate Social Responsibility (CSR) that are relevant to NS. The Executive Board reports on this to the Supervisory Board and the General Meeting. There were no changes in 2018 in the CSR policy and objectives.