Committees of the Supervisory Board
As noted in the ‘Corporate Governance’ section, the Board has two standing committees: the Audit Committee and the combined Selection, Appointment and Remuneration Committee. Early in 2006 an ad hoc Strategy Committee was set up.
The Strategy Committee met twice in 2007, together with the Chairman of the Management Board. These meetings were almost entirely devoted to the proposed merger between Nuon and Essent.
Meetings of the Audit Committee
The three members of the Audit Committee are all financial experts in the sense of best practice provision III.5.7 of the Code.
In 2007 the Audit Committee met six times in the presence of the Chairman of the Management Board, the CFO, the Corporate Planning & Control Director, the Internal Audit Director and the head of Legal Affairs. The external auditor attended five of these meetings.
During the meetings the Audit Committee discussed, assessed and subsequently advised the Board on a variety of issues, including the financial accounts for the fourth quarter 2006 and full-year 2006, the annual report for 2006 and the quarterly results 2007, as well as the accompanying audit reports.
Further subjects that were dealt with by the Committee included the Internal Audit Charter, the 2006 annual report of the Internal Audit Department, the 2007 year plan of the Internal Audit Department, the monitoring reports of the Internal Audit Department, the investment criteria, various fiscal matters, the assessment of the effectiveness and adequacy of the internal risk management and control systems, risk management and control, the actions taken in response to the recommendations of the external auditor, the current state of the verification process of the proposed merger between Nuon and Essent, fraud and incident investigations, the Enterprise Risk Reports, the 2008 budget, the financing plan for 2008, the current state of the Corporate Risk Management Framework and the financial ratios of the future production and supply company and of the network company. In addition, the committee assessed the substantive adequacy of its scope and activities as described in its own regulations.
Meetings of the Selection, Appointment and Remuneration Committee
In 2007 the Selection, Appointment and Remuneration Committee met four times. As in 2006 the external adviser Bedet Consultancy B.V. provided the Selection, Appointment and Remuneration Committee with information from the market and professional advice on market-consistent remuneration instruments, best practices and expected developments.
In one meeting the Selection, Appointment and Remuneration Committee discussed remuneration, (partly) in the presence of the CFO. During this meeting the short- and long-term incentives for 2006 of the members of the Management Board were evaluated and the variable remuneration objectives for the short term for 2007 and the long term for 2007-2009 for the members of the Management Board were discussed. In addition, the Selection, Appointment and Remuneration Committee discussed the approach to the remuneration policy in the proposed merged entity of Nuon and Essent and the criteria for awarding an additional remuneration to members of the Board. Furthermore, the Selection, Appointment and Remuneration Committee drew up the Remuneration Report and prepared the consultations with representatives of shareholders about the remuneration policy of the Management Board. The remuneration policy is discussed in greater detail in the Remuneration Report of this annual report.
The main subjects discussed in the field of selection and appointment were the appointment of the Management Board and the quartermasters of the proposed merged entity of Nuon and Essent. After the discontinuation of the merger talks between Nuon and Essent, the appointment of the quartermasters of the future production and supply company and the network company was discussed.
Corporate governance
Regarding corporate governance the Board considers it important to note that Nuon applies virtually all principles and the majority of best practice provisions – insofar as applicable – from the Code. The manner in which Nuon applies the Code remained unchanged in the reporting year. The corporate governance structure and the manner in which Nuon has applied the principles and best practice provisions of the Code, those areas where Nuon departs from the Code and the reasons for these departures, are outlined in this annual report.
