Corporate Governance and internal risk management and control system
In view of the role in society that we fulfil in the energy supply and the size of our company, we voluntarily apply the Dutch Corporate Governance Code.
Introduction
The Dutch Corporate Governance Code (the ‘Code’) entered into force on 1 January 2004. In principle the Code is exclusively applicable to Dutch listed companies. The Code is designed to promote more efficient supervision of the management (the ‘checks’) and a more balanced distribution of influence between the management, Supervisory Board and shareholders (the ‘balances’).
Though Nuon is not a listed company, we apply the Code on a voluntary basis (insofar as applicable and relevant). This decision was taken in view of the company’s size, the social role that we play in the performance of our tasks in the field of energy supply and because we are strongly committed to openness and transparency.
We attach great importance to good corporate governance, which is essential for reducing risks, improving the relationships with all stakeholders and promoting trust in the company. This trust is of crucial importance for the realisation of the company’s strategic objectives. As part of good corporate governance Nuon follows the Corporate Governance Monitoring Committee (Frijns) with great interest. Important tasks of the Frijns Committee include promoting the application of and adherence to the Code by Dutch listed companies. The Committee reports annually on its work in this framework. In its third report published on 19 December 2007 the Frijns Committee noted that the level of adherence to the Code by Dutch listed companies remains high (95%). The Committee also made further recommendations in the field of remuneration of members of the Management Board, diversity in the composition of the Supervisory Board and internal risk management and control systems. In view of our status as an unlisted company and our specific shareholder structure, not all best practice provisions are applicable to us. The majority of applicable provisions are complied with.
The application of the Code was discussed during the General Meeting of Shareholders in 2004 and again in 2005 and 2006. At these meetings the shareholders indicated that they were in agreement with the application of the Code by Nuon, including the non-application of a limited number of best practice provisions. The Corporate Governance chapter will again be submitted to the General Meeting of Shareholders for discussion in 2007. Every material change in Nuon’s corporate governance structure and application of the code will be put to the annual General Meeting of Shareholders for discussion as a separate agenda item.
This chapter first of all describes the main outlines of our corporate governance structure and the departures from the Code, in accordance with the ‘apply or explain’ principle. In addition, the closing paragraph contains the operation of our internal risk management and control system.
