Corporate Governance Statement (continued)
Conflict of Interest
Remuneration
Resolutions subject to Supervisory
Board approval
Delegated Member
Committees
Preparatory Committee
Audit Committee
O Q,
Introductio^^^^^^^^^^H Report of the Executive Board^^^^^l Report of the Supervisory Board
The Articles of Association and the Regulations
of the Supervisory Board prescribe how to deal
with (apparent) conflicts of interest between
the Company and members of the Supervisory
Board. A member of the Supervisory Board shall
not take part in any discussion or decision-making
that involves a subject or transaction in relation to
which he has a personal conflict of interest with
the Company. Decisions to enter into transactions
under which Supervisory Board members have
conflicts of interest that are of material significance
to the Company and/or the relevant member(s)
of the Supervisory Board require the approval of
the Supervisory Board. Any such decision shall be
published in the Annual Report for the relevant year,
along with a reference to the conflict of interest
and a declaration that the relevant best practice
provisions of the Code have been complied with.
Note 13.3 of the 2018 Financial Statements sets
out related party transactions in 2018.
Supervisory Board members receive a fixed
annual remuneration fee, as determined by the
AGM. More information on the remuneration of
Supervisory Board members can be found in note
13.3 to the 2018 Financial Statements.
Certain resolutions of the Executive Board are
subject to the approval of the Supervisory Board.
Examples are resolutions concerning the operational
and financial objectives of the Company, the
strategy designed to achieve the objectives, the
parameters to be applied in relation to the strategy
(for example, in respect of the financial ratios)
and corporate social responsibility issues that are
relevant to the Company. Also, decisions to enter
into transactions under which Executive Board or
Supervisory Board members would have conflicts
of interest that are of material significance to the
Company and/or to the relevant Executive Board
member/Supervisory Board member require the
approval of the Supervisory Board. Further reference
is made to Article 8 paragraph 6 of the Articles
of Association, which contains a list of resolutions
of the Executive Board that require Supervisory
Board approval.
The AGM may appoint one of the Supervisory Board
members as Delegated Member. Mr. Das currently
acts as the Delegated Member. The delegation to
the Delegated Member does not extend beyond
the duties of the Supervisory Board and does
not comprise the management of the Company.
It intends to effect a more intensive supervision
and advice and more regular consultation with the
Executive Board. The Delegated Member has a
veto right concerning resolutions of the Supervisory
Board to approve the resolutions of the Executive
Board referred to in Article 8 paragraph 6 under a, b
and c of the Articles of Association of the Company.
Heineken N.V. Annual Report 2O18IA0
Financial Statements Sustainability Review Other Information
The role of Delegated Member is consistent with
best practice provision 2.3.8 of the Code, except
insofar that the delegation is not temporary but is
held for the term for which the member concerned
is appoi nted by the AGM. The Company is of the
opinion that the position of Delegated Member,
which has been in existence since 1952, befits the
structure of the Company.
The Supervisory Board has five committees: the
Preparatory Committee, the Audit Committee,
the Remuneration Committee, the Selection
Appointment Committee and the Americas
Committee. The function of these committees
is to prepare the decision-making of the
Supervisory Board.
The Supervisory Board has drawn up regulations
for each committee, setting out the role and
responsibility of the committee concerned, its
composition and the manner in which it discharges
its duties. These regulations are available on
our corporate website. In 2018, more than half
of the members of the Audit Committee were
independent within the meaning of best practice
provision 2.1.8 of the Code. For the Remuneration
Committee and the Selection Appointment
Committee the independence criteria of best
practice provision 2.3.4 are not met.
The Report of the Supervisory Board states the
composition of the committees, the number of
committee meetings and the main items discussed.
The Preparatory Committee prepares decision
making of the Supervisory Board on matters not
already handled by any of the other committees,
such as in relation to acquisitions and investments.
The Audit Committee may not be chaired by the
Chairman of the Supervisory Board or by a former
member of the Executive Board. At least one
member of the Audit Committee shall be a financial
expert with relevant knowledge and experience of
financial administration and accounting for listed
companies or other large legal entities.
The Audit Committee focuses on supervising the
activities of the Executive Board with respect to
(i) the operation of the internal risk management
and control system, including the enforcement
of the relevant primary and secondary legislation
and supervising the operation of codes of conduct,
(ii) the provision of financial information by the
Company, (iii) compliance with recommendations
and observations of internal and external auditors,
(iv) the role and functioning of the internal audit
function, (v) the policy of the Company on tax
risk management, (vi) relations with the external
auditor, including, in particular, its independence,
remuneration and any non-audit services for the
Company, (vii) the financing of the Company
and (viii) the applications of information and
communication technology.
The Audit Committee acts as the principal contact
for the external auditor if the external auditor
discovers irregularities in the content of the financial
reporting. The Audit Committee meets with the
external auditor as often as it considers necessary,
but at least once a year, without the Executive
Board members being present.
